1. Male median wage data (down since 1969) suggest divorce is not the main issue; in any case divorce is an economic and psychological catastrophe for many people, and defending living standards by invoking the effects of divorce in the data strikes me as actually more pessimistic than my view. I suspect Russ’s own cultural values are in accord with this perspective. Russ’s postulated effect also does not explain 1998-2011 median wage stagnation very well.
3. The key question is the net bias of statistics, not the bias for consumer durables alone. Our real economic performance on a lot of services — a huge and growing part of the economy — is extremely weak. As durables get cheaper, the biases in measuring their quality become less important.
4. I don’t see that Russ has made an actual counter to my argument here.
6. In successful periods growth shows up in the major mainstream economic statistics, including the median. If it doesn’t, at the very least we should conclude that growth is considerably slower than usual.
9. There is no measured median income progress since 1997 and very little since 1973; that’s not just a cyclical phenomenon. The supposedly good years of the noughties now look like a bubble, not the reality.
On panel data, I read the Pew Report which Russ cites. Over a more than thirty year time period, only 63 percent of children had incomes exceeding those of their parents, and that comparison includes some pre-TGS, quite high-growth years. I don’t find that number impressive at all. In any case the key question is a comparative one, and while the study has not been done, it is highly likely one would find much stronger cross-generational measures of progress for earlier generations.
On reconciling the per capita gdp and median stories, the concept of rent-seeking — most of all through the service sectors and finance and government — will suffice. I know that Russ already agrees with the finance side of this story, maybe the government side too and who knows, perhaps education and medicine as well?