American voters are in the process of deciding who will take on Donald Trump and his Republican Party in this November’s election. The Democrats running for this privilege are putting forth proposal after proposal, sparking concern among some: why change the system? Isn’t it working?
This juxtaposition of healthy economic numbers and poor measurable outcomes is due in part to the way our system is organized. While stocks are persistently high, very few Americans actually benefit from the boom. A majority of Americans live with deep financial instability, living paycheck-to-paycheck and remaining unable to set aside money for unexpected emergencies.
Americans die younger, live sicker, and get worse education than residents of comparatively wealthy countries.
On top of all this, economists from across the political spectrum agree that wages aren’t keeping pace with expenses. Here’s a chart from Republican Mitt Romney’s former policy advisor comparing wages in 1985 with wages today:
In the 80s and 90s, a full-time wage would cover housing, health care, transportation, and college, costs, with some money left over for food, utilities, clothes, and hopefully a few birthday presents. Not so in the 2010s.
If these are the results we get when our economy is booming, what can we expect when it isn’t?
Data from the Pew Research Center back up this conclusion. The fact is, wages have “gone up,” but purchasing power has barely budged since the 70s. The economy is booming, but most workers are simply not seeing the benefits.
Data from the Federal Reserve tell a similar story. Even during periods of GDP growth, less and less of that growth ends up going to workers in the form of wages and salaries:
The numbers reflect a disturbing trend— the rising tide is lifting a few of the yachts but not the rank-and-file boats. To add insult to economic injury, our system ranks far behind other wealthy countries in many key metrics that measure quality of life, prosperity, education, and health.
Life expectancy in the United States has fallen in every year measured since 2014, giving America the 35th longest life expectancy in the world, tied with Lebanon. Sure, America has a booming economy, but our people die younger than residents of 34 other countries.
There are many rankings and metrics out there to measure the overall wellbeing of a country. For this article, I have selected four widely-respected international ranking systems maintained by reputable organizations using thorough research: The Social Progress Index, The Legatum Prosperity Index, The World Happiness Report, and The OECD Better Life Index. None of these metrics is perfect, but no metric is (especially not GDP).
The most recent Social Progress Index puts the US in Tier 2 with an overall rank of 26th best in the world, just behind Estonia and the Czech Republic.
The Legatum Prosperity Index measures a host of factors, including security, governance, economy, living conditions, health, and education. According to their 2019 rankings, the US comes in at 18, below much of Western Europe as well as Canada, Hong Kong, Singapore, and Australia:
The 2018 World Happiness Report places the US at 19th in the world, behind most of these same countries:
The OECD Better Life Index ranks the US slightly higher but still 10th in the world, behind a group of countries that’s starting to look familiar.
Democratic candidates for president are proposing significant changes to the American system. They are forcing us to consider the hard reality: if these are the results we get when our economy is booming, what can we expect during the next recession? Why protect a system that isn’t working for most Americans?
We are the wealthiest country in history and we can’t even beat Iceland. It’s time for significant political change.