There have long been a bunch of hypotheses about why the American “middle class” feels “stressed” in spite of constant real incomes and what appears to me increased utility over time as more expenditure shifts toward information goods where consumer surplus is a higher multiple of factor cost:
Americans are used to seeing real incomes improve at 2%/year–doubling every generation–and they have not been getting that. Living little better than your predecessors a generation ago is an unpleasant shock.
The things that have been becoming cheaper are not seen as things key to your “middle class” status, while the things becoming more expensive and difficult to obtain–a detached house in a good neighborhood with a short commute, health insurance, secure pensions, a good education for your children–are things that it used to be taken for granted a middle-class family could get.
The widening gap between the middle class and the upper class.
Now come Emmons and Noeth with a new and very interesting hypothesis: that people who have done better than their parents with respect to education and family structure are no richer, and people who have matched their parents with respect to education and family structure are poorer. In other words, people who thought they were upwardly mobile are finding themselves with no higher real incomes. And people who thought they were sociologically stable are finding themselves poorer:...