John Hood: Prevailing winds in our favor
The past three decades have brought one of the largest improvements in living standards in history. The share of human beings living on less than $3 a day is now about 26 percent, down from 53 percent in 1990. Even if you use higher poverty thresholds than extreme poverty in the measurement, the improvement is still enormous.
As for America, the U.S. Census Bureau just released its income estimates for 2017. Median household income was $61,372 — which is, after standard adjustments for inflation, the highest ever recorded. The news is quite a bit better than that, actually, because the standard adjustments likely overstate inflation by a lot and fail to account for the fact that today’s households contain fewer people.
Mark Perry, a University of Michigan economist and scholar at the American Enterprise Institute, points out that adjusting for household size alone makes a good growth trend into a great one. Since 1975, real median household income has gone up 25 percent. But if you adjust for household size, the increase was really 46 percent — to $24,160 per person, up from $16,600.
Now let’s focus on North Carolina. As of 2017, our median household income was $52,752. That level is lower than the national median, to be sure, but North Carolina’s growth rate since 2010 was faster than the national rate. In fact, only one other state in the Southeast, Tennessee, had a faster rate of median household income growth than North Carolina did.
Set aside, for now, the political debate about this. Should Republicans in the General Assembly receive credit for cutting taxes, streamlining regulations, reforming state programs, and otherwise pursuing fiscal conservatism since 2010? Alternatively, is the growth trend merely a delayed effect of policies enacted under previous Democratic legislatures and administrations? Or do state policy decisions have essentially nothing to do with the trend?
Rather, just consider the fact that North Carolina — for all our spirited disagreements, our chronic challenges, and our occasional misfortunes — is a wonderful place to be. Lots of people in other states and around the world seem to think so. They continue to move here looking for economic opportunity, for vibrant community, for natural beauty, for a new home. Most find what they seek.
As I guess you can tell, I’m an optimist about our state and its future. We will recover from Florence. North Carolina will thrive again, and prosper. But I’m also a realist when it comes to human nature. The late Texas newspaper columnist William Arthur Ward once explained the distinctions this way: “the pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.”
We’ve had a lot of damaging wind lately — both literal and figurative. Usually, however, the prevailing winds blow in our favor. Either way, let’s work those sails together.
John Hood (@JohnHoodNC) is chairman of the John Locke Foundation and appears on “NC SPIN.”