Falling Behind

That's what a study commissioned by the New York Times  says is happening to the American lower- and middle-income tiers, as lower- and middle-income citizens of other countries are doing better than us. Median per capita income adjusted for inflation here has been essentially unchanged since 2000. In Britain and Canada it's increased by 20% and by 14% in the Netherlands. A poor American family (at the 20th percentile of the income distribution) makes significantly less money than a similar family in Canada, Sweden, Norway, Finland or the Netherlands. Thirty-five years ago, the reverse was true.

The study concludes that the change is due to three reasons:

• First, educational attainment in the United States has risen far more slowly than in much of the industrialized world over the last three decades, 
• Companies in the United States economy distribute a smaller share of their bounty to the middle class and poor than similar companies elsewhere. Top executives make substantially more money in the United States than in other wealthy countries. The minimum wage is lower. Labor unions are weaker. 
• Governments in Canada and Western Europe take more aggressive steps to raise the take-home pay of low- and middle-income households by redistributing income.