In Two Americas, Just One Sees Goldilocks

We could say we have a Goldilocks economy. At 3.8 percent unemployment and massive job creation, the worker side of the economy appears fine. Meanwhile, GDP continues to grow, and the inflation rate is slowly heading toward its two percent target.

However, with a notably high proportion of people saying the country is “on the wrong track,” we have two Americas.

Two Americas

Case and Deaton

Princeton economists Anne Case and Angus Deaton tell us that the two Americas’ dividing line is education.

Americans with a college degree are living longer and earning more. Equal to long living Japan, their average life expectancy is 84 years. Correspondingly, from 1970 to 2019, their median income soared by 24 percent in families that had at least one member with a college degree.

At the same time, the two-thirds of all adults without college degrees can expect to live fewer years than in 2010. Close to eight-and one-half years behind those with a college degree, their life expectancy is closer to 75 years. As for income, between 1970 and 2019, the wages of those in families where no one had a college degree were up by just four percent.

The mortality/education gap:

Other Studies

Using a different lens, other studies ask us to look at high school dropouts and geography. They point out that for the least educated 10 percent of American white men and women, death rates are way up. They also emphasize that in rural America, the divide between those with more and less income is most striking.

Our Bottom Line: Reasons For the Divide

I’ve used three declines to summarize the Case Deaton research:

We have diminished worker power. Related, unions have been less able to elevate the wages of their non-college educated members. And finally, the mobility that got us higher wages and better jobs is tougher to achieve. Case and Deaton add that the college degree is a screen. Rather than indicating skills, it is a signal that blocks entry into an “elite” club.

As a result, Case and Deaton document the spread of unhealthy behaviors. Decimated by globalization, the communities where the non-college educated remained have decayed. The lack of work has resulted in single parent families and opioid consumption. Citing suicide, accidental drug overdose, and alcohol-related liver disease, Ann Case called it “deaths of despair.”

From there, we see some substantiating numbers (though slightly dated) in a recent Gallup survey. Looking at “Life Evaluation” from 2008 to 2019 and 2020 among 3,649 U.S. adults, Gallup classified people as “thriving, struggling, or suffering,” Down from 59.2 percent in June 2021, the 51.2 percent that were “thriving,” was an 18-month low. Commenting during August 2022, Gallup hypothesizes that the reason is inflation.

So yes, we have two Americas. But, depending on your data, we can find them in different places. And maybe, based on our featured image, we even have more than two.

My sources and more: Thanks to Drs. Case, Deaton, and the NY Times for inspiring today’s post. From there, Vox says its more complicated than the Deaton/Case conclusions. Then also, this Gallup survey added to our grasp of the great divide in the country.

Adding a bit of frivolity to a very serious subject, our featured image is from The Washington Post.