America is so wealthy, so why are the people suffering so much?

Author: David French, New York Times columnist

America’s economy makes the world envious. However, Americans are deeply dissatisfied with their own economic conditions—and this dissatisfaction has been going on for a long time.

Both of these claims are true. To be honest, until recently, I was baffled by this contradiction. Given such striking economic growth, how could it possibly be rational for people to stay pessimistic for so long?

Over the past quarter-century, the growth rate of the U.S. GDP has far outpaced Europe and Japan—two major economic rivals (excluding India and China). The gap has become so large that the level of affluence in many European economic powerhouses is roughly comparable to that of just a few of the poorest states in the United States. For example, measured by disposable income, the standard of living of people in the United Kingdom and France is closer to that of Mississippi—the poorest state in the U.S.—than to the national average.

We often hear claims that the middle class is shrinking, but the reason for this phenomenon is that the ranks of the wealthy and the upper-middle class are expanding. An analysis by economists Scott Winship and Stephen Rose shows that the share of the “core middle class” (defined as households with income from 250% of the poverty line to under 500%) fell from 35.5% in 1979 to 30.8% in 2024. At first glance the drop doesn’t seem that large, but in reality the proportion fell by 13%.

This is not because Americans are getting poorer. On the contrary, they are getting richer, and their level of wealth has risen dramatically. In the same period, the share of people in poverty or near poverty in the U.S. (income below 150% of the poverty line) plunged from 29.7% to 18.7%. The share of lower-middle-class households (income from 150% to under 250% of the poverty line) also fell from 24.1% to 15.8%.

At the same time, the proportions of the U.S. upper-middle class and the wealthy exploded upward. In 1979, households in the upper-middle class (income from 500% to under 1,500% of the poverty line) accounted for only 10.4%; by 2024, that figure had nearly tripled to 31.1%. Meanwhile, the share of the wealthy (income of 1,500% of the poverty line or more) rose from a trifling 0.3% to 3.7%, increasing by more than tenfold.

To help you understand what these numbers mean, take a three-person household: in 2024, the thresholds dividing five income tiers were $40,000, $67,000, $133,000, and $400,000.

The result is that the vast majority of Americans’ lives are, compared with those of their parents and grandparents, extremely comfortable. Even though complaints about housing affordability are entirely reasonable, the average American home is now larger and more lavishly renovated—far beyond anything previous generations experienced.

Once-considered luxuries—central air conditioning, big-screen TVs, home computers, multiple cars per household, and so on—are now standard equipment for most of American society (not, of course, all).