In an article entitled "Free trade costs thousands of jobs" published in the Chicago Sun-Times, Thomas Roesler writes:

John E. Jones, the banker and manufacturer I wrote about last week, has made an intensive study of so-called free trade...
Jones calculates that real wages for the middle class peaked in 1973, "shortly after the U.S. became an unprotected economy in 1971...
During the 17 years after 1973, real wages declined to 86 percent in 1995 and recovered to only 92 percent of real wages in 2000 during the "economic boom" of the late 1990s. "If 'free trade' had been a better policy. . . their real wages in 2000 should have been significantly more than 175 percent of 1973--not a reduction," says Jones.
In an article entitled "Income Inequality in the U.S." published in the Scientific American, Roger Doyle writes:

by the early 1970s, productivity growth slowed and real wages declined, at least for the unskilled. Although average household income in real dollars rose by 41 percent from 1967 to 1997, those with low incomes--the two lowest groups on the chart--benefited little. Of course, from year to year, some households moved up the income scale, whereas others moved down.
In a book entitled "When Work Disappears", Harvard sociologist Julius Wilson states that since 1969, real wages for the poorest workers have fallen by over 30%.

According to the calculations of the Census Bureau the average "real weekly wage" [i.e. wage adjusted for inflation using the "consumer price index"] has fallen by 14 percent between 1970 and 1996. Meanwhile real G.D.P. has increased from $3.771 trillion in 1970 to $9.817 trillion in 2000.

Average real consumption per person has increased 66% between 1970 and 1996. How can Americans be both earning 14% less in terms of money-wages and purchasing 66% more in terms of real goods? Why in 1995 does the Census Bureau record the average income of the lowest quintile [fifth] of households as $8,350 whereas the Department of Labor records their average consumption expenditure as $14,607 [if taking into account welfare programs then over $20,000]?

First, "real wages" do not include non-wage income, for example from pensions - which have grown relative to wage-income since 1970, and real wages do not take into account lower saving. A "real wage" figure does not indicate the number of people working or the number of dependents. The average number of children per household has decreased and a greater percentage of married women are now in work, hence although the "real wage" of people in work may stay constant the actual income per person increases with more people working. These factors alone suggest "real wages" or more accurately "real incomes" have increased by 9% during 1970-1996. Official "real wages" are calculated by the Census Bureau using a system which has major faults, and are also subject to changes in the measuring standard. An error in measuring housing costs was corrected in 1983 but not for the preceding years, resulting in "real wages" 8 percentage points too low in 1996 compared to 1970. "Real wages" exclude bonuses. Measurements have subsequently been broadened to include smaller firms paying lower wages, again artificially depressing wages compared to 1970. Finally, the "consumer price index" overestimates price inflation by up to 1 percentage point per annum according to the Boskin report. 1

The Census Bureau recorded 1996 aggregate annual personal income at $4.8 trillion, the Department of Commerce's National Income and Product Accounts [N.I.P.A.] measured a personal income of $6.8 trillion.

If one wants to compare changes in wealth over long time periods, it is advisable to examine consumption expenditures: in the U.S. this is the Consumer Expenditure Survey by the Department of Labor. Consumption expenditure surveys compare the goods and services bought. And after all this is what wealth is - cars and houses and food and clothing. Americans in 1996 were consuming on average at least 66% more than in 1970.

In 2001 the Department of Labor C.E.S. measured the average expenditure per person in the poorest quintile of households to be equivalent to the average expenditure per person in a median income household in 1976.

Poverty in America
In 2002 the Census Bureau classified 35 million Americans as living in poverty. But what does "being poor" in the U.S. mean?

46% of poor households own their own homes. 2

The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio. 2
Residents of 67.2% of poor households occupy 2 or more rooms per person. 2

The average "poor" American occupies one-third more living space than the average middle-income Japanese, and four times as much living space as the average middle-income Russian. 3
U.S. average floor space per person, in square feet: 721.2 2

U.S. '...' for poor households: 438.6 2

European average: 396.7 2

75.6% of "poor" persons have home air conditioning, compared with 36% of the entire population only 30 years ago. 2

72.8% own a car. 2

30.2% own two or more cars. 2

97.3% own a color T.V. 2

55.3% own 2 or more color T.V.s. 2

78.0% own a VCR or DVD. 2

25.3% own 2 or more VCRs or DVDs. 2

73.3% own a microwave. 2

58.6% own a stereo system. 2

33.9% own a dishwasher. 2

64.7% own a clothes washer. 2

55.6% own a clothes dryer. 2

Comparing the nutrition of poor children with middle-class children [of households with an income 350% greater]: the average consumption of protein, vitamins, and minerals is virtually identical across all age groups [and, in most cases, is well above recommended norms.] Poor children consume more meat than do middle-class children and have average protein intakes 100 percent above recommended levels. 2

Most poor children today are super-nourished and grow up to be, on average, one inch taller and 10 pounds heavier that the G.I.s who stormed the beaches of Normandy in World War II. 2
Only 2% of members of poor households say they "often" do not have enough to eat. 2

1 "American Wages Have Grown" by Richard N. Cooper, Professor of Economics, Harvard University

2 "Understanding Poverty in America" by Robert E. Rector and Kirk A. Johnson, http://www.heritage.org

3 "The Myth of Widespread American Poverty" by Robert E. Rector, http://www.heritage.org