“…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
“Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
“…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
“…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
“Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
“A full-throated defense of economic dynamism.” - The Wall Street Journal
“…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
“…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
“…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
“…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
“Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times

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The Effect of Taxes and Transfers On Low-Earning Workers’ Income

Scott Winship Economic Innovation Group

Date Posted:: October 3, 2024
Is Database:: Database

Between 1979 and 2022 prime-age men in the bottom quintile saw their inflation-adjusted market income rise 10%, to an all-time high of $22,800/year. Their female counterparts saw their market income rise 63% to $20,300/year. @swinshi

Figure 1 shows four trends in the disposable income of lower-earning men, from 1979 to 2022, after adjusting for inflation. In each case, the focus is on the bottom fifth of working-age men (age 25 to 54), as ranked by their pretax earnings. In all of the analyses here, “earnings” includes not just the pay of employees but self-employment income. Looking at annual earnings rather than hourly pay is useful because, in addition to earnings, the Current Population Survey’s Annual Social and Economic Supplement (CPS ASEC) includes information on a variety of taxes and transfers, measured on an annual basis. Looking at the bottom fifth’s average rather than the 20th percentile of earnings makes it easy to layer on the impact of taxes and transfers.

Takeaways by Macro Roundup^® AI

Figure 1 tracks four trends in inflation-adjusted disposable income for the bottom fifth of working-age men aged 25 to 54, ranked by pretax earnings, from 1979 to 2022.
Earnings in the analysis include self-employment income alongside employee pay, and the Current Population Survey's Annual Social and Economic Supplement provides annual measures of a variety of taxes and transfers.
Using the bottom fifth's average rather than the 20th percentile of earnings makes it easy to layer on the impact of taxes and transfers.

What Six Years of Inflation Mean for the Midterms

Owen Tucker-Smith Wall Street Journal

Date Posted:: October 8, 2026
Is Database:: Database

Inflation outpaced real year-over-year average hourly earnings growth in the 5 months through August.

Overall prices, as measured by the consumer-price index, have risen almost 29% in the past six years. During the six years before that, prices crept up at a third of that pace. Over the past six years, prices have, on average, risen faster than wages. The trend has been pronounced recently: In both July and August, inflation outpaced average hourly wage growth.

Takeaways by Macro Roundup^® AI

U.S. consumer prices, as measured by the consumer-price index, have risen almost 29% over the past six years, about three times the pace of the preceding six years.
Prices have on average risen faster than wages over the past six years, with inflation outpacing average hourly wage growth in both July and August.

Not Tech, Not Wall Street

Torsten Sløk Apollo

Date Posted:: September 21, 2026
Is Database:: Database
Is Important:: Important

More than half the increase in the top 1% income share since 1985 flowed through pass-through businesses to ~ 3mm private business owners with a mean net worth of ~$25mm.

The income that lifted America's top 1% did not come mainly from tech or Wall Street, according to Owen Zidar and Eric Zwick. More than half of the rise in the top 1% income share since 1985, 5.8 of 10.5 percentage points, flowed through pass-through businesses. Zidar and Zwick, counted roughly 3 million wealthy private business owners, with average net worth near $25 million, running law firms, car dealerships, medical practices, commercial contractors and regional restaurant chains, the kind of businesses that make their owners wealthy and well known in their own communities without ever making them nationally famous.

Takeaways by Macro Roundup^® AI

Owen Zidar and Eric Zwick find that 5.8 of the 10.5 percentage-point rise in the U.S. top 1% income share since 1985 flowed through pass-through businesses, more than half of the increase.
Zidar and Zwick count roughly 3 million wealthy private business owners with average net worth near $25 million, running law firms, car dealerships, medical practices, commercial contractors and regional restaurant chains.
The income that lifted America’s top 1% did not come mainly from tech or Wall Street, according to Zidar and Zwick, but from businesses whose owners are well known locally without becoming nationally famous.

Family Income Continues to Grow in 2025 Data

Jeremy Horpedahl Economist Writing Every Day

Date Posted:: September 17, 2026
Is Database:: Database
Is Important:: Important

In 1967, just 5.5% of American families had an inflation adjusted income of $150,000 or more. In 2025, 35.7% did. During that timeframe, the share of families with a real income less than $75,000 declined from 63.4% to 32.8%.

In 1967 there were fewer than 3 million families with incomes over $150,000 (in 2025 inflation-adjusted dollars). By 2025, that had grown to over 31 million families. If we look at the highest income threshold in this Census data — over $200,000 — the number of families has grown from just 1 million in 1967 to over 20 million in 2025. And there are fewer lower-income families too: the number of families under $75,000 shrunk, not just as a proportion of the total but even in absolute terms by almost 3 million families from 1967 to 2025. Of course, some of these families do have more earners than in 1967, though we shouldn’t overstate that too much. Using other data from Census, we can see that the share of families with multiple earners hasn’t increased much since 1967, and especially hasn’t since the mid-1990s.

Takeaways by Macro Roundup^® AI

The number of U.S. families with incomes above $150,000 in 2025 inflation-adjusted dollars rose from fewer than 3 million in 1967 to over 31 million in 2025, according to Census data.
Families earning over $200,000, the highest income threshold in the Census data, grew from about 1 million in 1967 to over 20 million in 2025.
Families with incomes under $75,000 declined by almost 3 million in absolute terms from 1967 to 2025, while Census data show the share of families with multiple earners has not increased much since 1967, and especially not since the mid-1990s.

Income in the United States: 2025

Melissa Kollar and Zach Scherer U.S. Census Bureau

Date Posted:: September 16, 2026
Is Database:: Database
Is Important:: Important

Real US median household income increased 2.6% year over year in 2025 to a record high of $87,460.

In 2025, median household income was $87,460, an increase of 2.6% from the 2024 estimate of $85,210. Household income in 2025 was the highest on record dating back to 1967. For all demographic characteristics of the householder the median household income estimates in 2025 were either higher than the 2024 estimates or were not statistically different from 2024. Median household income increased by 3% for White households, 2.9% for non-Hispanic White households, and 4.8% for Black households. Median income did not change significantly for Asian or Hispanic households.

Takeaways by Macro Roundup^® AI

Median U.S. household income reached $87,460 in 2025, up 2.6% from $85,210 in 2024 and the highest on record in data dating back to 1967.
Median household income rose 4.8% for Black households, 3% for White households, and 2.9% for non-Hispanic White households in 2025, while Asian and Hispanic households saw no statistically significant change.
Across all demographic characteristics of the householder, 2025 median household income estimates were either higher than or not statistically different from 2024 estimates.

Sticky Wage Norms and the Real Wage Cost of Unexpected Inflation

Erik Hurst, Christina Patterson, Nela Richardson, and Ye Liv Wang University of Chicago

Date Posted:: September 10, 2026
Is Database:: Database

ADP microdata from 2016–25 suggest firms set wages according to “wage norms” ~ invariant to inflation. The 2020–21 inflation surge mechanically reduced real wages. By the end of 2025, 34% of incumbent workers’ real wages were lower than in 2020.

Roughly 42% of all nominal wage increases below 6% were within 0.01 percentage points of a whole or half number [Figure 6]. Figure 9 plots the employment-weighted average modal wage change across firms (solid line) alongside inflation rate (dashed line) from 2016 through 2025. In the pre-pandemic period, firm-level wage rules were relatively stable at a median of 2.7%, modestly above the rate of inflation. Beginning in 2021, inflation rose sharply, peaking at approximately seven percent in 2022. The average modal wage change also rose, reaching a peak of 3.5% in 2022 and 2023. By 2025, the median firm had a wage rule granting increases of three percent, roughly in line with inflation. The stickiness of firms’ wage rules in the face of inflationary pressure contributed to the systematic fall in real wages for job stayers. Evidence from Belgium [which has strong wage indexation], suggests that declining real wages, rather than inflation itself, helps explain the persistence of depressed consumer sentiment during the 2021–2024 period.

Takeaways by Macro Roundup^® AI

Roughly 42% of all nominal wage increases below 6% fell within 0.01 percentage points of a whole or half number.
Firm-level wage rules held near a median of 2.7% before the pandemic, and the employment-weighted average modal wage change peaked at 3.5% in 2022 and 2023 while inflation peaked near 7% in 2022; by 2025 the median firm granted 3%.
The stickiness of firms' wage rules amid inflationary pressure contributed to a systematic fall in real wages for job stayers, and evidence from Belgium, which has strong wage indexation, suggests falling real wages rather than inflation helps explain depressed consumer sentiment in 2021–2024.

How Many Big Macs Does Your Salary Buy?

Economist Staff The Economist

Date Posted:: September 2, 2026
Is Database:: Database
Is Important:: Important

The Economist’s venerable Big Mac Index is indicative of significantly higher after-tax, PPP-adjusted wages for American workers than for their French and German counterparts.

On an annual basis, America continues to top our McWages rankings. The average American worker earns enough to buy 10,215 Big Macs a year; Switzerland and Australia are in second and third place, respectively. But American working hours are supersized, too. On an hourly basis, Switzerland comes out on top: the average worker there earns the equivalent of seven Big Macs an hour, compared with America’s six. Australia ranks third, at five burgers for every hour worked.

Takeaways by Macro Roundup^® AI

The average American worker earns enough to buy 10,215 Big Macs a year, topping the McWages rankings, with Switzerland second and Australia third.
On an hourly basis Switzerland leads, with the average worker earning the equivalent of seven Big Macs an hour, compared with six in the United States and five in Australia.
American working hours are longer, which shifts the United States from first place on annual McWages to second on an hourly basis.

Between 1979 and 2022 prime-age men in the bottom quintile saw their inflation-adjusted market income rise 10%, to an all-time high of $22,800/year. Their female counterparts saw their market income rise 63% to $20,300/year. @swinshi

How do taxes and transfers affect low-earning men's disposable income?

Takeaways by Macro Roundup® AI

Related Articles:

Inflation outpaced real year-over-year average hourly earnings growth in the 5 months through August.

Have prices risen faster than wages over the past six years?

Takeaways by Macro Roundup® AI

Related Articles:

More than half the increase in the top 1% income share since 1985 flowed through pass-through businesses to ~ 3mm private business owners with a mean net worth of ~$25mm.

Did most of the top 1% income gain come from private businesses?

Takeaways by Macro Roundup® AI

Related Articles:

In 1967, just 5.5% of American families had an inflation adjusted income of $150,000 or more. In 2025, 35.7% did. During that timeframe, the share of families with a real income less than $75,000 declined from 63.4% to 32.8%.

Are more American families reaching higher inflation-adjusted income levels?

Takeaways by Macro Roundup® AI

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Real US median household income increased 2.6% year over year in 2025 to a record high of $87,460.

Has median U.S. household income reached its highest level on record?

Takeaways by Macro Roundup® AI

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ADP microdata from 2016–25 suggest firms set wages according to “wage norms” ~ invariant to inflation. The 2020–21 inflation surge mechanically reduced real wages. By the end of 2025, 34% of incumbent workers’ real wages were lower than in 2020.

Do round-number wage rules cause real wages to fall during inflation?

Takeaways by Macro Roundup® AI

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The Economist’s venerable Big Mac Index is indicative of significantly higher after-tax, PPP-adjusted wages for American workers than for their French and German counterparts.

Which country's workers can buy the most Big Macs?

Takeaways by Macro Roundup® AI

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