June 29, 2023
D'OH!:
The Cost of Thriving Has Fallen: Correcting and Rejecting the American Compass Cost-of-Thriving Index (Scott Winship | Jeremy Horpedahl, 6/22/23, American Enterprise Institute)
The Cost-of-Thriving Index (COTI), developed by American Compass Executive Director Oren Cass, asks whether families can afford a middle-class lifestyle. It compares the costs of five goods and services to the income of a typical full-time male earner. Cass concludes that the cost of thriving has increased dramatically, from 40 weeks of work in 1985 to 62 in 2022. Our improvements to Cass's estimates indicate the cost of thriving rose by 10 weeks rather than 22. After accounting for the better quality of the goods and services he tracks, the increase was four weeks. The cost of thriving declines when we account for falling federal taxes or include all full-time workers. The after-tax cost of thriving for this broader group fell by 7.5 weeks.
No one has it harder than their father did.
Posted by Orrin Judd at June 29, 2023 6:42 AM