Are Americans Getting Richer? New Data Might Surprise You
Workers have proven resilient over the past decade, despite inflation and valid affordability fears.
Washington Post Editorial Board —
Summary: We introduce the American Abundance Index, which measures living standards by how many hours Americans must work to afford a standard basket of goods, rather than by prices or wages alone. The index uses time prices to show that for most US workers, purchasing power has generally risen over the last two decades, even amid inflation and public pessimism.
The resilience of the American worker is one of the most underreported stories of the 2020s. From red tape to import taxes, successive governments have erected barriers to success. Yet America’s workers have persevered and figured out ways to prosper.
A new American Abundance Index illustrates this. The project from Human Progress, an arm of the Cato Institute, reveals the steady rise of the average worker’s purchasing power. The premise of the index is simple: how many hours do you need to work, compared to the month or year before, to be able to afford the “basket of goods,” which is a standard set of household items and services that comprise the Consumer Price Index used to calculate inflation.
The “time price” is how many hours of work it takes to purchase the basket of goods. The “abundance” is how much of the basket one hour of work can buy. The story told by the index is a very good one: since recordkeeping began, “abundance” for average private sector workers comes out to a net increase of 13.8 percent.
It increased the past year, too. The index shows the average private sector worker saw prices rise by 2.7 percent from December 2024 to December 2025, while their hourly wages grew by 3.8 percent. This means workers could work 1 percent less to buy the same basket of goods. Put differently, workers could afford 1 percent more stuff.
The reason for this is that earnings have continued to outpace inflation. So long as wages increase faster than inflation, the worker gets ahead. And it’s not just desk jobs that have enabled workers to purchase the same amount of goods and services for fewer hours worked. The gain for traditional “blue collar workers” is even higher: a historical net increase of 18.4 percent since 2006.
Despite workers significantly increasing their purchasing power over the past two decades, the past five years have taken a toll. The self-inflicted pain of printing vast sums of money during the pandemic sent the annualized inflation rate to over 9 percent in 2022, far outstripping raises. While inflation is now mostly under control, it has taken time for the gap between wages and inflation to settle, and workers are only now just catching up after their losses during those inflation-heavy years.
Americans continue to rank affordability as a top concern and do not believe the government is doing enough to address the cost of living. These frustrations are understandable. Prices are still rising while tariffs and uncertainty strangle businesses and push consumer confidence to a 12-year low. America’s growth and prosperity story has always been one of fits and starts, and workers are right to demand that government gets out of their way. But the new data make clear that 21st century Americans can still be content about how far they’ve come and optimistic about how far they’ve yet to go.
This article was originally published in the Washington Post on 2/6/2026.
Keeping Cool: The Air Conditioner That Changed America
The time price of air conditioning has fallen 98.6 percent since 1952. That ordinary luxury saves lives every summer.
Gale L. Pooley —
Summary: Air conditioning has transformed extreme heat from a major threat into a manageable challenge, helping save lives, improve productivity, and make hot climates far more livable. Since its invention in the early 20th century, advances in technology and rising prosperity have made cooling dramatically more affordable, with the time required to earn an air conditioner falling by nearly 99 percent since 1952. Differences in air-conditioning adoption help explain why heat-related mortality remains much higher in Europe than in the United States, underscoring the role of innovation, wealth, and energy policy in protecting human wellbeing.
Heatwaves have pushed temperatures to record highs across both Europe and the United States. Yet the human toll between these two locales was dramatically different, with Europe recording more than 10,000 excess deaths in June.
The United Nations estimates that the European continent accounted for approximately 175,000 heat-related deaths annually between 2000 and 2019. The Environmental Protection Agency, meanwhile, calculates that about 1,300 deaths per year in the US are due to extreme heat. (This translates to four heat-related deaths per million annually in the US and 235 heat-related deaths per million annually across Europe.)
Europe and the US differ in demographics, urban density, reporting methods, and climate patterns. Even so, the death rate due to heat in Europe is 59 times higher than in the US.
In the United Kingdom, only about five percent of homes have air conditioning. In the United States, roughly 93 percent do.
Research identifies 72°F and 45 percent humidity as optimal for maximizing office and mental productivity.
With sweltering temperatures once again gripping much of the world, it is worth appreciating air conditioning — the quiet invention that transforms dangerous heat into manageable discomfort, shields millions from heat-related suffering and death, boosts productivity, and makes once-hostile climates livable. It is a powerful reminder that wealth, innovation, and human ingenuity enable societies to adapt to nature’s extremes and protect human life.
To understand why the US heat death rate is 59 times lower than that of Europe, it helps to begin with a young engineer named Willis Carrier.
The Father of Air Conditioning
Willis H. Carrier was born outside of Buffalo, New York on November 26, 1876, the same day inventor Alexander Graham Bell successfully demonstrated his large box telephone between Boston and Salem, Massachusetts. Carrier was an only child and attended a one-room schoolhouse. When he was nine years old he struggled to grasp the concept of fractions. His mother helped him master the idea using a pot of apples and slicing them into portions. Carrier remembered this event fondly as “the most important thing that ever happened to me.”
Carrier was awarded a full scholarship to attend Cornell University. He majored in engineering, earning a Master’s degree in 1901. After graduation, Carrier accepted a job at the Buffalo Forge Company for $10 a week.
The Sackett & Wilhelms printing plant in Brooklyn, New York was losing money because the sweltering, humid summers caused sheets of paper to absorb moisture from the air. The paper would expand and warp, throwing off the alignment of colored inks on the printed page and ruining entire print runs. They asked the Buffalo Forge Company for help. Carrier was assigned to solve the problem.
He was not trying to cool people. He was trying to save knowledge.
Air conditioning began not as a luxury, but as a technology of information, productivity, and adaptation — a machine that transformed oppressive heat from an economic barrier into a manageable inconvenience.
Carrier’s breakthrough system, in July of 1902, controlled both temperature and humidity, stabilizing the paper and rescuing the precision of mass communication.
Carrier applied for a patent on his invention, an “Apparatus for Treating Air,” which became patent No. 808897 and was issued on January 2, 1906.
In 1915 Carrier and six other engineers formed the Carrier Engineering Corporation using their personal savings of $32,600. Carrier Global Corporation (NYSE: CARR), the parent company of the Carrier HVAC and refrigeration business, has a current market capitalization of approximately $56 billion. This valuation makes it one of the largest climate and energy solutions providers in the world.
“With his new company,” Alexander Hammond notes, Carrier began to expand the use of air conditioning units by supplying hotels, department stores, movie theaters and private homes. His units were even installed in the White House, the US Congress and Madison Square Garden.”
Another overlooked legacy of Carrier’s invention is the birth of the summer blockbuster. Before air conditioning, movie theaters dreaded the hot months — few people wanted to sit in a crowded, sweltering auditorium. That changed in 1925 when the Rivoli Theatre in Times Square installed one of Carrier’s new cooling systems. Crowds flocked in, many as eager for the cool air as for the feature presentation. Almost overnight, summer transformed from Hollywood’s off-season into its most profitable season. Air conditioning didn’t just cool theaters — it reshaped the economics of entertainment and helped create one of America’s most enduring cultural traditions.
When New York City organizers launched the 1939 World’s Fair under the motto “Building the World of Tomorrow,” they sought technologies that would advance human progress and improve everyday life. Few embodied that vision better than modern air conditioning. During the Fair’s first 100 days, nearly 1.3 million visitors toured the striking “Carrier Igloo of Tomorrow.”
Carrier Corp’s Igloo, image from New York Public Library Digital Collections.
Inside, guests learned how air conditioning worked, explored a modern refrigerated food store, and experienced Carrier’s latest self-contained cooling systems — getting a glimpse of a future that would soon make homes, offices, and entire cities more comfortable, productive, and livable.
In 1985, Willis H. Carrier was inducted into the National Inventors Hall of Fame, and in 1998, Time magazine recognized him as one of the 100 most influential people of the 20th century.
By conquering heat and humidity with knowledge, Carrier enlarged the realm of human possibility. His invention transformed sweltering regions into thriving economies, extended human productivity, and brought comfort and prosperity to billions around the world.
One of the great triumphs of entrepreneurial capitalism is how quickly air conditioning traveled the familiar path from luxury to necessity. What began as an expensive convenience for a tiny elite became, within a generation, affordable to ordinary families. The market did not merely invent comfort — it democratized it.
In their report Time Well Spent: The Declining Real Cost of Living in America, Michael Cox and Richard Alm found that a 5,500-BTU air-conditioning unit cost about $350 in 1952. At the time, entry-level workers earned roughly 83 cents an hour, putting the time price at 422 hours.
Today, Walmart sells a far more efficient 6,000 BTU air-conditioning unit (with a remote control) for only $115. The current hourly wage for limited-service restaurant workers is around $19 an hour, putting the time price at six hours.
The time price has decreased by 98.6 percent. For the time it took US workers to earn the money to buy one unit in 1952, they get 70 today.
If air conditioning saves lives, why don’t more Europeans have it?
Europe’s electricity prices are typically much higher than the US, driven by higher taxes, network costs, renewable energy mandates, and energy import dependence. Customers in the US pay 17 to 19 cents per kilowatt-hour (kWh) compared to 25 to 32 cents in Europe. This means Europeans pay roughly 47 to 68 percent more per kWh than US customers.
Americans are also much richer than Europeans. According to World Bank data, American gross domestic product (GDP) per capita was $84,809 in 2024, while the European Union’s was 25 percent lower at $63,585. That $21,224 difference could buy a lot of comfortable cooling.
The European Union also prioritizes environmental targets over human comfort by imposing strict regulations for heating and cooling, making these amenities much more costly. The commission encourages citizens to use fans instead of air conditioning. Imagine the government doing that in Phoenix and Atlanta in July. Italy, Greece, and Spain even announced temperature limits in public spaces during the 2022 heatwave in an effort to meet these environmental objectives. Spain limited air conditioners to be set no lower than 80°F. No wonder European productivity is 38 percent lower than the US.
Historic preservation laws and strict landlord rules frequently ban exterior window units to maintain aesthetic uniformity.
While air conditioning ownership increases households’ electricity consumption, it may be a small price to pay for comfort and avoiding death.
The problem is not the climate but the policy mindset. Too many European regulators approach energy and technology through the ideological lens of scarcity rather than creative innovation and human flourishing. One reason such policies persist is that the officials who design them are largely insulated from the consequences of their decisions and rarely experience their costs directly. Instead, those costs are borne by millions of ordinary citizens.
Air conditioning is not ultimately a story about cooling. It is a story about knowledge. It transformed oppressive heat into comfort, inhospitable regions into thriving communities, and summer misery into year-round productivity. Coal, copper, and electricity become valuable only after humans discover how to harness them. The history of air conditioning is the history of knowledge triumphing over nature’s constraints.
The ultimate resource is neither energy nor matter. It is the infinite capacity of human beings to learn, create, and discover.
This article appeared in The Daily Economy on 7/13/2026.
Diamond Prices Fall as Lab-Grown Diamonds Gain Ground
“De Beers is halting production at South Africa’s biggest diamond mine, as consistently depressed conditions in the market for the precious stones weigh on the company that mining major Anglo American is trying to sell.
The diamond group said on Monday that it would pause production for two years at its Venetia mine, which employs about 3,500 people and accounts for about 10 per cent of the company’s production, to cut costs. It will also reduce capital expenditure for the site.
The mine accounts for 40 per cent of South Africa’s annual diamond production…
Diamond prices have fallen because of slowing demand, especially in China, and competition from lab-grown gems that can be made and sold much more cheaply than natural stones.
WWW International Diamond Consultants’ rough diamond price index is down about 50 per cent from the record highs of 2022.”
The Amazon founder’s innovations save customers 22 hours a year on average, giving them the gift of time.
Marian L. Tupy —
Summary: Amazon’s immense value may be better understood not through Jeff Bezos’s fortune, but through the time Amazon saves for consumers and businesses. Entrepreneurs capture only a small fraction of the value they create. Amazon has generated trillions of dollars in social benefit through greater convenience, lower transaction costs, and improved access to goods and services. By reducing the time people spend shopping, managing inventory, and building technological infrastructure, Amazon has created substantial consumer surplus that far exceeds Bezos’s wealth.
Amazon founder Jeff Bezos recently made a point that every critic of billionaire wealth should confront: “If I do my job right, the value to society and civilization from my for-profit companies will be much, much larger than the good that I do with my charitable giving.”
To see if he is correct, consider the one resource that is truly finite: time. Modern debates about wealth start in the wrong place. They begin with the fortune. They should begin with customers and their time. Mr. Bezos is worth roughly $275 billion. That number offends many people because they assume wealth must have been taken from someone else. But Amazon didn’t become valuable by force. It became valuable because hundreds of millions of people chose to use it.
Consumers weren’t forced to buy books, batteries, diapers, cables, razors, tools, groceries or printer ink from Amazon. They did so because Amazon saved them time, money, effort or uncertainty. Sellers weren’t forced to use Amazon’s marketplace. They did so because it gave them access to demand. Firms weren’t forced to use Amazon Web Services. They did so because renting computing power was cheaper than building and maintaining their own information-technology infrastructure. That is capitalism: People get rich by creating something others value enough to buy.
The Bezos fortune looks large because it is visible. The value Amazon created is harder to see because it is dispersed. A mother who doesn’t drive to a store to buy diapers doesn’t appear in an economic headline. A small business that reorders supplies in two minutes doesn’t make the evening news. A rural customer who gains access to goods once available only in cities doesn’t receive a subsidy check with Amazon’s logo on it. Yet each transaction saves time, and time is limited.
Consider the arithmetic. Suppose an hour of labor is worth about $64, roughly the average gross domestic product per hour worked in the countries in which Amazon operates. If Mr. Bezos’ fortune corresponded to the total value that Amazon created, his $275 billion would represent about 4.3 billion hours of saved time. Divided among Amazon’s more than 300 million active customers, the saving comes to about 14 hours per customer over Amazon’s life. That’s nothing. Many customers save that in a month.
But entrepreneurs don’t capture all the value they create. The Nobel Prize-winning economist William Nordhaus estimated that innovators keep only a small share of the social value—roughly 2%—produced by their innovations. Under that assumption, Mr. Bezos’ $275 billion fortune implies that Amazon created about $13.8 trillion in total value for society.
At $64 an hour, that means Amazon has saved its customers about 214 billion hours. Across 300 million customers over roughly 32 years (Amazon was founded in 1994), the saving equals about 22 hours per person a year. That is 25 to 26 minutes a week, or a little less than four minutes a day.
So the question isn’t whether Mr. Bezos has too much money. It is whether Amazon has saved the average customer four minutes a day. The answer is yes. A single avoided trip to a store can save 30 minutes. Finding a product online instead of driving to three retailers can save an hour. Reading reviews can reduce the chance of buying the wrong product. Automatic reordering can save repeated errands. Price comparison can save money and time. Fast delivery can substitute for inventory kept in closets, garages, offices and warehouses.
The savings extend beyond retail. Amazon Web Services lowered the cost of starting and scaling companies. It gave firms computing capacity without the old capital expense. That made experimentation cheaper. Some firms failed faster. Others grew faster. Both outcomes matter. Cheap failure is part of progress.
Amazon also forced competitors to improve. Walmart, Target, grocery chains, hardware stores, logistics firms and online retailers responded with better websites, faster delivery, wider selection and lower search costs. Even people who dislike Amazon benefit when its competitors become better because Amazon raised consumer expectations.
Charity can do good, but Mr. Bezos is right: Business can do better. Charity moves existing resources toward chosen ends. Business, when it works, creates new value by reorganizing labor, capital, knowledge and logistics. Enterprise can improve how hundreds of millions of people spend their time every week. Some people will spend the extra time earning money to buy things they previously couldn’t afford, helping their communities, enjoying the company of their loved ones, taking a holiday or relaxing.
That distinction is often lost. Critics praise entrepreneurs when they give money away, but condemn the process that made the money possible. That is backward. The social contribution of an entrepreneur usually occurs before the charitable foundation is created. It occurs when customers gain, workers earn, suppliers sell, competitors improve, and resources move to better uses.
None of this means Amazon is perfect. No large company is. Amazon can make errors. But that doesn’t cancel the basic fact: Amazon created enormous consumer surplus.
The moral case for Mr. Bezos’ wealth doesn’t require blind admiration of his business acumen. It requires arithmetic. If Amazon saves each customer 22 hours a year, Mr. Bezos’s fortune passes the Nordhaus test. If it saves more than that, society receives far more than he keeps.
It is easy to resent the billionaire. It is easy to ignore the saved hours. But the hours matter because time is limited. It is our most precious resource. Count the time saved, and Mr. Bezos’ fortune becomes less mysterious and much more defensible.
A previous version of this article appeared in the Wall Street Journal on 5/26/2026.
US Broadband Delivers Faster Speeds and Lower Prices
“USTelecom’s 2026 Broadband Pricing Index (BPI) is an annual analysis of U.S. residential broadband pricing and performance. The report finds that broadband internet has delivered a consistent trend of falling real prices and dramatically faster speeds for eleven consecutive years, which stands apart from nearly every other category of household spending.”
