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.

We are excited to share a new tool we’ve been building at Human Progress: The American Abundance Index—an interactive dashboard that tracks US living standards while adjusting for both inflation and rising incomes.

The idea is straightforward: how many hours do you need to work to afford the same basket of goods and services? Using Bureau of Labor Statistics data, the American Abundance Index converts price and wage growth into “time prices”—the amount of work time required to buy the Consumer Price Index (CPI) basket of goods and services—and “abundance,” which is the inverse: how much of that basket one hour of work can buy. When time prices fall, abundance rises, and each hour of work goes further. That’s the measure of affordability that actually matters.

Conceptually, this work builds off of Superabundance, a book by our editor, Marian Tupy, and his coauthor and Human Progress board member, Gale Pooley. Their core argument—that abundance is best measured in time—forms the foundation of the project. The index itself was built by our Quantitative Research Associate, Jackson Vann.

Users can select multiple worker categories, compare short- and long-run trends, and even see wage growth modeled to reflect real career progression rather than freezing workers in place. All the calculations are transparent and replicable, with the full dataset and code available on GitHub.

So what does the index actually say about American standards of living?

Over the past 12 months, inflation rose 2.68 percent while hourly earnings for the average private-sector worker grew 3.76 percent. As a result, the CPI basket became 1.05 percent more abundant. Since 2006, it has become nearly 14 percent more abundant—roughly equivalent to adding an hour of purchasing power to the average workday.

“At first glance the global economy looks more uneven than ever: billionaires’ fortunes keep breaking records, asset prices have soared and voters across rich countries insist that life is getting harder and more expensive. Yet in the 21st century the world economy has kept getting more equal.

Data released on January 20th, covering 194 countries and economies, and compiled by the World Data Lab, a research firm, show that the ratio between spending by the world’s richest 10% and the poorest 50% has more than halved since 2000. Back then, the rich spent about 40 times more than the poor; today the figure is closer to 18. Over the same period, the richest 1% have also seen their share of consumption shrink.

The shift is driven mostly by gains in low- and middle-income economies, rather than changes in rich countries. Poorer countries have grown faster than rich ones and consumption has risen with incomes. The ratio of average American to Indian spending, for instance, has more than halved over the past 25 years, from more than 16 to less than eight.”

From The Economist.

“Over the long run, global inequality has declined dramatically across many dimensions as living standards have improved. While a substantial reduction in worldwide inequality occurred between 1990 and 2021, the last two years in that range reveal far slower progress, reflecting pandemic-era stagnation. These findings underscore the vital role of undisturbed markets in sustaining the trajectory of human progress, as well as the vulnerability of political liberty in times of perceived crisis. The Inequality of Human Progress Index reveals that pandemic-driven shocks to the global economy slowed advances, halting the momentum of earlier growth across many measures of human well-being and stalling progress toward the world becoming better off and more equal…

The pandemic’s disruption to globalization, trade, and other forms of economic activity measurably slowed the pace of human progress as captured by the Human Progress Index. However, the updated HPI and Inequality of Human Progress Index also demonstrate the remarkable resilience of the modern world. Even amid significant disruptions, on average, only a limited decline has been registered in living standards across most of the HPI’s dimensions.”

From Cato Institute.