The Politics of Struggling Americans

In 2023, the median household income in Alabama was about \$62,000 (see here). In the United Kingdom, the median household disposable income (after taxes and transfers, equivalized for household size) was £34,500 (see here), roughly \$49,000 to \$51,000 at purchasing power parity. The comparison is imperfect: the British figure nets out taxes while the American figure does not, and "equivalisation" adjusts for household composition in ways the American number ignores. Even so, the gap favors Alabama, and widens further after adjusting for Alabama's below-average price level. The median income for Black American households, \$56,490, also falls in the neighborhood of the British median (see here).

Consumption markers tilt the picture further. About 88 percent of American households used air conditioning in 2020 (see here); in the United Kingdom, the figure is below 5 percent (see here). Climate and building stock differ, but the gap is too large to attribute entirely to need. Housing tells a related story: the median new single-family home sold in the United States in 2023 was 2,286 sq ft (see here), large by any international standard. These are material-intensity indicators rather than welfare measures, but they suggest that American households convert income into durable goods, space, and environmental control at rates exceeding most peer countries.

On reasonable 2023 measures, then, the median material position in a low-income American state is competitive with that of a wealthy European country. Why does American politics so consistently frame economic policy as a response to widespread hardship?

One theory is that it is because people do not benchmark their circumstances against the UK median or national accounts. They benchmark against their parents' remembered story and demand accordingly.

A popular version of the comparison romanticizes the American past: a single income, cheap housing, and a broadly “easier” life. That nostalgia doesn’t square well with broad living-standard indicators. In 1967, real median household income (in 2023 dollars) was roughly \$55,820, and \$80,610 in 2023, an increase of more than 44 percent (see here). Housing quantity also rose markedly. In the Census Bureau’s series on the median square feet of new single-family houses sold, the median was about 1,650 sq ft in 1978 (the first year reported in this sold-size table) and 2,286 sq ft in 2023 (see here). Basic necessities absorbed a smaller share of household resources: USDA estimates Americans spent 17.0% of disposable personal income on food in 1960, versus 10.6% in 2023 (see here; this accounts for increase in food 'away from home'). Safety improved dramatically: the U.S. traffic fatality rate fell from about 5.06 deaths per 100 million vehicle miles traveled in 1960 to about 1.26 in 2023 (see here). And on health, long-run age adjusted cardiovascular mortality has fallen by roughly two-thirds since 1970 (with some recent setbacks), reflecting major improvements in prevention and treatment (see here). Like the UK, the past is another country, and a poorer one.

Another theory is that Americans are more insecure. A high median can coexist with widespread insecurity because many costs are lumpy and potentially catastrophic. On this view, the key cross-national differences are less about mean consumption and more about how well systems insure households against downside risk. Consider three domains.

• Unemployment: Canada’s Employment Insurance (EI) replaces 55% of insurable earnings and can be paid for 14 to 45 weeks depending on regional unemployment and insured hours (see here). In the United States, regular unemployment insurance in most states is available for up to 26 weeks, with state UI replacing about 40% of wages on average (though replacement varies a lot by state and claimant) (see here). The UK provides a flat £90/week (~13% of median wages) for 6 months (though there is some support that comes from 'Universal credit' which is up to a few hundred pounds.)
• Old age: In Canada, the official Market Basket Measure (MBM) poverty rate for seniors (65+) was 5.0% in 2023 (see here). In the United States, the official poverty rate for the aged population in 2023 was 9.7% (see here). (The UK and France do not publish commensurate statistics.)
• Healthcare: Out-of-pocket costs per capita run roughly \$1,425 in the US, \$941 in Canada, and \$764 in the UK (see here). The distinctively American feature is not only the level but the link between coverage and employment for many working-age people: KFF reports that about 154 million people under 65 are covered by Employer-Sponsored Insurance (ESI) (see here), and employer contributions are large on average, e.g., in 2024 the average family premium was \$25,572 and workers contributed \$6,296, implying employers paid roughly three-quarters of the premium on average (see here). That arrangement can feel stable while employed, but it raises a natural question about what happens at job-loss “seams.” In expansion states, Medicaid is designed to be a relatively continuous safety net: Medicaid/CHIP can be applied for any time of year, and KFF notes Medicaid has no open enrollment period. As of early 2026, KFF counts 41 states (including D.C.) that have adopted Medicaid expansion and 10 that have not, with expansion generally covering adults up to 138% of the federal poverty level. For those who do not qualify for Medicaid, Marketplace coverage can be heavily subsidized: for the 2024 plan year, CMS stated that four in five HealthCare.gov customers could find coverage for \$10 or less per month after subsidies, and KFF similarly notes that most Marketplace shoppers receive subsidies and that enhanced subsidies were set through 2025 under then-current law.
  
  Finally, the remaining uninsured are not a monolith. In the CPS ASEC, the uninsured rate was 8.0% in 2023, corresponding to about 26.4 million people in one widely used summary of the same release. And a large share of the uninsured are eligible for help but not enrolled: using 2022 microdata, KFF reports that among 25.6 million nonelderly uninsured, roughly 25% were eligible for Medicaid and 35% for subsidized Marketplace plans yet remained unenrolled, while about 1.4 million people were in the ACA “coverage gap” in the ten non-expansion states; Texas alone accounted for 42% of the gap (Florida 19%, Georgia 14%).

The US trails France and Canada on unemployment generosity and elderly poverty rates, but outperforms the UK on unemployment replacement. On healthcare, Americans face higher out-of-pocket costs and employment-tied coverage friction, yet the uninsured are disproportionately eligible for subsidized coverage they haven't claimed rather than locked out entirely. The insecurity theory has force in some domains, but it cannot explain why American political rhetoric treats material hardship as the defining fact of national life.

If neither nostalgia nor insecurity fully accounts for the intensity, a third possibility presents itself: the frame persists because it serves political purposes. Redistribution politics has structural advantages that other forms of politics do not. Transfers and subsidies produce visible benefits on a political timescale. Programs create constituencies that can be mobilized and rewarded. The moral case ("help people now") is rhetorically simpler than "fund uncertain long-horizon research." And the attribution asymmetry is severe: hardship is personalized (my medical bill, my rent), while long-run progress is diffuse and hard to credit to any particular policy or politician.

The hidden cost of this frame is what it crowds out. A politics centered almost entirely on near-term relief leaves little room for a complementary politics of systematic investment—particularly in research whose benefits are delayed, probabilistic, and shared by everyone, which means owned by no one in particular. As I note in another blog,

"[i]n 2023, federal and state governments spent on the order of \$1.9 trillion on health care programs and benefits. Over the same period, the NIH budget was about \$48 billion and the CDC budget about \$9 billion. Within NIH, the National Institute on Aging received about \$4 billion, and the Division of Aging Biology about \$337 million. These are not precise apples-to-apples comparisons, but they capture the scale: we devote orders of magnitude more to paying for care than to understanding and slowing the processes that generate late-life disease."

If the research share rose from about 2.8 percent to 5 percent, the increment would be roughly \$45 billion per year. Spread across 330 million people, that is about \$135 per person per year. Health economists often value a quality-adjusted life year in the range of \$50,000 to \$150,000. At \$100,000 per QALY, the one-year spending increment breaks even if it buys about 0.00135 QALYs per person, which is roughly half a day of healthy life per American.¹ That is the threshold. If an additional \$45 billion in research spending could produce, on average, an extra half-day of healthy life per American per year, it would pay for itself by standard welfare accounting before counting spillovers like reduced disability, lower caregiver burden, and productivity gains. (Because biomedical knowledge is partly durable, effective treatments, diagnostics, and prevention strategies persist and diffuse, so the benefits of a given year’s research spending can accrue to many future cohorts so the breakeven is likely even smaller.)

Yet this politics is rare. Innovation spending is handicapped by its own virtues. The benefits arrive late, often after the politicians who funded them have left office. Attribution is contested. The beneficiaries are everyone, which means the constituency is no one in particular. And the costs are line-item visible, easy to attack as waste or misprioritization.

The past is another country, but so, potentially, is the future—if someone decides to fund the trip.

¹ Note: A 20 to 30 year delivery horizon does not mean the benefits bypass current Americans. It is the horizon on which many of today’s working-age adults become tomorrow’s high-risk patients. Shifting the frontier on that timeline is therefore not only an investment in future cohorts, but an insurance policy for large parts of the existing population as it ages into the periods when health spending and disability are most concentrated.