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Outside the Box

American workers are producing more than ever — but a decades-long wage gap has left them struggling with even the basics

America’s cost-of-living crisis is being misdiagnosed. Yes, housing is expensive. Health-insurance premiums are punishing. Childcare costs rival a second mortgage. But the core problem isn’t runaway prices. It’s that wage growth for the middle of the country has been structurally weak for decades.

For years, policymakers celebrated cheap consumer goods as proof that globalization was working. After China entered the World Trade Organization in 2001, U.S. corporations shifted production overseas at an unprecedented speed. The result was a surge in imports and a collapse in the price of tradable goods such as electronics, apparel and furniture.