October 6, 2003
LOSING GROUND?:
The Notion of Poverty is Extremely Subjective (Bruce Bartlett, October 6, 2003, NATIONAL CENTER FOR POLICY ANALYSIS)
Two hundred years ago, Adam Smith recognized that our concept of adequate living standards will change over time. Today's luxuries become tomorrow's necessaries. "By necessaries," he said, "I understand, not only the commodities which are indispensably necessary for the support of life, but
whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without."Smith noted that a linen shirt would be considered necessary in his time even though the ancient Greeks and Romans got along fine without linen at all. So too, many items that did not exist even in the recent past are often considered necessary for life today, even by the poor.
In a supplementary report that got no press attention, the Census Bureau looked at some of these new necessities and their ownership by the poor. It turns out that many poor people today own appliances that were considered luxuries when I grew up, and some would still be considered luxuries today. For example, 91 percent of those in the lowest 10 percent of households--all of whom are officially poor--own color TVs, 74 percent own microwave ovens, 55 percent own VCRs, 47 percent own clothes dryers, 42 percent own stereos, 23 percent own dishwashers, 21 percent own computers, and 19 percent own garbage disposals.
When I grew up in the 1950s, only the wealthy owned color TVs, clothes dryers, stereos, dishwashers and disposals. These were all considered luxuries. We got by with black and white TVs, hanging our wet clothes on a line to dry, washing dishes by hand and throwing our potato peels in a pail instead of down the drain. So did most other middle class families. Not even the wealthiest people owned microwave ovens, VCRs or computers. Some economists have suggested that using consumption, rather than income, as the measure of poverty gives a better idea of the true economic condition of the poor. They note than many of those officially classified as poor based on income actually live quite well. For example, many are elderly who own their homes free and clear. Others may just be poor temporarily and can draw down saving to tide them over. An analysis by economist Daniel Slesnick found that the official poverty rate of 13.8 percent in 1995 would actually have been 9.5 percent if based on consumption rather than income.
The Wife was watching some dam Food Network show last night and they were doing like a four-hour special on the Kitchen-Aid Mix Master--actually, it could be a mini-series, you'll have to check local listings. At any rate, the one thing that stuck from their Castroesque exposition on the thing is that when they were first around in the 50s they weren't in average homes because they sold for something like $280, or $2,000 in inflation adjusted dollars. It's within a few dollars of that today in 2003 dollars. Posted by Orrin Judd at October 6, 2003 6:55 PM
That knife slices both ways.
When I was growing up, we didn't have even black and white TV or any of that other stuff aside from a washing machine.
On the other hand, a guy delivered fresh milk right to the door three times a week. Try pricing that today.
Posted by: Harry Eagar at October 6, 2003 11:00 PMHarry:
I agree with you there. We were poorer but our lives were better.
Posted by: oj at October 6, 2003 11:07 PMOn the other hand we'd be throwing away a lot
of milk, because I don't think we could consume
all of that hearty goodness.
The kids drink it but the wife and I don't touch
it. If milk were the staple it once was, it
would be cost effective to deliver.
Different knives. Cost of living as compared to quality of life.
Posted by: jefferson park at October 7, 2003 11:23 AMThat's part of it, jefferson, but my main point is that the economy is split now. Everything that can be commoditized is being commoditized, meaning (usually) an overall increase in average quality while eliminating the truly top quality varieties; and the gradual disappearance of all goods and (more commonly) services that connot be commoditized.
Whether you think that's an improvement depends on what you like.
There are something like 70K items on sale at a big supermarket. Presumably, few of us ever purchase any of about 80% of them. The increase in the supply and capability and decrease in the price of, say, air fresheners does not enhance my quality of life, because I don't use 'em.
Posted by: Harry Eagar at October 7, 2003 3:19 PMActually, the coming thing in consumer sales is mass customization.
Posted by: David Cohen at October 7, 2003 4:43 PMYeah, they said that about my field (broadly, information), but it hasn't happened yet.
There are many more outlets but not much more real variety. The range available is, probably, not as high as it used to be. And customization, despite lots of talk back in the '80s, never happened.
Posted by: Harry Eagar at October 7, 2003 10:18 PMWhat are blogs but mass (small mass) customized newspapers?
Posted by: oj at October 7, 2003 10:20 PMThey are no more customized than subscribing to a special interest magazine.
The idea that you would order up your news seems to have been stillborn.
It remains to be seen how long blogs last. They presumably take up a fair amount of effort, but most don't seem to generate much income.
The idea of "customization" needs to be defined.
In 1930, a custom car meant perhaps a handbuilt, one-off body on a Rolls chassis. In 1955, it was chrome on a Mercury.
I don't think we're likely to get back to the kind of custom auto product that the rich enjoyed in 1930; and for mid-price cars your chance of ordering even the color you like is less than it was in 1960.
Perhaps David has some examples, but the only attempts I know about to customize products were in audio equipment and computers. Neither seems to amount to much.
Posted by: Harry Eagar at October 9, 2003 1:20 AM