January 23, 2013

NO ONE HAS IT HARDER THAN THEIR FATHER DID:

The Myth of a Stagnant Middle Class : Household spending on food, housing, utilities, etc. has fallen from 53% of disposable income in 1950 to 32% today. (DONALD J. BOUDREAUX AND MARK J. PERRY, 1/23/13, WSJ)

Third and most important, the average hourly wage is held down by the great increase of women and immigrants into the workforce over the past three decades. Precisely because the U.S. economy was flexible and strong, it created millions of jobs for the influx of many often lesser-skilled workers who sought employment during these years.

Since almost all lesser-skilled workers entering the workforce in any given year are paid wages lower than the average, the measured statistic, "average hourly wage," remained stagnant over the years--even while the real wages of actual flesh-and-blood workers employed in any given year rose over time as they gained more experience and skills.

These three factors tell us that flat average wages over time don't necessarily support a narrative of middle-class stagnation. Still, pessimists reject these arguments. Rather than debate esoteric matters such as how to properly adjust for inflation, however, let's examine some other measures of middle-class living standards.

No single measure of well-being is more informative or important than life expectancy. Happily, an American born today can expect to live approximately 79 years--a full five years longer than in 1980 and more than a decade longer than in 1950. These longer life spans aren't just enjoyed by "privileged" Americans. As the New York Times reported this past June 7, "The gap in life expectancy between whites and blacks in America has narrowed, reaching the lowest point ever recorded." This necessarily means that life expectancy for blacks has risen even more impressively than it has for whites.

Americans are also much better able to enjoy their longer lives. According to the Bureau of Economic Analysis, spending by households on many of modern life's "basics"--food at home, automobiles, clothing and footwear, household furnishings and equipment, and housing and utilities--fell from 53% of disposable income in 1950 to 44% in 1970 to 32% today.

One underappreciated result of the dramatic fall in the cost (and rise in the quality) of modern "basics" is that, while income inequality might be rising when measured in dollars, it is falling when reckoned in what's most important--our ability to consume. Before airlines were deregulated, for example, commercial jet travel was a luxury that ordinary Americans seldom enjoyed. Today, air travel for many Americans is as routine as bus travel was during the disco era, thanks to a 50% decline in the real price of airfares since 1980.

Shhhh...the white middle class doesn't like to be bothered with facts when they're whingeing.
Posted by at January 23, 2013 8:20 PM
  
blog comments powered by Disqus
« & I JUST SENT BOOKS...: | Main | JUST MAKE EVERYONE PAY OUT OF THEIR OWN POCKET: »