Posted on 01/24/2013 6:25:41 AM PST by SeekAndFind
A favorite "progressive" trope is that America's middle class has stagnated economically since the 1970s. One version of this claim, made by Robert Reich, President Clinton's labor secretary, is typical: "After three decades of flat wages during which almost all the gains of growth have gone to the very top," he wrote in 2010, "the middle class no longer has the buying power to keep the economy going."
This trope is spectacularly wrong.
It is true enough that, when adjusted for inflation using the Consumer Price Index, the average hourly wage of nonsupervisory workers in America has remained about the same. But not just for three decades. The average hourly wage in real dollars has remained largely unchanged from at least 1964—when the Bureau of Labor Statistics (BLS) started reporting it.
Moreover, there are several problems with this measurement of wages. First, the CPI overestimates inflation by underestimating the value of improvements in product quality and variety. Would you prefer 1980 medical care at 1980 prices, or 2013 care at 2013 prices? Most of us wouldn't hesitate to choose the latter.
Second, this wage figure ignores the rise over the past few decades in the portion of worker pay taken as (nontaxable) fringe benefits. This is no small matter—health benefits, pensions, paid leave and the rest now amount to an average of almost 31% of total compensation for all civilian workers according to the BLS.
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.
(Excerpt) Read more at online.wsj.com ...
WHY WE’VE NEVER HAD IT SO GOOD ( ACCORDING TO THE AUTHORS ):
CONSIDER:
* 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.
* 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.
* 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.
* What’s true for long-distance travel is also true for food, cars, entertainment, electronics, communications and many other aspects of “consumability.” Today, the quantities and qualities of what ordinary Americans consume are closer to that of rich Americans than they were in decades past.
Stand up Bob,Oh.......!
The middle class isn’t stagnant - it is showing plenty of movement.
It is sliding into the lower income class - that’s movement.
And regardless of the statistical arguments, the vast majority in the middle class FEEL and BELIEVE this is happening.
In the present paradigm that means it may as well be reality. And that means Obama is winning the argument that our current economic and social systems must be “changed”.
Arguments like these are intended to make people accept the “new normal”...
and worse, to think that it’s either always been this way or that this way is better than it’s ever been.
The libs have been complaining about the “stagnant” middle class since Reagan. Thomas Sowell does an excellent job about once a year popping the myth.
And thus, they are not spending - which is making it come true. Regardless of arguments over the merits of thrift, our economy was not built to handle a sudden shift away from a consumerist mentality. Job losses will continue to mount, and people will be forced to spend even less...which will lead to even more job losses. The Great Contraction is well underway.
I call BS on this article. Take travel..say I want to fly to San Diego to surf... Plane fair, renting a car, hotel and hotel taxes..parking fees..$6:00 hotdog ..$5:00 beer at beach. Rentng a board. Getting lesson. I’d bet your into prices that were unimaginable 20 years ago.
My brother took his 3 kids to Wrigley Field last summer. Between tickets,parking, food and a few trinkets it was $450.00. He’s a wealthy guy and said never again
As for prices at Wrigley Field, there's a heck of a lot more going-on there than just inflation.
What you’re saying doesn’t make sense. Wages have scarcely gone up since the 80s. Flying out to go sking in Colorado for a week used to be something a upper middle class family could afford. Now it’s solely for the rich. I could keep Giving examples....
What you’re saying doesn’t make sense. Wages have scarcely gone up since the 80s. Flying out to go sking in Colorado for a week used to be something a upper middle class family could afford. Now it’s solely for the rich. I could keep Giving examples....
I can cite a personal example.
In the 70s, when I was a kid, my father was able to afford his mortgage, my stay-at-home mom, me, and did I mention we went to Europe every other year to visit relatives in Sweden and Italy? And on those years we didn’t go to Europe, we went to places like Japan, Egypt, etc.
My father was a baker. Yes, a baker.
Purchasing power was obviously higher in the past. How many families could afford to do what I just mentioned on a working-class salary today?
By 2010s standards, I had a childhood of the rich and famous. Yet my parents were solidly working-class.
Cubs tickets and ski vacations in Colorado are also luxury items. (Incidentally, I am nowhere near "upper middle class," and I can still afford a Colorado ski vacation--it's new ski equipment I can't afford, but that's another issue altogether).
Now, ask yourself, if your dad bought your mom a washer and dryer, how many hours did he work for it? How much of a proportion of his take-home pay did he spend for them?
He owned two cars. Well, three at one time, but he restored one and sold it off. Yes to both washer and dryer. Dishwasher...well, I was the dishwasher. And “grounds maintenance”. House had central air and heating, and it was 1550 sq.ft. With attached garage.
I honestly don’t know how many hours we would’ve worked in the 70s for a washer and dryer. I know he NEVER used credit cards.....he despised them, and always paid cash, and always negotiated prices, like when the central air and heat was installed. He managed to negotiate a 15% reduction in the price....he had the gift of gab I guess. :) He didn’t replace things too often, like the TV. We had the same TV set for 18 years as I recall. He also performed all of his own auto maintenance, as well as pretty much all the construction around the house (he had a knack for building things, as well as being something of an electrician). He was also a very good hunter, so I grew up eating venison until it was coming out my ears, LOL.
But he and my mother loved travel, and I inherited the sand in my shoes from them, I’d say.
The authors mentioned women and immigrants moving into the workforce dragging down the average, but it should also be mentioned that the population of Blacks and Hispanics is larger than thirty years ago as well. Those two ethnic groups tend to have more low-paying jobs than other ethnic groups even ignoring the illegal population.
In other words, your father worked "harder" to buy that washer for your mom in the 1970's. Boudreaux argues that it is an example of how living standards have increased. It's really not that controversial of an argument, and he provides the numbers. If people feel differently than I agree, they have a problem.
Granted that's outrageous (one reason I don't go to ballgames) but nevertheless, the parks are filled. Who then is going to the games? Just the rich? I doubt it. I'll assume that most of the fans are non-rich. And if people are willing to pay those crazy prices, the clubs are quite happy to charge them the limit.
But going to a ballgame is hardly a necessity. And the facts are the cost of feeding, clothing, and sheltering a family are a lot less than 30-50 years ago. Candy bars are also a lot higher, but they're hardly a staple food.
than = then
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