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 ...
Now I have two siblings who are worth more than a million and maybe a third, but my older brother won't tell me how much he has. I live in a nice home. Last year I visited my youngest brother who was struggling financially for a number of years. His house is nicer than mine. In short, I might be the poorest member of my siblings, and I did alright. Most of my siblings have traveled extensively overseas. We all have a lot more than what my parents had material-wise.
So even though it's a near-monopoly product, even the Cubs understand that the quality of their product does not match the market demand for tickets to see it.
There’s not much concern about middle class salaries decreasing. The real concern is with the middle class being tossed in the ditch, hundreds of thousands per month, again. I doubt that many readers will be distracted from that.
I have no doubt that he worked longer hours to buy that washer and dryer than the average person would work today. I know lots of people who sometimes come across old newspaper ads from the 30s and 40s, and they’re like, “Wow! Look how cheap a car was back then” or “I could buy a house for $_________ “. Yes, that’s all quite true. However, I come back with how much did people make back then, and what level of disposable income did they have?
I admit my childhood was likely an anomaly, in that my parents were frugal when they needed to be, but knew how to save income in order to do extraordinary things. Part of that meant when I was a child, I wasn’t wearing Calvin Klein jeans....I was wearing Toughskins (and being ribbed for it, I might add). I wasn’t wearing Nikes. I was wearing shoes from K-Mart. Hell, I didn’t even get a pair of brand-name sneakers until I was 15, a pair of Pumas, that I’d worked for and saved up to buy.
Oh yeah.....Toughskin jeans. Memories of childhood, LOL :)
In the last two years my wife and I have gone to concerts of well known entertainers like Paul Simon, Neil Diamond, Elton John, Rod Stewart, Stevie Nicks, and a few others. The prices for our tickets were usually over $100 per seat. And there were also the hotel and restaurant prices. While I've always wanted to see some of those entertainers live, I balked at the ticket prices. But the look from my wife told me I'd better agree to go.
The trope is well refuted by Boudreaux and Perry, but (as they doubtless know) its function has never been to catalyze serious economic analysis. It functions merely as an excuse for interventionist politicians who want excuses to further expand the power of government in order to reward their political allies. The trope suckers voters into supporting politicians who claim that they’re for the struggling middle class, but intend to succor union leaders, environmental zealots, the education establishment and so on. Expanding the scope and cost of the government is exactly the opposite of what would actually benefit the middle class, namely lower taxes, increasing private investment, a more efficient educational system, and less waste of our limited resources on political boondoggles.
I try to explain this to my fellow middle classers and they sneer and call me a racist.
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