America’s Middle-Class: Doing Better than Ever

by Don Boudreaux on January 24, 2013

in Growth, Myths and Fallacies, Standard of Living, Truth-seeking & ideology

In today’s Wall Street Journal, Carpe Diem’s Mark Perry and I offer evidence against the frequently heard trope that America’s middle-class has stagnated economically since the 1970s.  (To read the entire essay at the WSJ requires that you have a subscription to the WSJ, but AEI just put up, at its site, the full text.)  Here’s a slice from Mark’s and my essay (link added):

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.

Mark here has a graph of some of these data.  (And here’s a spreadsheet of the BEA data from which the above figures are calculated.)

Finally, note this comment, at the WSJ‘s page for our article, by the always-insightful George Leef:

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 believe that George is correct.  If I were a “Progressive” I would not deny the facts that Mark and I report in our essay.  I would, instead, trumpet and celebrate these facts, insisting that they are the happy and as-promised results of government programs and institutions such as Social Security, Medicare, the National Science Foundation, the U.S. Department of Education, Fannie Mae and Freddie Mac, rarely broken streams of deficit financing since the late 1960s, the ITC’s diligence in protecting Americans from dangerously low-priced (“dumped”) imports, and on and on.  (Not being a “Progressive,” I believe that the the continuing improvement in the economic well-being of America’s middle-class occurs despite, rather than because of, these government programs.  But contrary to what many “Progressives” seem instinctively to believe, there’s nothing at all about the facts reported by Mark and me that, standing alone, refute the case for government intervention and strengthen the case for freer markets.)

But to so celebrate the continuing improvement in the economic well-being of America’s middle-class (and America’s poor, btw) would be to suggest that yet further increases in the intensity, reach, and discretion of Uncle Sam’s power might not be so urgently needed after all.  Any such recognition of the continued improvement, at least until recently, of the economic well-being of middle-class Americans might scratch the itch that, when left unscratched, prompts so many people to yearn to be led to some imaginary (and always rather gauzily understood) promised land by secular saviors – charlatans whose theatrics and flowery, if largely empty, speeches so impress and enchant “Progressives.”

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