In an op-ed in this weekend’s Barron’s I challenge the myth that middle-class Americans of today should envy – or look with nostalgia on the life-styles of – middle-class Americans of the 1950s (at least as far as material consumption is concerned). Unfortunately, the essay is gated for now. Here, though, are my opening paragraphs:
Many Americans, including some famous economists, yearn for the good old days. They talk about the U.S. economy of the 1950s with loving nostalgia, which they contrast with a parallel story about the alleged economic stagnation of middle-class Americans over the past several decades.
Typical is Paul Krugman’s assertion in the New York Times last November that “America in the 1950s made the rich pay their fair share; it gave workers the power to bargain for decent wages and benefits; yet contrary to right-wing propaganda then and now, it prospered. And we can do that again.”
In a nutshell, this variety of left-wing propaganda holds that middle-class Americans are no longer prospering as they did in the 1950s because top income-tax rates and labor-unionization rates are each much less than half of what they were in the 1950s.
While the 1950s were indeed a decade of economic growth, the notion that the standard of living of ordinary Americans today is not much higher than it was back then is a myth. Regardless of causes, average Americans today are much more prosperous than they were 60 years ago.
Perhaps the best evidence that today’s Americans are better off than Americans in the age of Eisenhower is the fact that life expectancy is now 6.3 years longer. Compared with the average American in the 1950s, today’s average American enjoys 9% more time on Earth. The average time that grandparents remain alive to enjoy their grandchildren is now about 25% longer than in the 1950s.
And here’s my concluding paragraph:
Reasonable people can argue about whether the higher quality of education and health care justifies the higher costs of these services. But no reasonable person familiar with the costs and full range of consumer options available in 2013 can reach any conclusion other than that ordinary Americans today are far more prosperous than at any time in the past.