Here’s a letter to the Washington Post:
You report that Jason Furman, Chairman of the Council of Economic Advisors, recently “displayed a chart showing how food stamps and other social programs had lowered poverty dramatically over the past half century…. But the graph also showed that the economy itself had done nothing for the poor: Only government dollars had” (“Economist Jason Furman is the wonkiest wonk in the White House,” Feb. 13).
Whatever the consequences of government welfare programs, Mr. Furman is mistaken to assert that, over the past half century, “the economy itself had done nothing for the poor.”
Here’s a link to a 2008 article with its own charts.* Figure 2 shows that the percentage of poor American households in 2005 to have refrigerators, stoves, color televisions, air conditioning, and automatic dishwashers is higher than was the percentage of all American households in 1971 to have these amenities. And my own research** suggests an important reason for this happy fact: the amount of time that ordinary (“non-supervisory”) workers must work in order to earn enough income to buy these (and many other) products is today much lower than it was decades ago.
For example, to buy a 22 cubic feet refrigerator-freezer, such a worker in 1975 had to toil for 140 hours. To buy the same size refrigerator-freezer today, the typical American worker must work only 52 hours. To buy a 30″ electric range and oven cost the typical American worker in 1975 125 hours of work; today such a range and oven costs the typical American worker only 21 hours of work.
Similar reductions in work-time costs have occurred for food, clothing, and countless other goods and services – a trend that is strong evidence that “the economy itself” continues to improve the living standards of middle-income and poor Americans.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
* W. Michael Cox and Richard Alm, “How Are We Doing?” The American, July/August 2008
I should add that when I write, in the letter, “my research,” I mean research that I do that is inspired by – and follows very closely – research done along these lines by Mike Cox and Richard Alm.