In December 2013, a Congressional Budget Office (CBO) study looked at historical tax burdens borne by Americans at all income levels. Among other things, the CBO examined after-tax income trends for each quintile of American households since 1979, including not just wages but benefits and transfer payments. Using the CBO data, the Brookings Institution economist Gary Burtless has shown that from 1979 to 2010, the last year for which data are available, the bottom fifth’s after-tax income in constant dollars rose by 49 percent. The incomes of households in the second lowest, middle, and fourth quintiles increased by 37 percent, 36 percent, and 45 percent, respectively. The poor and the middle class got richer.
Occupational licensing has grown significantly since the 1950s, when roughly one out of every 20 workers were required to obtain a government license. Economists Morris Kleiner and Alan Krueger estimate that an astounding one out of every three US workers needs government permission before they are legally allowed to work today. Many of these occupations have traditionally provided low-income Americans with a path to self-sufficiency and upward mobility. By erecting barriers to entry to these occupations, we erect barriers to entry to achieving the American dream.
Discussing Michael Cannon’s noble crusade against the continuing calamity that is Obamacare, David Henderson highlights just how pathetically naive many economists remain today about the most basic tenets of public-choice economics. These are economists who have in their ‘scientific’ analyses of public policies the following step: “Then a miracle occurs.”
Matt Ridley takes on today’s Luddites. A slice:
Automation has made us so much richer than our ancestors, by cutting the cost (in hours worked) of most of the services that we desire, that we have been able to afford to employ more and more people to amuse or pamper us. Most people can afford to eat out, for example — an unimaginable luxury only a century ago.
If the worst comes to the worst, and the androids take over absolutely every kind of work, providing all our daily needs so cheaply and efficiently that we just don’t need people at all, not even as politicians — why, then what’s the blooming problem? The point of work is so we can consume, not vice versa. Do not forget that the poor benefit more than most from automation — as consumers of ever cheaper goods and services.
The great Norman Borlaug would have celebrated his 100th birthday yesterday. (HT Fred Dent)
