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You can read my column beneath the fold.
We’re much wealthier today
The release late last month of the new Census Bureau report on income and poverty in America has ignited welfare-state champions into a frenzy of anguish over the economic plight of ordinary Americans.
I, too, have read this report. It inspires me to repeat here a mental experiment that I recently did on my blog at www.cafehayek.com.
That report shows real (inflation-adjusted) median household income in America to have risen 31 percent between 1967 and 2004. This increase in real income is not impressive, for it means that real household income grew at an average annual rate since 1967 of much less than 1 percent. Seems lame.
But ask: Would you prefer to live in 1967 with today’s real median household income ($46,326) or live today with 1967’s real median household income ($35,379)? (These figures are expressed in 2005 dollars.)
Given these two options, I would certainly choose to live today with only 1967’s income. The reason is that today’s economy offers so very many more options than did the economy in 1967.
Today I can buy cell-phone service; today I can buy cable television with hundreds of channels, including ones specializing in sports, cooking and science; today even the cheapest automobiles are safer and more reliable than were the finest cars for sale in 1967; today I can buy telephone answering machines (with caller-ID), microwave ovens, compact discs, personal computers, Internet service and MP3 players.
Today’s houses are bigger, on average, than they were a few decades ago. They’re also better equipped and more affordable.
Today’s coffee is far superior to the coffee Americans regularly drank just a few years ago; a huge selection of books is available at the neighborhood Barnes & Noble or Borders — or through online retailers such as Amazon.com.
The variety of foods sold at restaurants and in supermarkets is now much larger and more interesting. (The average number of items offered for sale in today’s typical supermarket is 45,000, up from about 5,000 in the late 1960s.)
Today I can buy an inexpensive quartz wristwatch that keeps time with remarkable accuracy. Today, because of sites such as eBay, I have access to a thicker market for selling my junk. Today I can buy a powerful electronic calculator. Today I can take digital photographs and digital videos and send them by e-mail, instantaneously, to family and friends around the world.
Today I can pay even for small purchases with a credit card — or if I prefer to pay with cash, I can get that cash from an ATM.
Today I can have packages delivered overnight.
Today, anesthesia is much better — as anyone who had teeth filled in the 1970s and again much more recently can attest. Many medicines available today were unavailable back then. Today I can wear not only soft contact lenses, but disposable ones that are cleaner and more convenient than standard lenses. And if I choose, I can have my vision restored to 20/20 through Lasik surgery.
Today we spend fewer hours per day on the job than we did just a few decades ago. In 1960 the average length of the American work week was 38.6 hours; in 1973 it was 36.9 hours; in 1996 (the latest year for which I have data), this figure was down to 34.4 hours. (From 1870 to 1996 the trend in the length of the work week has been steadily downward; there’s no reason to think that this trend has reversed itself in the last 10 years.)
And because the average number of days worked per year has also fallen, the average American worker in 1996 spent nearly 200 fewer hours annually on the job than did his counterpart in 1973.
Today, diapers are disposable.
Today I can google.
And perhaps most importantly, today Americans’ life expectancy is at a record high.
Of course, I’m happy that I live today with today’s income. But again, if forced to choose between living 30 or 40 years ago with today’s higher income and living today with the income earned by the average American 30 or 40 years ago, I wouldn’t hesitate for a nanosecond to choose living today with the income from the past.
And I suspect that most people who reflect on this choice knowledgeably would make the same choice. If I’m correct then, the growth in real dollar income between 1967 and today vastly underestimates the improvements to everyday life brought to us by economic growth during the past 40 years.