Again over at Wonkblog (they do such good work), Jim Tankersley has a great post contesting a recent op-ed in the WSJ that says the middle-class is doing better than we think because their standard of living has constantly improved, even if their wages haven't.
This WSJ op-ed reminded me of The Heritage Foundation's Refrigerator Ownership report. They don't call it that, but I do. Much like the WSJ article the report tries to redefine poverty. People have TVs, Xboxes, and refrigerators in overwhelming percentages of poor households. They aren't as poor and in need as some would suggest.
Metrics like this have always struck me a fallacious. It's smoke and mirrors and doesn't get to the reality of income disparity. I'm glad Tankersley challenges it.
This WSJ op-ed reminded me of The Heritage Foundation's Refrigerator Ownership report. They don't call it that, but I do. Much like the WSJ article the report tries to redefine poverty. People have TVs, Xboxes, and refrigerators in overwhelming percentages of poor households. They aren't as poor and in need as some would suggest.
Metrics like this have always struck me a fallacious. It's smoke and mirrors and doesn't get to the reality of income disparity. I'm glad Tankersley challenges it.
Jim Tankersley has a great post contesting a recent op-ed in the WSJ that says the middle-class is doing better than we think because their standard of living has constantly improved, even if their wages haven't.
ReplyDeleteThe problem with Tankersley's analysis is so glaring that even Matt Yglesias immediately picked up on it. Even if we accept Tankersley's expanded definition of what basics entail and that they account for 62 percent of consumer spending in 2011 versus 64 percent in 1970, we still have to admit that both quality and quantity have increased. For roughly the same proportion of money spent in 1970 we have access to better TVs and other household items, cars and health care while more people than ever have a college education. If one's expenditures are held constant but the quality increases, then pretty much by definition one's standard of living has increased. Thus, Boudreaux and Perry -- even accepting Tankersley's modified definition -- are still correct that the middle class is doing better than ever.
What does "doing better than ever" mean though? We have nice TVs, but if we're living in fear of slipping on ice and not being able to work are we doing better? If we have a refrigerator and a freezer, but our kids have no choice but to graduate from college with tens of thousands of dollars in debt because states aren't funding education like they used to, are we doing better? And if this is happening while the top income earners are expanding on their possession of wealth, is the middle class doing better off?
ReplyDeleteCome now Colin, it's a little comfort to the working poor to have a color television is they have to declare bankruptcy because a child got sick.
What does "doing better than ever" mean though?
ReplyDeleteThis isn't difficult. Would you rather trade placed with a middle class person living in 1970? Would most people, knowing that it would entail giving up all access to all medical advancements made since then? Using crappy cars? No computer? No internet? No Blu-ray and HDTV? No 300 channels? No Whole Foods (pretty much all grocery stores are miles ahead of where they were in the 70s)? Worse restaurants (try finding Thai food in 1970)? No cell phones? No free long-distance? Smaller homes? Expensive air fare? Worse odds of owning an AC, dishwasher or microwave? You really think most middle class people would either trade places with someone from back then or be indifferent to the choice? If you say no, then you concede the argument that middle class living standards have improved.
our kids have no choice but to graduate from college with tens of thousands of dollars in debt because states aren't funding education like they used to
You're right, government is not funding higher education like it used to -- it is providing even more money. As Usgovernmentspending.com notes, government spending on higher education has increased from
1.49 percent of GDP to 1.6 to 1.8 percent of GDP currently.
And if this is happening while the top income earners are expanding on their possession of wealth, is the middle class doing better off?
What is the relevance of the what the top income earners are making? My standard of living has absolutely zilch to do with the income levels of Warren Buffet, Bill Gates or anyone else. Does yours? If the rich were losing wealth would the middle class be better off?
Come now Colin, it's a little comfort to the working poor to have a color television is they have to declare bankruptcy because a child got sick.
Of course, we don't evaluate the standard of living based on anecdotes or individual scenarios, but statistical data, which indicates that broadly speaking things are better. And why are you talking about the working poor anyhow -- the article was about the middle class.