9.16.2006
Progress or Regress? (NYTimes.com)
By PAUL KRUGMAN
Published: September 15, 2006
Is the typical American family better off than it was a generation ago? That’s the subject of an intense debate these days, as commentators try to understand the sour mood of the American public.
But it’s the wrong debate. For one thing, there probably isn’t a right answer. Most Americans are better off in some ways, worse off in others, than they were in the early 1970’s. It’s a subjective judgment whether the good outweighs the bad. And as I’ll explain, that ambiguity is actually the real message.
Here’s what the numbers say. From the end of World War II until 1973, when the first oil crisis brought an end to the postwar boom, the U.S. economy delivered a huge, broad-based rise in living standards: family income adjusted for inflation roughly doubled for the poor, the middle class, and the elite alike. Nobody debated whether families were better off than they had been a generation ago; it was obvious that they were, by any measure.
Since 1973, however, the picture has been mixed. Real median household income — the income of the household in the middle of the income distribution, adjusted for inflation — rose a modest 16 percent between 1973 and 2005. But even this small rise didn’t reflect clear gains across the board. The typical full-time male worker saw his wages, adjusted for inflation, actually fall; the typical household’s real income was up only because women’s wages rose (although by far less than everyone’s wages rose during the postwar boom) and because more women were working.
The debate over the state of the middle class, for the most part, is about whether these numbers understate or overstate the true progress achieved by typical families. The optimists point to technological advances that, they argue, don’t get reflected in official estimates of the standard of living. In 1973, you couldn’t chat on a cellphone, watch a video or surf the Internet; many medical conditions that are now easily managed with drugs were untreatable; and so on.
(More ... Progress or Regress? - New York Times) ¶ 12:04
Published: September 15, 2006
Is the typical American family better off than it was a generation ago? That’s the subject of an intense debate these days, as commentators try to understand the sour mood of the American public.
But it’s the wrong debate. For one thing, there probably isn’t a right answer. Most Americans are better off in some ways, worse off in others, than they were in the early 1970’s. It’s a subjective judgment whether the good outweighs the bad. And as I’ll explain, that ambiguity is actually the real message.
Here’s what the numbers say. From the end of World War II until 1973, when the first oil crisis brought an end to the postwar boom, the U.S. economy delivered a huge, broad-based rise in living standards: family income adjusted for inflation roughly doubled for the poor, the middle class, and the elite alike. Nobody debated whether families were better off than they had been a generation ago; it was obvious that they were, by any measure.
Since 1973, however, the picture has been mixed. Real median household income — the income of the household in the middle of the income distribution, adjusted for inflation — rose a modest 16 percent between 1973 and 2005. But even this small rise didn’t reflect clear gains across the board. The typical full-time male worker saw his wages, adjusted for inflation, actually fall; the typical household’s real income was up only because women’s wages rose (although by far less than everyone’s wages rose during the postwar boom) and because more women were working.
The debate over the state of the middle class, for the most part, is about whether these numbers understate or overstate the true progress achieved by typical families. The optimists point to technological advances that, they argue, don’t get reflected in official estimates of the standard of living. In 1973, you couldn’t chat on a cellphone, watch a video or surf the Internet; many medical conditions that are now easily managed with drugs were untreatable; and so on.
(More ... Progress or Regress? - New York Times) ¶ 12:04
