Categories
economics

The disappearing middle class

Pundits constantly decry the disappearing middle class. The NYT article I linked to last time made a comparison of hourly workers from 1976 and today and found that their hourly wages had gone down by 7% or so. They were comparing that to folks up in the top 1% and how much more their wages had gone up. I went over my take on the top earners in my last post, I’m going to talk about those poor hourly workers…

I make the claim that even if the wages have gone down by 7%, that is more than made up for by the stunning advances in the standard of living since 1976. Think about, what has changed since then…. damn near everything really. I will use myself as an example. How many retail workers were able to travel the world in 1976? How many of them managed their own retirement accounts back then? How many had retirement accounts? How many had color TVs? No I don’t actually have a TV, but I do watch the programs on my computer, in color of course. The air is cleaner, we have things like the internet, computers, more people can afford cars, more can afford things shitake mushrooms, brie, pomegranates, food that only the wealthy had access to in 76. What about medical advances? My God, things have come a long way. Folks with MS in 1976 were essentially SOL. The same goes for any number of other diseases. The advances in imaging, drugs, etc, have literally added 5 or 6 years to our lives…

It seems to me that folks that consider themselves as middle class would solidly be in the upper classes back in 76 when viewed through the lens of what their possibilities are. That is the only real way to judge wealth. Money, even adjusted for inflation, does not tell the whole story. A person with $500 back in 1976 could do far less than the person with the equivalent amount of cash today. Think about it, how much more money would you have if you lived like middle class folks did in 1976? Drop your cell phone, cable TV, computer, and internet. How much more money would you have in your pocket each month? Drive an (on average) older ¬†and more dangerous car, stay in an (on average) smaller house/apartment, only pay for medicine from back then, etc. It’s difficult to do of course, but its a handy way of trying to see how much wealthier we are today.

I’m not saying that wages aren’t important but I am saying that there is an awful lot more that needs to be considered when we talk about how “bad” we’re doing. We’re doing really well. Even the folks below the poverty line are doing better than they did back then. They have longer life spans, a stunning percentage have more than one car, the average number of TVs in those households is over 2. The most common medical issue? Obesity….

There is a huge middle class today and we are quite a bit better even if our wages have gone down by 7%, so smile!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.