Tuesday, August 14, 2007

Overwhelming Evidence: Good Old Days Are Now

The chart above is from a 1995 Reason Magazine article "The Good Old Days Are Now," by W. Michael Cox, senior vice president and chief economist at the Federal Reserve Bank of Dallas.

Forget what you've heard in the media about "working harder and getting further behind." Most Americans today have both more leisure and better goods than they did even 10 or 20 years ago, and most of us certainly live at a much higher standard of living than our grandparents or great-grandparents, despite the fact that many people today mistakenly think their standard of living is declining.

Exhibit A: Look at the evidence in the chart above, and consider that further improvements have been made since 1990. We now live longer, start to work later in life and work much less annually (1,562 hours annually in 1990 vs. 3,069 hours in 1870), spend 30% less time working around the home vs. 100 years ago, retire earlier, have an increasing number of years in retirement (expected time in retirement was 0 years through all of human history until the last quarter century or so), experience 3X as much waking leisure now compared to our ancestors in the 1800s, etc. etc.

According to Dr. Cox, "Being distracted by the myth of declining living standards isn't getting us anywhere. The evidence is overwhelming. On average, Americans are better off than ever before."

Just ask yourself: would you be willing to trade the life you lead today, with your current income and with all of the modern conveniences, all of the new and improved products like computers and cell phones, all of the medical advances, for the life of your great-grandparents? I sure wouldn't, and I think the people who would trade their standard of living today for their grandparents' would be the rare exception.


15 Comments:

At 8/16/2007 8:48 AM, Anonymous Anonymous said...

Numbers from 17 years ago do not represent NOW.

In fact offering numbers from 17 years ago is a good way to misrepresent the current situation.

 
At 8/16/2007 10:00 AM, Blogger Mark J. Perry said...

Using current data from 2007 would show that things have gotten even better, all of the variables in the chart have improved in the last 17 years.

For example, life expectancy is now longer by about 3 years (78) vs. 1990 (75), so retirement years have increased, waking leisure hours have increased, etc.

The current situation today is even MUCH BETTER than 1990.

 
At 8/16/2007 10:45 AM, Anonymous Anonymous said...

Thank you, labor/socialist movement!

 
At 8/16/2007 10:51 AM, Anonymous Anonymous said...

LOL!

The source is the FEDERAL RESERVE BANK?

This is like quoting Satan that Hell isn't that bad.

They are more secretive than the CIA with their data...and directly benefit from overworking Americans.

 
At 8/16/2007 10:52 AM, Anonymous Anonymous said...

If the current situation is better than 1990, then please post some recent numbers. I don't doubt that the situation is improving worldwide. I don't doubt that it is improving in the long term. What I do doubt is that the standard-of-living is improving in the US right now.

We've got a couple of trends going. First, we have globalization. Unlike most people, I don't resent globalization. I would much rather ten guys in the developing world weren't living on the edge of starvation than that a person in the US can buy a nicer car and TV. Nevertheless, globalization does, in the short term, drive the mean standard of living in the US down somewhat. Second, we've got Bush in the White House, and we've had Republicans in congress, gutting the core of our economy. The core reason we've had the best economy in the world is research, both private and public. In the last century-and-a-half, we've created air travel, the modern automotive industry, the transistor, the computer, the internet, television, the telephone, creating huge economic value for the world, and spent a big chunk of time being the monopolist supplier of technology to the rest of the world. Bush gutted spending on basic university research. In the meantime, the IP laws got way too strong, going from encouraging innovation to protectionism. Venture capital dried up following the .com bust. At the same time, Asia increased spending on R&D. The result is that we are no longer at the forefront, and so we're falling.

Life expectancy is also not a great metric -- it is based on medical progress. I'd much rather see statistics of real spending power.

 
At 8/16/2007 11:15 AM, Anonymous Anonymous said...

On top of how old these numbers are, I have to ask - are they median or mean numbers? The article doesn't say, and there is a big difference.

 
At 8/16/2007 11:48 AM, Blogger Roger Ritthaler said...

Something doesn't add up - actually divide down - for 1990. Assuming 3 weeks of vacation, 1,562 / 49 = 32 hours/week. Who worked that? And what was the "home work"? (1,278 / 49 = 26 hours/week)

 
At 8/16/2007 11:49 AM, Anonymous Anonymous said...

The "bad old days" did not come from out of nowhere -- they were the result of a concerted effort by the owners of capital to turn the workers into economic slaves:

"You load sixteen tons, what do you get?
Another day older and deeper in debt.
Saint Peter, don't you call me, 'cause I can't go;
I owe my soul to the company store."


what was misery for the worker was gold for the employer. That drive for profits is still at work today, creating economic slavery wherever it can.

If you feel you need to dredge data up from a 100 years ago to show progress is being made now, we still have a problem.

 
At 8/16/2007 12:01 PM, Anonymous Anonymous said...

You need to include how many members of a family were working. In the 1960/1970s just the dad/husband working was common. Both parents/spouses working is common today.

 
At 8/16/2007 12:41 PM, Blogger Mark J. Perry said...

Roger: According to the Bureau of Labor Statistics, the "average work week" is about 32.5 hours, probably because many workers are only working part-time. So if you take the total number of hours worked divided by the number of workers, it averages about 32.5 hours per week per worker.

 
At 8/16/2007 12:45 PM, Blogger bitswapper said...

You know, its possible to make shit look good next to something bad enough. This says nothing at all about working conditions today, and only says people worked fewer hours in 1990 than they did in 1870. How about a comparison to home hours, productivity, and work hours between 1990 and now? Between people working in the US and other countries? That would be more interesting that this (which is kind of interesting).

 
At 8/16/2007 12:46 PM, Blogger Mark J. Perry said...

Roger: Depending on: a) sex, b) work hours outside the home, and c) the number of children, and d) the ages of the children, the average household work ranges between 5-50 hours per week, and averages about 26 hours per week, or 3.25 hours per day for household services: cooking, cleaning, repais, yard work, snow removal, shopping, transporting kids, etc.

 
At 8/16/2007 4:13 PM, Blogger Jeremias X said...

You teach ECONOMICS in FLINT??? LOLZ

 
At 8/17/2007 12:32 AM, Anonymous Anonymous said...

"You need to include how many members of a family were working. In the 1960/1970s just the dad/husband working was common. Both parents/spouses working is common today."

- My grandparents both worked in the mills. Same goes for their sisters and in laws.

 
At 10/18/2007 7:01 PM, Anonymous Kathryn said...

I would NEVER give up the modern conveniences. Our family has had to go two weeks without running water (while the plumber tried to find a major leak), two months without an over or stove (we cooked out ALOT), and two days without air conditioning in August (in Alabama - while I was 7 months pregnant).

There is way too much to be grateful for to spend any amount of time complaining about things being worse than any time in history.

 

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