As I read Matt O’Brien’s post at the Washington Post on how much greater it is to be middle class now than it was 30 years ago:
But even though median households are only making 9 percent more in inflation-adjusted terms than they were in 1980, there’s not a hint of any kind of civil strife, unless you count a few bongo drums in Zuccotti Park. Why not? Well, maybe because that 9 percent number understates how much better off the middle class is today than it was a generation ago. That, at least, is what a majority of economists at the ideologically-diverse IGM Panel think.
The first was that its title should have been “Shut Up! He Explained”. The second was that he was using the wrong dates for comparison. Rather than using 1980 he should be using 1970 or 1960. 1980 was a different point in the business cycle than we are now which renders the comparison facetious.
The third was that the things he cites as great advantages we have now that we didn’t have then:
But even if we have less money, you know what we do have that we didn’t 15 years ago? Smartphones and social networks, Netflix and HD TVs, apps and whatever other technology you prefer to waste time on. Now, it’s true, you can’t eat an iPad, but it’s also true that these things make our lives better in ways that are hard to measure.
really don’t mean as much to me as they apparently do to him. He’d be better off picking healthcare (something else that doesn’t mean as much to me as it does to most people) for which I think there’s at least a reasonable argument.
It seems to me that he’s using meaningless ways of analyzing the differences presumably to bolster his case. Let’s try something else.
Every year Forbes publishes their “Cost of Living Extremely Well Index”, a shopping list of what it takes to life the lifestyle of the rich and famous and how much it costs. Here’s the article for 2014. Unsurprisingly, it takes a lot more money (in real terms) to be rich than it used to.
I propose that we develop a shopping list of what constituted a middle class lifestyle in 1960, what that shopping list is now, and the costs of each. My intuition is that a middle class lifestyle in 1960 was a lot more within the reach of most Americans that the presumed middle class lifestyle is today but I’m willing to be pleasantly surprised.
So, what did it take to lead a middle class lifestyle in 1960? Now? Divide it (as Forbes does) into entertainment, fashion, household, services, travel, and food and drink.
Being middle-class is about feeling that one can improve one’s lot in life, and that of one’s children, by reasonable efforts, and in feeling secure of one’s position in life.
I don’t think you need a list. Owning a house is the most important item.
I believe it is much more difficult for young people buy a home today than it was in 1980 or 1960. Some will counter that since the average house is larger people are better off today. I don’t think feeling middle class requires having a large house and that young people would be happy with a small house but there are not many being made to today in many suburbs.
1) Since only about 25% of women of working age were working in 1960, and about 66% do now, the numbers are worse that they first appear, I believe. Household income went up a small amount, but household hours worked went more, since you now have two workers in the household. Could only find for 1975-present, but suspect the differential will be larger for 1960.
http://economix.blogs.nytimes.com/2011/07/20/rising-family-income-more-work-not-raises/?_r=0
2) No civil strife? I guess he has his TV blocking out news from Baltimore, but he simply reiterates a fuller version of the libertarian response that HD TVs are cheaper now. I suspect it has more to do with the fact that, as a people, we just don’t hit the streets over stuff like they do in, say, France. Also, the safety nets largely worked during the Great Recession. They are being dismantled now, but if they had not been in place or expanded, I think you would have seen some civil strife after the collapse in 2008.
Steve
Mercer, I think there are a lot of issues. Even in the crappy neighborhood I lived in until age 10 we didn’t hear gunshots every night, our neighbors weren’t getting shot, and (although even a half century ago there were drug dealers around) drug use wasn’t nearly as pervasive as it is now. My parents didn’t worry about our safety when we ran around the neighborhood. And that was in a neighborhood in which there was a brothel on the corner with a saloon below it, the woman who lived next door ran numbers, and there was a guy selling drugs out of his garage three doors down.
There was more confidence in the public schools than there is now. Was it misplaced? I don’t know.
The rate of home ownership today is about what it was in 1970, a bit higher than in 1960. Yes, most middle class people own their own homes but I don’t think it’s the sole factor in a middle class lifestyle.
How much did you need to spend on education to get a decent job? Zero. A high school education was enough for a middle class lifestyle and most people attended public schools.
Dont forget child care costs. Back then a sister or grandmother could watch kids if Mom worked.
Steve
Mostly agree with everything above. I’m not sure which safety nets are being dismantled, though. Food stamp usage and disability usage are way up, and I haven’t heard anything about getting rid of those.
If steve means unemployment compensation being cut back – well, it was greatly expanded. And according to every Democrat the economy is fucking fantastic whenever they need to get re-elected, so by their logic it shouldn’t be 99 weeks of UEC anymore.
I think the answer depends on how terms are defined. What is “middle class” mean in terms of comparable metrics between today and earlier times?
Which is why the lifestyle-based index I’m proposing makes sense. As noted above, my intuition is that it’s a lot more expensive to live a middle class lifestyle than it used to be which, since the increase in median income has been so small, means that fewer are middle class than used to be.