The Shrinking Middle Class in America

[Kidlicious]

Mr.Fun:

Even if the gap between rich and poor is greater than it was in let's say 1960, that doesn't mean that the entire population, rich and poor, has not moved together to the the richer side; in other words, even if the gap is greater, everyone has become richer.

In other words let's go back to your first assertion.

WRONG!

[Al B. Sure!]

1) It's wrong because it's completely obvious that the increase in standard of living is dominantly explained by improvements in technology. Stuff that is now considered essential - that is, it would be significant hardship to be without it - didn't exist forty years ago.

2) Yeah, it really is clearly absurd. Sorry dude. Unless you actually think "hmmmm, maybe I would prefer going back to the 1970s" then you must agree with my conclusion.

Why is it so completely obvious? You can't just say that, Kuci. You say all those economists at the BLS are wrong. You say that the economists at the Austrian School thinktank von Mises Institute are wrong. Yet you give no evidence.

We know for a fact that there are more wage earners per household now than in 1970 because far more women work.
Women as % of nonfarm payrolls:


We know for a fact that average household size has become smaller since 1970 so there's fewer people to divide the household 'pie' between.


We know for a fact that there is significantly greater use of credit, particularly as a percentage of income.


Real wages have been stagnant.


Why is it that these facts are not the primary explanations for the increase in standard of living? Why do you undermine the CPI and not see that standard of living increases have been motivated by more people working to support fewer people and using credit?

People were happy with the 1960 standard of living which was supported by only one person in the family working.

Do not underestimate the effect on well-being by having more people working, children having less time with their parents, etc.

[Al B. Sure!]

In other words let's go back to your first assertion.

WRONG!

Hey genius look at the charts that I referenced from your link again... do you see the bottom 10th percentile declining? No, it's gone up slightly, just not as much as the top wage-earners.

Looks like you're WRONG!

(just in case you act daft, it shows exactly what I said... the gap widening but everyone rising regardless)

[Hauldren Collider]

Wiggy's posts are teh mark of pure genius unfettered by the standard mores of mere mortals.

Exactly

[Kuciwalker]

I find it immensely amusing that the two of you continue a dance to the death all the while ingoring (rightly so) the idiocy spouted from Kid.

I've had Kid on ignore since forever.

[Kuciwalker]

Just wow Kuci, there's hardly any of your sentence that makes any sense at all.

You are trying to introduce into economy concepts of pleasure and leisure, which are just not quantifiable. At any given time, a human being will be satisfied with his leisure time relative to what is rationally available to him.

People did not enjoy TV shows less when they had small b&w TVs, and did not enjoy a family gathering less when the only music available was the handful of uncles/cousins playing violin and banjo. Kids are not happier from playing with an X-Box instead of a worn out puppet.

The only reasonably quantifiable measure of leisure is the amount of time you can devote to it. And most indicators point towards the ability to do so going down for most people.

Thankfully, I'm not trying to quantify pleasure, just compare it, and it's really easy to do so: consider which of two options you would choose.

[Kuciwalker]

Why is it so completely obvious? You can't just say that, Kuci. You say all those economists at the BLS are wrong. You say that the economists at the Austrian School thinktank von Mises Institute are wrong. Yet you give no evidence.

Dude, I've already given all the evidence necessary. I asked whether you would prefer to live in 1970 with ~7k or in 2004 with ~30k.

[If you like, say "live in 2004 with the stuff you could buy in 1970 using ~7k or live in 2004 with the stuff you could buy in 2004 using ~30k.]

Unless you would actually pick the former option, you agree that the real value of ~7k 1970 dollars is less than the real value of ~30k 2004 dollars.

[Al B. Sure!]

Kuci, I'd need a home right? I wonder what sort of 1970 house my 1970 dollars could buy compared to what sort of 2004 house my 2004 dollars could buy?

[Hauldren Collider]

I've had Kid on ignore since forever.

Why? He's hilarious.

[Ogie Oglethorpe]

Why? He's hilarious.

Your brother has the right attitude, its all about time prioritization. Plus you read too much of it and it actually has been clinically proven to cause neural degeneration.

[Kuciwalker]

Kuci, I'd need a home right? I wonder what sort of 1970 house my 1970 dollars could buy compared to what sort of 2004 house my 2004 dollars could buy?

Go have fun in your somewhat bigger home containing nothing invented in the past 40 years.

[Hauldren Collider]

And constructed with Asbestos

[Al B. Sure!]

Go have fun in your somewhat bigger home containing nothing invented in the past 40 years.

It will be fun.



Back to the golden age of America. When only dad had to work and he brought home enough for a tv, a refrigerator, and a sedan... Mom took care of the kids and always had dinner ready. Little Jimmy played stickball in the street with the neighborhood boys. And Little Susie dressed up her dolls with the neighbor's daughter.

Why do you think, Kuci, that so many look fondly on that era?

Maybe this will help you get it...

To use the definition from earlier, standard of living as output per capita...

output per capita (1965)/working hours per capita (1965) > output per capita (2010)/working hours per capita (2010)

again...

standard of living (1965)/working hours per capita (1965) > standard of living (2010)/working hours per capita (2010)

The standard of living has gone up, sure. But so has the amount of total hours worked per household (which has almost doubled with as many women working as men now). Also, the number of individuals per household has shrunk. I could be wrong (I can't find good statistics for these measures as yet), but I highly suspect that working hours per capita has increased faster than output per capita if for no other reason than the introduction of women in the workforce.

I've seen a few people like Imran and KH peek in this thread several times but not post. I'd like to hear some other opinions.

[Al B. Sure!]

Actually, I might have been wrong on that. Output per capita represented by real GDP per capita has increased pretty dramatically and has more than doubled (indicating that it has exceeded the growth in working hours per capita brought on by women working). The change in family sizes from 3.5 kids to 2 kids is something that needs to be considered, however, as the household pie is being distributed among fewer children. Still, the increase in GDP per capita is so significant that I'm not sure that it doesn't exceed hours per capita even with this consideration.

This can be explained almost entirely by technological improvements which increase productivity/hour, however. I forgot to consider that.

Still, had productivity/hour remained constant, my point would have been true.

Looks like technological change has in fact been the primary mover with regards to standard of living but not for the reasons that you believed.

However, an important caveat is that while GDP per capita is the definitive measure for standard of living as indicated by Gordon, it has some issues as it doesn't consider wage inequality. Wage inequality, judging from many sources that I have referenced, has increased.

That is another point to complicate the issue. GDP per capita does not accurately reflect the actual distribution of income in a nation if there is inequality and complicates inter-temporal comparisons if wage inequality has risen over time, as it has in the US over the last 50 years.

Again, things aren't as simple as they seem.

[Kuciwalker]

Holy ****, AS, you still don't get it. None of that "hey, let's look at GDP/capita!", "hey, let's try to explain productivity increases!" etc. MATTERS. AT ALL. For the purpose of figuring out "would you rather have $X in year A or $Y in year B". You don't need to know ANYTHING ABOUT ECONOMICS to answer that question, you just need to know how much stuff cost and what stuff you could buy.

It will be fun.

Back to the golden age of America. When only dad had to work and he brought home enough for a tv, a refrigerator, and a sedan... Mom took care of the kids and always had dinner ready. Little Jimmy played stickball in the street with the neighborhood boys. And Little Susie dressed up her dolls with the neighbor's daughter.

You didn't answer the question. Would you really give up, say, your computer, internet access (free porn! oh, thank god I don't live in the 70s), and mobile phone for the ability to buy $7k worth of stuff from 1970? Not "to be teleported to the ideal 1970s family*", to buy $7k worth of stuff.

*especially since you are so incompetent with women that I doubt YOU would have an easy time getting that