Tuesday, January 02, 2007


Real-Wage Pessimists

In his new book, Income and Wealth, Alan Reynolds refutes claims that real wages have fallen steadily over the last few decades. His data on inflation, non-wage benefits and average work week show that the average American is actually doing much better than now than he was in the 1970s. His main point:

When poor families can afford what even middle-income families couldn't imagine having 30 years earlier, aren't things working out pretty well?

This truth emerges in some of the most interesting ways.
My mom doesn't understand why we don't want hand-me-downs for my girls from my little sister, or their cousins. My sisters and I wore nothing but hand-me-downs growing up. But clothes for kids today are so cheap that it doesn't pay to take the time to alter or mend hand-me-downs. Her mentality, from the 80's, is still stuck in ultra-frugality mode. We are all so much better off than our parents.

Really good point. Thanks for the link. The ability of the market system to help poor individuals through economic growth is too often under appreciated.
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