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Spoiled By Success

© Beth Skinner

GUEST COLUMN by Brian Goff*

Columnists sometimes exaggerate problems to generate interest. When discussing long term trends in pressing social problems, no exaggeration is needed - the figures speak for themselves. Births to unwed mothers have jumped from negligible percentages in the 1950s to one-third of all births today. More than 30 percent of children do not live with a married couple versus less than 10 percent in 1960. Crime rates per 100,000 people have more than tripled since 1960. Murder and manslaughter by juveniles and young adults have more than doubled since 1970.

The most understudied contributor to them is the explosion in living standards over the past thirty years. As a nation, we are richer than we have realized, and yet, this material success has sowed the seeds of many our most pressing social problems.

Perceptions and Reality of Living Standards

Rather than emphasize or even acknowledge an economic explosion, doomsayers on the left and (some on the) right have preached a gospel of economic stagnation. Best sellers, newspaper columnists, academics and politicians repeated standard themes: enormous gains for the rich and crumbs for the middle class and poor. Politics has played a role in this misinformation.

The 1996 Clinton, Perot, Buchanan, and Dole campaigns all utilized the stagnation message, picking and choosing facts to support their particular ends. Newt Gingrich, Richard Gephardt, and many other congressional leaders followed in their path. Also, even more honest analyses became overly reliant on a few measures of economic performance such as real GDP, real wages, and labor productivity. All of these widely used measures over-adjust for the effect of inflation because measures of inflation underaccount for improvements in the quality of products and services.

Still, the supposed economic stagnation is wrong at best, absurd at worst. Per capita real GDP has grown from $17,000 in 1970 to around $30,000 today. Real median family income jumped from less than $30,000 in 1970 to about $45,000 now. Real compensation (wages plus fringe benefits) per hour rose by 15 percent from 1970 to 1995.

Using broader based facts about expenditures, ownership and consumption not only illustrates the explosion, but also the folly of the stagnation premise. We enjoy better health, longer lives, more living space, a wider variety and a higher quality of foods, clothing and consumer goods, sophisticated electronics, faster travel and so much more. Food shares of household budgets dropped significantly after 1970 even though Americans now spend nearly half of their food budget meals outside their homes.

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