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The Poor Today are Better Off than the Average Person of 1971

I read Cafe Hayek every day, where Russ Roberts and Don Boudreaux, two professors at George Mason University, write on the intersection of economics and politics. Today, Professor Boudreaux points to a marvelous post by Steve Horwitz at the Austrian Economist. Professor Horwitz keeps track of the lifestyle of the poor over the years, and helpfully compares it to the average lifestyle of all Americans in 1971. Here is part of his table from the post:

Poor.JPG

Notice how much better off the poor are in 2005 (most recent census data available) compared to the average of all Americans in 1971. He writes of the data:


The overall lesson is clear: lives for Americans below the poverty line continue to get better in terms of what they are able to put in their households and have to make use of everyday. And do note that the average American household in 2005 was doing much better than its 1971 counterpart. MUCH better - and this doesn't even count medical advances and the like. So whatever one hears about stagnating wages and the like, the bottom line is ultimately what we can afford to buy and have in our households to improve our lives. By those measures, life for the average American is better today than 35 years ago, life for poor Americans is much better than it was 35 years ago, and poor Americans today largely live better than the average American did 35 years ago. Hard to square with a narrative of economic stagnation or decline.

What the current policy regime holds for the future remains, of course, to be seen. But to use Pete's terms: as long as the Schumpeterian horse of innovation and the Smithian horse of the gains from trade outrun the Government horse of stupidity, the winners will continue to be you, me and our children and grandchildren, even if the stupid horse is running a bit faster than it used to.


Remember this when you hear someone in the media or the Democrat party say that we are not making progress in improving the lives of ordinary citizens, and need some new government program to fix society. American will do that if we just leave people alone to take advantage of the the freedom to innovate.


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Comments (36)

Someone needs to drone thes... (Below threshold)
914:

Someone needs to drone these facts daily into Dumbo's ears..Their big enough, Lord help us, they just need some gray matter placed between them.

I've seen a lot of "poor" p... (Below threshold)
GarandFan:

I've seen a lot of "poor" people all over the world. The US "poor" don't know what the word really means.

The Federal Poverty Level h... (Below threshold)
epador:

The Federal Poverty Level has been adjusted upwards countless times to increase the number of:

a) Feeling Entitled Voters
b) Democrat Voters
c) Voters on the Dole
d) Folks needing Federal Assistance to ensure job security of Federal Poverty workers/programs

Cue trolls arguing that the... (Below threshold)
JustRuss IT1(SW) USN [reitred]:

Cue trolls arguing that the only reason the poor are better off today is because of progressive programs.

Telephone 71.0 circa "1981... (Below threshold)
914:

Telephone 71.0 circa "1981", this one troubles Me... Not the phone participle, but the Tele, pre agitator.

There really are no truly "... (Below threshold)
Smokey:

There really are no truly "poor" people in America any more. There are only the less affluent:

http://www.heritage.org/Research/Welfare/bg2064.cfm

Click on the graphs to see.

"Cue trolls arguing that th... (Below threshold)
GarandFan:

"Cue trolls arguing that the only reason the poor are better off today is because of progressive programs."

You'd think with all the trillions spent on LBJ's "Great Society" that there would be no more "poor" in the US now.

GarandFan proves the point!... (Below threshold)
JustRuss IT1(SW) USN [reitred]:

GarandFan proves the point! it is only because of LBJ that the poor are so well off in our society!

Excuse me while I go puke now.

Persons like myself with ab... (Below threshold)
Paul Hooson:

Persons like myself with about 20 experience in electronics and appliance retailing and repair can dispute parts of the premise here. In 1980, your average VCR was American made by Zenith or GE and sold for around $1100. Today Chinese VCRs sell for around $59-79, and may even include a DVD player as well. TVs that sold for around $399 retail in the late 70's have been replaced with modern LCD display sets with falling prices for 20inch series models. Electronics continues to see new innovation for lower prices.

But major appliance prices are similar to late 70's levels, and haven't increased very much. But housing prices, utility prices, taxes etc. only continue to climb. However, if any real success has been made against poverty since the Johnson years, then maybe that's a sign of success of the War On Poverty and other Great Society programs, right?

As usual, it really pays to... (Below threshold)
Steve Green:

As usual, it really pays to the click through the link and see just how badly you're being mislead. It's revealing to see what you aren't being told.

And, no surprise, what you aren't being told is what the data that was purposefully and intentionally left off of the data you were presented with.

What you aren't being told is that the gap between the halves and the have nots - you are only being told what the poor have.

For example, the chart above shows you that 42.4 of the 2005 poor now have a computer.

What you aren't being shown is that the percentage for everyone has now risen to 67.1. So in fact there is a 25% gap.

Somebody went to all of that trouble to make this chart -- intentionally and deliberately leaving off the most telling percentages - the percentages for all - that shows the gap between the haves and the have nots hasn't changed.

It's just another way they lie and mislead.

Click through and compare the charts - notice they left off the entire last column of data - intentionally and deliberated doing so in order to mislead.

And THAT is unlikely to change anytime soon. They aren't interested in telling you the full truth, just half truths and lies.

So the question for Charlie... (Below threshold)
Steve Green:

So the question for Charlie is... why did you leave off the last data set - the "average 2005" column?

Steve Green...Excuse... (Below threshold)
tyree:

Steve Green...
Excuse me?
What difference does the gap make? So if the poor had flying cars today you would be upset because the rich had two flying cars?

Your rant just goes to prove that liberals like you won't be happy until everyone is equally miserable.

The "poor" today have access to penicillin, something no one had when my father was a kid. But if the gap between rich and poor was smaller that would have made the Great Depression a paradise to people like you?

The gap between the rich an... (Below threshold)
Steve Green:

The gap between the rich and the poor is the subject of this entire article, but for some "strange" reason Charlie left of the data that shows the gap.

He's trying to show that there is no gap.

Of course there is, you just have to look at the data that was intentionally left off of the chart above to see the gap.

Steve and Paul,If ... (Below threshold)
Rodney:

Steve and Paul,

If the price is less and more "poor" people have the convenience what difference does it make to the "poor" person what the "rich" person has?

Yeah, the real problem with... (Below threshold)
Alfonso Paulista:

Yeah, the real problem with the poor is that they're just not poor enough. More poverty and suffering, I say.

Steve said, "He's trying to... (Below threshold)
tyree:

Steve said, "He's trying to show that there is no gap".
Incorrect, Steve. Look at what Charlie wrote as opposed to what you read into his essay. He wrote , "Notice how much better off the poor are in 2005 (most recent census data available) compared to the average of all Americans in 1971."

Once again, as has happened thousands of times since I started reading blogs, a leftist troll is making things up and trying to get us to believe that he knows we are being "misled".

As Larry Elder was fond of saying, "Facts are to liberals as Kryptonite is to Superman".

I left off the final column... (Below threshold)

I left off the final column because it made the data more difficult to understand. I'd be happy to include it if you think it contributes to the point, that the poor today are better off than the average person in 1971. There will always be a gap. Deal with it.

I remember hearing Margaret Thatcher's final Prime Minister's Questions before Parliament in 1990 as she was leaving office. It was on C-SPAN or some such program. One of the Labor Party members, probably Neil Kinnock, but I can't remember, remarked at the widening of the gap between the rich and the poor that happened under her leadership. She responded that he would only be happy if all were equally miserable. Exactly.

"So the question for Cha... (Below threshold)
914:

"So the question for Charlie is... why did you leave off the last data set - the "average 2005" column"

The "cash for junkers scam", Government take, could not yet be specified, as the jug eared dooooshhh is still crossing his eyes and dotting his tease.

"And, no surprise, what you... (Below threshold)
914:

"And, no surprise, what you aren't being told is what the data that was purposefully and intentionally left off of the data you were presented with.

What you aren't being told is that the gap between the halves and the have nots - you are only being told what the poor have.

For example, the chart above shows you that 42.4 of the 2005 poor now have a computer"

2005? So i guess Bush wasnt all bad for the Country eh?

There will always be a g... (Below threshold)
Steve Green:

There will always be a gap. Deal with it.

We Democrats are dealing with it every chance we get.

You're the one hiding the data, and pretending the gap doesn't matter. You're the one who is so 'unable to deal with it" that you hide it.

"For example, the chart ... (Below threshold)
Steve Green:

"For example, the chart above shows you that 42.4 of the 2005 poor now have a computer""

It's the height of arrogance, and so typical of many conservatives, to ignore the gap between the haves and have-nots that exists today, and suggests that poor Americans today should be happy with what the average American had 40 years ago.

Typical arrogance and elitism.

"We Democrats are dealin... (Below threshold)
914:

"We Democrats are dealing with it every chance we get. You're the one hiding the data, and pretending the gap doesn't matter. You're the one who is so 'unable to deal with it" that you hide it"


Yeah troll, The more You deal the deeper in debt WE become... Asshat

"Once again, as has happ... (Below threshold)
Steve Green:

"Once again, as has happened thousands of times since I started reading blogs, a leftist troll is making things up and trying to get us to believe that he knows we are being "misled"."

Going to all of that trouble of making up that chart and intentionally leaving off a critical data point that doesn't support your thesis proves it's a critical data point - that's why Charlie his it from his readers.

You folks are fed propaganda, and some of you just drink the kool aid so willingly.

"- that's why Charlie hi... (Below threshold)
914:

"- that's why Charlie his it from his readers.

You folks are fed propaganda, and some of you just drink the kool aid so willingly


~


Deepends on what the meaning of "his it" is?

And what are You fed nincompoop? Goebbels entrails?

Charlie: "Remember this ... (Below threshold)
Steve Green:

Charlie: "Remember this when you hear someone in the media or the Democrat party say that we are not making progress in improving the lives of ordinary citizens, and need some new government program to fix society."

Hiding the data that shows the gap between average Americans and poor Americans today and then suggesting the data shows we don't need social programs today is just plain disingenuous.

Only "gap" I see is in Stev... (Below threshold)
GarandFan:

Only "gap" I see is in Stevie's intellect.

Steve, maybe if you and you... (Below threshold)
Rich:

Steve, maybe if you and your dems would stop encouraging people to be lazy and living off of your government programs the poor would be closer to partying like it was 1999.

Steve,How many TV'... (Below threshold)
Rodney:

Steve,

How many TV's/VCR/DVD Players does a person need to have to make them not "poor". If you have more than one that makes me poor compared to you, so to keep yourself happy send me a tv.

I think they should have co... (Below threshold)
Rich:

I think they should have counted video games starting with the ataries and on up to the xbox and playstations. Poor people really don't have the most technological luxury items. Just think, at some point like b/w tv it will be old tv's or flat screens.

Rich

The problem is that Federal... (Below threshold)
chsw:

The problem is that Federal, state and local governments continue to define poverty as a percentage of the population, or a percentage of the median household income (pretty much the same) rather than as a level of economic consumption. Most welfare recipients - a smaller group than "the poor," now live better than the middle classes of most countries. Facts be damned, full spend ahead as the statists in both parties redistribute the economy into inertia.

Steve Green,How much... (Below threshold)
SCSIwuzzy:

Steve Green,
How much of the gap in computer ownership is from price/access, and how much is from priorites?

If the poor had flying cars... (Below threshold)
tyree:

If the poor had flying cars, the socialists, communists, anarchists and some Democrats would march in the streets because the rich had two flying cars. What matters to the haters is that there is gap between "rich" and "poor". What matters to most normal people is that the poor are better off than they were.

Taking from the rich has never eliminated the poor class, it just eliminates the rich class.

My folks were middle class ... (Below threshold)
JLawson:

My folks were middle class in '71. We had a color TV! No microwave - $2k, too expensive, no cell phones yet, no computers, cable TV was maybe a half-dozen channels, and the cost wasn't (to my father's thinking) worth it. The treatment for his heart attack in '73 was extended bed rest - we're talking a month or more. No MRIs, no CAT scans, no clotbusting drugs. No computers - barely any microprocessors. (The closest you could get to it was a 4-function handheld electronic calculator that cost $400 if you were lucky - and ate AA batteries like popcorn.)

Now, cell phones are ubiquitous. Cable TV's got 200 or more channels, lots in HD. There's a hole-in-the-wall shop on my way to work that sells computers for $125 for a desktop model, $150 for a laptop. They're not new, but they run.

If you want a TV, VCR/DVD player, microwave, WalMart's got 'em cheap. WalMart's done more to raise the standard of living for people than any government program out there.

"My folks were middle class... (Below threshold)
John S:

"My folks were middle class in '71..."

Unlike most of the trolls on this site, I actually was alive in 1971. And I'd trade 1971 for today in an instant. It was a much more polite world that wasn't full of self-entitled, self-absorbed assholes. The $1.65 an hour in gold-backed dollars I made flipping pizza was a hell of a lot more money than the $15/hr I'm extremely lucky to make today. (Not that it matters, that job, like most I've had, is destined for India soon enough.) In 1971, you couldn't find someone who'd been laid off 7 times in the course of their working career. People stayed 40 years at jobs that had benefits.

In 1971, gas was 24 cents a gallon. If you car broke down (and they frequently did) you could fix it for free on the side of the road. And someone would usually stop to help without the slightest danger that they would shoot/rob/rape you.

Also I would trade the crappy 1970s economy, Jimmy Carter and all, for what's in store for us in the next 5 years. Want a hint of what's to come? Goggle Argentina 2001 or France 1789.

#34Me too.... (Below threshold)
914:

#34

Me too.

The difference is only that... (Below threshold)
bee:

The difference is only that in 1971 there was much less credit card debt. Period.

People are not any better off today, they just can acquire stuff because they are preyed on by ruthless lenders, from credit cards to sleazy rent-to-own schemes to paycheck anticipation loans that charge as much as 500% annual interest.




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