Material well-being of the poor and middle class since1980

Discussion in 'Economy' started by Wiseacre, Oct 25, 2011.

  1. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    There is a report out over at the AEI Blog, it's a 57 page paper, if you want to download and read it. The basic premise is sure to outrage many on the left who piss and moan all day long about income inequality and the middle class being destroyed. Well, maybe it ain't as bad as some suggest.

    snippet:

    This grim picture is inaccurate for several reasons. First, most analyses of economic well-being rely almost exclusively on narrow income measures that do not reflect the resources available to the household for consumption. These measures ignore taxes and in-kind transfers such as food stamps and often rely on underreported measures of income. For example, the official measures, which ignore taxes, fail to capture the benefits of falling marginal tax rates or expanded tax credits. Second, official statistics account for inflation using a price index that is biased upward. This bias implies that official statistics significantly understate improvements in economic well-being over time. Finally, even improved income measures fail to capture important components of economic well-being such as consumed wealth, the ownership of durables such as houses or cars, or the insurance value of government programs. For example, consider the case of a retired couple who own their home outright and who live off of savings. Clearly, their income will not reflect their material well-being.

    In this paper, we provide a more accurate assessment of how the material circumstances of the middle class and the poor have changed over the past three decades. We consider several different measures of material well-being. We examine how improved measures of income, which better reflect the resources families have to consume, have changed between 1980 and 2009 for the middle class and the poor, accounting for the overstatement of inflation in standard price indices. Similarly, we analyze patterns of family consumption, which our research suggests is a better indicator of economic well-being than family income. For both middle-class and poor families, we also examine independent indicators of well-being such as housing and car characteristics.

    Our results show evidence of considerable improvement in material well-being for both the middle class and the poor over the past three decades. Median income and consumption both rose by more than 50 percent in real terms between 1980 and 2009. In addition, the middle 20 percent of the income distribution experienced noticeable improvements in housing characteristics: living units became bigger and much more likely to have air conditioning and other features. The quality of the cars these families own also improved considerably. Similarly, we find strong evidence of improvement in the material well-being of poor families. After incorporating taxes and noncash benefits and adjusting for bias in standard price indices, we show that the tenth percentile of the income distribution grew by 44 percent between 1980 and 2009. Even this measure, however, understates improvements at the bottom. The tenth percentile of the consumption distribution grew by 54 percent during this period. In addition, for those in the bottom income quintile, living units became bigger, and the fraction with any air conditioning doubled. The share of households with amenities such as a dishwasher or clothes dryer also rose noticeably.

    AEI - Papers
     
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  2. CrusaderFrank
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    CrusaderFrank Diamond Member

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    "Our results show evidence of considerable improvement in material well-being for both the middle class and the poor over the past three decades."

    Ouch!
     
  3. expat_panama
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    expat_panama Silver Member

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    Thanks for the post. Expect a flame war from the doom'n'gloomers.
     
  4. Trajan
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    Trajan conscientia mille testes

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    thx Wiseacre. its has been so since the industrial revolution. If you think about it, the middle class and even upper lower class have always very shortly had access to appurtenances that one would think would strictly for the wealthy or a select grp. of folks. All thx to mass production, productivity and resource access.

    when Ford mass produced cars , it took what, less than 10 years for them to be available to lower middle class folks. Same for just about everything- dishwashers, microwaves, telephones, color television, clothes, airplane travel, food.........*shrugs*
     
  5. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    You don't need to be an economist to see how rich the middle class got by looking at all the new inventions they could suddenly afford in the last 10 years: suddenly we had plasma TV's, LCD TV's, DLP-TV's, iPods, iphones, CD's and CD players, DVDs and DVD players, Blue Ray and Blue Ray players, PCs, desk top PCs, DVRs, color printers, satellite radio, Advantium ovens, HD-TV, Playstations, X-Boxes, X-box live, X-box Konnect, broadband, satellite TV, cell/camera/video phones, digital cameras, OnStar, palm corders, Blackberries, smart phones, home theaters, SUVs, big houses, more houses per capita, TiVo, 3D movies and TV's, built in wine coolers, granite counter tops, $200 sneakers, color matched front loader washing machines, matching washer dryer combinations, McMansions, 6 burner commercial ranges, Sub Zero refridgerators, more cars than drivers, a $1 billion ring tone industry, a pet industry that just doubled to $34 billion, 10's of millions lining up to buy Apple's I-tablet, Wii, Netflix boxes, jet skis, low profile tires, aluminum/titanium rims, Harley Davidson and Japanese motorcycles. $700 Billion spent Christmas 2010, $10.5 billion movies 2010, 10 million ocean crusies, 44 million taking plane flights over 2012 holiday, $500 billion spent on Christmas 2012.

    The list goes on and on. I hope that helps you realize you can't just parrot the communist press and expect to make sense? They have other objectives and are merely using you to promote their point of view.
     
  6. Rshermr
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    Rshermr VIP Member

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    Great source. Before you start reading it, you know it will be a con piece. No question at all. Because it came from AEI. So, should I post a piece from move on??? Any papers on the subject from independent sources???
    Watching cons clap like a bunch of trained seals about something produced by AEI is truly sad. Just another con living in the con dogma world of right wing web sites.
     
    Last edited: Sep 4, 2012
  7. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    I seriously doubt you would acknowledge any report that says what this one says as being legitimate, regardless of where it comes from.
     
  8. Freemason9
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    Freemason9 Gold Member

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    This is golden. The "paper" argues that Americans are better off now, because many in the middle class have fallen into the growing low-income category and, therefore, qualify for some "benefits."

    Stupidity.
     
  9. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    OMG!! Too completely stupid!!! Do you have even one paper from one independent source that resolved anything or presented the best answer?? Independent merely means they lack the IQ to understand the ideological context in which they live.


    too stupid by 1000%.

    1) Our founders were limited government cons just like modern Republicans/libertarians. Why don't you move to Cuba where you belong

    2) If cons are biased against the truth and liberals are too, then a correct policy or answer is not possible since both sides are biased against the truth according to your pure liberal stupidity.


    See why we are positive a liberal will be slow, so very very slow??
     
    Last edited: Sep 4, 2012

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