higher total lifetime income (wealth) expectations
I guess this is where I see a fundamental difference in views of what is "wealth"
Here she says we are getting poorer:
harvard-magazine.com
The data can be summarized in a financial snapshot of two families, a typical one-earner family from the early 1970s compared with a typical two-earner family from the early 2000s. With an income of $42,450, the average family from the early 1970s covered their basic mortgage expenses of $5,820, health-insurance costs of $1,130 and car payments, maintenance, gas, and repairs of $5,640. Taxes claimed about 24 percent of their income, leaving them with $19,560 in discretionary funds. That means they had about $1,500 a month to cover food, clothing, utilities, and anything else they might need—just about half of their income.
By 2004, the family budget looks very different. As noted earlier, although a man is making nearly $800 less than his counterpart a generation ago, his wife’s paycheck brings the family to a combined income that is $73,770—a 75 percent increase. But higher expenses have more than eroded that apparent financial advantage. Their annual mortgage payments are more than $10,500. If they have a child in elementary school who goes to daycare after school and in the summers, the family will spend $5,660. If their second child is a pre-schooler, the cost is even higher—$6,920 a year. With both people in the workforce, the family spends more than $8,000 a year on its two vehicles. Health insurance costs the family $1,970, and taxes now take 30 percent of its money. The bottom line: today’s median-earning, median-spending middle-class family sends two people into the workforce, but at the end of the day they have about $1,500 less for discretionary spending than their one-income counterparts of a generation ago.
...In other words, today’s family has no margin for error. There is no leeway to cut back if one earner’s hours are cut or if the other gets sick. There is no room in the budget if someone needs to take off work to care for a sick child or an elderly parent. Their basic situation is far riskier than that of their parents a generation earlier. The modern American family is walking a high wire without a net.
Below he says women having the "choice" to work is a good thing - but they used to have the CHOICE to not work eh - what of that choice? Why do you think we are wealthier gpowell?
tcsdaily.com
Well, no. Unfortunately for our various class warriors this isn’t actually true, for reasons that those who read about the gender gap will be able to appreciate. First, the basic smell test. Have a look at the second graph here at Macroblog. Using this same measure, this same set of statistics from the BLS we seem to find that real (i.e. adjusted for inflation, and there are several ways to do that) average hourly earnings are unchanged (virtually) since 1964.
Hunh? We’re really expected to believe that Joe Sick Pack has made no headway at all in 41 years? That an hour of labor then buys the same as an hour of labor now? That the world’s economic powerhouse of the past generation has not been able to raise the living standards of the average worker at all? No, clearly, that isn’t true, it simply doesn’t pass any of the normal common sense tests. So the question isn’t now whether it is all GW Bush’s fault for the seeming stagnation of the past few years; it’s why is this figure telling us something that we know, in our heart of hearts, to be ridiculous? Just to make it clear that it’s not the evil Republithugs that have caused this it might be worth noting that there has been the occasional Democratic President over this time period and they didn’t do any better by this measure either.
What’s actually happened is that the underlying structure of work has changed making this particular measure unreliable. So unreliable, in fact, that the BLS is phasing it out in favor of something that actually measures something useful. Economist Alan Reynolds explains some of it at Townhall:
"Average earnings" is an arithmetic average -- a mean not a median -- and it includes part-time jobs.
...
Since 1973, as the BLS explains, there have been "persistent long-term increases in the proportion of part-time workers in retail trade, and many of the service industries have reduced average workweeks in these industries." Millions of previously nonworking spouses and students sought and found part-time work, which diluted average earnings, particularly on a weekly basis. Substituting a low-wage job for an unpaid job makes average earnings appear lower, yet results in higher family incomes. Adding millions of low-skilled immigrants in recent years has likewise diluted average earnings without affecting typical earnings.
As I pointed out in an earlier article, (and while I was using UK figures I’ll only use those relevant to the US now) there are several pay gaps. There is the gender gap, whereby women get paid less than men. When this is for the same job we rightly decry it but we all also know that choices made, discrimination against women with children and so on lead to their lower wages. What has been one of the defining things of the US labor market over the past 40 odd years? Yes, that’s right, the entry of armies of women into it. Given the way in which the average is calculated, as a mean not a median, this is bound to lower the headline figure.
There is also, as we noted, a pay gap between those who work part-time and those who work full. Part-timers not only get less in total, they tend to get less per hour worked. And yes, the past 40 years have seen a huge expansion of part-time workers. Thus, if we simply average pay received across hours worked, we will inevitably see a reduction in pay per hour worked.
Whether these gaps should exist is an argument for another day but it’s indisputable that they do exist, both for women and for part-timers.
Which leaves us with something of a conundrum. Outside of the more reactionary circles it is usually considered a good thing that women now have the choice to enter the workforce, are allowed to partake of that great joy that arises in the breast of anyone clocking on for a productive shift with fellow smiling stakhonovites. Similarly, the freedom that comes from being able to choose the hours, perhaps part-time, perhaps full, is also generally welcomed as an advance in human freedoms, an increase in utility as the economists call it, greater choice, simply a good thing in and of itself.
Indeed, on many a day you will find the various leftists linked in the second paragraph insist that we need more of such things, more women enjoying the fruits (and independence) of their labor, more availability of part-time work and job sharing. More freedom to choose if that phrase has not yet been co-opted to mean something different.
So why they decry the obvious and forseeable effect on average wages as they are calculated is something of a mystery.
Myself, I’d say there’s politics involved somewhere. There usually is when people start to ignore the facts. |
