Prof. Perry of economics at the school of Management, University of Michigan has an interesting blog on economics called Carpe Diem, which roughly translated means seize the day. In a recent post, he claims “that despite what many people think, our standard of living is higher now than ever before”.
The evidence he cites is that we’re spending less on food, clothing and shelter than in 1901, and we’re spending less than citizens of “developing countries” like India or China.
We might have a better standard of living than someone in India, a country where nearly 30% of the population currently lives in poverty. Thats nearly 400 million people or MORE than the US’s entire population!!!! How is that comparison relevant? Don’t we measure up to the Canadians, British, French, Swiss, Australian, German or Japanese that we have to resort to comparing ourselves to countries that were either socialist or communist-dictatorships for the past several decades. (Incidentally, India has the only democratically elected communist-party in the world).
Also, I would be highly skeptical of anything the Federal Reserve publishes. Their assertion that the average person spends 18% of their income of housing sounds too small. I think the average person in the US spends about 25-30% on housing (although houses have become bigger and much more comfortable from 1901!).
And another factor to consider is that the average family had only 1 working member in 1901 – the male head of household.
Today you have most family with 2 income earners. So two people are now working, but they’re not living twice as well.
That doesn’t sound like an improvement to me.
However, I do agree on thing, we most undoubted have a better standard of living of anyone who lived in 1901, even maybe robber barons. But I don’t think we’re living better than ever before.
I think the late 1950s was when Americans were the richest. That was when we had a lot of manufacturing jobs and the government wasn’t wasting money on fighting wars in remote places. And the dollar was backed by a precious metal, not just an empty promise.