Letters

From the March 1996 issue

(Page 3 of 3)

In the notion that today's technology is alienating, we hear romanticizing of the past, looking back to a golden time of brotherhood and community that never really existed. There is nothing more alienating to the human spirit than the backbreaking and repetitive work our forbears did on farm, factory, and home. There may be negative side effects to technology, as well as benefits, but the average American today has a much better opportunity to find happiness, however he might define it.

It may surprise Dan Kacsir that in our assessment of the state of the United States, we never used the word "happy." We are economic researchers, not philosophers or psychologists. Our goal is to show that many of the sour economic commentaries of our times had ignored empirical data that, taken together, prove material progress didn't stop a generation ago. We don't know whether material progress creates happiness, but we strongly suggest that the absence of it brings misery.

Mr. Kacsir repeatedly asserts that Americans are unhappy. We know of no objective measure of the nation's mental state, if indeed there is such a construct. Unhappiness in America is an assumption. We prefer to rely on our personal experience: We know some happy people and we know some unhappy ones. It's an individual matter, and bigger houses and neater toys may help make some of us happier. We prefer not to look down on those people. Generations ago, Alexis de Tocqueville pondered a similar question: "Why the Americans are so Restless in the Midst of Their Prosperity." Wondering why Americans aren't prone to count their blessings is interesting but it's nothing new. Neither is fear of "ruinous change." At least a few members of every generation have seen the changes in their lifetimes as harbingers of social and moral calamity.

Obviously, Timothy M. Barrett didn't take freshman economics from Dr. Cox. If he had, he would have learned the limitations of partial supply-and-demand analysis. The entry of new workers into the labor market will depress wages and cause unemployment only if the demand for labor stays put. But it doesn't. When women leave home production and enter market production (which many people mistakenly refer to as "get a job") both labor supply and labor demand increase. Somebody else has to cook the food, clean the house, wash, iron and mend clothes, do the taxes, and on and on. To ignore or discount all those tasks is not only insulting to women, but misses the whole point of how economic progress has occurred through specialization. At one time, both men and women engaged in purely household production, usually on a farm. As first men, and then women, entered the labor force, they turned over to the market the often onerous chores they once did. As this occurred, it created demand for new workers, from grocers to financial planners. Similarly for women.

The facts tell what this has done to wages. When fringe benefits are included, real wages have risen as women have entered the labor force over the past four decades. What's more, unemployment has gone up and down with the business cycle, but the U.S. economy produced an average of nearly 1.9 million jobs a year since 1970, helping keep unemployment relatively low.

We stand second to no one in our admiration for motherhood, but every family has a right to decide whether one parent should stay at home and nurture the children. Many women, and even a few men, are choosing to do just that. This is an individual question of values and priorities, not economics. Our economic point still holds: When men moved into the labor market and specialized, households could afford more goods and services. The principles aren't any different for women. We recognize a child's need for love from both parents, but we aren't ready to prescribe for society the precise circumstances in which that benefit ought to be delivered. What's right for one family might not be for its neighbors. What's right for one generation might not work
in another. We continue to believe that market work can be compatible with responsible parenting--for both men and women.

Gary Yocum's letter allows us to correct one of the most persistent misinterpretations of our research. We do not believe that every American is better off in every way. In good times, it's always easy to find someone who is flat broke. In hard times, there's always somebody who is making it big. To find examples of people who aren't sharing in the general progress doesn't take away the gains for society as a whole. Most people are, on balance, better off. The statistics we cite prove that.

We deliberately chose to examine broad trends, steering down the middle of the course, so we wouldn't fall into the logical trap of false generalizations. It's wrong to take the few observations at hand and conclude they represent the whole country. That's why the government spends so much money collecting economic data. That's why statisticians use such concepts as averages and per capita. These allow for more accurate generalization.

We, too, deplore excess regulation, high taxes, and foolish litigation. They are indeed drags on the economy. Perhaps that ought to make us marvel even more at the progress that's been made in the past generation or so. Our free enterprise economy has made most of us better off despite the handicaps put on it.

Contrary to Frederick C. Thayer, we find the data on wages full of ambiguities that can create a misleading view of the performance of the U.S. economy over the past two decades. What are "wages" in one year are not in another, largely because of changes in fringe benefits. These numbers are not a useful tool for measuring changes in our living standards. We rely on things that are consistent and countable, such as per capita ownership of automobiles or square feet in an average house. As we assembled the data, we wondered why the researchers who concentrate on the wage data fail to mention all of the facts and figures that don't support the conclusion that Americans are worse off. We at least gave our readers a look at the wage data.

We are currently hard at work on further research that will address Prof. Thayer's concern over the widening gap between rich and poor. For now, we can only give a small hint of the conclusion: There's strong evidence of upward mobility in the United States. The conventional view of income distribution misses the most important issue: opportunity. It abounds.

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