The Good Old Days Are Now
Forget what you've heard about "working harder and getting less." Most Americans have both more leisure and better goods than they did 20 years ago.
Draw a six-inch line on a piece of paper. Make a dot at the right end, and label it Knowledge. Make another dot two inches from the line's other end. Label that point Ignorance. What's to the left of that dot might be called Mythology. It's what we think we know but what isn't really so.
Often the biggest stumbling block to accurate perceptions of our world is getting beyond the glib notions that nearly everyone takes for granted. We spend an awful lot of time stumbling about in the realm of mythology:
· U.S. living standards are falling, and Americans aren't as well off as they were 25 years ago.
· These days, it requires two workers for a typical family to maintain a middle-class lifestyle.
· Today's children are likely to become the first generation that won't live as well as their parents.
· The United States, once the world's undisputed leader, is falling behind as other nations grow faster.
These are the myths that plague discussion of what's happening to U.S. living standards. They have been repeated so often, and by such respected authorities, that few Americans even question the proposition that the economy is failing them. The message pours out of Washington, where Labor Secretary Robert Reich frets that American workers are getting stiffed by greedy corporations. It's the central theme of leading academics and think tanks, including Ray Marshall at the University of Texas, Frank Levy at the Massachusetts Institute of Technology, and the Progressive Policy Institute in Washington, D.C. Downward mobility has emerged as a staple of big-city newsrooms, where hard-luck stories make good copy.
Anecdotes, of course, can only illustrate, not prove. In good times and bad, individuals and families will move up and down in the social pecking order for a variety of reasons. Making the case, then, for slipping American living standards demands broad-based evidence. More often than not, the negativists point to falling real wages as their smoking gun.
And the trends do seem decidedly grim: After adjusting for inflation, average hourly wages rose by 2.1 percent a year from 1953 to 1973. After that, wages stagnated and then began a long slide, with an average annual decline of 0.8 percent since 1978. (See Figure 1.) If Americans are making less, it stands to reason they're not going to be able to maintain their living standards.
The pessimists bolster their argument with other trends that seem to show lost dynamism: lackluster economic growth, less-than-stellar productivity gains, widening trade deficits, fewer manufacturing jobs, an inability to match the growth rates of Asia's fast-growing nations. All told, these statistics make for a rather bleak view of the U.S. economy. To make matters worse, the country seems plagued by crime, pollution, insecurity, homelessness, cynicism, and a host of other social pathologies always in a downward spiral toward deeper crisis.
In a society that's addicted to hand-wringing, in a country that accentuates the negative, all this gets plenty of repetition. There are problems in these United States–no doubt about it–but the conclusion that we're not living as well as we once did is pure mythology. There's abundant evidence, easily obtained but largely ignored, showing that economic progress is still on track in the United States. Today's Americans aren't orphans of history. Far from it, they are experiencing what previous generations worked so hard to achieve–rising living standards.
In fact, Americans never had it so good.
At best, real wages and the other evidence of a faltering economy are indirect barometers of living standards. It's curious that the declinists spend so much time examining a bunch of proxies but can spare so little energy for direct measures of what's been happening to Americans' well-being. The government's statistical mills and industry groups churn out boatloads of numbers, touching on nearly every aspect of American life. The diligent researcher can look up how many cars we own, how many hours we spend on housework, and how many music buffs attend symphony concerts. All that and much more.
Living standards are best measured by what we consume, not by our earnings or income. Looked at this way, the available numbers don't lend any support to the view that the country isn't doing as well as it once did. Comparisons to the early 1970s are particularly relevant. After all, no one doubts that Americans are living better today than they did a century ago, or even 50 years ago. The past quarter century is when the declinists contend the country's living standards started to slip.
But many numbers say it isn't so. On average, for instance, Americans now live in bigger and better houses. From 1970 to 1992, a typical new home increased in size by the equivalent of two 15-foot by 20-foot rooms. While home ownership rates have remained roughly constant over the past two decades, the average age at which Americans buy their first home has moved by roughly three years–from 27.9 in 1970 to 31.0 in 1992. Doomsayers, of course, have been quick to chalk this up to deteriorating economic conditions, ignoring the marked change in Americans' lifestyles. The median age at which we first marry (an event that often precedes home buying) has increased from 21.5 in 1970 to 24.7 in 1992–again roughly three years. And nearly 12 percent more of us today also decide never to marry. Add to this the fact that the average number of children per family has declined–from 1.09 in 1970 to 0.67 today–and the story clearly changes from deteriorating economic conditions to lifestyle changes.
Then there are the homes themselves. New houses are much more likely to have central air conditioning and garages. About 45 percent of homes now have dishwashers, up from 26 percent two decades ago. Clothes washers were in three-quarters of homes in 1990, up from less than two-thirds in 1970. At the same time, households with dryers jumped from 45 percent to almost 70 percent. The average number of televisions in a household rose from 1.4 in 1970 to 2.1 in 1990. Comparing 1970 and 1990, the typical U.S. family owned 4.5 times more in audio and video equipment, 50 percent more in kitchen appliances, and 30 percent more in furniture. For fun and games, the household has twice as much gear for sports and hobbies.
Among those 15 years and older, passenger vehicles per 100,000 people increased from 61,400 in 1970 to 73,000 in 1991. Americans are enjoying more luxuries, too. The average amount spent on jewelry and watches, after adjusting for higher prices, more than doubled from 1970 to 1991. Per capita spending on overseas travel and tourism is three times greater than in the early 1970s.
Of course, we could be paying for our consumption by depleting our savings. The evidence, however, suggests it isn't so. Although Americans may not set aside as much as people in many other countries, the average American still has managed to gain net worth. Median real wealth per capita rose by 2 percent a year from 1970 to 1990. The Dow Jones Industrial Average jumped sixfold since the early 1970s. The nation has had the best of two worlds: consuming more in the present and setting aside more for the future–not a bad standard for "better off."
No catalog of higher living standards would be complete without products that didn't even exist for past generations. Twenty years ago, only a lucky few could show movies at home. Now, two of every three households own videocassette recorders. When Elvis was king of rock 'n' roll, records succumbed to warps and scratches. Today's practically unbreakable compact discs offer concert-hall quality sound. Microwave ovens, answering machines, food processors, camcorders, home computers, exercise equipment, cable TV, Rollerblades, fax machines, and soft contact lenses are staples of the 1990s lifestyles. As important, many products, from computers to clothing, have been getting higher in quality even as they drop in price. (See Figure 2.)
A decade ago, most motorists had to search out a pay telephone to make a call. Now, cellular technology has put a phone in millions of cars. Companies served 11 million subscribers in 1992, up from 92,000 in 1984. The past 20 years brought many medical breakthroughs–new drugs, new treatments, and new diagnostic tools–to enhance and prolong our lives. Today's cars go farther on a gallon of gas. They've been improved with anti-lock brakes, airbags, fuel injectors, turbochargers, cruise control, and sound systems that outperform even the best home stereos of 1970. Today's youth may gripe, but they're already benefiting from products their parents didn't get until later in life. What's more, there's a huge inventory of even more world-shaking technologies that will create new waves of convenient, innovative consumer products.
The first test of national well-being, the one that makes the most common sense, should be the material facts of life. If the average consumer owns more of everything, plus the bonus of new products, then it's hard to fathom how a nation could have lost ground over the past 20 years. (See Figure 3.)
Wistful As We Work?
At least some declinists will concede that Americans have more material goods than ever, but they contend that it's only because we're working harder. The two-income family, with both husband and wife holding jobs, is all that keeps the country from the consequences of the weakening of the economy.
What conclusion could be more backward? Both adults have always worked. Running a household entails a daunting list of chores–cooking, cleaning, gardening, child care, shopping, washing and ironing, financial management, ferrying family members to ballet lessons and soccer practice. The average workweek of yesterday's housewife, the stay-at-home mom of the 1950s, was 52 hours, a more exhausting schedule than the 39.8 hours typically put in at the office.
The idea that people at home don't work isn't just insulting to women, who do most of the housework. It also misses how specialization contributes to higher and higher living standards. At one time, both adults worked exclusively at home. The man constructed buildings, tilled the land, raised livestock. The woman prepared meals, preserved food, looked after the children. Living standards rarely rose above the subsistence level.
Over time, household tasks were turned over to the market. At first, only one adult went to work outside the home, gaining specialized skills and earning an income that allowed the family to buy what it didn't have the time, energy, or ability to make at home. When men went to work outside the home, living standards rose. Why do we insist that the same transition for women results in a squeezing of the household's possibilities? What's good for the gander is good for the goose. It's more efficient for workers to spend time earning money doing what they do best on the job and then pay others to perform at least some household chores. It makes no sense to suggest that the economic rules flip-flop when a second adult takes a job. Working women make families better off.
As the United States grows richer, tasks once done by family members continue to move out of the home and into the market. To the extent they can afford it, households hire professionals to clean, paint, tend the yard, figure taxes, care for clothing, and perform other responsibilities once assigned to family members. In getting their daily bread, Americans are finding ways to ease the burden of cooking at home. In 1993, restaurants received 43 percent of the country's spending on food, a big gain from the 33 percent of 1972. Eating out, once an occasional luxury, has become a way of life. And, even when we eat at home, we often rely more on market goods–heat-and-serve products, microwave meals, and carry-out items.
The data show that home production–the market of all housework and related chores–fell steadily from 45 percent of GNP at the end of World War II to 33 percent in 1973. Since then, it has drifted slightly lower, and it's likely to continue a gradual ebbing. Turning to the marketplace for many of the time-consuming, dull chores of maintaining a household frees time for more valuable pursuits. A job is one of them. Another is the pursuit of pleasure.
In the 1990s, Americans aren't just enjoying the plenty of bigger houses, better cars, and more electronics. As people get wealthier, they are likely to want more time off work, trading higher income for additional leisure. Today's lickety-split lifestyles leave many people breathless, but there's plenty of evidence that a typical American spends less time than ever at work either at home or on the job. (See Figure 4.)
Additional free time comes from the confluence of several trends. Americans are starting work later in life. On average, the age of initial employment has been pushed back seven months in the past 20 years. Once at work, Americans are putting in fewer hours because of shorter weeks, more holidays, and longer vacations. In the past two decades, there's been a gain of the equivalent of 23 days off a year. At home, Americans on average are devoting 18 minutes less a day to chores. Over the course of a year, that adds up to an extra four days of leisure. Toward the end of life, Americans are retiring earlier and living longer. As a result, a typical retirement grew by four years since 1973.
When it's all added up, the results are mind-boggling: Workers have added the equivalent of nearly five years of waking leisure to their lives since 1973. The typical employee spends less than a third of all non-sleeping hours on the job–that's better than any generation in U.S. history.
There's indirect confirmation that Americans have more free time these days: We're participating in more recreational activities and spending more money on leisure activities. Ownership rates more than doubled for vacation homes and rose 50 percent for recreational boats. Pleasure trips per capita rose from 1.5 a year in 1980 to 1.8 in 1991. Americans took 4.4 million cruises in 1994, compared with 500,000 in 1970 and 1.4 million as recently as 1980.
Increased leisure has fueled a sports boom. Attendance at National Football League games rose from 10 million in 1970 to 15 million in 1994. A fan backlash over last year's strike is keeping baseball attendance down, but hockey, basketball, golf, car racing, and other sports are drawing bigger crowds–in person and on television.
Participatory sports are booming, too. From 1970 to 1991, Americans who play golf regularly doubled to 11 percent of the population. In 1970, a quarter of Americans bowled; now, a third of them do. Even after adjusting for population growth, the number of adult softball teams jumped sixfold in two decades. Growing up, few of us ever imagined rock climbing, bungee jumping, or Rollerblading. These are now regular activities for millions of Americans.
Cultural activities haven't been short-changed. Per capita attendance at symphonies and operas doubled from 1970 to 1991. Movies, pop-music concerts, and television fare are proliferating. We're even buying more books: Annual sales rose from 6.6 per person in 1974 to 8.1 in 1991. The much-bemoaned overcrowding of national parks bespeaks the arrival of a great democracy in free time, with the masses enjoying what was once possible for only a privileged few.
Money tells the same story. Total recreational spending, adjusted for inflation, jumped from $91.3 billion in 1970 to $257.3 billion in 1990, an average annual gain of 9.1 percent that well outstrips population growth of 1 percent a year. During the 1980s alone, outlays rose from $1.2 billion to $4.1 billion for recreational vehicles, $2.7 billion to $7.6 billion for pleasure boats, and $17 billion to $44 billion for sporting goods. Over the past 20 years, money allocated to recreation increased from 5 percent of consumer spending to nearly 8 percent.
One of the advantages of statistics is they reduce subjectivity. In polls, Americans will swear life is more hectic than it used to be, that there's not enough time anymore. What's crowding their lives, though, isn't necessarily more work or more chores. It is the relentless chasing after the myriad leisure opportunities of a society that has more free time and more money to spend.
The preferences of richer countries extend beyond additional consumption and leisure. The better off a country is, the more citizens will value non-material aspects of living standards: better health and safety, more pleasant working conditions, a cleaner environment. All of us could add other considerations we regard as important.
Intangibles, by their very nature, aren't as easy to count as television sets or hours of work. Yet, there are some numbers that counter fears that the United States is losing ground in most of what might be loosely called the quality of life.
In fact, longevity may be the most important measure of well-being in a modern society. The data show that an average American's life expectancy at birth has risen decade after decade. As might be expected, the biggest gains came in the first half of the 20th century, but the upward trend continues into the 1990s. Over the past 10 years, the life expectancy increased by more than one year and eight months.
What's more, the populace reports that it feels healthier. Surveys by the U.S. Department of Health and Human Services show a steady drop in the proportion of Americans who rate their health as "fair or poor"–from 12.2 percent in 1975 to 9.3 percent in 1991. Infant mortality rates fell from 20 deaths per 1,000 live births in 1970 to fewer than nine in 1991. The death rate from natural causes fell by 27 percent from 1970 to 1990, with most of the progress coming in combatting diseases of the heart. The portion of the adult population with high cholesterol fell sharply over the past two decades. What once was fatal can in many cases now be treated. Heart, liver, and lung transplants, experimental to theoretical in the early 1970s, are increasingly common today.
But the country isn't just healthier; in many respects, it's also safer. Accidental deaths have declined in every category, especially since 1970. In 1991, 88,000 Americans died in accidents, the lowest figure since 1962. Highway deaths totaled 43,500 in 1991, the best since 1962. Even more encouraging, the death rate per 100 million miles traveled on the nation's roads fell from 3.0 in 1975 to 1.8 in 1990. The incidence of death from crashes of scheduled airliners is just a fraction of what it was 20 years ago. Safety at work is improving, too. Accidental deaths on the job have declined steadily since at least 1945. Job-related injuries are well below what they were in previous decades.
Americans are also making progress on improving the environment. Levels of such major air pollutants as particulate matter, sulfur oxides, volatile organic compounds, carbon monoxide, and lead hit their peaks in 1970 or before. Levels of nitrogen oxides have been declining since 1980. Overall, air quality is better now than at any time since data collection began in 1940. Water quality has improved since the 1960s, when authorities banned fishing in Lake Erie and fires erupted on the polluted Cuyahoga River as it passed through Cleveland. The U.S. Geological Survey, examining trends since 1980, found that fecal coliform bacteria and phosphorus have decreased substantially in many parts of the country. Other indicators of water quality–dissolved oxygen, dissolved solids, nitrate, and suspended sediments–haven't been getting any worse.
We live in a complex, contradictory world. Not in this era, nor in any other, should we expect the country to get better by every measure. The general gains in health are clouded by the AIDS epidemic. Air and water may be getting cleaner overall, but they still aren't pristine. Environmentalists warn of global warming, deforestation, hazardous waste dumping, and the loss of endangered species. Working conditions may be improving for most Americans, but at least some workers, displaced by corporate downsizing, may have new jobs that aren't as good as the ones they lost, or they may have no job at all. Even among the 120 million employed in the United States, reports of widespread layoffs are likely to cause anxiety about job security.
We are even more alarmed about the increasing incidence of crime and violence. In many surveys, crime ranks first among Americans' worries. The data indicate why. Crime remains high, even though there hasn't really been a big surge in crime in the past 20 years. Statistically, the increase in reported offenses came earlier–from 1960 to the mid-1970s.
Disease, pollution, unemployment, and crime are but a few of the threats in the modern world, but we shouldn't let them overshadow two decades of progress in so many other aspects of our living standards.
A wealth of data makes a case for rising U.S. living standards. Even so, there's the pesky problem of the falling real wages the declinists bring up so often. Common sense seems to dictate that smaller paychecks are simply incompatible with a society being better off.
The data on rising consumption, plus additional leisure, suggest that the decline in real wages isn't the best indicator of what's happening to the country's economic prospects.
And, it turns out, there are better ways to show how the typical American is doing. The most straightforward alternative to real hourly wages is per capita income. One of its virtues is simplicity: divide total output by the number of people. This computation isn't skewed by changes in the way we work, the way we live, how we're paid, or what we produce. When we look at per capita personal income, the historical trend shows no monumental sign of a decline during the post-World War II era. It rose by an annual average of 1.7 percent since 1974, compared with 2.0 percent in the 1950s and 1960s. (Figure 5.)
Statistics on average hourly wages suffer from one glaring omission–fringe benefits. Over the past two decades, as tax rates and income have risen, these non-wage benefits have surged. Workers have chosen to take more compensation in the form of additional health care, contributions to retirement savings, or employee assistance programs. Overall, non-monetary benefits as a percentage of payroll increased by a third since 1970. Compared with a generation ago, more employers are providing eye care, dental benefits, paid maternity leave, and stock-purchase plans. Today's most progressive companies are starting to offer day care and paternity leave–both unheard of in the early 1970s.
When fringe benefits are included, there is indeed a slowdown in the rate of growth for total compensation in the past 20 years. But even so, the average American worker is still better off than his counterpart in the early 1970s, with a total gain of almost 15 percent.
Part of this relates to a change in the distribution of wages throughout the economy. Since 1973, the gap has widened between income and compensation. This trend tells us that the share of income paid for production and nonsupervisory work is declining, while the share paid elsewhere–to professionals, supervisors, managers, and owners–is growing.
One explanation appears to be the rising return to human capital. In an increasingly information-and service-oriented economy, business capital has come to encompass not just plant and machinery, but, more and more, intellectual capital as well. As Figure 6 shows, the workers reaping most of the economic gains have been those at the higher end of the education spectrum. The income premium to education is substantial and has grown markedly over the past two decades. In 1992, college graduates made an average of 82 percent more than high school graduates, up from only 43 percent in 1972. The really big returns to education these days come with advanced degrees–Ph.D.s, M.D.s, J.D.s, M.B.A.s, etc. In 1972, people with advanced degrees made 72 percent more income than high school graduates. By 1992, they made 2.5 times more. Today, high school dropouts earn scarcely half as much as high school grads, and the split is growing.
Contrary to what declinists might argue, the reallocation of wealth to more-educated people doesn't mean that some people necessarily get left behind. Declinists like to use data that breaks income down into quintiles; they then point to growing disparities between quintile levels as proof that the rich get richer while everyone else gets poorer.
The problem with using quintile data to track individuals' income experience is that exactly who is in each of the quintiles changes over time. A young woman working at McDonald's may appear in the lowest income quintile while working to pay her way through college, but two years later move up to the second or third income quintile as she lands her first job, then advance further through the economy's income distribution as she accumulates valuable job experience, gets promoted, or completes her M.B.A. at night school. So, comparing the income of today's quintiles to yesterday's just makes no good sense.
To see the fortunes of actual people we have to track actual people. A 1992 study by the U.S. Department of Treasury, based on 14,351 income tax returns filed from 1979 through 1988, showed that 86 percent of those in the bottom income quintile in 1979 had managed to raise their incomes by enough to move to a higher quintile; 20.7 percent of those in the bottom moved to the second quintile, 25.0 to the middle, 25.3 to the next-to-highest income quintile, and 14.7 percent moved all the way up to the top quintile. More moved from the bottom all the way to the top than stayed in the bottom.
Per capita income and total compensation don't exhibit the downturn that's so unsettling in the statistics for real wages. To the contrary, they maintain an upward thrust up through the most recent data. More to the point, these measures of earning power square with the other evidence showing that Americans are better off than they used to be.
Us Versus Them
In the declinist view, Americans should be worried not only about the country's ability to keep pace with its own past but also about a failure to grow as fast as many other nations.
The numbers are fairly familiar. From 1973 to 1990, per capita GNP in the United States grew by an average of 1.5 percent a year. By contrast, average annual gains were 3.1 percent for Japan and 2 percent for Germany. While the United States seemed to crawl along, such developing countries as Korea, Taiwan, Thailand, and, most recently, China managed to post strong growth rates.
Is this a sign of U.S. failure? Not if you understand the dynamics of how economies move forward. Envision an explorer wielding a machete to cut a path through a dense jungle. He goes slowly, hacking his way forward, destination not really known. Those who come behind him have a much easier time of it. They see the path. They know where they're going. They can move faster, gaining ground on the trailblazer. That's just what happens with economies. The most advanced nations open the way for others by pioneering industries, markets, technologies, business systems, and infrastructure–in effect, creating a successful model. Less-developed countries can quickly adopt what works and exploit existing markets. In short, catching up takes less effort.
As other nations move closer to the U.S. level of development, their growth rates will slow and converge toward the American performance. Take Japan, for example. Its annual growth rate outdid that of the United States by 6.9 percentage points in the 1960s, by 2.3 percentage points in the 1970s, and by 1.7 percentage points in the 1980s. So far in this decade, the United States is growing much faster than Japan. Among the major industrial nations, the United States' lead in per capita income dwindled over the past 45 years. Even so, the United States still hasn't lost its lead–and it's not likely to. (See Figure 7.)
To some Americans, faster growth abroad is viewed as a threat. Nothing could be further from the truth. What's important is absolute standard of living, not relative well-being. The United States doesn't benefit when other countries' economies stumble. To the contrary, prosperity abroad provides opportunities for U.S. exports and business deals.
There's plenty of good, hard data refuting the notion that American living standards are in decline. We're enjoying more of almost all material goods. We're taking more leisure. We're healthier. We're making gains on other measures of well-being. We're making daily life easier by paying others to do what we once did for ourselves. We've got no reason to be alarmed by the evolution of two-income households, or the faster growth rates of other countries.
So why aren't we happier? Why can't we see the progress that continues to make the American dream into an everyday reality?
Many do, of course. Public opinion polls yield a telling schizophrenia. Asked where the country is going, respondents lean toward doom and gloom. When contemplating their own prospects, however, a majority expects to be better off in the future. The first question rests on the dispiriting reports people hear and read, the second reflects their personal experiences.
The poll data, with its dichotomy between societal and personal prospects, suggests that being better informed might not produce peace of mind. These days, with the intrusion of so many media, it's almost impossible to be blissfully ignorant of the seamier sides of society. We're overwhelmed by the negative, including a steady drumbeat of reports that living standards are declining. That message sounds loud and clear, drowning out all the evidence and experience.
For one thing, bad news sells. A report on the plight of workers with diminished prospects, or some disconcerting analysis of an ebbing of U.S. competitiveness, makes the front page of The New York Times. A book called The Great Depression of 1990 can become a bestseller. Advocacy groups and politicians concentrate on the country's problems, not its strengths. This is a society deluged by information. The sensational, the extreme, and the garish compete for attention. Realistic assessments of the American economy and its prospects don't make much of a splash in this marketplace.
What's more, among many opinion leaders, there's an anti-capitalist mentality that seizes on signs that the U.S. economy isn't performing the way it should. Their motives are obscure, their scholarship often biased, but they play up the failures of this economy. They diminish the evidence of progress and play up the black marks, such as real wages. More important, they ignore the fact that many of today's unpleasant transitions are nothing new, ominous, or unexpected. For example, jobs are always routinely created and destroyed. No society moves forward unless the jobs of the past give way to the jobs of the future. The churn of jobs can be unsettling, but it's what makes free market economies succeed. And no other economic model works as well.
Clearly, many Americans are buying the myth of declining U.S. living standards. Explaining the resonance of negativism in today's world moves beyond the precision of economic principles and the Statistical Abstract of the United States. Even so, it's possible to take a few speculative stabs.
Part of it may lie in human nature. Today's imperfections are confirmed by daily trials and tribulations at home and at work, or the media's latest reports of murder and mayhem. Many of us forget the turbulence of the past–the wars, recessions, scandals, crimes, and human failings that come with every age. We remember the past in a hazy glow of good feelings. In the 1990s there's a nostalgia for the 1950s and 1960s as more peaceful and prosperous times. Yet those eras had plenty of horrors–the threat of nuclear annihilation, an unpopluar war in Vietnam, racial strife that erupted into rioting, assassinations, and political hanky-panky.
Demographics might have something to do with it, too. The baby boom generation, that bulge in population that significantly sways cultural and social trends, now shoulders the burdens of middle age. To to three decades ago, the boomers were in their 20s, with few demands on their time and money. Now,these people are at a time in life where they are running in place to provide for children, maintain a good living standard, save for retirement, and care for their aging parents. Over the next decade or two, the boomers will move into a less hectic time of life. Perhaps then, the negativism will begin to fade.
To be sure, economic changes are coming fast and furious. Many of us grew up in an era where workers could take a job and expect to keep it until retirement. Those entering the labor force today might have as many as four different jobs during their lifetimes–and three of them haven't been invented yet. In addition, there's an unsettling shift from a national economy to an international one, and all the new Information Age technology that changes the way we live and work. Transitions are hard on humans. The arrival of the Industrial Revolution created similar upheavals, though. Over time, people will get used to the new environment, make the necessary adjustments, and look back to wonder how they could have lived in the previous age.
The United States has its economic problems, no doubt about it. Budget deficits are too big. Too many people are still poor. Workers need skills to match today's technology–and tomorrow's. So, with real problems at hand, we shouldn't spend our time on phony ones. Being distracted by the myth of declining living standards isn't getting us anywhere. The evidence is overwhelming. On average, Americans are better off than ever before.
Michael Cox is vice president and economic adviser at the Federal Reserve Bank of Dallas and Richard Alm (firstname.lastname@example.org) is a business writer for The Dallas Morning News. The views expressed here are solely those of the authors and should not be attributed to the Federal Reserve Bank of Dallas or the Federal Reserve System.