Unhappy Days?

"The Good Old Days Are Now" by W. Michael Cox and Richard Alm (December) is the best retort to the ignorance of the doomsdayers seen in a long time. You are to be congratulated and thanked. Much more of what you have done is needed.

Donald R. Marsh
Seattle, WA

I do agree with Cox and Alm's essay on the need for meaningful data to counterbalance economic mythologies, but see no references to support the data quoted by the authors. The putative "improvements" quoted to support the notion of greater well-being are mainly trivial (pagers, video games, electric knives, etc.). What has been happening is that high-tech gadgets are replacing human contact resulting in a poorer, more alienated social environment. This has happened because the cost of such technology is so much lower now whether the wage rates have declined or per capita income has increased.

I have serious doubts regarding the validity of the data relating to extra leisure and the shorter work week. In the computer industry long hours on the job are the norm, and are not recorded and thus never reported. Vacations are apparently more generous but can only be taken in full at the expense of losing a job.

David Brown
Fairfax, CA

W. Michael Cox and Richard Alm state, "The first test of national well-being, the one that makes the most common sense, should be the material facts of life." They try to support that hypothesis with a virtual whirlwind of facts and figures. If that statement is true, then we should all be as happy as proverbial clams. Unfortunately, most folks are not all that happy. Either everyone is just too dense to realize how good they've got it or that "test of national well-being" touted by Cox and Alm is off the mark. I suspect the latter. The material facts of life are neither the first test of national well-being nor the one that makes the most sense. It is just the only one that the current version of America has to sell.

The material facts of life pertain only to survival and, as any first-year psychology student knows, it is difficult for any person to attain true happiness until he or she moves beyond that point. Once we reach a certain level of comfort it is time to pursue other things. Bigger houses and more toys are just higher levels of survival. We really don't even need them. The American myth has simply convinced us that we must have them. I think that is why there is a certain amount of nostalgia for the 1950s and early '60s. As a country, that was the first time we had achieved stability as far as daily survival was concerned. As a people, we were poised to move on to bigger and better things.

But we didn't. Instead, we built bigger houses and invented neater toys. We became infatuated with those material facts of life. And we paid a monstrous price for them: Shattered and scattered families. World record crime statistics. Loss of personal freedom to bloated and intrusive government. And general unhappiness.

Perhaps we feel that we should be handling all of this bounty just a little bit better. Perhaps it is just too obvious that any society that uses increased levels of consumption as its standard of excellence cannot possibly come to a good ending in a world of limited resources. Perhaps we are uncomfortable with the fact that for every one of us who succeeds in carving out a larger piece of the pie than we really need, there is another one or two who are forced below the level of subsistence. (The high rate of poverty in our country is neatly done away with by the fancy averages of Mr. Cox and Mr. Alm.) Perhaps we question that wonderful quality of life we are told we have. We lead the world in expensive drugs and high-tech surgery but can't keep our babies alive and continue to slip behind older, more established countries in day-in-day-out health care. We give additional years to our elderly by extraordinary means only to let them die alone in nursing homes and hospitals.

I don't buy the material facts argument and, if the general mood of the country is any indication, I suspect that a lot of other people do not either. If a person departs this world having left some mark–whether it results in a Nobel Prize or just the lasting admiration of a child–then that person will have lived and died well. But if all a person manages to do in this life is accumulate material things and avoid death a little longer than normal–then that is a life wasted. We were meant for better things.

There is another and better test of national well-being. However, it is pretty tough to pin down because it has more to do with feelings and senses and intuition than it does facts and figures and material things. It does not easily yield its secrets to the calculator. Yet it is there and I believe we are all aware of it.

Dan Kacsir
Indianapolis, IN

While I thank Cox and Alm for their recognition of the efforts put forth by work-at-home women in fulfilling their domestic responsibilities, I cannot help but question their sincerity and their rose-colored analysis of the economic impact women entering the labor market has had.

True, the time necessary to devote to domestic tasks has shrunk due to technology and the market's provision of alternatives to women performing their own household tasks. However, are the authors prepared to say that every family can afford this technology or alternatives and, more importantly, that the market can possibly provide an alternative to the love and caring provided by a mother in the rearing of her own children? Are women as mothers nothing more special than an economic unit? This is the ideology of cultural suicide.

The authors state that working women make families better off. Even aside from the love which can only be provided by a mother, freshman-level economics proves this to be false. The law of supply and demand as it pertains to labor is clear: Women entering the work force have increased the supply of workers while the demand lags far behind, causing wages to fall and unemployment to rise. How is this good for families?

Secondly, those families that have benefited have caused an increase in demand for goods while supply lags behind, causing goods to become more expensive. This has priced many families, especially those who allow mom to perform her God-given function, out of the market for many goods they should otherwise be able to have. And this is good for families? Of course, as the authors pointed out, recent history has been good for restaurants; it has just been a net loss for families.

Timothy M. Barrett
Virginia Beach, VA

Authors Cox and Alm don't make a very convincing case in their December article. In the first place, they ignored the cost of a mortgage. In the mid-'60s my wife and I purchased our first home with a 3.25 percent mortgage. Today only the fortunate few get by for less than double that rate, and most pay triple.

In those days I would pay Social Security tax until September or October and pocket that amount for the remainder of the year. This was on a teacher's pay, no less. How many inexperienced teachers earn in excess of the $59,000 earnings cap today? The first two new automobiles I bought didn't have the extra cost of seat belts, airbags, and catalytic converters factored into the price. In 1970 we bought a small nine-year-old airplane for $3,000. Today a similar airplane, if you could find one, would cost more like $35,000; approximately 11.6 times as much. Product liability awards have driven the cost of general aviation aircraft, even used ones, out of reach of all but the well-to-do. Teachers' salaries have not multiplied by a factor of 11.6 since 1970.

The increased costs of borrowing money, government regulations, rampant litigation, and Social Security were ignored in the article. Sorry, guys, but when I look back on the '60s as the "good old days," there's more involved than just nostalgia.

Gary Yocum
Marshalltown, IA

In "The Good Old Days Are Now," the authors grossly misrepresent the arguments they claim to attack and display both slippery analytical techniques and an unfamiliarity with bipartisan public policies.

Nobody claims that all Americans are worse off than before, that all families can survive only if two adults are working, or that the United States is generally worse off than other industrial countries. The most prominent argument is that the income gap between high-paid and low-paid workers is greater in the United States than in other industrial countries, and that the gap has been widening. Cox and Alm indicate as much by their initial reference to the steady decline in average hourly wages since 1978.

They dismiss such data by emphasizing per capita income for all Americans, and by pointing to the absence of fringe benefits from hourly wage data. Surely they know that averages do not accurately outline the gaps between groups, and that all sorts of fringe benefits are rapidly disappearing.

Almost shockingly, they seem unaware of the bipartisan policy to maintain about a 6 percent unemployment rate to control inflation by depressing wages, thereby making it very difficult for young people to get full-time jobs at decent wages. Obviously, decisions to delay marriage or not marry at all are not necessarily voluntary, as Cox and Alm prefer to suggest.

They do provide laughs here and there, and we should thank them. Yes, there are indeed more VCRs in the country than in previous decades. There also were more radios in the 1930s than in the 1920s. Perhaps they believe that the Great Depression was imaginary.

Frederick C. Thayer
Visiting Professor
Department of Public Administration
The George Washington University
Washington, DC

W. Michael Cox and Richard Alm reply: David Brown has "serious" doubts about our facts and figures. Every statistic cited in our article came from a public source, easily available in most libraries. Overwhelmingly, the data came from various government agencies and The Statistical Abstract of the United States. That's true of our numbers on work hours. The U.S. Department of Labor tells us that Americans, on average, are working less. It strives to remain consistent over time and reduce any biases. Why do so many people find it hard to believe Americans work less? Our guess is they're generalizing from a few observations, or maybe from themselves. The baby boom generation has entered the 45-54-year-old age category–the period of life during which people typically work hardest and longest. So many of us today are perhaps looking back on the carefree days of youth. But that's not the correct perspective to use for comparison. The correct perspective is our lifetime compared to that of our parents and grandparents. Surely, few would doubt that they worked harder than us.

A few modern-day gadgets might seem trivial to some people. That's a value judgment that cannot be tested in any way. One man's triviality might be another's highest blessing. Try telling an opera buff that the clarity of sound on a compact disc isn't a great gain for mankind. Even we have trouble with the social value of video games, but on the whole technology has made life more pleasurable, less burdensome, and cheaper. Today, you can watch a $48 million motion picture such as Jurassic Park in your living room for $2.00. Having seen the hard lives of our parents and grandparents, we do not agree that the machines of modern life are trivial. In addition, our list of advancements included organ transplants, computers, lifesaving airbags and antilock brakes, and a host of other inventions that certainly can't be dismissed as trivial.

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.