The View From Here . . .

The unemployment rate for US workers edged downward in August to 4.7 percent, a historically good showing that was well below the average percentage during the Clinton Administration. Nevertheless, critics of the Bush Administration's economic policies make the argument that real wages (although they did rise in the most recent report) are not keeping up with inflation. For example, a New York Times editorial last week entitled "Downward Mobility" states that median income for the under-65 group declined by $2000 between 2001 and 2005.

Nevertheless, while the exact state of economic well being of the average worker rather quickly turns into a partisan debate, a recent article by Don Boudreaux, an economics professor at George Mason University, entitled "We're Much Wealthier" does put the matter in some perspective.

Mr. Boudreaux notes that in the period between 1967 and 2004, inflation adjusted wages rose by 31 percent, a not very impressive gain of less than one percent a year. Nevertheless, he argues that improvements in the quality and availability of goods and services make life today much better. Indeed, the professor states he would much prefer to live with the 1967 level of income today than live with today's higher income in 1967.

The article gives numerous relevant examples of why product enhancements make things much better than a generation ago. For example, even the cheapest cars today are safer and more reliable than the best cars available in 1967. Cellphones and telephone answering machines are widely available and so is cable television, a vast improvement over the world of 3 or 4 channels once available in most areas. Today's average supermarket offers about 45,000, items, up from about 5,000 in 1967.

Many other areas have improved as well. Houses are bigger, better equipped and on balance more affordable than in prior years. Even coffee is much better.

There are also improvements in other spheres. Life expectancy is up considerably since 1967, with many new medications available. In addition, many more low-fat products are for sale. Anesthesia is better and so are contact lenses, which now can be obtained in soft disposable form.

Of course, as the professor points out, the internet has also made life better. Now consumers may order from Amazon from a vast variety of books or sell unwanted goods on eBay.

I can add a some anecdotal support for Professor Boudreaux's analysis. I remember in 1969 buying a 19" black and white television for $125, which must be equivalent $500-600 in today's money. I could get a much larger flat screen, cable ready television for that amount today. I also remember around that time marveling at multifunction calculators selling for $50 in 1969 dollars that would be available for $10 in 2006 money. Another example not mentioned by the professor is air travel, which (for all the hassles) has become far cheaper than it was 35 years ago. Few of my friends had ever taken a plane in those days.

Obviously, life is not good for everyone today and many families still live paycheck to paycheck. Still, even if real wages are rising only slowly over time, or even decline on occasion, for most people the trend in overall standard of living is up, not down.