W. Michael Cox enjoys comparing living standards as measured by personal consumption. Here Mark Perry posts some results of the difference between what a summer job in 1952 would buy as versus one today. It is very enlightening. However, a big difference is emerging of late: any teen could get a job in 1952, but not so today. The youth unemployment rate is soaring thanks to every manner of government restrictions. So the point is even more intense: the markets keeps trying to shower us with blessing but government keeps getting in the way.
Source link: http://archive.mises.org/18104/free-markets-have-made-us-incredibly-richer/
Free markets have made us incredibly richer
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I fear that some people are going to take that study and claim that this “proves” we need a higher minimum wage.
read the post. He addresses that.
I’m not sure why I’m missing it, but I don’t seem any kind of pre-refutation to avoid taking away the “lesson” being “hike the minimum and they can get more”.
So all the inflation since 1971 isn’t really that bad?
So despite all the state interventions we have now (as compared to 1952) aren’t really that bad?
It would be good to have a libertarian interpretation of these results.
Also I think the result is heavily distorted by the fact that he’s comparing consumer electronics only. Another more meaningfull comparison would be: could a minimum wage worker support a family of 6-8 today? As compared to 1952?
All of these types of studies deal with consumer markets, not issues like capital accumulation, savings, household wealth, etc. The market has done its best to bring us great stuff, despite every government attempt to smash things. This is the lesson.
Well, food is part of the consumer market, isn’t it?
And as far as ‘lesson learned’. It’s basically the same argument the Keynesians are using today: the stimulus failed because it was not big enough.
Both are not very convincing arguments. We, as libertarians, tell everybody that government involvement, taxes, etc all increased by _so_ much over the decades, and that this is bad. On the other hand, we point out that it really didn’t matter, because we are still better off today than back in the days. This does not help our argument at all. In fact, it’s an argument that’s helping more the mainstream economics. And here lies the danger of this analysis.
And that’s why i would prefer an analysis on the most important consumer costs: food, housing, social costs, etc.
Price inflation in terms of work hours required to purchase similar goods and services is generally flat or negative, medical services being the big exception. In 1952 a person could buy an low priced family car for a half year’s pay. A person could buy 3 or 4 gallons of gas for an hour’s pay and still can. Houses would be about the same (equal quality and size) except for the costs of building permits. I suspect equal quality medical service would be about the same. Tools, appliances, and clothing is much cheaper. For example, The Wife says it is much cheaper to buy clothing than to make her own.
I don’t recall many 6-8 people families, especially living on one income.
Mark Perry is by no means a pure Misesian, but he’s a gift to the blogosphere and humanity
I would change the title to Free-ish Markets…. Or maybe just Markets….
I hear the unemployment rate for pre-teens is even worse.
When I read the original post, my thought was: 1) consumer goods are cheaper because materials and manufacturing costs are cheaper because of technology, and 2) a smaller portion of teenagers have jobs and many that do come from the higher skilled and more affluent classes anyway because they tend to be more productive. The analysis of the purchasing power of minimum wage when the earner is not responsible for living expenses reflects the real growth of minimum wages, which simply price minorities and the unskilled out of the labor market.
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