Monday, November 30, 2009

Charts of the Day: It's Getting Better All The Time

Great stuff from Steve Horwitz over at Austrian Economists on the modern enrichment of America's poor:

% Households with: Poor 1984 Poor  1994 Poor 2003 Poor 2005 All 1971 All 2005
Washing machine 58.2 71.7 67.0 68.7 71.3 84.0
Clothes dryer 35.6 50.2 58.5 61.2 44.5 81.2
Dishwasher 13.6 19.6 33.9 36.7 18.8 64.0
Refrigerator 95.8 97.9 98.2 98.5 83.3 99.3
Freezer 29.2 28.6 25.4 25.1 32.2 36.6
Stove 95.2 97.7 97.1 97.0 87.0 98.8
Microwave 12.5 60.0 88.7 91.2 1.0 96.4
Color TV 70.3 92.5 96.8 97.4 43.3 98.9
VCR 3.4 59.7 75.4 83.6 0.0 92.2
Personal computer 2.9 7.4 36.0 42.4 0.0 67.1
Telephone 71.0 76.7 87.3 79.8 93.0 90.6
Air conditioner 42.5 49.6 77.7 78.8 31.8 85.7
Cellular Telephone

34.7 48.3 0.0 71.3
One or more cars 64.1 71.8 72.8 (2001)
79.5







source:  http://www.census.gov/population/www/socdemo/extended-05.html and prior years


As we can readily see, America's poor (i.e., those officially below the poverty line) own a lot more household "necessities" today than they did only 20 years ago.  And what about the gap between rich and poor?  On that issue, Horwitz offers a follow-up chart:

% Households with: Poor 2003 Rich 2003 2003
gap
Poor 2005 Rich 2005 2005
gap
Gap
change
Washing machine 67.0 94.8 27.8 68.7 95.2 26.5 -1.3
Clothes dryer 58.5 93.6 35.1 61.2 94.3 33.1 -2.0
Dishwasher 33.9 86.1 52.2 36.7 88.4 51.7 -0.5
Refrigerator 98.2 99.6 1.4 98.5 99.8 1.3 -0.1
Freezer 25.4 44 18.6 25.1 43.7 18.6  0.0
Stove 97.1 99.6 2.5 97.0 99.7 2.7  0.2
Microwave 88.7 98.6 9.9 91.2 98.8 7.6 -2.3
Color TV 96.8 99.5 2.7 97.4 99.5 2.1 -0.6
VCR 75.4 97.7 22.3 83.6 98.5 14.9 -7.4
Personal computer 36.0 87.9 51.9 42.4 92.7 50.3 -1.6
Telephone 87.3 98.6 11.3 79.8 97.1 17.3  6.0
Air conditioner 77.7 90.3 12.6 78.8 89.1 10.3 -2.3
Cellular Telephone 34.7 88.6 53.9 48.3 92.4 44.1 -9.8

As the chart makes clear, the gap has narrowed in 10 of 13 categories in only 2 years, and the only product with a large increase is landline telephones - something that is easily explained by the large increase in poor cellphone ownership.  Finally, these charts inspired Mark Perry to issue his own awesome chart on the cost of these household necessities in terms of hours worked to pay for them:


Very cool.  As we can see from Perry's chart, the average American today has to work far fewer hours than they did in 1973 to buy basic household items.  As such, they're far better off today than they were back then. Indeed, all of these charts make clear that we should be very, very suspicious when we hear politicians lamenting the worsening state of America's "poor."

I think the charts speak for themselves, but I'll still offer up a post-script: one of the big things driving these figures is open trade with China and other low-cost countries. Indeed, according to University of Chicago's Christian Broda and John Romalis, "[M]uch of the rise of measured income inequality has been offset by a relative decline in the prices of products that poorer consumers buy." And China, as the primary manufacturer of such "products," is one of the main drivers of their price declines.

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