Better to be poor today than 30 years ago


QC report:

Income in the US has increased in the last few decades, but and well being are different. If everyone is living better than before, the fact that some people are much better off isn’t necessarily a bad thing. The recent has been a problem because, at least in income terms, a few have prospered while most stagnated. But income does not tell us much about living standards. Anecdotally it seems like living standards increased for everyone since the 1970s. Once, hardly anyone had air-conditioning, now everyone has mobile phones. Others argue the poor are struggling like never before.

An article in the latest version of the American Economic Review finds that Americans’ consumption has become more unequal too: The amount high-earning Americans spend grew much more than that of low income earners in the last 30 years. But that does not mean low earners are worse off. The figure below shows the share of low and high earners who own goods that used to be considered luxury items. Despite more inequality, low income Americans have better access to dishwashers, laundry, and entertainment goods.

I’d argue access to goods is more important to low income households than relative inequality between deciles.

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