Steven Horwitz

As many of you know, this is a set of data I've followed closely over the years (as has Don Boudreaux among others). The Census Bureau just released the 2005 data on what households have (HT: Ariel Goldring) and it has allowed me to update my data. In addition, I've also rendered the data more consistent. Each column on the poor below reflects households below the poverty line. In previous iterations I had said it was the "lowest quintile." I've discovered that some of my data was that, but the older stuff was "below the poverty line." I've now made it all poverty line as the cutoff. Here's the historical data:

% 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

I think these data largely speak for themselves. The only categories where the poor have become "worse off" are in freezers (likely due to more being built into fridges) and now telephones, which is, of course, explained by the gains in cell phones. Stoves are down slightly, but that too could be due to swapping regular stoves for microwaves or even toaster ovens. In any case, it's a pretty small decline.

The overall lesson is clear: lives for Americans below the poverty line continue to get better in terms of what they are able to put in their households and have to make use of everyday. And do note that the average American household in 2005 was doing much better than its 1971 counterpart. MUCH better - and this doesn't even count medical advances and the like. So whatever one hears about stagnating wages and the like, the bottom line is ultimately what we can afford to buy and have in our households to improve our lives. By those measures, life for the average American is better today than 35 years ago, life for poor Americans is much better than it was 35 years ago, and poor Americans today largely live better than the average American did 35 years ago. Hard to square with a narrative of economic stagnation or decline.

What the current policy regime holds for the future remains, of course, to be seen. But to use Pete's terms: as long as the Schumpeterian horse of innovation and the Smithian horse of the gains from trade outrun the Government horse of stupidity, the winners will continue to be you, me and our children and grandchildren, even if the stupid horse is running a bit faster than it used to.

