Next Tuesday, April 13, I'll be making a presentation in Las Vegas at the annual meetings of the Association for Private Enterprise Education (APEE). My topic is "Is the Middle Class Disappearing?" Unusually for me, I actually have the final draft complete a week before presenting.
When I first proposed the topic to session chair Dwight Lee about six months ago, I thought, given all the wailing there is about how much the middle class is hurting, I would find a substantial literature by economists taking that viewpoint. Not so. The one economist willing to go out on a limb and say that the middle class is disappearing is Paul Krugman. So I focus on his arguments and data. I quote him talking about the idyllic childhood he had in the 1950s and 1960s.
Here's the quote:
Those considered very well off lived in split-levels, had a housecleaner come in once a week and took summer vacations in Europe. But they sent their kids to public schools and drove themselves to work, just like everyone else.
Then I write:
I remember the same times he remembers. Take our family, which I think was right in the middle of the Canadian middle class in the 1960s. (I say "I think" rather than "I'm sure" because I don't know my father's income.) Our family owned a house built in the 1880s and not much remodeled after that except for the addition of a small, dark room--we called it the "utility room"--in which my mother had her motorized washing machine with a wringer on top to wring out the water and in which we had our 1955 remodeled black and while 21-inch Philco television set that we bought in 1961. My father was variously a high-school principal and a high-school teacher and my mother, with three kids on her hands, was a housewife who made money on the side by teaching piano lessons. The farthest my mother ever got by the late 1960s was a trip to Vancouver. Occasionally, we drove south of the border to that exotic state of North Dakota. My uncle, a doctor in Winnipeg whom we considered upper-class, had a split-level house built in 1961. Even he and his wife didn't take trips to Europe but did often go to the Caribbean for one or two weeks to escape the long, rough Canadian winter. So right there you have in microcosm the Canadian middle class and upper class in the 1960s. Because the income of the average Canadian family was about 20% below that of the average U.S. family, add 25% to the Canadian picture and you have the American picture.
Now look at what people in the U.S. middle class have today, something that Krugman conspicuously avoids doing. It's not just upper-income people who have split levels. It's middle-income people who have two-story houses. And think about what's in the house, keeping in mind what we had in the 1960s. According to Michael Cox and Richard Alm, an economics professor and an economics writer respectively at Southern Methodist University, in 2005, 82 percent of U.S. households had clothes washers and 79 percent had dryers; my mother, by contrast, never had a modern washer and never had a dryer. In 2005, over 96 percent of U.S. households had a color television. We never had a color TV. Over 89 percent of U.S. households in 2005 had a microwave and 87 percent had a VCR. 73 percent have a computer and 88 percent of people over age 15 have a cell phone. I think you all know how many people had microwaves, VCRs, computers, or cell phones in the early 1960s. It was precisely zero.