The War On Poverty’s Results
Data shows income inequality hasn’t changed over the past 100 years, and the three key wealth indicators are: productivity improvement (which has improved dramatically), income mobility, and personal well-being. “While income inequality is rising, inequality of personal well-being is dropping.”[1] George Mason University economist Tyler Cowen explains further:
[T]he inequality of personal well-being is sharply down over the past hundred years and perhaps over the past twenty years as well. Bill Gates is much, much richer than I am, yet it is not obvious that he is much happier if, indeed, he is happier at all. I have access to penicillin, air travel, good cheap food, the Internet and virtually all of the technical innovations that Gates does. Like the vast majority of Americans….our health outcomes are in the same ballpark. I don’t have a private jet or take luxury vacations, and – I think it is fair to say – my house is much smaller than his….Still, by broad historical standards, what I share with Bill Gates is far more significant than what I don’t share with him.[2]
James Sullivan and Bruce Meyers’ research reveals similar results as Wehner and Beschel: From 1980 to 2009, the personal well-being of the population in the lower level income brackets have certainly improved. In fact, according to Sullivan and Meyers, “Median income and consumption both risen by more than 50 percent in real terms between 1980 and 2009.”[3] Sullivan and Meyers continue explaining that:
In addition, the middle 20 percent of the income distribution experienced noticeable improvements in housing characteristics: living units became bigger and much more likely to have air conditioning and other features. The quality of the cars these families own also improved considerably. Similarly, we find strong evidence of improvement in the material well-being of poor families. After incorporating taxes and noncash benefits and adjusting for bias in standard price indices, we show that the tenth percentile of the income distribution grew by 44 percent between 1980 and 2009. Even this measure, however, understates improvements at the bottom. The tenth percentile of the consumption distribution grew by 54 percent during this period. In addition, for those in the bottom income quintile, living units became bigger, and the fraction with any air conditioning doubled. The share of households with amenities such as a dishwasher or clothes dryer also rose noticeably.[4]
While the United States continues to struggle with issues, the situation is not as grim as the collectivist-statists would like the citizens to believe. Encouragingly, Sullivan and Meyers concluded that their “results paint a picture of widespread improvement over the last thirty years in the material well-being of American families. Improvement is seen in the middle of the distribution and among those near the bottom.”[5]
While in another study conducted by Sullivan and Meyers they show that poverty since the 1960s has not changed under the official poverty rate, but under their more accurate measurements it has actually improved.[6] Conclusions show that collectivist-statist programs do not make improvements, but rather productivity and economic growth are the keys to improved well-being.
[1] See Peter Wehner and Robert P. Beschel, Jr., Spring 2012, “How to Think about Inequality,” National Affairs, Number 11, p. 97.
[2] Tyler Cowen, January/February 2011, “The Inequality that Matters,” The American Interest, Vol. VI, No. 3, [http://www.the-american-interest.com/article.cfm?piece=907]. Emphasis added. Cowen is referenced and quoted in Peter Wehner and Robert P. Beschel, Jr., Spring 2012, “How to Think about Inequality,” National Affairs, Number 11, p. 98. Thomas Piketty and Emmanuel Saez, February 2003, “Income Inequality in the United States, 1913-1998,” (The Quarterly Journal of Economics, Vol. CXVIII, Issue 1), p. 3.
[3] Bruce D. Meyer and James X. Sullivan, September 2007 (updated September 22, 2011), “The Material Well-Being of the Poor and the Middle Class Since 1980,” (American Enterprise Institute, Monograph series on Prosperity and Economic Inequality), p. 3, [http://nd.edu/~jsulliv4/well_being_middle_class_poor4.3.pdf].
[4] Bruce D. Meyer and James X. Sullivan, September 2007 (updated September 22, 2011), “The Material Well-Being of the Poor and the Middle Class Since 1980,” (American Enterprise Institute, Monograph series on Prosperity and Economic Inequality), p. 3, [http://nd.edu/~jsulliv4/well_being_middle_class_poor4.3.pdf].
[5] Bruce D. Meyer and James X. Sullivan, September 2007 (updated September 22, 2011), “The Material Well-Being of the Poor and the Middle Class Since 1980,” (American Enterprise Institute, Monograph series on Prosperity and Economic Inequality), p. 33, [http://nd.edu/~jsulliv4/well_being_middle_class_poor4.3.pdf]. Also see Figures 2 through 8c (pages 53-56) which graphically illustrate their findings.
[6] Bruce D. Meyer and James X. Sullivan, March 2009, “Five Decades of Consumption and Income Poverty,” (National Bureau of Economic Research: Cambridge, MA), Working paper 14827, [http://www.nber.org/papers/w14827]. See Figures 1 through 7, p. 53-59 for graphical data.
Originally published on Townhall Finance.
Jim Huntzinger began his career as a manufacturing engineer with Aisin Seiki (a Toyota Group company and manufacturer of automotive components) when they transplanted to North America to support Toyota. Over his career he has also researched at length the evolution of manufacturing in the United States with an emphasis on lean’s influence and development. In addition to his research on TWI, he has extensively researched the history of Ford’s Highland Park plant and its direct tie to Toyota’s business model and methods of operation.
Huntzinger is the President and Founder of Lean Frontiers and a graduate from Purdue University with a B.S. in Mechanical Engineering Technology and received a M.S. in Engineering Management from the Milwaukee School of Engineering. He authored the book, Lean Cost Management: Accounting for Lean by Establishing Flow, was a contributing author to Lean Accounting: Best Practices for Sustainable Integration.
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