Over at Slate, Matt Yglesias writes covers “Donald Boudreaux and Mark Perry: The Myth of a Stagnant Middle Class” article.
Yglesias correctly points out:
I feel like the longer the time horizon you’re considering, the more sense it makes to think less about monetary income and more about quantities of stuff, which are less subject to the vagaries of inflation calculations. And it seems to me that when you look at it in terms of quantities consumed the stagnational hypothesis—which originally was popular on the left but now has gained a lot of credence on the right as well—seems much harder to defend.
I tend to agree with this. Americans are still buying some of the same things they did in the 1970s, but are also buying things that didnt even exist in the 1970’s (computers for one), that the purchasing power of the middle class has remained pretty strong. additionally, treaties like NAFTA and the internet have opened wider markets and cheaper goods for the average purchaser. Whether free trade is good for both the supplier and the buyer is another question, but by and large americans like cheap well made goods. Frankly, it doesnt even seem to be a worry that its well made in some areas, just that the cost of the purchase doesnt have a marginal effect on a persons power to aquire other goods.
When I argue with my grandparents that the middle class isnt doomed, and that things werent really, ‘that cheap’ earlier in the last century I think its good to point out all the things that have changed in terms of purchasing power of people, production of better goods, and inflation. No, you can’t get anything for a nickel anymore, but you can still buy a fair amount with $5, an amount that seemed exorbanant in 1960 or 1970.