Americans are better off than we think

By Amy Ridenour
web posted May 1999

Quiz: Which are true?

A. The rich are getting richer and the poor are getting poorer.

B. Americans have less free time every year.

C. Americans are being left with inferior service jobs because manufacturing jobs are being shipped overseas.

If you answered "false" to all three, you are correct.

So reports a delightfully cheery new book, Myths of Rich and Poor: Why We're Better Off Than We Think, by W. Michael Cox and Richard Alm, vice president of the Dallas Federal Reserve Bank and a business reporter for the Dallas Morning News, respectively.

If you thought the rich were getting richer and the poor poorer, say the authors, here's why: the gap between the richest fifth of Americans and the poorest fifth has widened over 20 years. What the pessimists don't add, however, is that most people in the poorest fifth don't stay there. Only 5 per cent in the poorest fifth in 1975 were still there in 1991, while 30 per cent of the poorest Americans in 1975 were among the richest Americans by 1991. Nor did progress take 16 years: nearly a quarter of the people in the poorest fifth in 1975 moved to a higher income bracket in just a single year.

Of persons in the second-poorest fifth in 1975, by 1991 70 per cent had moved to a higher bracket and 25 per cent had made it all the way to the richest fifth.

In other words, the rich are getting richer and the poor are getting poorer only if the poor stay poor. 95 per cent of them don't.

If you thought Americans are working harder now, say the authors, think again. An average American's annual work hours fell almost in half over the past 125 years, from 3,070 hours to 1,570 hours. In 1996, we averaged 30.2 hours of work a week, down from 33.5 in 1973, 35.3 in 1960 and 36.6 in 1950.

Thanks in part to labor-saving devices and a tendency to eat in restaurants more often than we once did, we even have it easier now once we get home. In 1950, we averaged 4 hours and 12 minutes a day on housework, but today we spend 3 hours and 30 minutes.

One reason we may think we are working harder is that Americans apparently value leisure more. In 1986, 33 per cent of Americans considered leisure important, but by 1997 57 per cent did.

We're also working harder at leisure. Over the past 25 years, American spending on leisure has climbed from 5 per cent of consumer spending to 8 per cent. Participation in golf, softball, bowling and other participatory sports is up, as is attendance at pro sports games. Per capita attendance at symphonies and operas doubled from 1970-94, while Americans tripled the frequency of their pleasure trips from one in 1970 to three in 1995. And while Americans watch an average of 3,300 hours of television a year (compared to 2,153 in 1970), the number of books sold in America hit an all-time record of 2.3 billion in 1997.

Cox and Alm also take on the allegation that Americans are becoming a nation of hamburger-flippers. Not so, they say. Although the fast food industry has grown swiftly in recent decades, employing 9,723 Americans in 1948 and almost 3 million by 1997, only 30 per cent of America's fast food workers are aged 20 or older. For most, working in fast food is an introduction to work or a part-time job during school, not a lifetime employment. McDonalds alone is estimated to have provided the first job for 20 per cent of the U.S. workforce.

Citing the 1997 Economic Report of the President, the authors say 70 per cent of the new jobs created from 1993-96 paid better-than-average wages. Many of these are service jobs but, they say, America's demand for services is a result of prosperity and technological advancement, not a national decline. Furthermore, service jobs aren't necessarily inferior to manufacturing jobs. Although manufacturing jobs paid an average of 20 per cent more than service jobs in 1980, today the gap stands at 1 per cent. If retail jobs (many of which are part time) are excluded, service jobs are actually an average of 5 per cent more lucrative than manufacturing jobs.

In a year so far characterized by stories about impeachment, bombings and Y2K, Cox and Alm have provided a much-needed public service. With these figures and many others on the trade deficit (not as big a problem as you might think), the wages of women and minorities (growing in relation to men and non-Hispanic whites), America's technological competitiveness (unmatched by any nation), our standard of living (skyrocketing) and much more, they've not only delivered a fascinating collection of well-documented information about how much Americans have to be grateful for, but they've provided a happy, if temporary, respite from news stories about scandal and tragedy.

Amy Ridenour is President of The National Center for Public Policy Research, a Washington, D.C. think tank. Comments may be sent to

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