Boomerang Economics

September 15, 1995|By BEN WATTENBERG

WASHINGTON — Washington. -- Middle-class workers, we are told, are making no progress. Wages have declined or stagnated, jobs are being shipped overseas, free trade is a disaster, unskilled workers are suffering, young workers can't afford houses, the rich get richer and the poor get poorer and it's not like it was in the good old days of the 1950s and 1960s.

Conservatives have properly scorned the you-owe-me-pay-up remedies that liberals propose for the victims they have enshrined. But now, as the 1996 election looms, you can hear some GOP presidential candidates sound like copycat whiners on the biggest victim issue. They, too, are saying that wages are stagnant, that the middle class is going nowhere, that there is pain for workers as far as the eye can see.

There are some tactical reasons for such a maneuver. But it works against economic reality and contains a built-in boomerang.

Fact is, the economy isn't broken, hasn't been broken, and shows no signs of breaking soon.

The biggest part of the statistical case for wages going down is based on money earnings. But in recent decades American workers have been taking their pay increases through non-cash items like health care, pension plans and insurance. The measures of total compensation show a sturdy increase. So do the decennial census data for mean and median household and family income. Per-capita income has almost doubled in three decades.

Homes have gotten larger and easier to afford (according to Harvard's Joint Center for Housing Studies). Home-ownership rates are near all-time highs. The Americans living in those homes are much more likely to have air conditioning, garages, additional bathrooms, washers, dryers, stereos, microwaves, ceiling fans, VCRs, cable wiring, color television and electronic garage-door openers (from a list offered by Karl Zinsmeister in The American Enterprise magazine). Believe me, that's not a picture of American life in the 1950s.

There are surely many Americans who are not doing well, and some states and communities that have suffered the economic vicissitudes with particular severity. But there is full employment. America is the world's biggest exporter. America is the richest nation in the world, ever.

How about the much-sold notion that the rich are getting richer while the poor get poorer? There has indeed been some increase in the inequality of income distribution. But its principal cause has not been a flaw in the economic structure. It comes from the social side -- a stunning surge in the numbers of female-headed families.

Now, I would not suggest that Republicans run on a platform of ''workers never had it so good.'' There are too many things wrong in America now to sell that one on the hustings. But paying lip service to liberal victimology poses a bigger problem for Republicans. Voters might believe them. If they believe that economic victimization is real and pervasive, they can vote for the folks who specialize in giving stuff to victims: Democrats.

Ben Wattenberg is a syndicated columnist and the host of the weekly public television program, ''Think Tank.''

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