Gains of the poor, other good news

April 06, 1999|By Amy Ridenour

WASHINGTON -- Try this quick quiz: Which of these 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, vice president of the Dallas Federal Reserve Bank, and Richard Alm, a business reporter for the Dallas Morning News.

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 percent of people in the poorest fifth in 1975 were still there in 1991, while 30 percent 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.

In other words, the rich are getting richer and the poor are getting poorer only if the poor stay poor. Ninety-five percent 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 last 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 percent of Americans considered leisure important, but by 1997 57 percent did.

We're also working harder at leisure. Over the last 25 years, American spending on leisure has climbed from 5 percent of consumer spending to 8 percent.

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 to 1994, 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. Mr. Cox and Mr. 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 percent of America's fast-food workers are aged 20 or older.

Citing the 1997 Economic Report of the President, the authors say 70 percent of the new jobs created from 1993 to 1996 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 percent more than service jobs in 1980, today the gap stands at 1 percent. If retail jobs (many of which are part time) are excluded, service jobs are actually an average of 5 percent more lucrative than manufacturing jobs.

Their book shows -- among other things -- that the trade deficit is not as big a problem as you might think, that the wages of women and minorities are growing in relation to men and non-Hispanic whites, and that America's technological competitiveness is unmatched by any nation. No wonder our standard of living is skyrocketing.

Mr. Cox and Mr. Alm not only have 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 nonpartisan Capitol Hill think tank.

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