Some people are impossible to convince, even when you explain things very carefully and show them the requisite information. A fellow congregant and I have been having a debate off and on over the past year about the relative standard of living between Europe and the United States. What follows is an email response to him, but it contains more follow-up information to earlier blogs I have made on HDI and HPI and the current sorry shape of the United States:
Hi,
At the end of the day, there is always a question of interpretation of the data and what it really means, hence one of the reasons why a certain mistrust of statistical data must be maintained. These data are good at showing trends, but poor at showing real life quality issues. In our disconnected conversation we have really touched on several arguments, and they're getting clouded as time goes by.
Let me try to spell my points out about each of these arguments one by one just to make sure we're clearly hearing what the other has to say, and then, perhaps, when all is said and done, concede various points if feasible, or simply agree to disagree.
Argument 1): The main thesis:
My main thesis in our general discussion is this: People, in general, living in our peer nations live better lives; they have better access to health care, education, leisure time and over all more disposable income. When *I* speak of "Standard of Living", I'm looking at it from the point of view of HDI, which is far more complex than merely the per capita GDP; I'm also including and HPI - Human Poverty Index. One indication of their superior level development is the level of poverty present in their countries. Another way to look at what I'm pointing out are Quality of Life Issues rather than "Standard of Living" since this latter term may force one to rely to heavily on GDP figures and relative incomes.
Argument 2): "The Poor Are Real": I will probably never agree with your point that by "getting rid" of the wealthiest ten percent of Americans we would somehow have anything more statistical parity with Europe. By our own measurements we have a far great number of poor than the other 16 wealthiest nations. We rank 17 out of 17 in HPI-2 (the HPI index for the 17 wealthiest nations). Since there is no way of simply disappearing 10% of the country, this is a moot point. We have a greater percentage of poor people in this country than France, Germany, the UK and 13 other nations. In a country as wealthy as this one (we have the second highest GDP in the world after the European Union, and the highest of any one nation), this kind of poverty is shameful. On the other hand, I'm on the horns of a dilemma about that best way to fix the problem. I am not convinced that European style socialism is the best way. Having said that, I am convinced it's still better than what we do now. At any rate, disregarding the wealthy does not make the poor go away. They're real, and they number about 12% of the population according the US census.
Argument 3): "Being Poor Is Relative": It's true that being poor in the US is better than being poor in developing nations; it is not better to be poor here than in Canada or any of the other 16 wealthiest nations. That's why we rank 17 out of 17. We have people who do not have access to running water, electricity, sufficient food or even shelter. About 3.5 million people in this country experience homelessness in a given year (http://www.nationalhomeless.org/numbers.html)
Argument 4): "The Rich Get Richer" or "CPI and Inflation":Interestingly your second chart shows a fairly alarming trend forming IMO. The 95th percentil has leaped significantly far ahead in percentage of increase by comparison to the other except the 80th. Sure, everyone has more money; but the wealthy have a whole lot more. Again, I would counter by pointing out that the numbers can show relative trends, but not reality. Your use of constant 2003 dollars is presumably based on the rate of inflation and/or the consumer price index, but the way in which those two numbers are generated has changed over the past 30 years. Your numbers, I think show an accurate trend, but what do 2003 dollars really mean in 2003? Why could they buy? The increase in 2003 $ may be there, but those dollars, even for the wealthy, may not in fact be going as far in relative purchasing power as 1970 dollars, and the problem is, it's hard to establish that one way or the other, hence the debate that is ensuing in circles where people address the question of economic justice. This is sticking point I don't think we'll agree on, so probably better to leave it at that. (http://www.pbs.org/now/politics/middleclass.html)
Argument 5): "Household income is on the rise; individual income does not appear to be...":To achieve an average household income of around $41,000/year, more and more families are turning to two or more incomes, many many more than in 1970. The over all income level of households would have to increase with two people working. Your charts don't make it clear if you are talking about individual and/or household income in all charts or just the first.
Argument 6) Americans are not better off than their peer nations, and on this point you will not get me to agree I'm afraid. The 7 nations whose HDI are higher than ours do have better standards of living over all, and the average person is better off in them. They're relative size is no excuse for us to tolerate our fellow countrymen's suffering, and really, to my way of thinking illogical. We should have more resources to help the poor than smaller nations. If we're supposed to be world leaders, then let's work to end poverty in our country, at least the crushing poverty with which some Americans live (even if it were true that 46% of the poor in American have homes, cars and cables, that still leave about 7% of the population unable to afford these things. The poverty level in our peer nations runs between 1% and 7%; you can be sure that 90% of those poor are better off than out 7% who are destitute...).
Argument 7) I would even argue that in peer nations whose HDI is lower than the US, the overall quality of life is better. This I state from personal experience of travelling to them on a yearly basis. Even if the typical German or French citizen does not have the purchasing power of his counterpart in the US, he has access to excellent healthcare (his government will send him overseas if he needs treatment not available at home), education, 5 weeks vacation and well managed land and relatively clean and safe cities (the crime rate in all EU countries is lower than in the US to the best of my recollection.) But I have to underscore *IF* - it's been my personal experience of having met folks at various socio-economic levels that they can afford to spend a lot more money than their "peers" in this country.
As to your question on the dwindling middle class, here are some relatively recent articles on the status of the middle class in the US; of course these are other folks crunching the numbers for the same goals you did, but they arrived in another place. Obviously I agree with them more than not...
http://www.washingtonpost.com/wp-dyn/articles/A52954-2004Aug9.html
http://www.buzzflash.com/contributors/03/09/04_sanders.html
http://www.drummajorinstitute.org/plugin/template/dmi/27/2841
http://www.newwork.com/Pages/Opinion/Raynor/Middle%20Class.html
http://themiddleclass.org/main.cfm?actionId=globalShowStaticContent&screenKey=debatesq
http://www.pbs.org/now/politics/middleclass.html (this one is the most concise)
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