Blackadder’s Lair

The home of many a cunning plan

Stagnant Thinking: An Introduction

The recently canceled television series Life on Mars featured a somewhat unusual premise. The show’s protagonist, Sam Tyler, is a cop in present day New York City who, after being hit by a car, finds himself mysteriously transported back to the year 1973. The show was a strange blend of police drama and science fiction, as Tyler sought to undercover how he had ended up in the past, and whether anything that was happening to him was even real.

The premise of the show was, as I said, somewhat odd. But equally odd is that, according to plenty of pundits and commentators across the political spectrum, Tyler may actually have lucked out in being sent back in time. The reason for this, according to these commentators, is that once you account for inflation the material condition (or at least the wages) of the typical American are no better, and may in fact be considerably worse, than in the early in 1970s. The following snippet from a recent Bob Herbert column in the New York Times is typical:

As hard as it may be to believe, the peak income year for the bottom 90 percent of Americans was way back in 1973, when the average income per taxpayer, adjusted for inflation, was $33,000. That was nearly $4,000 higher . . . than in 2005.

Men have done particularly poorly. Men who are now in their 30s — the prime age for raising families — earn less money than members of their fathers’ generation did at the same age.

While the claim that the wages of the typical American have stagnated is most often found on the left, the idea is hardly confined to such quarters. Many libertarians have also been pushing the claim (though whereas those on the left tend to blame Reagan and “neoliberalism” for the supposed stagnation, among libertarians government is the natural culprit). I know that several of my co-bloggers have also made some version of the claim at one point or another.

Can this really be right? Is Sam Tyler better off, at least materially speaking, back in 1973 than he was in 2008? I don’t think so. To me, the claim that the typical American is no better off today than 35 years ago is initially implausible, and gets more implausible the more it is held up to scrutiny. To explain what is wrong with the claim, however, is not the work of an instant, and I recognize that the subject is a contentious one, with many different aspects. I propose, therefore, to do a series of posts on the subject, each looking at the issue from a different angle and articulating some of the reasons that I don’t think the stagnation story holds water.

I am, of course, only to keenly aware of how statistics can be used to mislead and obscure, rather than to clarify. As the sage Homer once put matters: “People can come up with statistics to prove anything; 14% of people know that.” To some extent this is unavoidable. I will, however, try to limit the chances of providing a misleading account as best I can. To that end, in what follows I will try as much as possible to use general statistics, rather than cherry picking narrow statistics that would seem to bolster my case. When you see someone trying to make the case for a general proposition using curiously precise or narrow statistics, chances are that the statistic being quoted is not representative of the larger picture, and hence is misleading.

I know that this can be contentious subject, but the response to my series of posts last year on the equally contentious subject of race gives me hope that it can be a productive endeavor.

May 14, 2009 - Posted by | Progress, Statistics

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