Are You Better Off?
June 03, 2022
In the 1987 film Wall Street, Michael Douglas' character Gordon Gekko famously reasons, "Greed, for lack of a better word, is good." In the decade of Reaganomics and shows like "Family Ties," which normalized and promoted materialistic tendencies, such a statement is not surprising. In recent years, however, greed, and desire for financial success, has been villainized in the United States. This campaign seems to have been effective, as, according to the CATO Institute, a majority of Americans under 30 think the rich got to where they are by taking advantage of others. Resentment of the rich is an unfair sentiment, and could explain much of today's political atmosphere.
Over the last several decades, with the rise of technology companies and Silicon Valley, there has been a sharp increase in wealth inequality. The Pew Research Center finds since 1970, upper income households' share of aggregate U.S. income has risen from 29% to 48%. In that same period, on the other hand, middle income households’ share has dropped from 62% to 43%. When politicians rile up support by touting the decline of the American middle class they often bring up statistics like these. These figures fail to measure a far more important factor than wealth: quality of life.
Health insurance coverage, an often cited concern of those who criticize America's wealthy, has actually improved during the time America's upper class has become more affluent. According to the CDC's National Health Interview Survey, from 1972 to 2018, the uninsured rate among the nonelderly has fallen by over a third. Another way to measure the improvement of lives over the last half century is with the technological advancements that have occurred. The first personal computer, the 1974 Altair, was out of the reach of even America’s billionaires in 1970. By 2013, though, a majority of American households under the poverty line had computers, according to the Census Bureau. It is greed, not politicians, that Americans have to thank, as the promise of profits was what funded the technology industry.
While the middle class share of income has gone down in the last fifty years, what they can buy has only gotten better. Then-candidate Ronald Reagan asked Americans who lived under the Carter administration, "Are you better off than you were 4 years ago?" in the 1980 presidential election. Rather than asking if the American middle class is richer, politicians should be asking this question, as it unlocks so much more than who has more money.