Comment 61950

By Mogadon Megalodon (anonymous) | Posted April 07, 2011 at 16:33:02 in reply to Comment 61908

Prosperity-related:

http://www.nytimes.com/2011/04/03/business/03view.html?_r=1&scp=3&sq=1970&st=cse

"...a simple supplementary index can be calculated from readily available data that captures one of the most important ways that changing distribution patterns have affected middle-income families.

I call it the toil index. It measures the number of hours that median earners must toil each month to be able to rent a house in a school district of at least average quality. (Could the median earner aspire to any less?) Unlike per capita G.D.P., which, apart from brief recessions, grew at a strong and steady rate from the end of World War II until the recent downturn, the toil index has been much more volatile. Its movements suggest that recent increases in income inequality have imposed substantial economic costs on middle-income families.

From 1950 to 1970, incomes grew rapidly and at about the same rate — almost 3 percent annually, on average — for families at all income levels. From 1970 to 2000, however, that pattern changed sharply. Incomes of the top 1 percent grew more than threefold, while median household income grew less than 15 percent....

By 2000, the median worker had to work 67.4 hours a month to put his or her family into the median home. The toil index thus fell by 2.4 percent from 1950 to 1970, but rose by 62.4 percent from 1970 to 2000. Yet all the while, steadily rising per capita G.D.P. painted a substantially rosier picture."

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