What a great time to be poor - Reason Foundation

Lots of people get hung up on wages and income. Are they going up, down, stagnating? Those things are important but often the big picture gets missed. After all, we don’t want higher incomes for their own sake. We want to be able to buy more stuff (food, health care, cars, vacations, video games, etc.). As long as we have this stuff, who really cares how many zeros our paycheck has? A while back a great book called Myths of Rich and Poor picked up on the optimistic spirit of Julian Simon and explained that things are indeed getting better. And they’re getting better for the poor, too. Today’s poor enjoy all sort of things, from medical care to luxuries like television, air conditioning, and ice (can you imagine how hard it was to get ice before refrigeration?) that weren’t available even to kings in centuries gone by. And, in terms of material conditions, America’s poor compare very favorably to the middle class in much of Europe. (See also this study from Sweden’s Timbro.) This Ron Bailey article picks up the discussion:

[T]he conventional wisdom in development economics has long been that to boost the prospects of the world’s poor, one needs to boost their incomes. This is still true, but as World Bank economist Charles Kenny points out in a provocative article titled “Why Are We Worried About Income? Nearly Everything that Matters is Converging,” income growth does not tell the full story. Even though some of the world’s poorest people are not earning much more than they were two generations ago, they’re still living much better than they were. In fact, many quality of life indicators are converging toward levels found in the richer countries … So why is the quality of life for the world’s poorest people improving, and in fact converging toward levels found in the richer countries? Because improvements become cheaper over time. Kenny notes: “Broadly, the results suggest that it takes one-tenth the income to achieve the same life expectancy in 1999 as it took in 1870.

How ironic that those who champion the efficiency seeking innovations that lower prices and improve living standards are often regarded as heartless. It’s true that those folks might not be motivated by compassion in the conventional sense, but the end result seems pretty compassionate.