1. The Question Has ‘more economic freedom’ helped Americans since the mid-1970s? Or, asked only somewhat differently…

2. … was this man a menace to the middle-class?

3. inflation-adjusted, before-tax, money income for the median American household has stagnated since the mid- 70s. (Today only about 18% higher.) Inflation-adjusted hourly money wages for the median, non-supervisory worker has hardly budged.

4. Real Household Income

5. In 2012 dollars, average hourly earnings for non-supervisory workers in 1975 were $4.73. In 2012 dollars that’s $19.70. Today, they’re $20.42 – higher by a mere 3.6 percent

6. Great Stagnation? “Median [family] income is the single best measure of how much we are producing new ideas that benefit most of the American population. Yet the picture is depressing.” - Tyler Cowen, The Great Stagnation (2011) p. 14

7. Almost all the benefits of economic growth since [the 1970s] have gone to a small number of people at the very top. —Robert Reich, Financial Times, Jan. 29, 2008

8. So is this narrative correct? Are the policies advocated by Milton Friedman really a menace to the middle-class?

9. We could talk about how only a few of Friedman’s policy suggestions have been put in place….

10. … or we could talk about how measures of inflation inadequately account for changes in product quality….

12. … or we could talk about how, since the mid- 1970s, the per-person size of the median household has fallen by 11 percent… … or about how much more compensation today is paid in the form of non-wage – or, “fringe” – benefits… … or about how what happens to a statistical measure, such as an ‘average’ or a ‘median,’ does not necessarily tell us what happens to the individuals whose actions make up the data.

13. Average Household Size: Down 24% in 50 Years 1960 3.4 persons 1970 3.2 1976 2.86 1980 2.8 1990 2.7 2000 2.7 2006 2.56 2010 2.57

14. Per-Household-Person Income In 1976 the average household was 2.86 persons, then it fell 10.5 percent by 2006 (to 2.56 persons). Per-household-person income, therefore, rose not by18% but by 32%.

15. Different Respected Ways to Calculate Inflation

16. But let’s not. Let’s look at living standard from another angle… Purchasing power.

18. 7.7 hours

19. 2012 40 minutes

20. 6.3 hours

21. 2 hours

22. 1.5 hours

23. 1 hour

24. 75 minutes

25. 50 minutes

26. 7 hours

27. 4.4 hours (So, 11.4 hours total)

28. 5.5 hours And it’s got wheels!

29. 9 hours

30. 4.9 hours

31. 15.8 hours

32. 5.4 hours

33. 13 minutes

34. 3.8 minutes

35. 12.6 hours

36. 30 minutes

37. 57 hrs.

38. 52 hrs.

39. 73.4 hours

40. 1 hour, 52 minutes

41. 44 hours

42. 11 hours

43. 8.6 hours

44. 4.0 hours

45. 40.2 hours

46. 13.1 hours

47. 93 hours

48. 4 hours

49. 48.6 hours

50. 12.2 hours

51. 2.9 hours

52. 1.5 minutes

53. 26.4 hours

54. 3.9 hours

55. 12.7 hours

56. 3.9 hours

57. 158.6 hours

58. 17.1 hours

59. One final set of data….

60. 1975 2009 <$15K$15K-25K $25K-35K$35K-50K $50K-75K$75K-100K>$100K 15.8% 13.0% 11.9 11.1 14.1 18.1 11.5 20.1 13.0 12.3 17.3 22.3 11.0 8.4 -2.8 -1.1 -1.2 -3.2 -4.2 +0.5 +11.7 Percent of U.S. Households Earning Incomes in These Ranges, Constant (2009) dollars