Have the poor benefited more or less from economic growth than the rich?
Macroeconomic Paper #2
Chapter 27 Issues to Ponder #2 2. Have the poor benefited more or less from economic growth than the rich?
I would have to say more than less. I say more, because if you look back in history a century ago, it is all about time. According to the chart in Chapter 27, on page 600, in figure 27-2, it took a worker over an hour and some minutes (about 1 hour and 20 minutes) to earn enough to buy one dozen of eggs. But in 2012 it took only minutes (about 10-15 minutes) to earn enough to buy the same dozen of eggs. The growth has made the average workers significantly better off; the worker gets the same amount of money, but they have to work far less now than they did in the past. Even though the cost of living is much more now, than it was in the early 1900’s, growth has made the availability of new products. For an example that is in the book, like before 1952, air conditioners were not available at any price back then. The poor benefit a great deal from the growth that fosters markets. Through rivalry of markets, make the factors of production more productive and lower the cost of goods so more goods were available to everyone. The U.S. poverty level for Today for a family of four is about $23,000. But a hundred years ago in the U.S. history, in a step for inflation, that $23,000 income would have put that same family in the upper middle class. This does not mean that the poor always benefit from growth; many of us would judge our own well-being by relative, not absolute standards. Growth reduces the shared income that is earned by the poorest amount of society. So if one uses standards, than one would be able to say that the poor have become worse off over a certain periods of time. Because growth has been at the same rate, the poor would be even better off than they are.
Chapter 27 Issues to Ponder #2 2. Have the poor benefited more or less from economic growth than the rich?
I would have to say more than less. I say more, because if you look back in history a century ago, it is all about time. According to the chart in Chapter 27, on page 600, in figure 27-2, it took a worker over an hour and some minutes (about 1 hour and 20 minutes) to earn enough to buy one dozen of eggs. But in 2012 it took only minutes (about 10-15 minutes) to earn enough to buy the same dozen of eggs. The growth has made the average workers significantly better off; the worker gets the same amount of money, but they have to work far less now than they did in the past. Even though the cost of living is much more now, than it was in the early 1900’s, growth has made the availability of new products. For an example that is in the book, like before 1952, air conditioners were not available at any price back then. The poor benefit a great deal from the growth that fosters markets. Through rivalry of markets, make the factors of production more productive and lower the cost of goods so more goods were available to everyone. The U.S. poverty level for Today for a family of four is about $23,000. But a hundred years ago in the U.S. history, in a step for inflation, that $23,000 income would have put that same family in the upper middle class. This does not mean that the poor always benefit from growth; many of us would judge our own well-being by relative, not absolute standards. Growth reduces the shared income that is earned by the poorest amount of society. So if one uses standards, than one would be able to say that the poor have become worse off over a certain periods of time. Because growth has been at the same rate, the poor would be even better off than they are.