- The Washington Times - Thursday, December 30, 1999

For those who think economic growth does not matter, the Joint Economic Committee (JEC) has just released a fascinating new publication that demonstrates how much our lives have improved in the last 100 years. Titled "The U.S. economy at the beginning and end of the 20th century," this book of charts dramatically illustrates that our grandparents were right when they told us how lucky we are.
Perhaps the most startling statistic is the comparison of average income levels. Per capita economic output (GDP) in the United States today is more than $32,000. In 1900, by contrast, average output was only $4,748 per person (both in $1998 dollars). This means we are 7 times better off than our ancestors of just 100 years ago.
By the standards of today, the average American in 1900 lived in poverty. Another way of putting this figure in perspective: People in the U.S. 100 years ago had barely half as much income as the average person in Mexico today.
Yet income figures do not come close to capturing how much better our lives have become. In 1900, for instance, workers spent almost 60 hours a week on the job. Today, we spend a little bit more than 40 hours at work each week and get 7 times as much income after adjusting for inflation.
This added wealth has led to better health. The JEC's book reports life expectancy was less than 50 years back in 1900. Today, the average American will live more than 75 years. Prosperity has led to tremendous advances in health care. One hundred years ago, the death rate from infectious diseases was nearly 800 per 100,000 population. Now it is down to 59.
Life used to be a basic struggle to eat. In 1900, food accounted for 44 percent of household expenses. Now, thanks to both higher incomes and huge increases in farm productivity, we only spend 15 percent on food. Prosperity now allows us to spend almost 10 percent of our money on recreation, 3 times the level of 100 years ago. And while some complain we spend too much on health care 8 times as much as we did in 1900, this actually is a sign of our wealth.
Our living standards today dwarf those of our grandparents and great-grandparents. In 1900, for instance, only 15 percent of families had flush toilets. Today, the figure is more than 99 percent (please, no Arkansas jokes). Only 3 percent of families had electricity 100 years ago. Today, only nutcases like the Unabomber are without.
Still not convinced economic growth matters? Well, consider these comparisons: In 1900, an average worker had to spend nearly an hour on the job before earning enough to afford a half-gallon of milk. Today, it takes a worker 7 minutes. One hundred years ago, our average worker toiled nearly three hours in order to buy a 3-pound chicken. Now it only takes 14 minutes. We buy more electricity with one hour of work today than we bought with 150 hours of work in 1900.
It turns out John F. Kennedy was right when he said a rising tide lifts all boats. Some regions of the country, such as the South, lagged well behind in 1900. Today, regional differences in income have almost disappeared. Needless to say, growing prosperity also has helped open doors and create opportunities for groups, such as women and blacks, that faced barriers to the American dream in 1900.
To be sure, economic growth is not the only way to judge a century. And by many other measures, the 20th century was a failure. In the last 100 years, there have been two world wars. We have seen the horror of communism and Nazism. And we continue to strive even today to make sure education and opportunity are available to all.
Nonetheless, Americans can take pride in the last 100 years. Just as important, we can look with optimism to the next century. Policy-makers have learned important lessons, and this knowledge will help ensure that future growth is strong and help us avoid the mistakes that can lead to, or exacerbate, economic downturns.
The last century has taught us, for instance, that low tax rates are better than high tax rates. We now know protectionism undermines growth. Central planning has been consigned to the scrap heap of history, meaning policy-makers will be less likely to interfere with markets and that savings and investment therefore can be allocated in ways that boost wages and living standards.
There is every reason to think our grandchildren and great-grandchildren will be able to engage in this very exercise, looking back on today and wondering how we could survive such a meager existence. With any luck, we will have the chance to tell them, "Sonny, you have no idea how tough things were when I was your age."



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