100 Years Ago, Many of us were “Poor but Happy”
Real buying power is probably higher than ever, on the average, while the “happiness factor” may be down, due to unprecedented “them versus us” comparisons of rural and urban lifestyles (materialism at work?). 100 years ago, many were farmers and did not have electricity or running water. The WW 2 generation beget jobs with benefits, and college opportunities, but since the 80s the gap between rich and poor has widened.
There are recent articles floating around about how much different life was only 100 years ago, when life was simpler, and this is a great starting point for many modern discussions. I have only been alive since 1955, but I paid a great deal of attention to my grandparent’s testimonies, and of course they remembered life before national income taxes and the New Deal, when candy bars cost one cent and a Model T costs $500. All told, I believe that buying power has actually increased somewhat, given the improvements in education and tech. There is greater borrowing power, though it has made us a bunch of greedy complainers in the process. There seems to be no going back to the “ignorance is bliss” stage, unless we become hermits or Thoreaus.
I used to read Robert Reich’s column, and I agree with many of his tenets…that workers need benefits to keep them happy ala Henry Ford (who ironically was a Nazi sympathizer?) and that there is a dangerous and growing gap between rich and poor. But then when my kids ask me how much things cost in the old days, I realize that in terms of real value, buying power has actually increased, and that what we may be seeing is a massive increase in the overall wealth of the US in recent years, AND a gap between rich and poor. I believe this because everyone seems to be driving at least a relatively new $20k and up car, living in a temperature controlled home with running water and electricity, with ready access to almost any sort of electronic entertainment while having weekends off (little of that was possible 100 years ago). While the price of housing and cars have gone up perhaps 15 fold since my childhood, so have wages, and the quality of cars and houses are perhaps twice as good (given tech advances). Meanwhile, the price of food has only gone up about 5 fold (thanks to Latino guest workers), while the price of electronics and clothing have almost remained the same (thanks to tech and China, mostly). Indeed, if you can stave off greed and live in a moderately priced home and car, life is good. Red-Staters complain about job loss due to free trade agreements, but nobody talks about the massive savings in consumer goods in recent years.
Contrast this with life 100 years ago…most rural people had to pump water and use a drafty outhouse that was outside. They often lived with fireplaces and candles at night, and cooked on a wood stove (in fact wood burning was very important to them). If you lived in the city, you might live in a tenement, with primitive running water and shared bathrooms, and a steam heated radiator. If you were lucky, you may have had gas lighting, and your home and work existence involved living in a giant fire-trap. Clothes and food were expensive (in fact about 40% of your overall dollar) so that rural people liked to raise their own food, while tenement-dwellers liked to make their own clothes. Medical insurance was almost unheard of, and when people got sick (often), they would get chronically ill and often die. Thus medical care was cheap because it basically didn’t exist. Even housing was cheap because outside of nice hotels and plantations, it was made of cheap knockdown materials. Not many people had cars, let alone things like garages, and most were dependent on horses and streetcars. If you did want to buy a home, there was really not much of a banking system to loan you money. Often, you simply made a deal with an elderly couple that wanted to sell, they being eager to provide “seller financing” for 5–10 years, so they could get a retirement income. As such, you darn sure paid the thing off in a hurry, which was made easier if you were handy and didn’t pay things like today’s 30 year interest rates. (Thompson, 2016)
All together, it was not a bad world, since life was simpler and nobody knew enough about the alternatives to complain. It was also void of much of the exploitation that comes with today’s world (much associated with lending, but we’ll get to that). The story you’d later hear, even from those escaping sharecropper or coal miner poverty in the South (like Ray Charles and Loretta Lynn) was “we were poor but happy”. World War II brought a kind of mid-level progress to our country, as many were redirected to factories and served in the military, which beget a larger world-view and the GI Bill. It also brought the “benefits” of factory employment, as the government and companies eager to win the war sought to attract workers by offering medical and retirement benefits. All of the sudden, more people were moving to cities in the West (where many of these factories were located), going to college (this was only for a few rich folks before the war), and buying suburban homes which were financed by 15–30 year bank loans (unprecedented), not to mention driving more expensive cars with (gasp) safety features.
In the 80s, the “Michael Milken” corporate raider era greatly changed the way Americans managed their money, if not began the era of rich/poor pay gaps. Up to that time, many businesses were privately owned and sometimes quite large, with the assumption that they needed to keep workers happy with benefits. The Dow Jones Index was only around 2000, as there wasn’t that much corporate money available. Many Mom and Pops essentially stuffed their excess money into things like local banks, that made conservative investments. All that changed with the Gordon Gecko-like takeovers, in which small family owned companies were bought up and made more “efficient” (workers fired, pensions terminated, lending infused so as to “grow”). This brought about a bizarre kind of efficiency, as there were now higher returns paid to stock investors, mergers and acquisitions, and corporate growth, mostly at the expense of workers (many of whom got pushed into non-benefit jobs). Even bonds went from safe Main Street investments to a stock-type risk (see 2008 meltdown for details). All of this was good if you were an investor or wanted to start a business and needed lending, but bad for the vested worker, but then the prices of many things dropped due to all the investment and competition. (Trehan, et al)
So here we are, no doubt the corporations have too much power, the CEOs make too much money, and seen through the lens of urban life (where most people now live), there is a relative lack of safety net benefits, yet again, everyone seems to have an unprecedented access to education, modern cars and housing, plus clothes, electronics, and food at very reasonable prices. Even if you are very poor, its hard to feel sorry for you, because you could always go to a cheap Junior College, or do the work of a Mexican day laborer ($20/hr cash money here in California), while sharing a house and car. What has really changed, I believe, is the vast amount of wealth being hoarded by the rich, with little regard for the relatively unfair means by which they got it, along with any sort of charitable ethic. Among the poor, there seems a pitiful type of victimization refrain, which is odd when you consider that even the worst guy has incredible opportunity in this country, not to mention fairly good buying power. In a strange way, I feel more sorry for the hard-hearted rich, as they may not know hard-work, want, and hunger (three things that make us strong). We need to ponder this dilemma, channel our inner Thoreau, and learn once again to be “poor but happy”.
