Any comparison of a standard of living over time is blurry

(written by lawrence krubner, however indented passages are often quotes). You can contact lawrence at: lawrence@krubner.com, or follow me on Twitter.

I wrote this as a comment on Hacker News.

It’s also worth examining if our typical ways of measuring inflation (in the USA, the Consumer Price Index, or CPI) is an accurate guide to the real costs of raising children. The CPI currently takes into account a very diverse range of goods, including canoes and guns and lamps and kitchen wares and music and coffee grinders. The CPI tries to avoid the assumption that some purchases are more important than others, but if you are raising children, you know some things are much more important than others. You can cut back on coffee grinders, but you can not cut back much housing — you need a certain minimum for each child.
My great grandmother gave birth to 16 children (this is my mom’s mom’s mom) who lived to adulthood. She (with my great grandfather) had no trouble housing them, feeding them, clothing them and ensuring they got educations to at least 8th grade, most to 12th grade. Does the CPI accurately reflect the changing costs of each of the things that were then easy to afford? How much would it cost to raise 16 children now? In theory, we are much more wealthy now than my great-grandparents were in the period 1880 to 1910, and yet they were able to afford something that nowadays would take a great deal to afford. Why is that?

Another thing that the CPI does not capture is how some new expenses have arisen that have become essential. In particular, automobiles. In much of the USA, having an automobile is non-optional.

We should think about those changes in lifestyle that make comparisons difficult across time. My great-grandparents raised 16 children in a dense town where transportation was dominated by walking. If you were trying to recreate that lifestyle in a USA suburb, some odd questions come up. Can you fit 16 children in one car? Do you get multiple cars? Who drives them? These questions point out how difficult it is to make direct comparisons.

Nor is it correct to simply say “No one needs to live in the suburbs in the USA, they can, if they wish, continue to live in a dense urban center”. But the USA economy is a cohesive whole, and the existence of the suburbs effects the price of things in the urban core, as well as the focus of transportation infrastructure. Over the last 100 years, most USA urban centers have built significant transportation infrastructure to help workers in distant suburbs come into jobs in the urban core, and then go home at night. The money spent on those infrastructure projects could have been spent on some other priority, but instead were spent as they were because of the existence of the suburbs.

So it is very difficult to make direct comparisons, because some lifestyle changes make direct comparisons blurry. But in that blurriness, we can argue that in important ways our standard of living has not increased as much as the CPI seems to suggest. In particular, for those people who have a strong craving to have a large family, one can reasonably argue that their standard of living has actually decreased over time.

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