American Standards of Living: 1918-1988.

• Author: Cate, Tom

Many individuals have contributed to the development of devices to measure an economic system's progress over time. One such device is the National Income and Product Accounts pioneered by Simon Kuznets in the United States and Sir Richard Stone in the United Kingdom. Another is the Human Development Report compiled by the United Nations Development Programme. A third, The Standard of Living Index, is developed by Brown in American Standards of Living. The measures of economic progress developed by Kuznets, Stone and the Development Programme are macroeconomic in scope and do not provide a clear picture of the events affecting a nation's social classes, a point which Kuznets made in National Income 1929-1932 [2, 5-8]. Brown's theory examines the expenditure pattern of America's social classes and provides a unique look at the transformation of America's social classes during the years 1918-1988.(1)

The Standard of Living Index developed by Brown for the years 1918, 1935, 1950, 1973 and 1988 has three principal categories, the consumption category, the income category, and the needs category. The subcategories of the consumption category include: food, clothing, rent (which is replaced by housing in 1950), fuel and light (which is combined with housing in 1973), furnishings, transportation, recreation and education, household operation, medical care, personal care, gifts and contributions, personal insurance, and other. The income category bas four classes: salaried persons, wager earners, laborers and individuals who are poor and/or members of the underclass. These four income classes correspond roughly to the five quintiles used by the Bureau of the Census in depicting the distribution of income in this nation.

The needs category bas three subcategories: basic needs, variety needs, and status needs and three dynamic factors: emulation, innovation and dis-emulation. Basic items are designed" . . . to meet fundamental physical needs and minimum requirements for social integration" [p. 3]. Having satisfied theft basic needs, individuals spend a portion of their income to meet the needs of variety and status. Variety refers to the desire to have a greater diversity of various types of commodities - six business suits of different colors and cuts for example; whereas status refers to the desire for differentiation - a Lexus rather than a Corolla. "This enables us to distinguish between improvement in the standard of living that reflects more of...