Many Americans are mistakenly convinced that we live in a time of stagnation rather than record prosperity. One reason is the revolution of rising expectations. Another is that we view as necessities things that were once considered luxuries.

• Today's average new house is twice as large as one built just after World War II.

• The U. S. now has more registered motor vehicles than licensed drivers.

• The average American now consumes twice as many goods and services as in 1950 — in fact, the poorest fifth of the population today consumes more than the typical family did in 1955.

Baby Boomers and Generation Xers may think they are falling from the middle class in great bunches, even faring less well than their parents, but the evidence does not support this view.

• A 1993 study comparing young Americans with their parents found that after adjusting for family size and inflation, today's young families, on the average, are about two-thirds better off than their parents were at the same age.

• Another recent study by Urban Institute and Congressional Budget Office researchers found that inflation-adjusted pretax income per Baby Boomer was 55 percent higher in 1989 than for their parents 30 years earlier.

The idea of decline is also fostered by misleading government yardsticks. For example, the consumer price index (CPI), used to track price inflation, underestimates real income growth by about 1.5 percent annually. If the CPI were corrected, we would find:

• Median weekly earnings for full-time male workers actually rose 14 percent from 1979 to 1994, rather than falling 12 percent.

• Women's earnings over the same period zoomed upward 35 percent, not 7 percent.

• The number of persons counted as poor should be 15 million, not 38 million.

There are problems with other statistics, too. Cash earnings do not reveal that the share of compensation taken in fringe benefits by workers has doubled since the early 1970s. And median family income statistics do not indicate that the average family had 12 percent fewer members (and therefore more income per person) in 1993 than in 1970. [See related story.]

Source: Karl Zinmeister, "Coming This Year: Marx for Dummies," On the Issues, February 1996, American Enterprise Institute, 1150 Seventeenth Street, NW, Washington, DC 20036, (202) 862-7178.

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