A Lesson from History

Between 1870 and 1889, wages for non-farm labor decreased from $1.57 per day to $1.39 per day, a decrease of 10.2 percent. During the same period, the Consumer Price Index decreased more than 23 percent. Even though wages for unskilled labor fell by more than 10 percent over twenty years, prices fell by two times as much, that is, a dollar bought a lot more. Further, there was much more available: canned goods became widely available in the 1880s, which provided a much more varied diet, such as fruits and vegetables that were not in season; refrigerated railroad cars made it possible for urban residents to eat fresh meat, grapes, and strawberries more frequently; improvements in the sewing machine enabled manufacturers to mass produce clothing at low prices; department stores offered consumers wide selections in clothing, household goods, and more. In short, the unskilled worker’s life was immensely better in 1889 than it had been in 1870, even though he was paid less.

It wasn’t government programs that improved the lives of Americans. It was increased productivity, and that was made possible by economic freedom.