Video: Professor Steve Horwitz on Three Contemporary Economic Myths

First Published: 2011-04-17

Professor Horwitz discusses three common myths that are part of the public discourse on economics. For each myth, he will indicate their kernel of truth, but then offer arguments and evidence for why they are, ultimately, myths.

The first myth is the claim that the cost of living is higher than ever. Using data on the amount of labor time it takes to purchase goods at the average private sector wage, he will show that most goods and services have never been cheaper.

He will then turn to the argument that the rich are getting richer and the poor are getting poorer. By looking at both the real state of income mobility, which suggests that most poor households in any given year are richer five or ten years out, and what poor American households are able to consume, which is more than the average American household did a generation or two ago, Dr. Horwitz will argue that everyone is getting richer, especially the poor.

Finally, the belief that women earn 75 cents for every dollar men do will be discussed. Examining the important differences in the choices that men and women make before entering the labor market, and while they are in it, to demonstrate that although that statistic is true in the aggregate, it does not show that women are discriminated against in the labor market, as employers generally pay equally qualified and skilled workers close to the same, regardless of gender.



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