But as with most pop culture artifacts, this series about Victorian England is having a subversive effect on the views of modern Americans. Who would have guessed when the show premiered in the U.S. in 2011 that it would undermine liberal arguments about the significance of income inequality?
Many of those concerned about income inequality, though, don’t quite grasp that fact yet. Indeed, some even think the show proves their point. For example, Brett Arends, a columnist for MarketWatch, recently wrote an article titled, “Inequality worse now than on ‘Downton Abbey’” in which he notes,
A research paper to be presented this week at the National Bureau of Economic Research, a leading think tank, will confirm that the U.S. today has become as unequal as the England of the Earl of Grantham, Lady Mary, Daisy the kitchen maid and Carson the butler a hundred years ago.
The richest take home a higher share of national income in America today than did the aristocrats and superrich of 1920s England. The poor today take home a smaller share than the butlers, chauffeurs and other working folk did back then.
Peter Lindert, economics professor at the University of California in Davis, and one of the world’s leading experts in measuring income inequality, will be presenting research at the NBER this week, and he shared his thoughts with me by email. “Britain’s Downton Abbey economy of the 1920s,” Lindert says, was slightly “less unequal than…the U.S. today” (emphasis added).
Based on this information, Arends makes the spurious claim that, “Half of our country are just like Daisy the kitchen maid or Thomas the scheming footman a hundred years ago. They basically have nothing.”
Is that true? Do half of American have “basically nothing?” And are half of Americans as unfortunate as Daisy and Thomas?
No, it’s not true. But Arends’ isn’t completely incorrect either.
In 2013, the median annual salary for a man was $35,228 and $22,063 for a woman. Both Thomas and Daisy, who have rather plum jobs for low-skilled workers, actually earn more than the median U.S. worker. Thomas, as a second footman, would have earned an annual salary $37,379.37 (in 2014 dollars). Daisy, as an undercook, would have earned $22,150 a year. (They also received other benefits—such as free room and board—but that would have been offset by having to work 14-16 hour days for 6-7 days a week, so we’ll exclude those from our calculations.)
Daisy and Thomas would be even better off if they decided to get married (we’ll ignore the reason that is unlikely). Their combined salaries would be, in 2014 dollars, $59,529. Not too shabby for a couple of servants.
Yet Arends concludes they—both the servants and half of America— “basically have nothing.” That’s unlikely to be true for Thomas and Daisy (why couldn’t they save since their living expenses are so low?) and definitely not true for Americans. The median net worth of an American family in 2013 was $81,400. (For young single people like Thomas and Daisy it’s only about $14,1600, but that’s because their American equivalents are usually still in school or moving up on the economic ladder.)
Let’s concede that income inequality in America is roughly the same as it was in Victorian-era England. Let’s also concede that Downtown servants earned wages equal to the median for Americans today. If income inequality is the most important factor, then it shouldn’t matter much whether the average low-skilled worker was flipping burgers in a kitchen at a McDonalds in Dallas or making foie gras in the kitchen at Downtown Abbey. Yet how many modern fast food workers would be willing to trade places with Daisy? Not many, I suspect. Even Daisy wouldn’t make that trade-off.
The reason is because the inequality that matters is consumption inequality. When it comes to living standards, consumption is significantly more important than income. As The Economist explains,
Income inequality is the most commonly cited measure, primarily because the data on it is the most comprehensive. However, for the purpose of measuring how inequality affects a community it is also probably the least interesting yardstick of the three.
Consumption inequality, though harder to measure, provides a better proxy of social welfare. This is because people’s living standards depend on the amount of goods and services they consume, rather than the number of dollars in their wage packet.
Even though Daisy makes as much income as a modern day worker, both the quality and quantity of goods and services she can purchase in Victorian England is much less that what we have today. The income inequality may be the same between the two periods, but on the inequality that matters—consumption—Victorian Daisy is much worse off than Modern American Daisy.
Also, fans of Downton know that Daisy isn’t the least bit concerned about income inequality. If Lord Grantham’s income were to fall to the point where his income equaled a kitchen maid, income inequality would be reduced. And yet both Grantham and Daisy would be much worse off; the Grantham’s would be broke and Daisy would be out of a job. (Even uneducated Daisy understood economics better than the average Ivy League trained Occupy Wall Street protestor.)
Arends wrote a second article titled “10 ways ‘Downton Abbey’ servants had it better than you” and says “Daisy has it better than us in so many other ways.” Number one on his list is that Daisy has a job for life: “She works for one of the richest men in England and she knows she’ll be there as long as she wants or needs to be.” That is true, and as she pointed out in the most recent episode, she appreciates that fact. But she also wants options. Sure, she could work in a kitchen the rest of her life but what if she doesn’t want to?
That’s why Daisy is getting tutored in math and history and other topics. She wants to get an education so, in economic terms, she can increase her productivity and increase her ability to move up the social mobility scale. What Daisy cares about is not income inequality but intragenerational social mobility—the ability to a change one’s social position during a person’s lifetime. Daisy wants the opportunity to move up the economic ladder and have some sort of choice in the works she does.
Daisy understands that what truly matters is not the disparity between her pay and the income of the folks living upstairs, but the opportunities she has to improve her own human flourishing. She may be an uneducated kitchen maid, but Daisy is teaching modern Americans that, despite the claims of equality-obsessed economic liberals, income inequality isn’t all that important.