The Barbie movie has been this summer's biggest blockbuster, racing towards $1 billion in global ticket sales and reigniting age-old debates about what Barbie, the famous doll, means to American culture, the patriarchy, and feminism.
But this Barbie is an economist too. And she can also illustrate how average Americans are significantly more prosperous today than they were a few generations ago—despite the arguments made by populists on both the right and left.
Thanks to Jeremy Horpedahl, an economist at the University of Central Arkansas, we have what you might call the Barbie Price Index, which shows that the amount of work necessary to buy a single new Barbie has fallen quite a bit since the doll was introduced. Today, the average American woman has to work about 30 minutes to afford a Barbie. That's down from nearly two hours in 1959.
— Jeremy Horpedahl ????♂️ (@jmhorp) August 9, 2023
"Another way of thinking about it: with the same amount of work, a working mother today could buy her daughter 3-4 times as many Barbies as her counterpart in 1959," Horpedahl notes at Economists Writing Every Day, an economics blog.
On one hand, the decline in the Barbie Price Index shows how much women's wages have grown in the past six and a half decades. While women are still paid less than men, on average, the gap has closed considerably—and effectively vanishes once other lifestyle factors are taken into account.
But it also demonstrates something about the relative level of prosperity that today's Barbie-loving kids get to enjoy—and about the amount of work their parents have to do to deliver it.
It has become fashionable on the populist right to complain about stagnating male wages and a supposedly declining standard of living. Oren Cass, executive director of the right-wing think tank American Compass, published a "Cost-of-Thriving Index" earlier this year, claiming that the basic necessities for a middle-class lifestyle were no longer within reach for households relying on a single breadwinner. It would take 62 weeks of earnings—more than a full year—to pay for a year's worth of groceries, a home, health insurance for a family, a car, and to save for a child's college education, he argues. That's up from just 40 weeks' worth of earnings in 1985.
The study has some serious flaws, as Horpedahl and Scott Winship, a senior fellow at the American Enterprise Institute, have detailed at length. Chief among those problems is that Cass' analysis does not take into account taxes and various family-oriented subsidies delivered via the tax code. With those included, the so-called "cost of thriving" for families with a single male breadwinner has actually fallen since 1985.
But Cass' study also ignores the crucial role that women now play in the work force and in earning income to support their families. Including them in the overall assessment means that the cost of thriving has fallen by about 7 weeks since 1985, in part because women have seen bigger gains in earnings during recent decades.
Horpedahl tells Reason that the Barbie Price Index also demonstrates something else about the changing cost of an average American life. "It's easier to make manufactured toys cheaper than it is to make personal services cheaper," he says. "But even including the costs of all goods and services, the gains for women have been substantial."
Indeed, it is much easier to take advantage of economies of scale and cheaper labor markets to make plastic dolls than it is to provide essential services like health care and education. Even so, the falling costs of all the stuff that we buy—the physical necessities and the luxuries—in recent decades is something worth noting and celebrating.
Life in modern America might not be as fantastic as living in Barbie Land. But it sure beats the America of the past.