![[OC] The Luck of Being Born in the Right Year: U.S. Real GDP Per Capita Growth Across Working Lives](https://preview.redd.it/2c2us5dt1p2h1.png?auto=webp&s=f918bc8b699e1018f21d64f9797d414ca5d182ec)
[OC] The Luck of Being Born in the Right Year: U.S. Real GDP Per Capita Growth Across Working Lives
Personal choices matter a tremendous amount and I am a huge believer in personal responsibility and that individual people can absolutely wreck a good hand or play a bad hand amazingly well, but also the huge gigantic macro forces which an individual has ZERO control over matter in ways we don't often like to think about it.
I was curious what the average REAL per-capita growth rate was for an average American's working life. Had to make it crude so I assumed that people's working life through America started at age 20 and stopped at age 60. 40 years of real work. Obviously some people were working in the mines at age ten and some work into their 90's but exceptions. need for some workable model, yada yada yada.
So if you were born in 1913, the chart measures your working life as 1933 to 1973. If you were born in 1872, the chart measures your working life as 1892 to 1932. This is all adjusted for inflation, using real GDP per capita in constant 2017 dollars, so this is not just “prices went up” or “a dollar was worth less.” It is trying to measure how much real economic output per person grew during the years someone was likely working.
Basically: What GROWTH did you probably see in your own personal working life?
Two birth years stand out, 1972 and 1913. Someone born in 1913 turned 20 in 1933, right at the bottom of the Great Depression, and turned 60 in 1973, after the New Deal recovery, World War II mobilization, the postwar boom, highways, suburbs, cheap energy, mass consumer goods, the spread of higher education, the rise of corporate America, the peak of American industrial dominance, etc. Their real GDP-per-capita growth from age 20 to age 60 averaged about 3.61 percent per year, which is gigantic when compounded over 40 years.
The worst birth year in the completed-working-life chart is 1872. Someone born in 1872 turned 20 in 1892 and turned 60 in 1932, which means their working life ends in the nadir of the Great Depression. The real GDP-per-capita growth for their country from age 20 to age 60 averaged about 0.26 percent per year. That's not nothing but it's not -far- from nothing, in relative historical terms. They lived through railroads, electricity, telephones, automobiles, mass industry, steel, oil, cities exploding upward and outward, America becoming a huge modern power, and yet their working-life average growth was pretty garbage.
So imagine two half-brothers. This is not some insane edge case. In 1870 the United States had about 38 million people. Mortality was much higher and widowers remarried while birth control might as well have not existed. So many men had children across wider stretches of their lives. So _somewhere_ in America (statistically speaking) a man had a son young in the 1870s, outlives a wife, remarries later, and has another son in the 1910s. Two sons to the same father born about forty-one years apart. It's not common, but it absolutely happens.
The older half-brother is born in 1872. He is a child in the post-Civil-War United States. He grows up in an America of farms, railroads, coal smoke, horses, factories, immigration, disease, panics, strikes, debt, and hard physical work. He comes of age around 1892. Maybe he works a farm. Maybe he becomes a railroad man. Maybe he works in a mill. Maybe he becomes a clerk in some city- but whatever he does he's going to be average at it. He sees the country modernize with his own eyes. He sees electric light, the telephone, the automobile, the rise of giant corporations, the Spanish-American War, Progressivism, World War I, the 1920s boom, and then, at the end of his working life, the economy falls through the floor.
That man can be hardworking. He can be sober. He can save. He can marry well. He can be careful. But if his working life is 1892 to 1932 ( and he is around average) his relative growth experience is terrible. And of course the average person is around average.
Then there is the younger half-brother, born in 1913. His father is older now. Different wife, later family but this younger son turns 20 in 1933, which probably feels like the worst possible time to become an adult. Banks have failed. Farms are being lost. Men are out of work. The country looks broken. But! He has an incredibly bright figure in terms of relative growth, he is standing at the bottom of the elevator shaft right before the elevator rises faster than it ever has in American history before or since. He gets the rebound. He gets the postwar order. He gets an America which briefly, has around 50% of world GDP and that then becomes the central machine of the world economy. By the time he is 60, in 1973, if he has lived an average life he has seen his personal lived experience explode.
So assuming that they both _somehow_ make the average income for each year. It wouldn't really go like that, but go along with it for math's sake. So the first-born-half-brother will start his working life in 1892 making 6,398 (in Real GDP per capita, year 2017 dollars) and 40 years of work he will end his working life making $7,110 (in Real GDP per capita, year 2017 dollars). Basically an 11% total growth for 40 years worth of work. (https://www.measuringworth.com/datasets/usgdp/ )
The later born brother on the other hand will start his working life making the average the national average of $6,980 (in Real GDP per capita, year 2017 dollars) per year in 1933 and end his working life making the national average of making $28,812 (in Real GDP per capita, year 2017 dollars). Basically he'll have seen a 387% total real growth in his income for 40 years work of work. (https://www.measuringworth.com/datasets/usgdp/)
Or to put another way, these two men who both made the average for their country will have one see his lifetime income increase 35x more than his half-brother because he was born at a better time.
Obviously there can be x-factors, looking for a job in 1933 as a 20 year old is not great, WWII is a risk (but a manageable one for an American - 93-94% of US servicemen in WWII were not seriously wounded or killed and and if he's married at 30 with kids he might not be drafted either) but on the other hand the eldest-born had to grow up in the days before Germ Theory so his life was probably more objectively dangerous.
But if we are measuring the growth of the country’s real output per person during each adult working years, one caught the most powerful upward wave and one caught a historically awful working-life window.
The lesson is not that individual decisions do not matter. The lesson is that individual decisions are made inside giant forces we do not get to choose. Our place in history matters.