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> The nominal wage has increased since the early 70s, but the purchasing power of that nominal wage has gone down faster than the increase. This is policy, not
by Pyxl101 11y ago
> The nominal wage has increased since the early 70s, but the purchasing power of that nominal wage has gone down faster than the increase. This is policy, not capitalism.
Which option would you prefer? (1) You have a 70s real wage, but can only purchase goods and services that were available in the 70s, or (2) You have a 2016 real wage and you can purchase all goods and services available today. Keep in mind that real wages have stayed roughly constant since 1970.
Most people I know will pick option (2), which suggests that purchasing power has in fact increased rather than decreased. Technology is improving and everything is becoming cheaper, bringing up our standard of living.
Here are some facts about Americans living in poverty, according to the Census Bureau [1]: 80% of households below the poverty level have cell phones. 96% have a television and 83% have a DVR. 97% have refrigerators, 96% have stoves, 93% microwaves, and more than 83% have air conditioning. 58% have computers. If you had to choose, would you prefer to live in poverty today in 2016, or would you prefer to live in poverty in 1970? How about 1900 or 1800? How does the standard of living in poverty compare to any other time in history? An American living in poverty today probably has a better standard of living than a typical king did in centuries past.
[1] http://www.census.gov/hhes/well-being/publications/extended-11.html http://www.census.gov/hhes/well-being/publications/extended-...
- dnautics 11y agoYou're presenting a false choice. You could have a 1970 real wage and buy the stuff of today? My point is exactly the fact that we don't have that is a result of inflation. Please explain, mechanistically, why you believe that there are only two options here.
- Pyxl101 11y agoI'm simply presenting a thought experiment, not an actual choice. The thought experiment demonstrates that purchasing power has increased from 1970 to 2016 (at least, if you prefer 2016 wages and products to 1970 wages and products). If you'd like to argue that "purchasing power should have increased more if it wasn't for XYZ..." then that's fine, but it's separate from the point that I was debunking: > but the purchasing power of that nominal wage has gone down faster than the increase If one prefers 2016 products at 2016 wages, then purchasing power has increased. Since real wages have stayed constant, we're basically just talking about 1970 products vs. 2016 (and 2016 products are much better, cheaper, etc)
- dnautics 11y agoSure, I agree that the products in my life seem better than the products I would have had in the 70s. I am just wary of this argument because it becomes an argument for substitution (which is one way that government fudges the effect of inflation on the poor)... There are also a lot of things you aren't taking into account. In 2016, your phone costs $100 and has to be replaced every two years. Your phone in the 70s might probably still work today (I think most PBXs still support rotary). Has the improvement in quality of life tracked this increased cost?
- makomk 11y agoSure, purchasing power has increased massively for fancy new 2016 products like cellphones, TVs and gadgets. Unfortunately it's also plummeted for old-fashioned 1970s-esque products like food, fuel to go to work, and a roof over your head and even though it's 2016 people still need those products. Having a 42" television for a price that would have seemed astonishing a few years ago is little help if you can't feed your family and can barely pay the rent.
- yummyfajitas 11y agoNot true for food or energy, hard to find (imputed) rent vs income. http://www.npr.org/sections/thesalt/2015/03/02/389578089/your-grandparents-spent-more-of-their-money-on-food-than-you-do http://www.npr.org/sections/thesalt/2015/03/02/389578089/you... https://www.eia.gov/todayinenergy/detail.cfm?id=10891 https://www.eia.gov/todayinenergy/detail.cfm?id=10891
- collyw 11y agoIn the 70's a family with only one breadwinner earned enough to pay for a mortgage as well as all the other food and energy.
- quxbar 11y agoI'd take options 1 in a heartbeat, my student debt would vanish and my rent in NYC would be almost nothing.
- Pyxl101 11y agoAre you sure? You wouldn't have a personal computer, a cell phone, or the Internet. You'd have a rotary telephone in your house only. You'd have a TV that looks something like this: http://www.rewindmuseum.com/images3/hmv2647side.gif http://www.rewindmuseum.com/images3/hmv2647side.gif On that TV you can watch 1970s programming only. A 25" TV in 1970 cost $850 dollars ('77 Sylvania), which is equivalent to $5200 dollars today. I can hardly even find a TV that costs $5k today! For $4000 I can buy an 80-inch absolutely amazing Visio M80: http://www.amazon.com/dp/B00VQO5HSE http://www.amazon.com/dp/B00VQO5HSE - and they don't even sell TVs as small as 25" any more. Your stove and refrigerator look like this, and work about as well as they look: http://airconvintage.com/antique/images/101_8149.JPG http://airconvintage.com/antique/images/101_8149.JPG You also have access only to 1970s automobiles, which are nowhere near as comfortable, quiet, and maintenance-free as today. If you're making this (hypothetical) tradeoff, then you're also limited to 1970s medicine and dentistry as well. Would you really choose 1970s medicine over today, too? There are some people who would make this tradeoff, and I can respect that choice if you are one, but most people would not. Most people would prefer to live in 2016 with the products and services available today.
- beccasanchez 11y agoNone of those things make people happy. Childcare, healthcare, education, shelter, world travel, free time, organic food. Keep your trinkets and baubles.
- deleted 11y ago[deleted]
- collyw 11y agoBeer still existed in the 70's.