6 ms·

Housing went up 6.8% since last january alone. I didn't see any news about wages matching so yeah, I think there's a hidden layer of inflation on certain goods/

by bfrog 9y ago

Housing went up 6.8% since last january alone. I didn't see any news about wages matching so yeah, I think there's a hidden layer of inflation on certain goods/services (housing, healthcare) that just aren't being weighted heavy enough for.

pessimizer 9y ago
The good news is just that wages have reached 2007 levels for all deciles. When it comes to the rise in the average wage, the influence is concentrated in the top 10% of incomes. Black people are actually doing worse, finally reaching the wages they had in 2000, which wasn't a great year. This report definitely isn't a whitewash. It starts by making it clear that the wealthy are continuing to skim about 1/3 of middle class productivity gains (through housing, healthcare) as compared to the post-WWII period of the rise of America as a middle-class country that free-marketeers claim to want to go back to.
CompelTechnic 9y ago
Are there any good sources of information for a different aggregate inflation figure than CPI? I have read up on the CPI weightings before and I agree that they are inaccurate, but trying to find alternative weightings quickly leads into crank territory.
- JamesBarney 9y ago
  The MIT billion prices project. They basically wrote a program to go out and index a bunch of prices on the internet and see how they change. The results are pretty similar to the CPI. Do you have any specific complaints against the CPI? It's actually a pretty well thought out measure.
  - wyldfire 9y ago
    If housing is excluded from CPI, why is it excluded? I'll agree that people make housing decisions infrequently, but it still seems like it should be reflected somehow with some weight into the index.
    - occamrazor 9y ago
      Because buying a house is considered an investment, not a cost. Other housing related costs (e.g. renovations, maintenance, etc.) are included in CPI.
    - maxerickson 9y ago
      Housing isn't excluded from the CPI, it is one of the major components of the CPI. There's all sorts of information about how it is calculated on bls.gov.
    - JamesBarney 9y ago
      Buying a house is excluded, but renting is included. This is because buying a house is an investment, and CPI is meant to track consumption.
      - maxerickson 9y ago
        It factors in the rental value of owner occupied housing, they attempt to exclude the investment value of the property and recognize the shelter value.
  - lotsofpulp 9y ago
    Healthcare costs are not accurately represented, and almost all families are just one medical emergency away from losing everything. Also, increasing government taxes, fees, and decreasing quality of government infrastructure and services.
- ucaetano 9y ago
  AFAIK you can just take the source data and apply your own weightings. For example, based on your own personal spending. Also, calculating inflation can be very tricky. If every new iPhone costs the same, can you say that inflation = 0, or that there is deflation, since the same goods are now available at a lower price?
- dv_dt 9y ago
  Well, you might look at the fuzzier OECD Better life index. You can weight a set of broader category indicies. http://www.oecdbetterlifeindex.org http://www.oecdbetterlifeindex.org I really don't have a good feel for how robust the index and index data inputs are for that effort though.
gok 9y ago
> Housing went up 6.8% in january alone. Er, I think the number you're quoting is the median price of home sales, which went up 6.8% year-over-year. So it wasn't in a month alone.
- bfrog 9y ago
  I corrected my initial comment to match that.
dv_dt 9y ago
Housing costs are not included in the CPI (though I gather rents are), and things like college costs are also not represented. So when you see wages generally below or at best at CPI, it seems like the middle class is generally getting squeezed. So when HR departments use CPI as an input for planning of wage increases, that becomes a systemic squeeze. (Esp if they collectively think - we'll we had better keep raises at or below CPI...). Edit: on more searching, college is included in the CPI. https://www.bls.gov/cpi/factsheets/college-tuition.htm https://www.bls.gov/cpi/factsheets/college-tuition.htm

by bfrog 9y ago

pessimizer 9y ago

The good news is just that wages have reached 2007 levels for all deciles. When it comes to the rise in the average wage, the influence is concentrated in the top 10% of incomes. Black people are actually doing worse, finally reaching the wages they had in 2000, which wasn't a great year. This report definitely isn't a whitewash. It starts by making it clear that the wealthy are continuing to skim about 1/3 of middle class productivity gains (through housing, healthcare) as compared to the post-WWII period of the rise of America as a middle-class country that free-marketeers claim to want to go back to.

CompelTechnic 9y ago

Are there any good sources of information for a different aggregate inflation figure than CPI? I have read up on the CPI weightings before and I agree that they are inaccurate, but trying to find alternative weightings quickly leads into crank territory.

JamesBarney 9y ago
The MIT billion prices project. They basically wrote a program to go out and index a bunch of prices on the internet and see how they change. The results are pretty similar to the CPI. Do you have any specific complaints against the CPI? It's actually a pretty well thought out measure.
- wyldfire 9y ago
  If housing is excluded from CPI, why is it excluded? I'll agree that people make housing decisions infrequently, but it still seems like it should be reflected somehow with some weight into the index.
  - occamrazor 9y ago
    Because buying a house is considered an investment, not a cost. Other housing related costs (e.g. renovations, maintenance, etc.) are included in CPI.
  - maxerickson 9y ago
    Housing isn't excluded from the CPI, it is one of the major components of the CPI. There's all sorts of information about how it is calculated on bls.gov.
  - JamesBarney 9y ago
    Buying a house is excluded, but renting is included. This is because buying a house is an investment, and CPI is meant to track consumption.
    - maxerickson 9y ago
      It factors in the rental value of owner occupied housing, they attempt to exclude the investment value of the property and recognize the shelter value.
- lotsofpulp 9y ago
  Healthcare costs are not accurately represented, and almost all families are just one medical emergency away from losing everything. Also, increasing government taxes, fees, and decreasing quality of government infrastructure and services.
ucaetano 9y ago
AFAIK you can just take the source data and apply your own weightings. For example, based on your own personal spending. Also, calculating inflation can be very tricky. If every new iPhone costs the same, can you say that inflation = 0, or that there is deflation, since the same goods are now available at a lower price?
dv_dt 9y ago
Well, you might look at the fuzzier OECD Better life index. You can weight a set of broader category indicies. http://www.oecdbetterlifeindex.org http://www.oecdbetterlifeindex.org I really don't have a good feel for how robust the index and index data inputs are for that effort though.

gok 9y ago

> Housing went up 6.8% in january alone. Er, I think the number you're quoting is the median price of home sales, which went up 6.8% year-over-year. So it wasn't in a month alone.

bfrog 9y ago
I corrected my initial comment to match that.

dv_dt 9y ago

Housing costs are not included in the CPI (though I gather rents are), and things like college costs are also not represented. So when you see wages generally below or at best at CPI, it seems like the middle class is generally getting squeezed. So when HR departments use CPI as an input for planning of wage increases, that becomes a systemic squeeze. (Esp if they collectively think - we'll we had better keep raises at or below CPI...). Edit: on more searching, college is included in the CPI. https://www.bls.gov/cpi/factsheets/college-tuition.htm https://www.bls.gov/cpi/factsheets/college-tuition.htm