5 ms·

Yea, it's great that housing and healthcare have only grown by 1% per year in costs since 2000 as well.

by danharaj 8y ago

weber111 8y ago
"Real" is a technical term from economics and roughly means "after controlling for price increases".
- danharaj 8y ago
  "Adjusted for inflation" is an opaque term and doesn't actually explain which costs they controlled for. I doubt they controlled for both healthcare and housing.
Arnt 8y ago
I don't get what you're trying to say here? Are housing and healthcare not included in the general measurement of inflation where you live? Or do you mean that wage rises should be compared against only a part of inflation?
- lotsofpulp 8y ago
  Housing in desirable areas with potential for growth is offset by depressed housing in most of the rest of the US, so for the desirable portions of the country, housing, and higher education and healthcare have outpaced wage growth considerably.
  - Arnt 8y ago
    I'm not sure... is this a roundabout way of saying that the expensive things are the ones you prefer, or is there something more substantive behind the statement?
    - lotsofpulp 8y ago
      It means that there is a widening wealth and income gap, and that affects people's day to day lives. It's a more risky winner take all situation, where if you're not in the right place at the right time, you risk getting left behind, and that does affect people's psyche. People in rural areas where housing costs are not increasing might be experiencing a little wage growth, but there are fewer and fewer future work opportunities. People in urban areas where housing costs are increasing rapidly, but wages are not increasing rapidly enough to make them feel secure...but they need to stay there in case they're laid off or need to find another employer. Either situation isn't what's wanted, but the overall statistic is that real wage growth is positive.
- billysielu 8y ago
  They arnt included in most places, Arnt.
AlanSE 8y ago
The article is about real pay growth of 1% per year. You are commenting as if it were about nominal pay growth of 1% per year. Accepting that housing and healthcare costs have outpaced wage growth, that mathematically implies that costs of other goods and services were outpaced by wages by an even larger (appropriately weighted) margin.
- pjc50 8y ago
  Exactly. The west has experienced "Baumol cost disease", where things that can be outsourced or automated have got a lot cheaper and things that can't have got a lot more expensive. See https://medium.com/@6pranavk/insight-of-the-day-cost-disease-c14f50c1cd2e https://medium.com/@6pranavk/insight-of-the-day-cost-disease... especially the graph.
- Retric 8y ago
  First no, it was "at most 1%" which means it could be negative. > costs of other goods and services where outpaced by wages You're implying that all people consume the same basket of goods as calculated by the article. Wage growth and spending is not even across society, so most people could be worse off while all of the above math holds true. labour productivity rose by 75% in America from 1973 to 2016, while average pay rose by less than 50% and median pay by just over 10%. which is largely because between 1979 and 2016, pay adjusted for inflation for the bottom fifth of American earners barely rose at all. Further, many goods like computing power have gotten vastly cheaper, but that savings mostly end up with people who have disposable income. Spend a lower percentage of your income on such goods and the benifit decreases. This means the the bottom half of the work force is worse off than you might think.

Yea, it's great that housing and healthcare have only grown by 1% per year in costs since 2000 as well.

weber111 8y ago

"Real" is a technical term from economics and roughly means "after controlling for price increases".

danharaj 8y ago
"Adjusted for inflation" is an opaque term and doesn't actually explain which costs they controlled for. I doubt they controlled for both healthcare and housing.

Arnt 8y ago

I don't get what you're trying to say here? Are housing and healthcare not included in the general measurement of inflation where you live? Or do you mean that wage rises should be compared against only a part of inflation?

lotsofpulp 8y ago
Housing in desirable areas with potential for growth is offset by depressed housing in most of the rest of the US, so for the desirable portions of the country, housing, and higher education and healthcare have outpaced wage growth considerably.
- Arnt 8y ago
  I'm not sure... is this a roundabout way of saying that the expensive things are the ones you prefer, or is there something more substantive behind the statement?
  - lotsofpulp 8y ago
    It means that there is a widening wealth and income gap, and that affects people's day to day lives. It's a more risky winner take all situation, where if you're not in the right place at the right time, you risk getting left behind, and that does affect people's psyche. People in rural areas where housing costs are not increasing might be experiencing a little wage growth, but there are fewer and fewer future work opportunities. People in urban areas where housing costs are increasing rapidly, but wages are not increasing rapidly enough to make them feel secure...but they need to stay there in case they're laid off or need to find another employer. Either situation isn't what's wanted, but the overall statistic is that real wage growth is positive.
billysielu 8y ago
They arnt included in most places, Arnt.

AlanSE 8y ago

The article is about real pay growth of 1% per year. You are commenting as if it were about nominal pay growth of 1% per year. Accepting that housing and healthcare costs have outpaced wage growth, that mathematically implies that costs of other goods and services were outpaced by wages by an even larger (appropriately weighted) margin.

pjc50 8y ago
Exactly. The west has experienced "Baumol cost disease", where things that can be outsourced or automated have got a lot cheaper and things that can't have got a lot more expensive. See https://medium.com/@6pranavk/insight-of-the-day-cost-disease-c14f50c1cd2e https://medium.com/@6pranavk/insight-of-the-day-cost-disease... especially the graph.
Retric 8y ago
First no, it was "at most 1%" which means it could be negative. > costs of other goods and services where outpaced by wages You're implying that all people consume the same basket of goods as calculated by the article. Wage growth and spending is not even across society, so most people could be worse off while all of the above math holds true. labour productivity rose by 75% in America from 1973 to 2016, while average pay rose by less than 50% and median pay by just over 10%. which is largely because between 1979 and 2016, pay adjusted for inflation for the bottom fifth of American earners barely rose at all. Further, many goods like computing power have gotten vastly cheaper, but that savings mostly end up with people who have disposable income. Spend a lower percentage of your income on such goods and the benifit decreases. This means the the bottom half of the work force is worse off than you might think.