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> "Real pay" means nominal pay adjusted for inflation. So if pay went up by 3%, and inflation was 2%, you'd get something like a 1% "real" pay increase. Wow, i

> "Real pay" means nominal pay adjusted for inflation. So if pay went up by 3%, and inflation was 2%, you'd get something like a 1% "real" pay increase. Wow, if you're right about the meaning of "real pay" (and I do think you're correct[1]), then The Economist is being pretty dishonest in their reporting by not explaining that important point. It makes a huge difference in how anyone interprets the story. How many people reading The Economist are actually economists? I for one assumed that The Economist was saying that people on average are massively worse off since 2000 -- which is the obvious conclusion if (nominal) pay increased 1% a year but inflation was 2-3% a year. [1] https://en.wikipedia.org/wiki/Real_versus_nominal_value_(economics) https://en.wikipedia.org/wiki/Real_versus_nominal_value_(eco... EDIT: I'd like to mention that "real" meaning "adjusted for inflation" is easily misinterpreted when used in normal English sentences. The article says, "In most rich countries, real pay has grown by at most 1% per year." That sounds a lot like, "In most rich countries, your actual paycheck has grown by at most 1% per year." Or, "In most rich countries, the pay you get after taxes has grown by at most 1% per year." Or other senses in which "real" has a normal English meaning rather than "adjusted for inflation".

Brakenshire 8y ago
'Real pay' is a very well established term, The Economist will assume that its audience understands that kind of jargon. It's really not at all dishonest.
pjc50 8y ago
The Economist writes for an audience which is assumed to know these things, or at least be able to look them up. Just as the average HN article is not expected to explain what React is.
emodendroket 8y ago
Should they also explain the bicameral structure of the US legislature in every article about Congress?
Consultant32452 8y ago
The economist isn't being dishonest, "real pay" is a very widely used way of saying "adjusted for inflation."
CamelCaseName 8y ago
I'm surprised that you feel that the Economist was being dishonest. "Real value" is such a basic term that virtually everyone in finance, economics, and politics should know. It was taught in my high school economics classes, one certainly need not be an economist to understand. Defining real vs nominal in this article would be like defining "variable" and "recursion" in an article about deep learning implementation at Google. Completely annoying and useless to those who subscribe.
Kalium 8y ago
You're right! That's a term of art that can easily be misinterpreted by an uneducated reader. Rather than doing what the Eonomist tends to do and assume an educated readership, they should have defined any term not daily used by someone possessed of an education past that of the 8th grade or so. This would ensure that every single reader, every single time, without any exceptions, would attain full, proper, and correct understanding. No saying "real wages" - define it as nominal wage growth less inflation. And don't just say "nominal" or "inflation", define them. Immediately and in context, so that anyone can understand. Alternately, readers could put forth the minimal amount of effort required to Google any jargon (and "real pay" is pretty clearly jargon) they did not immediately know the definition of. I understand if some readers consider this work they should not be expected to do or otherwise an undue burden to which they refuse to rise.

Brakenshire 8y ago

'Real pay' is a very well established term, The Economist will assume that its audience understands that kind of jargon. It's really not at all dishonest.

pjc50 8y ago

The Economist writes for an audience which is assumed to know these things, or at least be able to look them up. Just as the average HN article is not expected to explain what React is.

emodendroket 8y ago

Should they also explain the bicameral structure of the US legislature in every article about Congress?

Consultant32452 8y ago

The economist isn't being dishonest, "real pay" is a very widely used way of saying "adjusted for inflation."

CamelCaseName 8y ago

I'm surprised that you feel that the Economist was being dishonest. "Real value" is such a basic term that virtually everyone in finance, economics, and politics should know. It was taught in my high school economics classes, one certainly need not be an economist to understand. Defining real vs nominal in this article would be like defining "variable" and "recursion" in an article about deep learning implementation at Google. Completely annoying and useless to those who subscribe.

Kalium 8y ago

You're right! That's a term of art that can easily be misinterpreted by an uneducated reader. Rather than doing what the Eonomist tends to do and assume an educated readership, they should have defined any term not daily used by someone possessed of an education past that of the 8th grade or so. This would ensure that every single reader, every single time, without any exceptions, would attain full, proper, and correct understanding. No saying "real wages" - define it as nominal wage growth less inflation. And don't just say "nominal" or "inflation", define them. Immediately and in context, so that anyone can understand. Alternately, readers could put forth the minimal amount of effort required to Google any jargon (and "real pay" is pretty clearly jargon) they did not immediately know the definition of. I understand if some readers consider this work they should not be expected to do or otherwise an undue burden to which they refuse to rise.