4 ms·

Huh? Inflation calculator says 70k in 1950 is worth 754k today. Edit: I did the calculation backwards. Thanks to everyone who pointed that out.

zelphirkalt 7y ago
You have it the wrong way around. You should calculate what historical wage would be 70k today. GP is probably also relating to what you can buy using 70k.
opan 7y ago
Wouldn't you instead want to see what 70k today is equivalent to back then, then check how that pay compares to the average?
eru 7y ago
I think you'd need to do the opposite: take 70k today, and figure out what the inflation calculator suggests about it's value in 1950 dollars. Just using your numbers, that would be about 6.5k. Now compare with median annual incomes in 1950. Asking Google about '1950 median american income' gives 'Average family income in 1950 was $3,300.' Not quite what I wanted to know, but close enough. (We are looking at per worker income, and would probably be more interested in median than average.)
- mzi 7y ago
  I found this link[0] that tells us that the median income - adjusted for inflation - seems to be rising since 1967. https://www.davemanuel.com/median-household-income.php https://www.davemanuel.com/median-household-income.php
  - nbp160130 7y ago
    This is measuring household income, not individual income. Real household income isn't increasing because wages are rising, it's increasing because more people in a household are working.
    - eru 7y ago
      On the other hand, household sizes have decreased. (Though not sure about workers per household.) > [...] it's increasing because more people in a household are working. More people are working outside the house and participating in the market economy. Women worked before, domestic chores don't show up in these statistics. Presumably they produce a lot more working outside the house: to estimate a monetary value of what they did before compare with the prevailing wages for nannies and housekeepers.
primitivesuave 7y ago
By the other interpretation of $6500 dollars in 1950 (roughly equivalent to 70k today), it would be much higher than the average family income of 1950 of $3,300 and put you in the top 10-20% of earners, which is probably not as far as 70k gets you today.
- eru 7y ago
  Of course, fewer people were middle class back then.. But yeah, the original comment we are replying to doesn't have much going for it.
- bencoder 7y ago
  The true inflation rate is probably a lot higher than CPI which is what most calculators use. Somewhere between 7-13% [0] (for example) [0] https://www.businessinsider.com/if-people-knew-the-actual-inflation-rate-it-would-crash-the-economy-2016-8?r=US&IR=T https://www.businessinsider.com/if-people-knew-the-actual-in...
  - eru 7y ago
    Serious economists mostly suspect that the CPI overstates inflation. See eg https://www.schroders.com/en/sysglobalassets/digital/insights/pdfs/2016/ih5_is-inflation-overstated.pdf https://www.schroders.com/en/sysglobalassets/digital/insight... or do some Google searches. In any case, I agree that inflation (or more precisely, the price level) is a finicky statistic to agree on. So if you are making an argument, it's better if you can avoid inflation. Eg people like to argue whether median real income has stagnated or not. And that crucially hinges on inflation. But what they actually want to talk about seems to be whether workers get 'exploited' more. So we can instead look at the labour share of GDP over time. No inflation adjustment necessary. The article you linked to is somewhat hilarious. It suggests eg China is cooperating with the US in massaging American inflation numbers. (See point 2 in their list.)
- luckylion 7y ago
  Comparing family income 1950 with a single income in 2020 though. Have two incomes of that size in a family, and you'll be at 140k, which will put you in in that range.
deleted 7y ago
[deleted]

zelphirkalt 7y ago

You have it the wrong way around. You should calculate what historical wage would be 70k today. GP is probably also relating to what you can buy using 70k.

opan 7y ago

Wouldn't you instead want to see what 70k today is equivalent to back then, then check how that pay compares to the average?

eru 7y ago

I think you'd need to do the opposite: take 70k today, and figure out what the inflation calculator suggests about it's value in 1950 dollars. Just using your numbers, that would be about 6.5k. Now compare with median annual incomes in 1950. Asking Google about '1950 median american income' gives 'Average family income in 1950 was $3,300.' Not quite what I wanted to know, but close enough. (We are looking at per worker income, and would probably be more interested in median than average.)

mzi 7y ago
I found this link[0] that tells us that the median income - adjusted for inflation - seems to be rising since 1967. https://www.davemanuel.com/median-household-income.php https://www.davemanuel.com/median-household-income.php
- nbp160130 7y ago
  This is measuring household income, not individual income. Real household income isn't increasing because wages are rising, it's increasing because more people in a household are working.
  - eru 7y ago
    On the other hand, household sizes have decreased. (Though not sure about workers per household.) > [...] it's increasing because more people in a household are working. More people are working outside the house and participating in the market economy. Women worked before, domestic chores don't show up in these statistics. Presumably they produce a lot more working outside the house: to estimate a monetary value of what they did before compare with the prevailing wages for nannies and housekeepers.

primitivesuave 7y ago

By the other interpretation of $6500 dollars in 1950 (roughly equivalent to 70k today), it would be much higher than the average family income of 1950 of $3,300 and put you in the top 10-20% of earners, which is probably not as far as 70k gets you today.

eru 7y ago
Of course, fewer people were middle class back then.. But yeah, the original comment we are replying to doesn't have much going for it.
bencoder 7y ago
The true inflation rate is probably a lot higher than CPI which is what most calculators use. Somewhere between 7-13% [0] (for example) [0] https://www.businessinsider.com/if-people-knew-the-actual-inflation-rate-it-would-crash-the-economy-2016-8?r=US&IR=T https://www.businessinsider.com/if-people-knew-the-actual-in...
- eru 7y ago
  Serious economists mostly suspect that the CPI overstates inflation. See eg https://www.schroders.com/en/sysglobalassets/digital/insights/pdfs/2016/ih5_is-inflation-overstated.pdf https://www.schroders.com/en/sysglobalassets/digital/insight... or do some Google searches. In any case, I agree that inflation (or more precisely, the price level) is a finicky statistic to agree on. So if you are making an argument, it's better if you can avoid inflation. Eg people like to argue whether median real income has stagnated or not. And that crucially hinges on inflation. But what they actually want to talk about seems to be whether workers get 'exploited' more. So we can instead look at the labour share of GDP over time. No inflation adjustment necessary. The article you linked to is somewhat hilarious. It suggests eg China is cooperating with the US in massaging American inflation numbers. (See point 2 in their list.)
luckylion 7y ago
Comparing family income 1950 with a single income in 2020 though. Have two incomes of that size in a family, and you'll be at 140k, which will put you in in that range.

deleted 7y ago

[deleted]