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That's correct, but also not particularly relevant, as there's no society on the planet where low income salaries experience a higher absolute increase than hig

by bhupy 6y ago

That's correct, but also not particularly relevant, as there's no society on the planet where low income salaries experience a higher absolute increase than higher income salaries. The fundamental point is: there's a narrative that lower income salaries 1) don't increase at all, and 2) increase at a slower rate than higher income salaries, and both are false. It's also important to remember that the increase in salaries at the lower income levels, do NOT necessarily represent a single earner's pay history. Those numbers show us the snapshot-in-time income numbers for everyone currently at that salary level, but does not account for people actually moving income levels as they progress in their career. The data isn't "here's the life of Joe over the last 5 years", it's "here's the life of people without college degrees that are X years old with Y years of experience with X & Y held constant over 5 years".

notacoward 6y ago
If low-end wages double and home prices double, the ratio remains the same but the poor person is still falling behind due to fixed expenses. You'd need disposable income to double for the effect to be neutral (probably a bit more because even poor people deserve a bit of indulgence now and then). As it is, poor people are more sensitive to housing inflation. Even if wages and home prices move up in lockstep (which they haven't) they'll take more years to save up enough for a down payment. That's why so many remain permanent renters, denied the equity and tax advantages of home ownership and putting them at even further disadvantage. So yes, the point about inequality damn well is relevant. Anyone who wants to pretend they know about statistics should know that distributions matter as much as averages and medians.
- bhupy 6y ago
  What I’m suggesting is irrelevant is pointing out that percentage increases are lower in absolute terms, because that’s universally true everywhere. If low-end wages double, you have to look at how low-end home prices did, not median home prices. Housing is a positional good. > If wages and home prices move up in lockstep (which they haven’t) These numbers are all inflation adjusted, and inflation calculation includes all of those costs: https://twitter.com/jmhorp/status/1308799186301747200 https://twitter.com/jmhorp/status/1308799186301747200 https://www.bls.gov/cpi/tables/relative-importance/2019.txt https://www.bls.gov/cpi/tables/relative-importance/2019.txt Even if housing costs have gone up more than overall inflation, other things have fallen, and OVERALL inflation rate is the best rough measure of "cost of living". Focusing just on home prices or healthcare is incomplete way of understanding purchasing power / cost of living. When we say that the median income has increased adjusted for inflation, it means that the real salary has increased even accounting for the increased prices of all of the stuff that needs to be bought. And finally, re-iterating the point: these numbers don’t represent a single earner’s pay history. It doesn’t really make sense to compare a single individual’s fixed expense in the context of these distributions, because they represent different individuals at different snapshots in time. While the shape of the distribution may be (moderately) fixed, the composition of it changes dramatically.

by bhupy 6y ago

notacoward 6y ago

If low-end wages double and home prices double, the ratio remains the same but the poor person is still falling behind due to fixed expenses. You'd need disposable income to double for the effect to be neutral (probably a bit more because even poor people deserve a bit of indulgence now and then). As it is, poor people are more sensitive to housing inflation. Even if wages and home prices move up in lockstep (which they haven't) they'll take more years to save up enough for a down payment. That's why so many remain permanent renters, denied the equity and tax advantages of home ownership and putting them at even further disadvantage. So yes, the point about inequality damn well is relevant. Anyone who wants to pretend they know about statistics should know that distributions matter as much as averages and medians.

bhupy 6y ago
What I’m suggesting is irrelevant is pointing out that percentage increases are lower in absolute terms, because that’s universally true everywhere. If low-end wages double, you have to look at how low-end home prices did, not median home prices. Housing is a positional good. > If wages and home prices move up in lockstep (which they haven’t) These numbers are all inflation adjusted, and inflation calculation includes all of those costs: https://twitter.com/jmhorp/status/1308799186301747200 https://twitter.com/jmhorp/status/1308799186301747200 https://www.bls.gov/cpi/tables/relative-importance/2019.txt https://www.bls.gov/cpi/tables/relative-importance/2019.txt Even if housing costs have gone up more than overall inflation, other things have fallen, and OVERALL inflation rate is the best rough measure of "cost of living". Focusing just on home prices or healthcare is incomplete way of understanding purchasing power / cost of living. When we say that the median income has increased adjusted for inflation, it means that the real salary has increased even accounting for the increased prices of all of the stuff that needs to be bought. And finally, re-iterating the point: these numbers don’t represent a single earner’s pay history. It doesn’t really make sense to compare a single individual’s fixed expense in the context of these distributions, because they represent different individuals at different snapshots in time. While the shape of the distribution may be (moderately) fixed, the composition of it changes dramatically.