5 ms·

That's all correct, but ~60% of the weight in PCE and CPI-U are given to housing, healthcare, and education costs: https://twitter.com/jmhorp/status/1308799186

by bhupy 6y ago

That's all correct, but ~60% of the weight in PCE and CPI-U are given to housing, healthcare, and education 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". Keep in mind that this still means that we ought to solve the rising house price problem (by liberalizing zoning restrictions) and reducing healthcare prices (either by having the State subsidize all of it or better price transparency). Doing so just improves the inflation-adjusted wage even more than it's already improved.

Tarsul 6y ago
thanks for the discussion and your sources. I guess your numbers add up. Nonetheless, I don't think using inflation is enough as measuring stick. Upward mobility/inequality is not really captured in it. Also, it appears public service in the US has suffered a lot in the last years. So my full picture of the US is not as bright as yours although your sources and arguments are fine in itself.
- bhupy 6y ago
  If you’re interested, I provided some empirical data around upward mobility during one’s life elsewhere. I’ll just copy-paste here for convenience: “Based on the empirical tax analysis, 12% of the population found themselves in the top 1% of the income distribution for at least one year. 39% of Americans spent a year in the top 5% of the income distribution, 56% found themselves in the top 10%, and a whopping 73% spent a year in the top 20% of the income distribution. https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0116370” https://journals.plos.org/plosone/article?id=10.1371/journal...
  - anemoiac 6y ago
    I’m not sure whether this oft-cited research demonstrates much regarding upward mobility, per se, but it does provide some compelling insight into the volatility of income throughout one’s life. Typically, when speaking of upward mobility, some degree of stability is assumed to follow an upward income movement, but this study doesn’t preclude the possibility of someone going from, say, the 20th income percentile to the 80th for a year, then subsequently falling back to the 20th income percentile for the remainder of their life. That’s not a fault of the study, to be sure, but it does limit the scope of its application with regard to the topic of upward mobility.
    - bhupy 6y ago
      You’re absolutely correct that, while one may spend time in the a higher percentile, they may then fall back to a lower percentile for the remainder of their life. Nevertheless, it’s an important analysis because if the majority of people really do spend a few years in affluence, it suggests the uncomfortable reality that there is a higher degree of personal responsibility involved than we may be letting on.
      - anemoiac 6y ago
        > it suggests the uncomfortable reality that there is a higher degree of personal responsibility involved than we may be letting on. How did you reach this conclusion? I don't see any link between data demonstrating that most people spend at least one year in relative affluence and even the general concept of "personal responsibility," let alone some sort of specific causal relationship between the two.
        bhupy 6y ago
        Because if the majority of people spend some time in the top quintile (54% spend at least 3 years in the top 20%), it means that the majority of people experience the same (or similar) set of opportunities available to the top quintile income earners. Either they are able to capitalize on those opportunities and stay in the top quintile, or they are unable to do so and fall down to a lower quintile. Also, nobody is concluding that it’s 100% personal responsibility. Rather, the implication is that personal responsibility might play a greater role in outcomes than some of us are willing to accept.

by bhupy 6y ago

Tarsul 6y ago

thanks for the discussion and your sources. I guess your numbers add up. Nonetheless, I don't think using inflation is enough as measuring stick. Upward mobility/inequality is not really captured in it. Also, it appears public service in the US has suffered a lot in the last years. So my full picture of the US is not as bright as yours although your sources and arguments are fine in itself.

bhupy 6y ago
If you’re interested, I provided some empirical data around upward mobility during one’s life elsewhere. I’ll just copy-paste here for convenience: “Based on the empirical tax analysis, 12% of the population found themselves in the top 1% of the income distribution for at least one year. 39% of Americans spent a year in the top 5% of the income distribution, 56% found themselves in the top 10%, and a whopping 73% spent a year in the top 20% of the income distribution. https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0116370” https://journals.plos.org/plosone/article?id=10.1371/journal...
- anemoiac 6y ago
  I’m not sure whether this oft-cited research demonstrates much regarding upward mobility, per se, but it does provide some compelling insight into the volatility of income throughout one’s life. Typically, when speaking of upward mobility, some degree of stability is assumed to follow an upward income movement, but this study doesn’t preclude the possibility of someone going from, say, the 20th income percentile to the 80th for a year, then subsequently falling back to the 20th income percentile for the remainder of their life. That’s not a fault of the study, to be sure, but it does limit the scope of its application with regard to the topic of upward mobility.
  - bhupy 6y ago
    You’re absolutely correct that, while one may spend time in the a higher percentile, they may then fall back to a lower percentile for the remainder of their life. Nevertheless, it’s an important analysis because if the majority of people really do spend a few years in affluence, it suggests the uncomfortable reality that there is a higher degree of personal responsibility involved than we may be letting on.
    - anemoiac 6y ago
      > it suggests the uncomfortable reality that there is a higher degree of personal responsibility involved than we may be letting on. How did you reach this conclusion? I don't see any link between data demonstrating that most people spend at least one year in relative affluence and even the general concept of "personal responsibility," let alone some sort of specific causal relationship between the two.
      - bhupy 6y ago
        Because if the majority of people spend some time in the top quintile (54% spend at least 3 years in the top 20%), it means that the majority of people experience the same (or similar) set of opportunities available to the top quintile income earners. Either they are able to capitalize on those opportunities and stay in the top quintile, or they are unable to do so and fall down to a lower quintile. Also, nobody is concluding that it’s 100% personal responsibility. Rather, the implication is that personal responsibility might play a greater role in outcomes than some of us are willing to accept.