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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 disposa

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.

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.