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To look at historical purchasing power, it's possible to normalize to a metric something like "ratio of average yearly income to minimum required for sustenance
by extr 5y ago
To look at historical purchasing power, it's possible to normalize to a metric something like "ratio of average yearly income to minimum required for sustenance". Eg, assuming you need 1800 kcal a day, scraps of cloth to serve as clothes, small amount of fuel/electricity, etc. So if average wages were $100/Year in 1700 and you needed $50/Year for bare-minimum sustenance, and today an average wage is $50K/Year, but you only need $15K/Year for bare-minimum sustenance, there is a sense in which purchasing power has gone up.
Obviously if you start bringing things like iPhones or pop tarts into it, it becomes entirely subjective, and under certain metrics people today live better than the kings of ancient times simply because we have A/C. But then it becomes more of a philosophical question.
- reedjosh 5y agoKind of need a way to measure peasant level income to total wealth available over time. Over the past several hundred years the 'pie' that is total economic goods and services has grown enormously. However, the share a median income can buy of the pie has shrunk greatly. Inflation vs median income intuitively gives a sense of this while not necessarily being scientific. But then economics is the dismal science.