7 ms·

With the exception of a few (very important) services (e.g. college tuition, healthcare, childcare), increases in income have actually outpaced inflation for mo

With the exception of a few (very important) services (e.g. college tuition, healthcare, childcare), increases in income have actually outpaced inflation for most other goods and services over the last 20 years [0]. This is something I almost never see discussed; almost everyone seems to believe that real incomes have totally stagnated. That said, given current inflationary trends, it will be interesting to see if this still holds up in a decade or two. [0] https://www.aei.org/wp-content/uploads/2021/01/cpi2020.png?x91208 https://www.aei.org/wp-content/uploads/2021/01/cpi2020.png?x...

crymer11 5y ago
Average hourly wages have, but what about the median?
- lotsofpulp 5y ago
  I do not understand why averages are so often used rather than deciles or even quintiles.
  - Clubber 5y ago
    Not always, but a lot of times people pick the number that supports their conclusion. For example, worker pay. If you want to make it seem higher, include the executives and do a mean average. Life expectancy works the same way. It's not that adults typically died at age 30, it's the number is a mean and includes child deaths which was a lot at the time. If you have 4 people, 2 are 60 and 2 died at birth, the mean age is 30. (60 + 60 + 0 + 0) / 4 = life expectancy of 30.
    - lotsofpulp 5y ago
      Yes, I cannot see any non cynical reason why the source of the data would want to only release the average. And even then, they usually do not specify what kind of average!
- MontyCarloHall 5y ago
  Average vs. median have grown fairly proportionally since 2000 [0]. Note, this chart is adjusted for inflation. [0] https://s3-us-west-2.amazonaws.com/gs-live/uploads%2F1527022617560-mean-income_chartbuilder+%281%29.png https://s3-us-west-2.amazonaws.com/gs-live/uploads%2F1527022...
  - lotsofpulp 5y ago
    This is a better graph including the past 5 years: https://cdn.dqydj.com/wp-content/uploads/2020/09/inflation-median-average-top-10-5-1-percent-household-income-1968-2020-768x565.png https://cdn.dqydj.com/wp-content/uploads/2020/09/inflation-m... Source: https://dqydj.com/individual-income-by-year/ https://dqydj.com/individual-income-by-year/
    - MontyCarloHall 5y ago
      Looks like that despite the top <=10% seeing a disproportionate increase in their income, the overall average and median are still growing relatively proportionally, though not to the same degree as 5 years ago.
    - Robotbeat 5y ago
      That is much better and it shows that median household incomes hadn’t grown much until recently (as the tight labor market and years of boom have pushed up wages). I still think it’s crazy our minimum wage is so low ($7.50/hr today vs $11/hour in late 1960s in today’s money). IMHO, it should be pinned to productivity growth since the 1960s (the question is: should we have higher or lower inequality than in the 1960s? The most conservative answer would be “the same”, in which case you tie the ratio of GDP per capita to minimum wage to the same level it was in the 1960s.), which would put the federal minimum wage somewhere north of $20/hour. (Or perhaps a regional approach where a minimum wage of $15/hour is universal and then above that, minimum wage at 40hours/week is three times what it’d need to support a two bedroom apartment rent at median local prices.) I’m also convinced that stagnated wages has caused stagnation in productivity growth, because as minimum wage becomes cheaper through inflation, it makes less sense for companies to invest in productivity enhancing automation and efficiency as they can just hire cheap workers and fire them as needed.
- rory 5y ago
  Sidenote-- is average === mean the standard lexicon now? When I was in grade school we learned that average was a generic term for mean, median, or mode. So when I see average conflated with median in discussion (as it often is), I assume it's intentional. But others seem to interpret it as a synonym of mean.
lotsofpulp 5y ago
> This is something I almost never see discussed; almost everyone seems to believe that real incomes have totally stagnated. Real people need to pay for tuition/childcare, housing, and healthcare, so what would be the point of excluding those from the calculation of real income?
- kiba 5y ago
  All of these are fundamentally related to the structure of our society and land use policy, not anything technological. There's no real reason to have to pay for college when we're already paying for public education.
JohnJamesRambo 5y ago
Well you can’t remove things and then say “See, inflation is fine!” If you want uneducated children with no healthcare and no affordable place to live I guess things are fine, and that’s pretty much what we see now.
- MontyCarloHall 5y ago
  The point of Gwern’s article is to highlight specific things that have improved since the 90s. I’m pointing out that this is supported by looking at inflation stratified by various goods and services. Nowhere in my post did I say that “inflation is fine”; I’m just saying many goods and services have gotten dramatically cheaper since the 90s, which is still counter to the prevailing narrative.
  - manux 5y ago
    Well you did say that > almost everyone seems to believe that real incomes have totally stagnated. suggesting that this is a false belief. I think this can easily be interpreted as you saying "inflation is fine" (even though that may not have been your intention).
- nivenkos 5y ago
  Exactly, it's like saying "wealthy homeowners are fine"... no shit?

crymer11 5y ago

Average hourly wages have, but what about the median?

lotsofpulp 5y ago
I do not understand why averages are so often used rather than deciles or even quintiles.
- Clubber 5y ago
  Not always, but a lot of times people pick the number that supports their conclusion. For example, worker pay. If you want to make it seem higher, include the executives and do a mean average. Life expectancy works the same way. It's not that adults typically died at age 30, it's the number is a mean and includes child deaths which was a lot at the time. If you have 4 people, 2 are 60 and 2 died at birth, the mean age is 30. (60 + 60 + 0 + 0) / 4 = life expectancy of 30.
  - lotsofpulp 5y ago
    Yes, I cannot see any non cynical reason why the source of the data would want to only release the average. And even then, they usually do not specify what kind of average!
MontyCarloHall 5y ago
Average vs. median have grown fairly proportionally since 2000 [0]. Note, this chart is adjusted for inflation. [0] https://s3-us-west-2.amazonaws.com/gs-live/uploads%2F1527022617560-mean-income_chartbuilder+%281%29.png https://s3-us-west-2.amazonaws.com/gs-live/uploads%2F1527022...
- lotsofpulp 5y ago
  This is a better graph including the past 5 years: https://cdn.dqydj.com/wp-content/uploads/2020/09/inflation-median-average-top-10-5-1-percent-household-income-1968-2020-768x565.png https://cdn.dqydj.com/wp-content/uploads/2020/09/inflation-m... Source: https://dqydj.com/individual-income-by-year/ https://dqydj.com/individual-income-by-year/
  - MontyCarloHall 5y ago
    Looks like that despite the top <=10% seeing a disproportionate increase in their income, the overall average and median are still growing relatively proportionally, though not to the same degree as 5 years ago.
  - Robotbeat 5y ago
    That is much better and it shows that median household incomes hadn’t grown much until recently (as the tight labor market and years of boom have pushed up wages). I still think it’s crazy our minimum wage is so low ($7.50/hr today vs $11/hour in late 1960s in today’s money). IMHO, it should be pinned to productivity growth since the 1960s (the question is: should we have higher or lower inequality than in the 1960s? The most conservative answer would be “the same”, in which case you tie the ratio of GDP per capita to minimum wage to the same level it was in the 1960s.), which would put the federal minimum wage somewhere north of $20/hour. (Or perhaps a regional approach where a minimum wage of $15/hour is universal and then above that, minimum wage at 40hours/week is three times what it’d need to support a two bedroom apartment rent at median local prices.) I’m also convinced that stagnated wages has caused stagnation in productivity growth, because as minimum wage becomes cheaper through inflation, it makes less sense for companies to invest in productivity enhancing automation and efficiency as they can just hire cheap workers and fire them as needed.
rory 5y ago
Sidenote-- is average === mean the standard lexicon now? When I was in grade school we learned that average was a generic term for mean, median, or mode. So when I see average conflated with median in discussion (as it often is), I assume it's intentional. But others seem to interpret it as a synonym of mean.

lotsofpulp 5y ago

> This is something I almost never see discussed; almost everyone seems to believe that real incomes have totally stagnated. Real people need to pay for tuition/childcare, housing, and healthcare, so what would be the point of excluding those from the calculation of real income?

kiba 5y ago
All of these are fundamentally related to the structure of our society and land use policy, not anything technological. There's no real reason to have to pay for college when we're already paying for public education.

JohnJamesRambo 5y ago

Well you can’t remove things and then say “See, inflation is fine!” If you want uneducated children with no healthcare and no affordable place to live I guess things are fine, and that’s pretty much what we see now.

MontyCarloHall 5y ago
The point of Gwern’s article is to highlight specific things that have improved since the 90s. I’m pointing out that this is supported by looking at inflation stratified by various goods and services. Nowhere in my post did I say that “inflation is fine”; I’m just saying many goods and services have gotten dramatically cheaper since the 90s, which is still counter to the prevailing narrative.
- manux 5y ago
  Well you did say that > almost everyone seems to believe that real incomes have totally stagnated. suggesting that this is a false belief. I think this can easily be interpreted as you saying "inflation is fine" (even though that may not have been your intention).
nivenkos 5y ago
Exactly, it's like saying "wealthy homeowners are fine"... no shit?