4 ms·

Mean, median and distribution taken together tell you something. Not the whole picture but way more than any one metric looked at in isolation. In my experienc

Mean, median and distribution taken together tell you something. Not the whole picture but way more than any one metric looked at in isolation. In my experience taking one single metric (be it mean or median) without context is more often than not because it supports a specific politicsl/ideological point of view. Using the mean in this case supports the notion that globalization was a win for the American society. Using the mean alone shows that it more or less did nothing (but maybe also did not hurt). Showing the distribution or the mean increase per income bracket would show it benefitting the upper income/net worth levels while maybe hurting the people on the lower end. Comparing income with buying power for specific goods (like done in other places of this discussion) is also often dependent on the political/ideological point of view. Others have stated that nowadays everybody has a supercomputer in their pocket (implying things got better through globalization) while others pointed out that the average worker cannot afford a home for themselves and their family (implying globalization wasn't so great - at least not for everyone). So it takes context and different metrics to at least paint a rich picture to enable us to rationally discuss good and bad sides of a phenomenon like globalization and what could be done to fix the bad things (if we (not you and me, but all discussion participants) could find middle ground in defining the same things as being bad).

pydry 5y ago
>Others have stated that nowadays everybody has a supercomputer in their pocket (implying things got better through globalization) while others pointed out that the average worker cannot afford a home for themselves and their family (implying globalization wasn't so great - at least not for everyone). I've yet to hear any of the former group actually say that they'd rather live on the street with an iPhone than in a house they owned in the 1960s with a rotary in spite of that being the implication.
NoLinkToMe 5y ago
Here's median, quite clearly 50% higher than the 70s: https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N Agreed that people cherry pick the specific goods vs inflation to defend their point of view. TVs vs College are typical examples of radically cheaper vs radically more expensive. The housing situation is quite a bit more nuanced though, in my opinion. A lot of data shows it hasn't really been getting more expensive. For one, we're not comparing the same houses. The average home size in 1969 was 1200 square feet. Today it's over 2400 square feet, or double. Second, we're not comparing the same members of the household. Homes were shared by 3.33, now by 2.5. That's in part an indication of cultural change, but also in part a change in wealth and luxury, as the number of single-person households more than tripled since 1969, something unaffordable at the time. Then there's the costs of the loan. Virtually nobody, certainly not first-time buyers, outright buys a home in cash, not then and not now. Homes are financed with mortgaged. The price of a mortgage is in the interest rate. Paying off the principal isn't an expense because it reduces your liability, any debt paid off means the equity is now yours, and if you sell the home you get the cash back. The interest you never get back, it's the price of the loan. The interest rate was 7.5%, now it's 3.5%, less than half. Putting it all together, yes, nominal home prices are about 15x higher today. But the cost to rent money to own a certain size home per person, is indeed 14.8 / (3.332.55) (1200/2500) / (7.5*3.55) = 2.57x as expensive, nominally. Whilst median personal income grew by about 6-7x [0] In other words, housing has gotten cheaper. It's the reason current prices are sustained despite the average house being 2x as big, and shared by 25% fewer people. The reason housing prices are so high is because we're living in bigger homes and sharing them with fewer people and paying less on the financing costs. [0] https://fred.stlouisfed.org/series/MEPAINUSA646N https://fred.stlouisfed.org/series/MEPAINUSA646N
- sdoering 5y ago
  Just linking my own comment (for others) with the inflation numbers for the same period being a factor of 5.2 times. Not only 1.5 times like the median income: https://news.ycombinator.com/item?id=30325835 https://news.ycombinator.com/item?id=30325835

pydry 5y ago

>Others have stated that nowadays everybody has a supercomputer in their pocket (implying things got better through globalization) while others pointed out that the average worker cannot afford a home for themselves and their family (implying globalization wasn't so great - at least not for everyone). I've yet to hear any of the former group actually say that they'd rather live on the street with an iPhone than in a house they owned in the 1960s with a rotary in spite of that being the implication.

NoLinkToMe 5y ago

Here's median, quite clearly 50% higher than the 70s: https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N Agreed that people cherry pick the specific goods vs inflation to defend their point of view. TVs vs College are typical examples of radically cheaper vs radically more expensive. The housing situation is quite a bit more nuanced though, in my opinion. A lot of data shows it hasn't really been getting more expensive. For one, we're not comparing the same houses. The average home size in 1969 was 1200 square feet. Today it's over 2400 square feet, or double. Second, we're not comparing the same members of the household. Homes were shared by 3.33, now by 2.5. That's in part an indication of cultural change, but also in part a change in wealth and luxury, as the number of single-person households more than tripled since 1969, something unaffordable at the time. Then there's the costs of the loan. Virtually nobody, certainly not first-time buyers, outright buys a home in cash, not then and not now. Homes are financed with mortgaged. The price of a mortgage is in the interest rate. Paying off the principal isn't an expense because it reduces your liability, any debt paid off means the equity is now yours, and if you sell the home you get the cash back. The interest you never get back, it's the price of the loan. The interest rate was 7.5%, now it's 3.5%, less than half. Putting it all together, yes, nominal home prices are about 15x higher today. But the cost to rent money to own a certain size home per person, is indeed 14.8 / (3.332.55) (1200/2500) / (7.5*3.55) = 2.57x as expensive, nominally. Whilst median personal income grew by about 6-7x [0] In other words, housing has gotten cheaper. It's the reason current prices are sustained despite the average house being 2x as big, and shared by 25% fewer people. The reason housing prices are so high is because we're living in bigger homes and sharing them with fewer people and paying less on the financing costs. [0] https://fred.stlouisfed.org/series/MEPAINUSA646N https://fred.stlouisfed.org/series/MEPAINUSA646N

sdoering 5y ago
Just linking my own comment (for others) with the inflation numbers for the same period being a factor of 5.2 times. Not only 1.5 times like the median income: https://news.ycombinator.com/item?id=30325835 https://news.ycombinator.com/item?id=30325835