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Countries by median income: https://en.wikipedia.org/wiki/Median_income https://en.wikipedia.org/wiki/Median_income One advantage the US has is being the world

Countries by median income: https://en.wikipedia.org/wiki/Median_income https://en.wikipedia.org/wiki/Median_income One advantage the US has is being the world's reserve currency. It tends to give the USD a lot of strength/more purchasing power in other countries.

refurb 4y ago
How does being the reserve currency drive local wages higher?
- jacurtis 4y ago
  It doesn't drive wages higher, but it improves buying power which is an indirect raise
  - refurb 4y ago
    Then why are countries who aren't the reserve currency also have a more valuable currency? In some cases more valuable than the USD?
    - adam_arthur 4y ago
      Whether the currency is <1 or >1 relative to the USD is not that important... it's largely a function of the money supply. 1 Euro is worth more than 1 USD, but goods in Europe may still cost more in USD terms than equivalent goods in the US. Or salaries could be lower (which is true as of today)
      - refurb 4y ago
        But that doesn't follow. 1. US has reserve currency status 2. That makes the purchasing power of the USD stronger (because USD > other currency) 3. Citizens benefit from that Ok, but other currencies have even stronger purchasing power than the USD.
        adam_arthur 4y ago
        To put it simply: In an alternate world where USD was not the reserve currency, PPP of US based wages would be lower, all else equal. The actual nominal conversion rate of the currency is pretty meaningless. The fact that Yen is 100 to 1ish to the dollar is also not very meaningful. They're all just nominal values. Only the exchange rate relative to fundamentals matters. USD gets stronger exchange rates relative to the fundamentals of the currency (because many foreign countries and citizens also hold USD, not just locals). Which is mostly untrue for other currencies. PPP adjusted salaries are lower everywhere else in the world, partially, but not wholly for this reason.
        refurb 4y ago
        You haven't actually proven that US' higher PPP is solely due to its reserve currency status. Other countries who are not reserve currencies have higher purchasing power than USD. So if the US wasn't the reserve currency, there is no reason it couldn't do the same. You're making a claim that you haven't backed up.
        adam_arthur 4y ago
        I never said "solely". Fact: The USD has large foreign demand which does not exist for other currencies. Fact: If more currency is demanded, it strengthens the currency in a relative sense. Fact: Therefore the USD is stronger than it would be otherwise, considering only local demand. Your whole counterargument seems to be based on a misunderstanding of real vs nominal. To say 1 Euro > 1 USD means people in Euro earning countries have higher purchasing power is simply wrong. All currency values are nominal. Fact: If USD money supply doubled overnight and all holders got 2x the amount and wages/prices adjusted automatically, the Euro would appreciate 2x against the dollar. Fact: That does not mean Euro earning citizens have higher purchasing power. It's an entirely nominal change. 1 hour of labor in USD terms earns the same in purchasing power, regardless of the face value of currency. Same concept as a stock split Fact: If Euro became the reserve currency tomorrow, Euro-holders would have more purchasing power due to foreign demand making each unit of currency more valuable in a relative sense than it was previously. Fact: If USD lost reserve currency status, it would weaken relative to other currencies. None of these are disputed, but you can believe whatever you want.
- adam_arthur 4y ago
  If the value of USD is higher relative to an alternative currency, then you can earn USD in the US and visit a foreign country, convert USD to local currency, and achieve higher purchasing power relative to local wages there. Or simply buy foreign produced goods cheaper (e.g. Chinese produced goods on Amazon). e.g. Exchange rate induced deflation
- tekla 4y ago
  It attracts outside investment since being the reserve currency is at the very least the bedrock of stability
  - fsckboy 4y ago
    well, switch it around, and I'm not just playing with words, there's cause and effect: The bedrock of stability (plus large size, i.e. Switzerland or Norway are not going to be it) is the reserve currency.
jacurtis 4y ago
The median income in tech (most people reading this site) is at least 4x that median, which is even more impactful.
- kfajdsl 4y ago
  The median income in tech is $200,000?
  - jacurtis 4y ago
    I was thinking $40k x 4 which is $160k. I just did a quick search and found several reputable sites saying the average FAANG salary is $230 (which is 5.75x). According to the Bureau of Labor Statistics (BLS), the mean software engineering salary was $136,230 in 2022. So you're right thats only 3.5x. Notice thats the mean. I suspect the median is actually slightly higher than the mean. So i'm guesstimating here. But I stand by my rough estimate.
    - lotsofpulp 4y ago
      Why would you suspect the median is higher than the mean? Almost all statistics related to wealth and income I have seen indicate power law distributions, which would mean median is lower than mean. https://en.wikipedia.org/wiki/Lorenz_curve https://en.wikipedia.org/wiki/Lorenz_curve
- nl 4y ago
  This is so far from true it's hard to work out if it is supposed to be trolling or just ignorant. The median salary of FAANG programmers in the Bay Area might be 4x that median. But I assure you that "most people reading this site" are not "FAANG programmers in the Bay Area" even if at times it might seem like they are.
lmm 4y ago
The US number is also artificially inflated by their unusual healthcare system - in most developed countries healthcare is paid for from taxes or mandatory insurance (which is deducted from that measure), whereas in the US it's considered to be paid from disposable income.
- theGnuMe 4y ago
  Nah FSA to pay copays is tax free as are standard premiums. So you can pay your copays tax free the problem is you have to get your utilization correct since it is use it or lose it.
  - lmm 4y ago
    They're tax free but they're still considered part of your disposable income since you can choose not to pay them.

refurb 4y ago

How does being the reserve currency drive local wages higher?

jacurtis 4y ago
It doesn't drive wages higher, but it improves buying power which is an indirect raise
- refurb 4y ago
  Then why are countries who aren't the reserve currency also have a more valuable currency? In some cases more valuable than the USD?
  - adam_arthur 4y ago
    Whether the currency is <1 or >1 relative to the USD is not that important... it's largely a function of the money supply. 1 Euro is worth more than 1 USD, but goods in Europe may still cost more in USD terms than equivalent goods in the US. Or salaries could be lower (which is true as of today)
    - refurb 4y ago
      But that doesn't follow. 1. US has reserve currency status 2. That makes the purchasing power of the USD stronger (because USD > other currency) 3. Citizens benefit from that Ok, but other currencies have even stronger purchasing power than the USD.
      - adam_arthur 4y ago
        To put it simply: In an alternate world where USD was not the reserve currency, PPP of US based wages would be lower, all else equal. The actual nominal conversion rate of the currency is pretty meaningless. The fact that Yen is 100 to 1ish to the dollar is also not very meaningful. They're all just nominal values. Only the exchange rate relative to fundamentals matters. USD gets stronger exchange rates relative to the fundamentals of the currency (because many foreign countries and citizens also hold USD, not just locals). Which is mostly untrue for other currencies. PPP adjusted salaries are lower everywhere else in the world, partially, but not wholly for this reason.
        refurb 4y ago
        You haven't actually proven that US' higher PPP is solely due to its reserve currency status. Other countries who are not reserve currencies have higher purchasing power than USD. So if the US wasn't the reserve currency, there is no reason it couldn't do the same. You're making a claim that you haven't backed up.
        adam_arthur 4y ago
        I never said "solely". Fact: The USD has large foreign demand which does not exist for other currencies. Fact: If more currency is demanded, it strengthens the currency in a relative sense. Fact: Therefore the USD is stronger than it would be otherwise, considering only local demand. Your whole counterargument seems to be based on a misunderstanding of real vs nominal. To say 1 Euro > 1 USD means people in Euro earning countries have higher purchasing power is simply wrong. All currency values are nominal. Fact: If USD money supply doubled overnight and all holders got 2x the amount and wages/prices adjusted automatically, the Euro would appreciate 2x against the dollar. Fact: That does not mean Euro earning citizens have higher purchasing power. It's an entirely nominal change. 1 hour of labor in USD terms earns the same in purchasing power, regardless of the face value of currency. Same concept as a stock split Fact: If Euro became the reserve currency tomorrow, Euro-holders would have more purchasing power due to foreign demand making each unit of currency more valuable in a relative sense than it was previously. Fact: If USD lost reserve currency status, it would weaken relative to other currencies. None of these are disputed, but you can believe whatever you want.
adam_arthur 4y ago
If the value of USD is higher relative to an alternative currency, then you can earn USD in the US and visit a foreign country, convert USD to local currency, and achieve higher purchasing power relative to local wages there. Or simply buy foreign produced goods cheaper (e.g. Chinese produced goods on Amazon). e.g. Exchange rate induced deflation
tekla 4y ago
It attracts outside investment since being the reserve currency is at the very least the bedrock of stability
- fsckboy 4y ago
  well, switch it around, and I'm not just playing with words, there's cause and effect: The bedrock of stability (plus large size, i.e. Switzerland or Norway are not going to be it) is the reserve currency.

jacurtis 4y ago

The median income in tech (most people reading this site) is at least 4x that median, which is even more impactful.

kfajdsl 4y ago
The median income in tech is $200,000?
- jacurtis 4y ago
  I was thinking $40k x 4 which is $160k. I just did a quick search and found several reputable sites saying the average FAANG salary is $230 (which is 5.75x). According to the Bureau of Labor Statistics (BLS), the mean software engineering salary was $136,230 in 2022. So you're right thats only 3.5x. Notice thats the mean. I suspect the median is actually slightly higher than the mean. So i'm guesstimating here. But I stand by my rough estimate.
  - lotsofpulp 4y ago
    Why would you suspect the median is higher than the mean? Almost all statistics related to wealth and income I have seen indicate power law distributions, which would mean median is lower than mean. https://en.wikipedia.org/wiki/Lorenz_curve https://en.wikipedia.org/wiki/Lorenz_curve
nl 4y ago
This is so far from true it's hard to work out if it is supposed to be trolling or just ignorant. The median salary of FAANG programmers in the Bay Area might be 4x that median. But I assure you that "most people reading this site" are not "FAANG programmers in the Bay Area" even if at times it might seem like they are.

lmm 4y ago

The US number is also artificially inflated by their unusual healthcare system - in most developed countries healthcare is paid for from taxes or mandatory insurance (which is deducted from that measure), whereas in the US it's considered to be paid from disposable income.

theGnuMe 4y ago
Nah FSA to pay copays is tax free as are standard premiums. So you can pay your copays tax free the problem is you have to get your utilization correct since it is use it or lose it.
- lmm 4y ago
  They're tax free but they're still considered part of your disposable income since you can choose not to pay them.