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Total real wages have gone up, while median real wages have stagnated. Your 62.5% labor force participation rate only aligns with the past if you completely di

Total real wages have gone up, while median real wages have stagnated. Your 62.5% labor force participation rate only aligns with the past if you completely discount women's unpaid and unaccounted work in the home and elsewhere. The male labor force participation rate has declined from around 90% to around 68%. Thanks to our glorious new economy instead of basically everyone getting a house, spouse, and kid, now many will rent, work and die. https://fred.stlouisfed.org/series/LNS11300001 https://fred.stlouisfed.org/series/LNS11300001

eru 3y ago
Huh? When women do stuff at home, you want to count that. Sure. But when men do stuff at home, you refuse to count that? > Total real wages have gone up, while median real wages have stagnated. An investigation of median wages can be interesting. The comment only talked about wages in general. > Thanks to our glorious new economy instead of basically everyone getting a house, spouse, and kid, now many will rent, work and die. The US doesn't build enough housing, yes. Though renting by itself isn't a problem, but that housing (whether rented or owned) has become less affordable. That's mostly because of various regulations (especially zoning) that limit how much developers can build. See eg https://www.amazon.com/Shut-Out-Shortage-Recession-University/dp/1538122146 https://www.amazon.com/Shut-Out-Shortage-Recession-Universit...
- bendbro 3y ago
  Men don't do stuff at home which is evidenced by marriage rates and fertility declining. There is no home to do work in. > An investigation of median wages can be interesting. The comment only talked about wages in general Looking at it I find my claim is false. Median real wages have gone up (excluding the last 5 years or so). I could make an argument from inflation being wrongly calculated (due to stuff missing from the basket, or housing excluded, or shrinkflation, pick your poison) but I'm too stupid for that. Comparing CPI (which includes housing) to median nominal wages over the past 5 years, it shows cost growth has exceeded wage growth. This though doesn't hold further into the past. https://fred.stlouisfed.org/series/CPIAUCSL https://fred.stlouisfed.org/series/CPIAUCSL https://fred.stlouisfed.org/series/LES1252881500Q https://fred.stlouisfed.org/series/LES1252881500Q
  - eru 3y ago
    Thanks for checking! Btw, many economist argue that CPI overstates inflation. Mostly because CPI has a relatively fixed basked, but people adjust what they are buying if relative prices shift. (Eg if bread becomes relatively more expensive than pasta, people buy less bread and more pasta. The CPI basket does not reflect that.) A modern alternative is to use the GDP deflator. https://en.wikipedia.org/wiki/GDP_deflator https://en.wikipedia.org/wiki/GDP_deflator Basically, it means to use everything that got produced / consumed as the basket for your inflation measurement.
    - bendbro 3y ago
      > if bread becomes relatively more expensive than pasta, people buy less bread and more pasta. The CPI basket does not reflect that That makes sense. But say bread at $1(2023) is objectively worse than pasta at $1(2023); is there any way to account for that? It seems like a generic form of shrinkflation: without holding the basket constant, how do we know we are getting the same value? To be fair, it could work the other way and the pasta at $1(2023) is better than the bread at $1(2023).
      - eru 3y ago
        > But say bread at $1(2023) is objectively worse than pasta at $1(2023); is there any way to account for that? See https://www.bls.gov/cpi/quality-adjustment/ https://www.bls.gov/cpi/quality-adjustment/ and https://www.bls.gov/cpi/quality-adjustment/questions-and-answers.htm https://www.bls.gov/cpi/quality-adjustment/questions-and-ans... for how the CPI attempts to control for quality. How well they succeed is another question. Quality adjustments in inflation data are always something that requires judgement. (Even though they try to minimise that.) A recent example that was not reflected in the CPI: During the pandemic choice and quality dwindled. Instead of buying your favourite toilet paper, you just got whatever wasn't sold out. Eating out got a lot worse, when it was possible at all. But if a burger still sold for 2 dollars before or during the pandemic, the CPI did not budge. So official inflation was understated. Conversely, as we came out of the pandemic quality recovered without that being fully reflected in the CPI. So official inflation was overstated. --- Because inflation requires judgement, I try to avoid having to rely on it in any analysis. The discussion we had could mostly be re-formulated in terms of > How has nominal median pay developed over time relative to nominal per capita GDP? That framing leaves out inflation completely. Of course, it ignores absolute advances. And deliberately so! But those are better left to a separate discussion.

eru 3y ago

Huh? When women do stuff at home, you want to count that. Sure. But when men do stuff at home, you refuse to count that? > Total real wages have gone up, while median real wages have stagnated. An investigation of median wages can be interesting. The comment only talked about wages in general. > Thanks to our glorious new economy instead of basically everyone getting a house, spouse, and kid, now many will rent, work and die. The US doesn't build enough housing, yes. Though renting by itself isn't a problem, but that housing (whether rented or owned) has become less affordable. That's mostly because of various regulations (especially zoning) that limit how much developers can build. See eg https://www.amazon.com/Shut-Out-Shortage-Recession-University/dp/1538122146 https://www.amazon.com/Shut-Out-Shortage-Recession-Universit...

bendbro 3y ago
Men don't do stuff at home which is evidenced by marriage rates and fertility declining. There is no home to do work in. > An investigation of median wages can be interesting. The comment only talked about wages in general Looking at it I find my claim is false. Median real wages have gone up (excluding the last 5 years or so). I could make an argument from inflation being wrongly calculated (due to stuff missing from the basket, or housing excluded, or shrinkflation, pick your poison) but I'm too stupid for that. Comparing CPI (which includes housing) to median nominal wages over the past 5 years, it shows cost growth has exceeded wage growth. This though doesn't hold further into the past. https://fred.stlouisfed.org/series/CPIAUCSL https://fred.stlouisfed.org/series/CPIAUCSL https://fred.stlouisfed.org/series/LES1252881500Q https://fred.stlouisfed.org/series/LES1252881500Q
- eru 3y ago
  Thanks for checking! Btw, many economist argue that CPI overstates inflation. Mostly because CPI has a relatively fixed basked, but people adjust what they are buying if relative prices shift. (Eg if bread becomes relatively more expensive than pasta, people buy less bread and more pasta. The CPI basket does not reflect that.) A modern alternative is to use the GDP deflator. https://en.wikipedia.org/wiki/GDP_deflator https://en.wikipedia.org/wiki/GDP_deflator Basically, it means to use everything that got produced / consumed as the basket for your inflation measurement.
  - bendbro 3y ago
    > if bread becomes relatively more expensive than pasta, people buy less bread and more pasta. The CPI basket does not reflect that That makes sense. But say bread at $1(2023) is objectively worse than pasta at $1(2023); is there any way to account for that? It seems like a generic form of shrinkflation: without holding the basket constant, how do we know we are getting the same value? To be fair, it could work the other way and the pasta at $1(2023) is better than the bread at $1(2023).
    - eru 3y ago
      > But say bread at $1(2023) is objectively worse than pasta at $1(2023); is there any way to account for that? See https://www.bls.gov/cpi/quality-adjustment/ https://www.bls.gov/cpi/quality-adjustment/ and https://www.bls.gov/cpi/quality-adjustment/questions-and-answers.htm https://www.bls.gov/cpi/quality-adjustment/questions-and-ans... for how the CPI attempts to control for quality. How well they succeed is another question. Quality adjustments in inflation data are always something that requires judgement. (Even though they try to minimise that.) A recent example that was not reflected in the CPI: During the pandemic choice and quality dwindled. Instead of buying your favourite toilet paper, you just got whatever wasn't sold out. Eating out got a lot worse, when it was possible at all. But if a burger still sold for 2 dollars before or during the pandemic, the CPI did not budge. So official inflation was understated. Conversely, as we came out of the pandemic quality recovered without that being fully reflected in the CPI. So official inflation was overstated. --- Because inflation requires judgement, I try to avoid having to rely on it in any analysis. The discussion we had could mostly be re-formulated in terms of > How has nominal median pay developed over time relative to nominal per capita GDP? That framing leaves out inflation completely. Of course, it ignores absolute advances. And deliberately so! But those are better left to a separate discussion.