5 ms·

You are 100% correct. I was a senior in college and my beater died. I went to the Mazda dealer and talked them down to $13k on a brand new Mazda3. My payment wa

You are 100% correct. I was a senior in college and my beater died. I went to the Mazda dealer and talked them down to $13k on a brand new Mazda3. My payment was like $280. Now inflation adjusted that is supposedly just shy of $22k. But it’s not the full story. That car was actually very nice for the time and to get an equivalently nice car today it’s not going to be a bare bones Nissan Versa or something like that.

jjice 1y ago
To share an anecdote on the more recent side of the spectrum, I bought a new 2025 Toyota Corolla LE two months ago. It's probably the cheapest vehicle Toyota makes. My cost before tax and title (not sure if that should be included or not) was $23k. It's a pretty great car. Highway averages like 45-50 MPH (25-35 city), it's comfortable, has Car Play, and everything else you'd expect in a car now. I'll say that the two things I'm used to having in a car that this one doesn't (since it's such a base trim) is automatic seat adjustment (not a big deal, I kind of prefer it since the automatic seats on my last vehicle died) and no remote start. All that to say that I think that inflation adjusted measure can still get you a fine car. As for the argument about income vs inflation in GP, I have no idea.
- csomar 1y ago
  I think the problem here is that we are comparing against price inflation (not salary inflation). If every company increased its prices, then that's the inflation. Customers will feel ripped off if their salaries didn't at least match inflation. In other words, if your salary in 2005 was $50k when Mazda was $13k; then your salary should be $82k for a $22k Mazda3 to be the same price. Currently, a Mazda3 starts at $24k and will probably run at $26-27k: https://www.mazdausa.com/vehicles/mazda3-sedan https://www.mazdausa.com/vehicles/mazda3-sedan > All that to say that I think that inflation adjusted measure can still get you a fine car. As for the argument about income vs inflation in GP, I have no idea. Kind of. But my understanding is that most salaries haven't caught up to inflation especially in the last few years when the US economy had the worst inflation.
  - TimPC 1y ago
    Salary inflation is much trickier to measure because it is confounded by years of experience increasing, getting promotions, etc. The distribution of the working population by seniority also changes over time so it's not self-correcting across the distribution. Assuming you have a good way of measuring it, (salary inflation/price inflation) would be an interesting Financial Quality of Life measure.
    - alephnerd 1y ago
      You can use real median household income [0] and real median personal income [1] to gauge potential salary inflation (real meaning CPI adjusted). The median American household and American has gotten significantly richer than in 2005, but in the 2020-23 period, income growth slowed due to the pandemic and the subsequent slow restart of the economy. The last time we saw similar retractions were during recessions like the 1990-93 recession, the Dot Com Bust, and the Great Recession. Turns out the "vibe check" in the early 2020s were right. Tl;dr - the median American feels poorer in the early 2020s than they did in 2019, but they have much more earning power than they ever did before 2018. I would not be surprised if this played an outsized role in voter dynamics in the 2024 election [0] - https://fred.stlouisfed.org/series/MEHOINUSA672N https://fred.stlouisfed.org/series/MEHOINUSA672N [1] - https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N
      - mitthrowaway2 1y ago
        (Just an aside that median household income will of course be affected by the changing composition of households towards multi income families.)
        alephnerd 1y ago
        Hence why I also provided personal income, but both data points show a significant correlation between dual-income households since the 1980s, so that is a moot point. Also, as at this point 1980 is 45 years ago - almost 2 generations, almost like using the 1960s as a frame of reference in 2005. At this point we've been a country of dual earners in a household for 2 generations now. It's best to assume that is the default given the overlap.

jjice 1y ago

To share an anecdote on the more recent side of the spectrum, I bought a new 2025 Toyota Corolla LE two months ago. It's probably the cheapest vehicle Toyota makes. My cost before tax and title (not sure if that should be included or not) was $23k. It's a pretty great car. Highway averages like 45-50 MPH (25-35 city), it's comfortable, has Car Play, and everything else you'd expect in a car now. I'll say that the two things I'm used to having in a car that this one doesn't (since it's such a base trim) is automatic seat adjustment (not a big deal, I kind of prefer it since the automatic seats on my last vehicle died) and no remote start. All that to say that I think that inflation adjusted measure can still get you a fine car. As for the argument about income vs inflation in GP, I have no idea.

csomar 1y ago
I think the problem here is that we are comparing against price inflation (not salary inflation). If every company increased its prices, then that's the inflation. Customers will feel ripped off if their salaries didn't at least match inflation. In other words, if your salary in 2005 was $50k when Mazda was $13k; then your salary should be $82k for a $22k Mazda3 to be the same price. Currently, a Mazda3 starts at $24k and will probably run at $26-27k: https://www.mazdausa.com/vehicles/mazda3-sedan https://www.mazdausa.com/vehicles/mazda3-sedan > All that to say that I think that inflation adjusted measure can still get you a fine car. As for the argument about income vs inflation in GP, I have no idea. Kind of. But my understanding is that most salaries haven't caught up to inflation especially in the last few years when the US economy had the worst inflation.
- TimPC 1y ago
  Salary inflation is much trickier to measure because it is confounded by years of experience increasing, getting promotions, etc. The distribution of the working population by seniority also changes over time so it's not self-correcting across the distribution. Assuming you have a good way of measuring it, (salary inflation/price inflation) would be an interesting Financial Quality of Life measure.
  - alephnerd 1y ago
    You can use real median household income [0] and real median personal income [1] to gauge potential salary inflation (real meaning CPI adjusted). The median American household and American has gotten significantly richer than in 2005, but in the 2020-23 period, income growth slowed due to the pandemic and the subsequent slow restart of the economy. The last time we saw similar retractions were during recessions like the 1990-93 recession, the Dot Com Bust, and the Great Recession. Turns out the "vibe check" in the early 2020s were right. Tl;dr - the median American feels poorer in the early 2020s than they did in 2019, but they have much more earning power than they ever did before 2018. I would not be surprised if this played an outsized role in voter dynamics in the 2024 election [0] - https://fred.stlouisfed.org/series/MEHOINUSA672N https://fred.stlouisfed.org/series/MEHOINUSA672N [1] - https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N
    - mitthrowaway2 1y ago
      (Just an aside that median household income will of course be affected by the changing composition of households towards multi income families.)
      - alephnerd 1y ago
        Hence why I also provided personal income, but both data points show a significant correlation between dual-income households since the 1980s, so that is a moot point. Also, as at this point 1980 is 45 years ago - almost 2 generations, almost like using the 1960s as a frame of reference in 2005. At this point we've been a country of dual earners in a household for 2 generations now. It's best to assume that is the default given the overlap.