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"In 1969 the median salary for a male worker was $35,567 (in 2012 dollars). Today it is $33,904. So for 44 years, while wages for the top 10 percent have contin

"In 1969 the median salary for a male worker was $35,567 (in 2012 dollars). Today it is $33,904. So for 44 years, while wages for the top 10 percent have continued to climb, most Americans have been caught in a ”Great Stagnation,” bringing into question the whole purpose of the American capitalist economy. The notion that what benefited the establishment would benefit everyone, had been thoroughly discredited." I don't believe this analysis (which appears to be the central point of the piece) is meaningful. What is the author trying to compare and why? A male worker in 1969 could not buy a smartphone or a flat screen television. They would pay far more for air travel. Does it really make sense to quote their salary in 2012 dollars? I would be interested to see the price of basic necessities over time. I would imagine Walmart, etc, would have caused a fall in food prices; I am unsure of other factors.

wisty 13y ago
The CPI is meant to account for this. It's weighted, and accounts for the changing quality of goods. The weighting goes something like: Housing, Transportation, Food and Beverages, Recreation, Apparel, Medical Care, Education and Communication, Other Goods and Services; in order of importance. The fact that an iPhone costs less this year than 5 years ago isn't a huge issue for most people. Rising rents (or imputed rents), transport costs, food costs, etc is more important. So yes, in 1969 a flat screen TV (or whatever the equivalent was) would have cost a lot. But food, housing, and so on was cheap. The CPI already accounts for this. Now, the tin-foil brigade who think CPI is flawed typically argue that basic necessities (housing, food) have gone up a lot more; which is the point I think you are trying to make. And it's kind of valid. You are also arguing the opposite point - that new products are often better than old ones. The CPI aims to strike a balance - some stuff is more expensive, and other things are cheaper. But overall, CPI is a pretty valid way to compare how much bang consumers get for their buck.

wisty 13y ago

The CPI is meant to account for this. It's weighted, and accounts for the changing quality of goods. The weighting goes something like: Housing, Transportation, Food and Beverages, Recreation, Apparel, Medical Care, Education and Communication, Other Goods and Services; in order of importance. The fact that an iPhone costs less this year than 5 years ago isn't a huge issue for most people. Rising rents (or imputed rents), transport costs, food costs, etc is more important. So yes, in 1969 a flat screen TV (or whatever the equivalent was) would have cost a lot. But food, housing, and so on was cheap. The CPI already accounts for this. Now, the tin-foil brigade who think CPI is flawed typically argue that basic necessities (housing, food) have gone up a lot more; which is the point I think you are trying to make. And it's kind of valid. You are also arguing the opposite point - that new products are often better than old ones. The CPI aims to strike a balance - some stuff is more expensive, and other things are cheaper. But overall, CPI is a pretty valid way to compare how much bang consumers get for their buck.