"are those studies saying that prices have outpaced incomes?"
Yes.
Can't Save? Here's Why
So... one says:
"Both of our measures show a significantly greater increase in consumption inequality than what is obtained from the CE's total household expenditure data directly."
and the other one says:
"We find that consumption inequality within the U.S. between 1980 and 2010 has increased by nearly the same amount as income inequality."
...I... don't get it..
"Both of our measures show a significantly greater increase in consumption inequality than what is obtained from the CE's total household expenditure data directly."
and the other one says:
"We find that consumption inequality within the U.S. between 1980 and 2010 has increased by nearly the same amount as income inequality."
...I... don't get it..
-
jennypenny
- Posts: 6861
- Joined: Sun Jul 03, 2011 2:20 pm
http://www.pewsocialtrends.org/2013/01/ ... eration/1/
Social changes like in the study above might have more of an effect on a family's ability to save. I can't decide though if this is another case of things costing more because people are choosing to pay more (like the increase in house size). People used to take care of their elderly family members in their own homes, but now frequently pay for living arrangements elsewhere.* I'm not saying one is better than the other, but it's usually a choice, not a necessity.
*It makes me crazy that as home sizes get bigger and bigger, family "units" get smaller and smaller as extended families no longer live together.
-------------
@Secretwealth, this one's for you...
http://www.mybudget360.com/inflation-un ... ed-prices/
*providing link does not imply endorsement
Social changes like in the study above might have more of an effect on a family's ability to save. I can't decide though if this is another case of things costing more because people are choosing to pay more (like the increase in house size). People used to take care of their elderly family members in their own homes, but now frequently pay for living arrangements elsewhere.* I'm not saying one is better than the other, but it's usually a choice, not a necessity.
*It makes me crazy that as home sizes get bigger and bigger, family "units" get smaller and smaller as extended families no longer live together.
-------------
@Secretwealth, this one's for you...
http://www.mybudget360.com/inflation-un ... ed-prices/
*providing link does not imply endorsement
-
secretwealth
- Posts: 1948
- Joined: Mon Jun 27, 2011 3:31 am
" I can't decide though if this is another case of things costing more because people are choosing to pay more"
Well, in the case of university, not really--a degree is a degree. More people are buying the service, thus higher demand equals higher costs, so yes, more are choosing to pay in aggregate, but that is different from an individual buying a degree. As for healthcare--that's dictated more by doctors than people themselves, and I am sure people are choosing to pay more (the doctor said I need an MRI, so I better get one)--again, however, we're now talking about a different issue. The issue of middle-aged people caring for their parents is also a different issue.
I usually find mybudget360's content ideologically aligned with my own worldview, but the research is usually atrocious, which is why I avoid it (and I don't read the blog regularly). He's a master at SEO, however.
Well, in the case of university, not really--a degree is a degree. More people are buying the service, thus higher demand equals higher costs, so yes, more are choosing to pay in aggregate, but that is different from an individual buying a degree. As for healthcare--that's dictated more by doctors than people themselves, and I am sure people are choosing to pay more (the doctor said I need an MRI, so I better get one)--again, however, we're now talking about a different issue. The issue of middle-aged people caring for their parents is also a different issue.
I usually find mybudget360's content ideologically aligned with my own worldview, but the research is usually atrocious, which is why I avoid it (and I don't read the blog regularly). He's a master at SEO, however.
I spent the past hour or so reading through this thread...some very interesting points made. My two cents:
Overall, I don't see how it is harder to save than it was in the past. The American society insists on (as I believe Jacob put it), "having its cake and eating it too." Of course it is harder to save than the past when you are consuming/purchasing 'luxuries' that didn't even exist back then.
In regards to college costs, yes it is a major problem that will likely end with the bubble bursting. Fun fact: there is more student debt outstanding(over $1 Trillion) than credit and car combined. However, there are alternatives. You can earn well above a median income by going to a trade school and spending a few years on the job. Also, most public universities still provide a viable option (except for the school I currently attend, the costliest public school in the nation...woo!).
I can't speak to health care too much since I'm young and don't know too much about it but I do know that by taking care of yourself and making your health a priority. You WILL significantly reduce your health care costs. That is just a step that most Americans refuse to do.
Simply put, I don't see how it is harder to save. Rather reducing expenses is just another example of things (fitness/health, DIY etc.) that people in American society do not want to make an effort to do.
Overall, I don't see how it is harder to save than it was in the past. The American society insists on (as I believe Jacob put it), "having its cake and eating it too." Of course it is harder to save than the past when you are consuming/purchasing 'luxuries' that didn't even exist back then.
In regards to college costs, yes it is a major problem that will likely end with the bubble bursting. Fun fact: there is more student debt outstanding(over $1 Trillion) than credit and car combined. However, there are alternatives. You can earn well above a median income by going to a trade school and spending a few years on the job. Also, most public universities still provide a viable option (except for the school I currently attend, the costliest public school in the nation...woo!).
I can't speak to health care too much since I'm young and don't know too much about it but I do know that by taking care of yourself and making your health a priority. You WILL significantly reduce your health care costs. That is just a step that most Americans refuse to do.
Simply put, I don't see how it is harder to save. Rather reducing expenses is just another example of things (fitness/health, DIY etc.) that people in American society do not want to make an effort to do.
-
secretwealth
- Posts: 1948
- Joined: Mon Jun 27, 2011 3:31 am
"but I do know that by taking care of yourself and making your health a priority. You WILL significantly reduce your health care costs. That is just a step that most Americans refuse to do."
Actually, this isn't true. The chronically obese, alcoholics, and drug addicts statistically cost less in health care because they die younger. There was an interesting study done on this a few years ago: http://www.nytimes.com/2008/02/05/healt ... .html?_r=0
Again, I think there's a confusion of things that viscerally feel right (iPhones + bigger houses = better life for the middle class; healthy living = less healthcare) and the truth. Plus a lot of moralizing going on--people are bad for living in a certain way, so they don't deserve sympathy.
The point of the beginning is a simple mathematical calculation: expenses have risen faster than income, so it's harder to save income. This is a really, really basic point, and the fact that this point has eluded very smart people on this thread (in the smartest forum I've seen on the internet, I might add), just demonstrates to me how ideology and morality cloud objectivity.
Quantum mechanics doesn't make any sense either, but that doesn't mean it's not true.
Actually, this isn't true. The chronically obese, alcoholics, and drug addicts statistically cost less in health care because they die younger. There was an interesting study done on this a few years ago: http://www.nytimes.com/2008/02/05/healt ... .html?_r=0
Again, I think there's a confusion of things that viscerally feel right (iPhones + bigger houses = better life for the middle class; healthy living = less healthcare) and the truth. Plus a lot of moralizing going on--people are bad for living in a certain way, so they don't deserve sympathy.
The point of the beginning is a simple mathematical calculation: expenses have risen faster than income, so it's harder to save income. This is a really, really basic point, and the fact that this point has eluded very smart people on this thread (in the smartest forum I've seen on the internet, I might add), just demonstrates to me how ideology and morality cloud objectivity.
Quantum mechanics doesn't make any sense either, but that doesn't mean it's not true.
You haven't shown us any study, chart, or numbers giving any kind of complete picture of what you're claiming. The closest thing you showed us was an unrelated study about spending at different income levels. You're primarily just claiming your opinion is the truth over and over again. It looks pretty clear that the answer to whether PRICES* have gone up depends on what you're buying**. Maybe your objectivity could be clouded also? I think we've beat the subject to death - there probably isn't much else we could say on the subject without going the 'you're acting stupid' route.
* An increase in spending doesn't mean it's harder to save. It also includes that people are choosing to spend rather than save.
**For those who go to very expensive colleges and/or have a lot of health issues, yes it is harder to save now. For the rest, it's easier.
* An increase in spending doesn't mean it's harder to save. It also includes that people are choosing to spend rather than save.
**For those who go to very expensive colleges and/or have a lot of health issues, yes it is harder to save now. For the rest, it's easier.
-
secretwealth
- Posts: 1948
- Joined: Mon Jun 27, 2011 3:31 am
C40--your own numbers demonstrate an increase in prices over income of 14%. Of course your numbers are highly questionable, largely due to your insistence in making automobile comparisons that most others wouldn't make, but even with that highly skewed vision, price appreciation has clearly outpaced income appreciation.
"For those who go to very expensive colleges and/or have a lot of health issues, yes it is harder to save now. For the rest, it's easier."
Well, no. Again, citing only your numbers, the rate of inflation for University of Nebraska tuition has gone up faster than the University of Pennsylvania. Likewise, your evidence of price appreciation for baby deliveries doesn't really relate to health issues, unless you think the poor should forego having children in hospitals and do it the old fashioned way in a barn.
"For those who go to very expensive colleges and/or have a lot of health issues, yes it is harder to save now. For the rest, it's easier."
Well, no. Again, citing only your numbers, the rate of inflation for University of Nebraska tuition has gone up faster than the University of Pennsylvania. Likewise, your evidence of price appreciation for baby deliveries doesn't really relate to health issues, unless you think the poor should forego having children in hospitals and do it the old fashioned way in a barn.
Again - my numbers show that in actual practice, the change for an individual person depends very heavily on what they spend their money on. While the certainty of the 14% is low (it could go higher or lower) it is definitely clear that price changes are very different in different categories. The true change for individuals is not 14% for all (or however much). Maybe it is -30% for some people (maybe me)while for some it is +40%. For some that have a health issue and huge bills all at once, it might mean a huge increase in a single year or two that they never recover from. I've read that many bankruptcies are related to big health bills - I'd guess a lower % of bankruptcies in the 50's were related to health costs.
-------------------------
If we want to just leave all the lifestyle inflation in, and ignore the fact that people are now buying so many more types of things than they used to, yeah it's going to look harder to save. The car example I used in the 14% calculation actually still includes a ton of product improvements. A more apples to apples comparison of buying cars of similar value would show cars to be (much) cheaper than the number I used. I'd rather not even debate this one myself because of all the categories I checked my certainty is the highest in this one. I am more familiar with the changes in cars from the 50s to now than I am with any other category (even food).
----------------------
I only checked those two schools because those were the first two that I found 1950s numbers for. I'd guess that the tuition increase varies by school and that there isn't necessarily more at cheaper schools. (and even if there is a bit more, it doesn't matter much - see the example below).
For people who go to the University of Nebraska, college tuition is a very small portion of their total lifetime spending. It becomes almost insignificant. The increase in college tuition prices matters more for people whose tuition spending is a higher portion of their total lifetime spending. See the weightings I used. If a person goes to a relatively expensive school and tuition becomes 10% of their lifetime spending, the price change in tuition matters a lot more for them than it does for someone going to a cheaper school having only 2% of lifetime spending on tuition.
If we use a 300% tuition price increase, we get: (shown in total lifetime spending amounts)
Cheap School:
1950 - 0.7%
Now - 2%
1.3% increase in lifetime spending. Not that bad.
Expensive School:
1950: 3%
Now: 10%
7% increase in lifetime spending. Ouch!
This is what I meant in the first paragraph about how the actual change in prices for an individual depend on their own spending categories.
---------------------
Not sure what you mean about the child delivery part. The only thing I removed from the current costs are epidural anesthesia. Wikipedia has many more disadvantages listed than advantages. I know little about childbirth so if that has some significant health impact maybe I missed it.
-------------------------
I'm going to try to stop posting in this thread. I don't think there's much more that I could add to it, and I've probably already learned as much as I will. Thanks for the discussion everyone. Secretwealth and Spartan Warrior - while I'll admit it can be annoying to disagree with someone so much (here), it is also nice that it drives me to think much more about the subject than I would if everyone just agreed straight off. (I never would've investigated the price changes like that)
-------------------------
If we want to just leave all the lifestyle inflation in, and ignore the fact that people are now buying so many more types of things than they used to, yeah it's going to look harder to save. The car example I used in the 14% calculation actually still includes a ton of product improvements. A more apples to apples comparison of buying cars of similar value would show cars to be (much) cheaper than the number I used. I'd rather not even debate this one myself because of all the categories I checked my certainty is the highest in this one. I am more familiar with the changes in cars from the 50s to now than I am with any other category (even food).
----------------------
I only checked those two schools because those were the first two that I found 1950s numbers for. I'd guess that the tuition increase varies by school and that there isn't necessarily more at cheaper schools. (and even if there is a bit more, it doesn't matter much - see the example below).
For people who go to the University of Nebraska, college tuition is a very small portion of their total lifetime spending. It becomes almost insignificant. The increase in college tuition prices matters more for people whose tuition spending is a higher portion of their total lifetime spending. See the weightings I used. If a person goes to a relatively expensive school and tuition becomes 10% of their lifetime spending, the price change in tuition matters a lot more for them than it does for someone going to a cheaper school having only 2% of lifetime spending on tuition.
If we use a 300% tuition price increase, we get: (shown in total lifetime spending amounts)
Cheap School:
1950 - 0.7%
Now - 2%
1.3% increase in lifetime spending. Not that bad.
Expensive School:
1950: 3%
Now: 10%
7% increase in lifetime spending. Ouch!
This is what I meant in the first paragraph about how the actual change in prices for an individual depend on their own spending categories.
---------------------
Not sure what you mean about the child delivery part. The only thing I removed from the current costs are epidural anesthesia. Wikipedia has many more disadvantages listed than advantages. I know little about childbirth so if that has some significant health impact maybe I missed it.
-------------------------
I'm going to try to stop posting in this thread. I don't think there's much more that I could add to it, and I've probably already learned as much as I will. Thanks for the discussion everyone. Secretwealth and Spartan Warrior - while I'll admit it can be annoying to disagree with someone so much (here), it is also nice that it drives me to think much more about the subject than I would if everyone just agreed straight off. (I never would've investigated the price changes like that)
-
secretwealth
- Posts: 1948
- Joined: Mon Jun 27, 2011 3:31 am
@theanimal: You live longer, so you require more healthcare over your lifetime, because your lifetime is longer and extends into a period where a lot of healthcare is required.
Imagine a chain smoker who dies of lung cancer at 45 and a jogging vegan who lives until 95. Who do you think winds up in the hospital longer, in total?
Imagine a chain smoker who dies of lung cancer at 45 and a jogging vegan who lives until 95. Who do you think winds up in the hospital longer, in total?
-
jacob
- Site Admin
- Posts: 16064
- Joined: Fri Jun 28, 2013 8:38 pm
- Location: USA, Zone 5b, Koppen Dfa, Elev. 620ft, Walkscore 77
- Contact:
I think the reason this discussions is side-tracking is the focus on a single number representing the distribution, usually expressed as a percentage.
I've noticed this a lot everywhere and I think this is why most discussions get stuck.
Example: Suppose the world population was 5 billion and the number of malnourished people was 1 billion. Suppose the world population is now 7 billion and malnourishment stands at 1.2 billion. Now, and here's the point, someone who "thinks" (more precisely "feels like") the world is going to hell will quote ABSOLUTE numbers and say that the number of starving people has increased by 200 million. Someone who "thinks" everything is going to be great will quote RELATIVE numbers and say that malnourishment has decreased from 20% to 17%. Both are correct!
Now for this particular discussion, there's been a lot of mentioning of AVERAGES, which I presume is the mean-estimate. There's also some mention of SKEW which is another description of the curve---a measure for the inequality (frequency technically). I haven't noticed much discussion about VARIANCE---how rich or how poor relative to the mean people can go.
Now I submit that people have different values for the ratios of these variables. That people often "stand where they sit".
Everybody likes a high average. Well, the US has the highest average in the world. However, the majority of people don't like a high skew...because the majority of the people belong to the group that has less than those who have the most. Assuming they're related, how much AVERAGE are you willing to give up to reduce SKEW. This ties into regulations. Deregulation increases VARIANCE. When variance works in one's favor, it's freedom-freedom-freedom, oi! When it doesn't, there's lots of whining about struggling.
My point ... if you cast this discussion in mathematical terms, you're really arguing about the price of MEAN/SKEW and MEAN/VARIANCE. And much like the population/starvation numbers above, numbers are given either in absolute or relative form depending on whether that particular number supports your preference.
I've noticed this a lot everywhere and I think this is why most discussions get stuck.
Example: Suppose the world population was 5 billion and the number of malnourished people was 1 billion. Suppose the world population is now 7 billion and malnourishment stands at 1.2 billion. Now, and here's the point, someone who "thinks" (more precisely "feels like") the world is going to hell will quote ABSOLUTE numbers and say that the number of starving people has increased by 200 million. Someone who "thinks" everything is going to be great will quote RELATIVE numbers and say that malnourishment has decreased from 20% to 17%. Both are correct!
Now for this particular discussion, there's been a lot of mentioning of AVERAGES, which I presume is the mean-estimate. There's also some mention of SKEW which is another description of the curve---a measure for the inequality (frequency technically). I haven't noticed much discussion about VARIANCE---how rich or how poor relative to the mean people can go.
Now I submit that people have different values for the ratios of these variables. That people often "stand where they sit".
Everybody likes a high average. Well, the US has the highest average in the world. However, the majority of people don't like a high skew...because the majority of the people belong to the group that has less than those who have the most. Assuming they're related, how much AVERAGE are you willing to give up to reduce SKEW. This ties into regulations. Deregulation increases VARIANCE. When variance works in one's favor, it's freedom-freedom-freedom, oi! When it doesn't, there's lots of whining about struggling.
My point ... if you cast this discussion in mathematical terms, you're really arguing about the price of MEAN/SKEW and MEAN/VARIANCE. And much like the population/starvation numbers above, numbers are given either in absolute or relative form depending on whether that particular number supports your preference.
-
RealPerson
- Posts: 875
- Joined: Thu Nov 22, 2012 4:33 pm
These statistical observations are an example of how looking at an issue from a different perspective can yield different conclusions. I do think that the whole idea that started this thread is hope. If I am in the bottom 20%, everything depends on my hope. If I believe that hard work will lift me out of those 20%, I don't want regulation and taxation because that will reduce/delay my opportunities. If I don't believe I will rise from the bottom 20%, I want regulation and taxation, so that entitlements will give me extra income. The article suggests that there is little to no hope, so why not get more entitlements? Hence taxation and regulation.
The actual comparison between 1950 and 2013 has proven very challenging, as the many posts here prove. Homes are quite different, so are cars and so is the list of what is considered essential. The medical care issue raised by secretwealth is another great example: the increase in life expectancy we are enjoying is not the result of healthier living. It is the result of interventional medicine, much of which is very expensive.
One fact is not disputable: there is a tangible benefit for politicians to hand out various goodies, whether corporate or personal entitlements. If I am the recipient of significant transfers of some kind, and therefore dependent on those transfers for my prosperity, I will do whatever I can to get the politician of the "correct persuasion" elected. Politicians, by virtue of the tax money they hand out, derive a great deal of power over people. That is troublesome for a democracy, regardless of who is the recipient and who gets "asked" to pay for the goodies.
The actual comparison between 1950 and 2013 has proven very challenging, as the many posts here prove. Homes are quite different, so are cars and so is the list of what is considered essential. The medical care issue raised by secretwealth is another great example: the increase in life expectancy we are enjoying is not the result of healthier living. It is the result of interventional medicine, much of which is very expensive.
One fact is not disputable: there is a tangible benefit for politicians to hand out various goodies, whether corporate or personal entitlements. If I am the recipient of significant transfers of some kind, and therefore dependent on those transfers for my prosperity, I will do whatever I can to get the politician of the "correct persuasion" elected. Politicians, by virtue of the tax money they hand out, derive a great deal of power over people. That is troublesome for a democracy, regardless of who is the recipient and who gets "asked" to pay for the goodies.
-
Riggerjack
- Posts: 3195
- Joined: Thu Jul 14, 2011 3:09 am
Economists use the term real dollars to control for inflation. Catalogs are a good starting point for historical prices.
The whole middle class is getting squeezed premise seems false to me, but I admit to bias. I'm posting from my phone, waiting on a meeting, so I'll post links and supporting docs tonight.
The whole middle class is getting squeezed premise seems false to me, but I admit to bias. I'm posting from my phone, waiting on a meeting, so I'll post links and supporting docs tonight.
-
Riggerjack
- Posts: 3195
- Joined: Thu Jul 14, 2011 3:09 am
Ok, I brought up real dollars because that will help with Google searches for price comparisons. Prices adjusted for inflation are termed 2012 real dollars, or whatever year they are adjusted to.
CPI is the most common rate used for inflation calculations, and there is alot of contention about it being a "fixed rate". I won't go into what goes into CPI and why it changes here, but a google search of CPI-U should get you going on the various forms of CPI and how/why they differ and change, or, simply look into:
http://en.wikipedia.org/wiki/United_Sta ... rice_Index
I appreciate the attempt at apples to apples comparisons, but there's a few things I have to point out.
Housing, several times the house in Frisco gets mentioned. Not my market, but I know Frisco is universally regarded as one of the highest priced markets in America. I'll use Seattle as a reference, because I know it.
North of Seattle, Ballard and Greenbank are the areas getting built in the 50's. 800-1200 sft bungalows are the rule. In good shape, in today's market, 300-400k. Next city north, is Everett, South Everett was getting built at the time. Same size/style house on similar lots is in the 200k's. Next city north, same size/style house is in the 150k area. No big developments in Marysville at the time, but individual houses on comparable lots. Which one's the right one for determining how much "the middle class is getting squeezed"?
All these samples cost about the same at the time, they were all suburban lots, using the same materials, and labor. The difference in present value isn't inflation, it's location. Planning in Seattle has artificially inflated the value of anywhere nearby. Increased population, with artificial constraints on supply will cause prices to go up.
Yes, choosing to live where everyone else wants to live will make you feel squeezed, but that's population pressure, not economic pressure.
As to the whole issue with stagnant incomes, rising prices thing, I don't buy it.
Inflation adjusted wages have gone up across the board. If you are aware of a particular demographic that is being squeezed, we could talk about that. But the generalization "middle class" won't cut it. Everyone identifies it differently, and it's usually used in a generic term for yellow journalism and political speeches. Not somewhere where you will find accurate math.
Further discussion on the math used to generate the numbers in said references can be found here: http://www.thebigquestions.com/2012/07/ ... rs-racket/
===============================================================
An excerpt for those that don't follow links:
"If you’re the sort of person who reads economics blogs, you’ve probably heard that the median US worker has enjoyed hardly any income gain over the past few decades. Here are the numbers behind the noise (all corrected for inflation):
A mere 3% increase over 25 years does indeed look pretty grim. And note that the year 2005 is pre-crash, so what we’re seeing is not an artifact of the recession.
Now let’s look a little deeper and ask which demographic groups account for all this stagnation. White men? Nope, their median income is up 15%. Nonwhite men? Up 16%. White women? Up 75%. Non-white women? Up 62%. That’s everybody:
What gives? How can the median income shoot up in every demographic sector while the overall median remains nearly unchanged?
Imagine a farmer with a few 100-pound goats and a bunch of 1000-pound cows. His median animal weighs 1000 pounds. A few years later, he’s acquired a whole lot more goats, all of which have grown to 200 pounds, while his cows have all grown to 2000. Now his median animal weighs 200 pounds.
A very silly person could point out to this farmer that his median animal seems to be a lot scrawnier these days. The farmer might well reply that both his goats and his cows seem to be doing just fine, at least relative to where they were.
That’s exactly what’s happened with median incomes. Each demographic group has progressed, but at the same time, there’s been a great influx of lower income groups — women and nonwhites — into the workforce. This creates the illusion that nobody’s progressing when in fact everybody’s progressing. "
===============================================================
Now there's no reason for folks who don't read econ blogs to know this stuff, it's never going to be in the NYTimes, but if you are interested enough to get thru 6 pages on this thread, there is further reading available. The narrative of the oppressed middle class isn't the only story out there.
CPI is the most common rate used for inflation calculations, and there is alot of contention about it being a "fixed rate". I won't go into what goes into CPI and why it changes here, but a google search of CPI-U should get you going on the various forms of CPI and how/why they differ and change, or, simply look into:
http://en.wikipedia.org/wiki/United_Sta ... rice_Index
I appreciate the attempt at apples to apples comparisons, but there's a few things I have to point out.
Housing, several times the house in Frisco gets mentioned. Not my market, but I know Frisco is universally regarded as one of the highest priced markets in America. I'll use Seattle as a reference, because I know it.
North of Seattle, Ballard and Greenbank are the areas getting built in the 50's. 800-1200 sft bungalows are the rule. In good shape, in today's market, 300-400k. Next city north, is Everett, South Everett was getting built at the time. Same size/style house on similar lots is in the 200k's. Next city north, same size/style house is in the 150k area. No big developments in Marysville at the time, but individual houses on comparable lots. Which one's the right one for determining how much "the middle class is getting squeezed"?
All these samples cost about the same at the time, they were all suburban lots, using the same materials, and labor. The difference in present value isn't inflation, it's location. Planning in Seattle has artificially inflated the value of anywhere nearby. Increased population, with artificial constraints on supply will cause prices to go up.
Yes, choosing to live where everyone else wants to live will make you feel squeezed, but that's population pressure, not economic pressure.
As to the whole issue with stagnant incomes, rising prices thing, I don't buy it.
Inflation adjusted wages have gone up across the board. If you are aware of a particular demographic that is being squeezed, we could talk about that. But the generalization "middle class" won't cut it. Everyone identifies it differently, and it's usually used in a generic term for yellow journalism and political speeches. Not somewhere where you will find accurate math.
Further discussion on the math used to generate the numbers in said references can be found here: http://www.thebigquestions.com/2012/07/ ... rs-racket/
===============================================================
An excerpt for those that don't follow links:
"If you’re the sort of person who reads economics blogs, you’ve probably heard that the median US worker has enjoyed hardly any income gain over the past few decades. Here are the numbers behind the noise (all corrected for inflation):
A mere 3% increase over 25 years does indeed look pretty grim. And note that the year 2005 is pre-crash, so what we’re seeing is not an artifact of the recession.
Now let’s look a little deeper and ask which demographic groups account for all this stagnation. White men? Nope, their median income is up 15%. Nonwhite men? Up 16%. White women? Up 75%. Non-white women? Up 62%. That’s everybody:
What gives? How can the median income shoot up in every demographic sector while the overall median remains nearly unchanged?
Imagine a farmer with a few 100-pound goats and a bunch of 1000-pound cows. His median animal weighs 1000 pounds. A few years later, he’s acquired a whole lot more goats, all of which have grown to 200 pounds, while his cows have all grown to 2000. Now his median animal weighs 200 pounds.
A very silly person could point out to this farmer that his median animal seems to be a lot scrawnier these days. The farmer might well reply that both his goats and his cows seem to be doing just fine, at least relative to where they were.
That’s exactly what’s happened with median incomes. Each demographic group has progressed, but at the same time, there’s been a great influx of lower income groups — women and nonwhites — into the workforce. This creates the illusion that nobody’s progressing when in fact everybody’s progressing. "
===============================================================
Now there's no reason for folks who don't read econ blogs to know this stuff, it's never going to be in the NYTimes, but if you are interested enough to get thru 6 pages on this thread, there is further reading available. The narrative of the oppressed middle class isn't the only story out there.
-
secretwealth
- Posts: 1948
- Joined: Mon Jun 27, 2011 3:31 am
-
RealPerson
- Posts: 875
- Joined: Thu Nov 22, 2012 4:33 pm
@secretwealth - Since the 1986 immigration amnesty bill was signed into law, an estimated 11 million undocumented aliens have entered the US. Although some are people overstaying their visas, most crossed the border from Mexico to be gardeners, bus boys, hotel maids, agro workers etc. Mostly low paid workers. The numbers are based on data from the Current Population Survey performed by the US Census bureau.
"...since 1980? "
I'm not going to do the research on this (I'm lazy), however... I just happened to be listening to NPR and there was a discussion about immigration slowing and the problems this could cause in the coming years. Specifically for low wage employers. And when they mentioned the historical numbers, they said this latest influx of immigrants into the US "started 30 years ago" (<-- Their words, not mine)
Hmmmmm.... 30 years ago... lower income employers... I think you can put it all together.
I'm not going to do the research on this (I'm lazy), however... I just happened to be listening to NPR and there was a discussion about immigration slowing and the problems this could cause in the coming years. Specifically for low wage employers. And when they mentioned the historical numbers, they said this latest influx of immigrants into the US "started 30 years ago" (<-- Their words, not mine)
Hmmmmm.... 30 years ago... lower income employers... I think you can put it all together.
-
secretwealth
- Posts: 1948
- Joined: Mon Jun 27, 2011 3:31 am
-
Riggerjack
- Posts: 3195
- Joined: Thu Jul 14, 2011 3:09 am
right... I'm sorry. I forgot this was about feelings, numbers aren't allowed.
For anyone still interested in facts, this is from BLS at:
http://data.bls.gov/pdq/querytool.jsp?survey=ln
Labor Force Statistics from the Current Population Survey
Series Id: LNU02000002Q
Not Seasonally Adjusted
Series title: (Unadj) Employment Level - Women
Labor force status: Employed
Type of data: Number in thousands
Age: 16 years and over
Sex: Women
Download:
Year Qtr1 Qtr2 Qtr3 Qtr4 Annual
1980 41785 41842 42101 42737
1981 42465 43044 43028 43463
1982 42715 43148 43539 43621
1983 42995 43510 44534 45146
1984 44820 45921 46201 46717
1985 46577 46939 47354 48168
1986 47637 48433 49131 49622
1987 49162 50180 50680 51313
1988 50841 51333 51832 52777
1989 52392 52831 53193 53666
1990 53587 53848 53816 53750
1991 53024 53590 53568 53800
1992 53501 54058 54215 54434
1993 54012 55124 55124 55750
1994 55771 56451 56803 57440
1995 56942 57308 57642 58198
1996 57602 58172 58762 59467
1997 59067 59655 60083 60687
1998 60293 60551 60795 61443
1999 61552 61900 61956 62760
2000 63306 63673 63234 64129
2001 64091 63802 63369 63687
2002 63382 63394 63497 64056
2003 64289 64510 64118 64700
2004 64219 64670 64651 65371
2005 65070 65529 65877 66550
2006 66136 66716 66990 67860
2007 67556 67542 67749 68322
2008 67784 68051 67723 67945
2009 66659 66500 65857 65815
2010 65653 65814 65489 65862
2011 65455 65590 65334 65937
2012 66575 66933 66706 67440
At the worst of the great recession, there were over 1.5 times as many women in the work force as in 1980. they have a nifty calculator that let's you screen for whatever you want to know out of the current population survey.
For anyone still interested in facts, this is from BLS at:
http://data.bls.gov/pdq/querytool.jsp?survey=ln
Labor Force Statistics from the Current Population Survey
Series Id: LNU02000002Q
Not Seasonally Adjusted
Series title: (Unadj) Employment Level - Women
Labor force status: Employed
Type of data: Number in thousands
Age: 16 years and over
Sex: Women
Download:
Year Qtr1 Qtr2 Qtr3 Qtr4 Annual
1980 41785 41842 42101 42737
1981 42465 43044 43028 43463
1982 42715 43148 43539 43621
1983 42995 43510 44534 45146
1984 44820 45921 46201 46717
1985 46577 46939 47354 48168
1986 47637 48433 49131 49622
1987 49162 50180 50680 51313
1988 50841 51333 51832 52777
1989 52392 52831 53193 53666
1990 53587 53848 53816 53750
1991 53024 53590 53568 53800
1992 53501 54058 54215 54434
1993 54012 55124 55124 55750
1994 55771 56451 56803 57440
1995 56942 57308 57642 58198
1996 57602 58172 58762 59467
1997 59067 59655 60083 60687
1998 60293 60551 60795 61443
1999 61552 61900 61956 62760
2000 63306 63673 63234 64129
2001 64091 63802 63369 63687
2002 63382 63394 63497 64056
2003 64289 64510 64118 64700
2004 64219 64670 64651 65371
2005 65070 65529 65877 66550
2006 66136 66716 66990 67860
2007 67556 67542 67749 68322
2008 67784 68051 67723 67945
2009 66659 66500 65857 65815
2010 65653 65814 65489 65862
2011 65455 65590 65334 65937
2012 66575 66933 66706 67440
At the worst of the great recession, there were over 1.5 times as many women in the work force as in 1980. they have a nifty calculator that let's you screen for whatever you want to know out of the current population survey.