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Old 11-21-2018, 01:19 PM
 
1,519 posts, read 627,421 times
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Without inserting inflation into the equation, it's a completely useless discussion. Example, in 1977 I got a job paying $20K per year. I retired from that company 27 years later making $93K per year. Adjusted for inflation they were the exact same salaries. I had made exactly the same equivalent wages for the whole 27 years.
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Old 11-21-2018, 01:54 PM
 
17,783 posts, read 12,462,980 times
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Quote:
Originally Posted by bobspez View Post
Without inserting inflation into the equation, it's a completely useless discussion. Example, in 1977 I got a job paying $20K per year. I retired from that company 27 years later making $93K per year. Adjusted for inflation they were the exact same salaries. I had made exactly the same equivalent wages for the whole 27 years.
Per the bls 20k in 1977 equates to 63k in 2004
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Old 11-21-2018, 02:30 PM
 
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**** article. Like most pieces that talk about this.

First, inflation hits people differently. Bill Gates has different inflation issues that Bill Joe Jim Bob in the trailer park in MS.

Second, averages when talking about stuff like this tend to be skewed and should be used sparingly. Including benefits for health insurance in compensation excludes 45% of the population as an example. Yet those huge dollar amounts sometimes get included into compensation.

Third, median on its own has its uses but you just can't use it by itself as some universally reliable statistic. This is done all the time and it is so half ass. Things like average house hold income for an entire country or median income are neat numbers but don't mean a ton in a country with as much disparity as we have. Median in NYC is crap and median in butt hole Louisiana is living large.

Fourth, our inflation measurements are far from perfect. This is huge because you are trying to compare inflation over 50 years. Not only that, there are other items like student loans now and the NEED for a good bachelors to even get your foot in the door today. Virtually zero defined benefit plans etc. There are all material differences that impact free spending and these "inflation" numbers but aren't included in the averages.

Fifth any serious look at wage growth is going to do more than just compare median and averages of age groups or taxes paid as if that means anything. I will explain why.

Go back to my first statement. You've seen the economy expand significantly at the top, not as much on the bottom. The middle class has shrunk. There are other issues like rents and property costs, the fact that many of the high paying jobs are in very high COL areas, student loan debt, etc are all items that don't show up in inflation reports properly. Thus, your all encompassing number you are using to bring wages up to today for comparison is very flawed.

Most folks don't have the attention span for this because it is an incredible difficult topic to compare. What really needs to be done is a few big city comparisons and a few rural comparisons, for each economic group (bottom, lower middle, middle, upper middle, upper and very wealthy) and compare these groups vs a normal every day budget from 1970 to today. Food, housing, transportation, education etc.

I think what we'd find is that there is a ton of disparity and trying to lump everyone together by age and averaging out the entire country is nothing more than lazy and amateur stats. Even with these terrible methods they still find that bottom is 20% off from inflation.

So yeah, there is a ton of wage disparity still. If I cut your salary by 20% you'd certainly think it was significant.
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Old 11-21-2018, 03:47 PM
 
3,814 posts, read 2,111,997 times
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The data is irrefutable...

https://www.epi.org/productivity-pay-gap/


Quote:
Originally Posted by MinivanDriver View Post
http://www.city-data.com/forum/52943839-post223.html
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Old 11-21-2018, 04:05 PM
 
5,906 posts, read 3,147,632 times
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Quote:
Originally Posted by aridon View Post
**** article. Like most pieces that talk about this.

First, inflation hits people differently. Bill Gates has different inflation issues that Bill Joe Jim Bob in the trailer park in MS.

Second, averages when talking about stuff like this tend to be skewed and should be used sparingly. Including benefits for health insurance in compensation excludes 45% of the population as an example. Yet those huge dollar amounts sometimes get included into compensation.

Third, median on its own has its uses but you just can't use it by itself as some universally reliable statistic. This is done all the time and it is so half ass. Things like average house hold income for an entire country or median income are neat numbers but don't mean a ton in a country with as much disparity as we have. Median in NYC is crap and median in butt hole Louisiana is living large.

Fourth, our inflation measurements are far from perfect. This is huge because you are trying to compare inflation over 50 years. Not only that, there are other items like student loans now and the NEED for a good bachelors to even get your foot in the door today. Virtually zero defined benefit plans etc. There are all material differences that impact free spending and these "inflation" numbers but aren't included in the averages.

Fifth any serious look at wage growth is going to do more than just compare median and averages of age groups or taxes paid as if that means anything. I will explain why.

Go back to my first statement. You've seen the economy expand significantly at the top, not as much on the bottom. The middle class has shrunk. There are other issues like rents and property costs, the fact that many of the high paying jobs are in very high COL areas, student loan debt, etc are all items that don't show up in inflation reports properly. Thus, your all encompassing number you are using to bring wages up to today for comparison is very flawed.

Most folks don't have the attention span for this because it is an incredible difficult topic to compare. What really needs to be done is a few big city comparisons and a few rural comparisons, for each economic group (bottom, lower middle, middle, upper middle, upper and very wealthy) and compare these groups vs a normal every day budget from 1970 to today. Food, housing, transportation, education etc.

I think what we'd find is that there is a ton of disparity and trying to lump everyone together by age and averaging out the entire country is nothing more than lazy and amateur stats. Even with these terrible methods they still find that bottom is 20% off from inflation.

So yeah, there is a ton of wage disparity still. If I cut your salary by 20% you'd certainly think it was significant.
Thank you. So many like to spew statistics without understanding what they mean. Personally I think something is amiss with how inflation is calculated because ground truth doesn't line up with the data. One item that doesn't add up to me is how today it typically takes a two wage earner family to maintain the same standard of living that a one wage earner family had in the 60s.
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Old 11-21-2018, 04:07 PM
 
10,385 posts, read 5,035,459 times
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Quote:
Originally Posted by GeoffD View Post
Yep. A right wing rag. Of course, the WSJ is owned by Rupert Murdoch so you have to look carefully to see if something is actual news or a regurgitated Fox News OpEd.

Iíll stick with The Economist for data on this. Inflation-adjusted, wage stagnation is not a myth.
Itís owned by Bezos, how right wing can it be. My husband just canceled the Economist, heís tired of the stuff they are preaching.
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Old 11-21-2018, 04:17 PM
 
2,256 posts, read 1,209,554 times
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Quote:
Originally Posted by tnff View Post
Thank you. So many like to spew statistics without understanding what they mean. Personally I think something is amiss with how inflation is calculated because ground truth doesn't line up with the data. One item that doesn't add up to me is how today it typically takes a two wage earner family to maintain the same standard of living that a one wage earner family had in the 60s.
The honest answer is there is a lot to it. Two big factors are, wages haven't kept up with real inflation and people spend more on stuff they didn't have to spend money on back then.

Wages not keeping up with real inflation or even the flawed metric the government releases is a well known fact. Especially as you move closer towards middle to the bottom.

Paying more for stuff that wasn't around back in the 70's is another big issue. Student loans and health care are big items here. Retirement is another. The rate of defined benefit plans has decreased tremendously over the decades. Sure, you had to save for that plan but the company paid much more than you did and compared to today people have to save much more with a 401k compared to what someone would of received with a defined benefit pension.

There is also the fact that people have more nice things. Bigger houses, newer cars and more gadgets / services that didn't exist back then. All factors. Now keep in mind when you look at averages, any average, that things tend to skew when you lump high end and low end together. Take them with a grain of salt.

Example. If I offer you a job at 100k a year for doing 30 hours a week of easy office work would you take it? Most would jump at that.

How about if I tell you that I have 10 employees? Anything change? Probably not.

How about if I tell you one employee makes 1m a year? Those that understand math should know that my average salary is mostly bull**** and meaningless for the job I was offering. While this is an extreme example you can clearly see that averages over large groups are the preferred measure of those that don't understand math.
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Old 11-21-2018, 04:56 PM
 
17,783 posts, read 12,462,980 times
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Quote:
Originally Posted by tnff View Post
Thank you. So many like to spew statistics without understanding what they mean. Personally I think something is amiss with how inflation is calculated because ground truth doesn't line up with the data. One item that doesn't add up to me is how today it typically takes a two wage earner family to maintain the same standard of living that a one wage earner family had in the 60s.

When people try to compare things to say the 50-60s they tend to gloss over a lot of facts Facts to include how the avg size of a new house is up 70%+/-, how bathrooms out number bedrooms, how the size of the avg family has declined, how many more households now have two cars, multiple TVs, multiple computers/tablets, everyone with cellphones/smartphones, internet, 200 channels of cable and many other things compared to the 50-60s size house, larger family size, one car, one tv, 10-20 channels, one home phone I could go on but the point should be clear
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Old 11-21-2018, 07:56 PM
 
Location: Silicon Valley
2,932 posts, read 1,289,432 times
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Quote:
Originally Posted by aridon View Post

First, inflation hits people differently. Bill Gates has different inflation issues that Bill Joe Jim Bob in the trailer park in MS.
This is very true. The price of many staples, as the country eliminated trade barriers, has actually fallen considerably. It would be nice for someone to take a typical budget and work from there.

Wages - Key argument here is minimum wage, which many of us start in, but we don't stay there forever. We move up. We learn something. We get a different job. Where it hurts is when people have to start over. When I hear of people that have been a cashier at Burger King for 12 years and haven't gotten a raise in 5 I can't help but think...didn't you ever want to be the fry guy...learn the different positions and become an assistant manager?

Food - Food prices have increased, but home food preparation has dropped off significantly. Cooking at home is the way to save money. There are food stamps more readily extended as well to buy what you need. The difference is if someone is buying made to eat meals or if they are buying ingredients. It's a big cost, so plan for it accordingly.

Health - Health inflation has been insane, and it will hit the poor harder....though that's been remedied somewhat with the State programs. It is also a byproduct of not eating decent home cooked meals.

Rent - Rents have gone up...in most places. The cost of land has risen and the requirements for a home have gone up. Homes are now more likely to be ADA compliant, have safety equipment, not have lead paint or asbestos.

Education - K-12 education remains free. College tuition is inflating dramatically. Still there are loan programs and grant programs available.

Electronics - This is dramatically cheaper. Computers, phones and other tools are now readily available and cheap.

Furnishings - There are so many second hand places with great deals. New has inflated, but has been held in check with cheaper materials and imports.

Clothing - Again, this is an area with a wide range, but you can get cheap clothes for very little. I walked into a Wal-Mart the other day and saw shirts for $1.70. I have no idea how they can possibly be made but that's cheap.

Utilities - roughly inline aside from telecommunications which is much cheaper. Power dependability has improved.

Banking - There's been fee inflation, but there are still opportunities to have fee free checking. Many also offer bill pay services that save the user a stamp.

Gasoline - Honestly, prices have risen but not out of line with inflation. What has improved dramatically is the energy efficiency of vehicles. There are also more mass transit options today then there were.

Savings - When people can save, there are now more realistic options for them to invest. You can put your money in an account, online, and it's automatically going to generate a cash rate return for you. You can invest in companies or mutual funds for less than $10. 401K plans dominate in many areas. DRIP programs are still widely available at many companies. This is a clear win.

The real thing that needs to be thought through is the mindset of the consumer. Whether rich or poor, there is a great deal of selection available. If, this tax season, you get a return of $1000, what is the first thought. Some will pay credit cards. Some will take a vacation. Some will invest. The rich rarely are getting most of their money through a paycheck. They get it through options, investments or real estate. Whether they got that head start or saved for it, they had to decide to forgo early consumption in order to build something that will reward them later. I see working poor make that call and slowly nudge ahead, at some point an opportunity presents and they are in position to take it. I see working poor not make that call and later become frustrated because that opportunity comes and they are not in position to take it.

Very hard to go from negative to 0.
Hard to go from 0 to 100,000
Moderately difficult to go from 100,000 to 1,000,000
Prudence gets you from 1,000,000 to 5,000,000
Not making horrible mistakes gets you from 5,000,000 to rich.

People starting sometimes never see beyond the paycheck and act accordingly.
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Old 11-21-2018, 09:22 PM
 
Location: Ohio
18,310 posts, read 13,432,534 times
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Quote:
Originally Posted by SWFL_Native View Post
That's a false measure.

Wages aren't based on Productivity, and the only correct measure of Productivity is unit volume per labor hours.

200,000 labor-hours; 1 Million widgets produced; unit price is $10; gross revenues $10 Million
190,000 labor-hours; 950,000 widgets produced; unit price is $12; gross revenues $11.4 Million

Did Productivity increase?


No, it did not, but EPI will claim it did in order to spew their Left-wing propaganda.

Quote:
Originally Posted by aridon View Post
First, inflation hits people differently.
Irrelevant.

70% of the 81.94% Inflation since 1990 is all you, brother.

You are the government, and you elected the people who enacted the laws and regulations that drive up the prices of goods and services. That's Cost-push Inflation.

You can un-elect them anytime you want.

And, you are the one consuming like a locust to drive up the prices of goods and services. That's Demand-pull Inflation.

It's all you.

The purpose of Demand-pull Inflation is to stop the depletion, over-use or over-consumption of resources, goods and services.

No one has the balls to answer, but I'll ask again: Explain how increasing wages to accelerate the depletion, over-use or over-consumption of resources, goods and services is a good thing?

Quote:
Originally Posted by aridon View Post
Second, averages when talking about stuff like this tend to be skewed and should be used sparingly. Including benefits for health insurance in compensation excludes 45% of the population as an example. Yet those huge dollar amounts sometimes get included into compensation.
In this case, the answer is "No."

The data is straight taxable wages with no forms of non-taxable compensation included.

Quote:
Originally Posted by aridon View Post
Third, median on its own has its uses but you just can't use it by itself as some universally reliable statistic. This is done all the time and it is so half ass. Things like average house hold income for an entire country or median income are neat numbers but don't mean a ton in a country with as much disparity as we have. Median in NYC is crap and median in butt hole Louisiana is living large.
The so-called "disparity" is the result of differences in Cost-of-Living. Cost-of-Living is overwhelmingly a product of Cost-push Inflation, and to a lesser extent, Demand-pull Inflation, which mainly affects the cost of housing.

As I pointed out earlier, Cost-push Inflation is all you, brother, just like Demand-pull Inflation is all you.


If you don't want prices to continually rise, then either stop consuming or increase Supply.



It's not quantum physics.



Quote:
Originally Posted by aridon View Post
Fourth, our inflation measurements are far from perfect. This is huge because you are trying to compare inflation over 50 years. Not only that, there are other items like student loans now and the NEED for a good bachelors to even get your foot in the door today. Virtually zero defined benefit plans etc. There are all material differences that impact free spending and these "inflation" numbers but aren't included in the averages.
Previously, you lamented over your false belief that compensation skewed wage data, and now you're contradicting yourself, complaining that defined benefit plans aren't included.

Which is it?

Make up your mind already.

Defined benefit plans were the product of MAFIA-controlled unions to launder mob money. They were unsustainable on their face, effectively being Ponzi-schemes predicated on a company with 3,000 workers ending up with 50,000 workers in the Future, and it would have worked out if companies constantly expanded the size of its work-force every year, but that's not how business actually operates, so it didn't work out that way.

Your ignorance aside, the cost of both private elementary and secondary education, and college education are included in the CPI.

Student loans are unnecessary. I went back in 2001 and got two more undergraduate degrees, plus a Master's and PhD, and I never used student loans, and of my four room-mates, only one obtained student loans, and she borrowed $2,000 the one year and $4,000 the other two years, instead of borrowing the full maximum she was allowed, so, no, she is not swimming in debt.

You are allowed to work while attending university, but you do have to be able to manage your time wisely if you do so. I worked 3rd Shift at a GAP warehouse one year, then 2nd shift supervisor at a meat-packing plant the next year, and then worked 2-3 part-time jobs to pay for tuition and living expenses, but if you're living at home, you have no expenses.

In 2016, the University of Cincinnati spent $116 Million on IT. Given that student enrollment is about 25,000 that works out to $4,460 per student for IT costs, and since tuition is $9,800 per year, more than half of their tuition goes to paying for IT

Funny thing is, students won't go to a university that doesn't have Wi-Fi all over campus.

Quote:
Originally Posted by aridon View Post
Fifth any serious look at wage growth is going to do more than just compare median and averages of age groups or taxes paid as if that means anything. I will explain why.

Go back to my first statement. You've seen the economy expand significantly at the top, not as much on the bottom. The middle class has shrunk.
No, it hasn't.

In 1990, 79% earned $30,000 or less, and today only 48% earn $30,000 or less.

No matter how you define Middle-Class, it has expanded.

Quote:
Originally Posted by aridon View Post
There are other issues like rents and property costs, the fact that many of the high paying jobs are in very high COL areas, student loan debt, etc are all items that don't show up in inflation reports properly.
Student loan debt is irrelevant.

The fact that high paying jobs are high Cost-of-Living areas is nonsensical. Cost-of-Living impacts wages/salaries and inflates them.

If you aren't smart enough to understand why someone in Cincinnati, Ohio earning $44,000 a year makes $4,000 more than someone in White Plains, New Jersey earning $100,000 a year, then you deserve to suffer so.
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