Is Wage Stagnation A Myth? (millionaire, taxes, profit, inflation)
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Inflation calculator: $30,000 in October 1990 has the same purchasing power as $56,828 in October 2018.
Now The question to be answered is what proportion of workers in 2018 earn less than $56,828 this year?
If the incomes of 79% of workers are not less than $56,828 this year, you’re correct; otherwise, you’re incorrect.
you are going back to the argument that was made earlier .
depending why prices rose they may not require an inflation adjustment on wages because demand for things ,weather ,strikes ,shortages .political acts ,etc are not monetary inflation .
these types of things can easily see prices plunge if the reasons for their rise cease .
so inflating wages to match rising expenses may not be right if the rise in expenses in not monetary inflation .
if the landlord just decides to raise my rent 2k a year or tomatoes go up 20% because of weather , my expenses rose , but there is no reason why when doing what if's for my budget that my income should be adjusted upward for those reasons , so i get what mircea is trying to say here .
not all price increases require an equivelant adjustment in what wages should have been . there are good reasons wages should not have gone up on the other side of the balance sheet unless it was monetary inflation causing the increases
you are going back to the argument that was made earlier .
depending why prices rose they may not require an inflation adjustment on wages because demand for things ,weather ,strikes ,shortages .political acts ,etc are not monetary inflation .
these types of things can easily see prices plunge if the reasons for their rise cease .
so inflating wages to match rising expenses may not be right if the rise in expenses in not monetary inflation .
if the landlord just decides to raise my rent 2k a year or tomatoes go up 20% because of weather , my expenses rose , but there is no reason why when doing what if's for my budget that my income should be adjusted upward for those reasons , so i get what mircea is trying to say here .
not all price increases require an equivelant adjustment in what wages should have been . there are good reasons wages should not have gone up on the other side of the balance sheet unless it was monetary inflation causing the increases
MathJak107, all spending of a nation’s monetary currency (to some extent) contributes to its inflation, (i.e. loss of purchasing power).
Regardless of the spendings’ reasons, that the manner in which monetary currency value behaves.
And yes, when aggregate prices within the nation increase, the Cost-price index number increases and that’s justification for wages to increase. Otherwise many employees could starve if they do not receive public assistance.
You have some very peculiar conceptions about monetary systems.
Respectfully, Supposn
well our system is based on about 2% monetary inflation so that is a given as far as monetary inflation , but not all price increases should be or need to be blamed on monetary inflation and adjusted for with incomes upped to match like a typical inflation calculator will do
well our system is based on about 2% monetary inflation so that is a given as far as monetary inflation , but not all price increases should be or need to be blamed on monetary inflation and adjusted for with incomes upped to match like a typical inflation calculator will do
That may all be true, but the bottom line IMO anyway is the standard of living for our middle class. And for whatever reason that does not advance, we have a problem. IMO not a very serious problem for the bulk of our middle class, but I think we and they should do better.
For instance HC today should be much easier financially. HC costs have accelerated faster than inflation adjusted middle class wages the last few decades.
well the term middle class lifestyle has no actual definition . it really is hard to even define what it is so you know if it advanced or not .
the ny times did a very nice article on that fact :
"There is no single, formal definition of class status in this country.
Statisticians and demographers all use slightly different methods to divvy up the great American whole
into quintiles and median ranges. Complicating things, most people like to think of themselves as middle
class. It feels good, after all, and more egalitarian than proclaiming yourself to be rich or poor. A $70,000
annual income is middle class for a family of four, according to the median response in a recent Pew
Research Center survey, and yet people at a wide range of income levels, including those making less than $30,000 and more than $100,000 a year, said they, too, belonged to the middle.
By one measure, in cities like Houston or Phoenix — places considered by statisticians to be more typical of average United States incomes than New York — a solidly middle-class life can be had for wages that fall between $33,000 and $100,000 a year.
By the same formula — measuring by who sits in the middle of the income spectrum — Manhattan’s middle class exists somewhere between $45,000 and $134,000.
But if you are defining middle class by lifestyle, to accommodate the cost of living in Manhattan, that salary would have to fall between $80,000 and $235,000. This means someone making $70,000 a year in other parts of the country would need to make $166,000 in Manhattan to enjoy the same purchasing power.
Using the rule of thumb that buyers should expect to spend two and a half times their annual salary on a home purchase, the properties in Manhattan that could be said to be middle class would run between $200,000 and $588,000.
On the low end, the pickings are slim. The least expensive properties are mostly uptown, in neighborhoods like Yorkville, Washington Heights and Inwood. The most pleasing options in this range, however, are one-bedroom apartments not designed for children or families.
It is not surprising, then, that a family of four with an annual income of $68,700 or less qualifies to apply for the New York City Housing Authority’s public housing."
Finally we reached new all time highs in median household income in the last few months. This is the best news I've seen for the domestic economy in a long time. I wouldn't expect a lot out the stock market, however.
Finally we reached new all time highs in median household income in the last few months. This is the best news I've seen for the domestic economy in a long time. I wouldn't expect a lot out the stock market, however.
RRuff, thank you for the graph, it supports those contending USA wages have stagnated during our last half-century.
The purchasing powers of many other nation’s median wages have been advancing. Our legacy to our future generations seems to be evolving as lesser living standards comparative to our history or to other nations that have surpassed us or are reducing our lead over them.
How did you generate this graph? why can’t I recover the link to the original source?
well our system is based on about 2% monetary inflation so that is a given as far as monetary inflation, but not all price increases should be or need to be blamed on monetary inflation and adjusted for with incomes upped to match like a typical inflation calculator will do
MathJak, you're responding post immediately follows and opposes the contention of my post. I contend the basis of the "typical inflation calculator" you find fault with, are the correct basis for calculating U.S. dollar's comparative purchasing power over the years.
just because my landlord raises my rent does not make that "inflation " the market conditions allowed it and what i have is an increase in my expenses with the same income . why should my income be adjusted upward hypothetically on paper to match ? it really shouldn't .
somethings are just plain ole rises in expenses , plain and simple . my income should not be inflated on a graph just because of that demand driving up my expense . there is no reason my income should be inflated to match . i need to earn more income to keep up on an un-inflated bases .
that is very different then the money supply growing and equaling things out by adjusting incomes accordingly . so it can be tough trying to really figure out wages on an inflation adjusted basis if not near impossible since it treats monetary inflation and just increases from shortages ,strikes ,weather and everything else all the same.
all those other reasons can just as easily be considered just expenses going up against the same income in reality and i need to earn more income to keep up not an adjustment that pretends to equal things out because nothing was done to dilute that income on the same scale so automatically boosting wages is not representative of what transpired ..
think about it , if you got a raise and the money supply was not fiddled with , you got more money in today's dollars .... the fact certain expenses may have risen is a separate issue . that does not mean you did not have wage growth , because you did
Last edited by mathjak107; 11-27-2018 at 05:05 AM..
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