34 sats \ 9 replies \ @Coinsreporter 15 Mar \ on: America's middle class is collapsing (because they get richer not poorer) charts_and_numbers
So, they are sliding up not down. But did you just consider what it meant to earn $100k in 1967 and what's in 2020. $100 in 1967 should have been like $1000k at least.
Yeah, @zuspotirko here's a thought experiment: suppose Bitcoin becomes the world's reserve currency and it triggers a gold age of economic growth. Within a few decades almost no one lives on less (the equivalent of) $35k a year. Very few live on $100k a year. Almost everyone has a standard of living way beyond that.
What would this graph look like? The "High Income" area would fill 90%+ of the area.
There are a lot of struggles with the middle class standard of living these days, but this graph doesn't show it right.
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A future where 90% of people earn 100k in 2020 constant Dollars sounds awesome. Don't you think a society where 90% earn the equivalent of 100k in 2020 should call 90% of people "High Income"? To repeat: we're talking 2020 constant Dollars here, not each years respective earnings and distribution.
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The chart says that these are 2020 Dollars, so 100k is the same in both periods.
Of course, there are problems with inflation adjustments.
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Those problems compound as well. The gov says 2-3%. I see more like 6%.
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It's tough to say, because much of what we use in daily life didn't even exist in 1967. VCR's cost thousands of dollars when they first came out. Can you imagine what internet enabled smart phones would have cost?
Big blockbuster films didn't even exist then and big action movies were made with puppets and strings. What would people have paid to see Dune on IMAX?
The examples are endless and mostly just illustrate how difficult these kind of living standard comparisons become over long stretches of time.
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It's tough to say, because much of what we use in daily life didn't even exist in 1967. VCR's cost thousands of dollars when they first came out. Can you imagine what internet enabled smart phones would have cost?
Well that is already in the govt figures.
The govt uses "hedonic adjustments" to negatively adjust CPI to account for new developments that didn't exist in the past.
Secondly they use "baskets of goods", so instead of tracking a specific item (like Tbone steaks), they track a "meat basket" and the elements of that meat basket is adjusted over time. (ie. 50% Ground meat, 25% steaks, 25% brisket, etc)
I think both of these things: Hedonic adjustments + variable baskets are really just accounting tricks to keep reported inflation artificially low.
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Well that is already in the govt figures.
Hedonic adjustments account for quality improvements in products that already existed, not previously non-existent products.
The introduction new products is a known issue for inflation adjustments.
Whether it's "just" an accounting trick or not depends on who you're talking about. There are plenty of economists who argue for those methods in good faith. It's also not a coincidence that whenever they tweak the methodology it makes the status quo look better.
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Well said. You hit the bull's eye.
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It's already inflation adjusted. Constant 2020 Dollars.
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