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Those charts show wages growing at an annualized rate of 1.5% at best. Any years with inflation greater than 1.5% were effectively years of wage LOSS, rather th

Those charts show wages growing at an annualized rate of 1.5% at best. Any years with inflation greater than 1.5% were effectively years of wage LOSS, rather than growth. Most of those years had inflation greater than 1.5%. Edit: this math is bad, see sokoloff's comment below.

Supermancho 3y ago
QED
wizofaus 3y ago
Doesn't the "adjusted dollars" mean the numbers are already adjusted for inflation? Pretty sure the median wage in 1984 was a lot less than 56K in 1984 dollars.
sokoloff 3y ago
Those charts show real wages, not nominal wages. "Real" in economics means "after taking inflation into account". https://www.investopedia.com/terms/r/real-value.asp https://www.investopedia.com/terms/r/real-value.asp A year showing any growth in real terms is a nominal growth that is higher than inflation.
- IanKerr 3y ago
  Fair enough. There still seems to be a disconnect though, as the cost of various goods, such as housing, have far exceeded inflation. Are there any charts that try to track wages against a basket of goods?
  - rank0 3y ago
    That's what the CPI is and the real wage growth charts are exactly what you're asking for. That being said, there's definitely a disconnect. The CPI metric is constantly changing, and is such a broad economic indicator that many people's experiences will not "feel" like what the federal data suggests. The root of the growing wealth gap is the massive deficit we've been running. Especially since the GFC, the strategy has been to rack up a bunch of debt and inflate that debt away. This inflates the value of financial assets, property, and commodities...none of which is owned by the average joe whose cash savings gets destroyed in the interim.
    - sokoloff 3y ago
      I agree with everything you say except for one point: > none of which is owned by the average joe About 66% of US households "own" a home (often with a fixed-rate mortgage, which makes rising inflation doubly good for those homeowners) and 58% of homes are owner-occupied. The median Joe is a homeowner, not a renter.
      - rank0 3y ago
        Yeah you’re right thanks for the correction. I’d rephrase to say among those three categories cumulatively most Americans own very little.

Supermancho 3y ago

QED

wizofaus 3y ago

Doesn't the "adjusted dollars" mean the numbers are already adjusted for inflation? Pretty sure the median wage in 1984 was a lot less than 56K in 1984 dollars.

sokoloff 3y ago

Those charts show real wages, not nominal wages. "Real" in economics means "after taking inflation into account". https://www.investopedia.com/terms/r/real-value.asp https://www.investopedia.com/terms/r/real-value.asp A year showing any growth in real terms is a nominal growth that is higher than inflation.

IanKerr 3y ago
Fair enough. There still seems to be a disconnect though, as the cost of various goods, such as housing, have far exceeded inflation. Are there any charts that try to track wages against a basket of goods?
- rank0 3y ago
  That's what the CPI is and the real wage growth charts are exactly what you're asking for. That being said, there's definitely a disconnect. The CPI metric is constantly changing, and is such a broad economic indicator that many people's experiences will not "feel" like what the federal data suggests. The root of the growing wealth gap is the massive deficit we've been running. Especially since the GFC, the strategy has been to rack up a bunch of debt and inflate that debt away. This inflates the value of financial assets, property, and commodities...none of which is owned by the average joe whose cash savings gets destroyed in the interim.
  - sokoloff 3y ago
    I agree with everything you say except for one point: > none of which is owned by the average joe About 66% of US households "own" a home (often with a fixed-rate mortgage, which makes rising inflation doubly good for those homeowners) and 58% of homes are owner-occupied. The median Joe is a homeowner, not a renter.
    - rank0 3y ago
      Yeah you’re right thanks for the correction. I’d rephrase to say among those three categories cumulatively most Americans own very little.