Adjusting for CPI the median wage in America is up about 10% in the last 20 years.

nothercastle 3 days ago | parent | next [-]

You can’t use cpi directly like that. The model uses hedonic adjustment to say that modern goods are better than old stuff so you are earning more.

For example your $1000 oled tv is better than your $1000 crt tv therefore you your purchasing power has gone up. Or your base truck now comes with nav therefore your truck can be 5k more and still be net neutral. The problem with this system is that in order to stay in the same price catagory on the index you continually need to move down the product tiers. So today’s lowest tier is a decade ago mid tier is 2 decades ago high end. Moving down like that makes you feel poorer because wealth is relative.

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confidantlake 3 days ago | parent | next [-]

Even this is missing the point. While they try to distract us with the price vs quality of tvs, the cost of college and housing has skyrocketed.

60 year ago, a 20 year old guy with a high school education could support a wife and 2 kids. Today he needs his wife to work and has to wait until 30 just to buy a 1 bedroom apartment. Forget about kids. But they act like we are kings because now we have iphones.

	▲	nothercastle 3 days ago \| parent [-]
		They can just say that Kahn academy is equivalent to college 20 years ago so qol is maintained

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hdgvhicv a day ago | parent | prev | next [-]

> "Real income" is measured against the consumer price index (CPI).

> What real income really shows is that more money now gives you less

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SpicyLemonZest 3 days ago | parent | prev [-]

TVs are the archetype of of why hedonic adjustment is necessary. Your $1000 OLED TV is better than your $1000 CRT TV, but it's not even the right comparison. Every TV on the market today, even the bargain basement ones it never even crossed your mind to buy, is better than your $1000 CRT TV. We've hedonically adjusted, so it's hard to believe - is it really true that the "huge" "high definition" CRTs our cool friends had two decades ago were 720p and <35 inches? But yes, it is true.

Consider a more concrete example. In 2005, a 40 inch 720p LCD panel cost $3,500 (https://slate.com/culture/2005/09/it-s-finally-time-to-buy-a...). Today, that same panel in 1080p is $100 at Best Buy (https://www.bestbuy.com/product/insignia-40-class-f40-series...).

	▲	_DeadFred_ 3 days ago \| parent \| next [-]
		I never had a CRT die on me. A $100 Best Buy TV is disposable junk. Is that factored in to your index? Modern product lifespan is at least half, and repairing something is no longer an option or is 'replace $1000 board' not the $50 fix it used to be. The current price should be at least doubled to try and match in some way. For 30 years my parents had the same TV, is that factored in? My TV has an explicit shelf life. Apps have already stopped working/being supported even without the TV breaking. My parent's TV never sold any data. My new, much more 'expensive' TV spys on me 24X7. You would not have been able to PAY my grandparents enough to put a TV like that in their house, yet alone consider it an 'upgrade'.
	▲	tossandthrow 2 days ago \| parent \| prev \| next [-]
		As the sibling also mentions, you need to add in ongoing costs, or expected yearly ecpensiture on TVs, which makes even the worst modern TVs much more expensive that older crts. You need to do this with all tech. But factoring in hedonic adaptation is fine, if general societal trends are also factored in. 30 years ago there was strong social institutions on workplaces that people have to buy into now. More people did manual labor where they need to pay for fitness now. These things also needs to be factored in.
	▲	account42 a day ago \| parent \| prev [-]
		Your CRT TV didn't try to manipulate you into spending on stuff you don't need. Your average OLED today does (if you give it an internet connection for now, but you need that for some of the features that supposedly make it better). It may have improved on paper but the quality of the experience has not.

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lotsofpulp 3 days ago | parent | prev | next [-]

Yet people feel like their purchasing power is going down.

Their expectations might be to live in the top few decile neighborhoods of a metro, where land prices have gone up a few hundred thousand in the previous decade.

It doesn’t matter if the stats say income went up 10% if they or their kids won’t be able to land that house they wanted, or can’t make that appointment with the doctor and instead have to see an NP, or worry about having to move to a more expensive metro to reduce income volatility.

	▲	camgunz 2 days ago \| parent [-]
		This is pretty spot on. In the mid/latter half of the 20th century, most people who thought they should have what they thought was the good life could get it. It's less about "you didn't need 2 incomes" and more about "culturally, people thought women should work in the home while men worked outside it". Now, it's not really even clear what the good life is, but whatever you think, it's very hard to get it. Schools, commutes, quality housing, health care, stable income, they've all gotten far, far worse for almost everyone, and there's nothing they can do about it.

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chessgecko 3 days ago | parent | prev | next [-]

The real issue is that housing is heavily underweighted in the cpi basket. How many people do you know that are only spending 12.9% of their after tax take home on housing, water and fuel? Only people with paid off mortgages.

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geye1234 3 days ago | parent | prev [-]

In the 1970s, a single-income family on a factory worker's wage could buy a 3-bedroom house with a 3x mortgage.

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SpicyLemonZest 3 days ago | parent [-]

Factory workers weren't (and even today really aren't) a replacement-level job that anyone can just go out and get. A guy making $4.50/hr at GM in 1970 had a great job that his peers would have envied; quite a lot of people who worked just as hard were making $3 or $2.

	▲	geye1234 3 days ago \| parent [-]
		Sure, but the 2025 equivalent of that GM job -- if you can find it -- is not going to pay enough to support a family and pay a mortgage on one income.