[gfrangakis]

> 10/ When we say "inflation-adjusted wages look good," we are actually saying "if you could take your wage back to 1970 and spend it, you'd be better off than you were at the time with a 1970 wage." I mean, maybe that's interesting. But it doesn't describe lived experience.

Isn't more like saying, you can buy more units of 2020 "consumer goods" with a 2020 wage than you could buy 1970 consumer goods with a 1970 wage? His point is just the definition of inflation: $1,000 in nominal dollars more valuable in 1970 than in 2020.

[LeifCarrotson]

The important part is the segmentation of inflation between the whole economy (consumer goods, industry, and also the basics) and the price of just the basics: housing, health care, transportation, education. If those basics were the basket of goods used to define inflation, then the numbers would be very different.

$1000 in 1985 dollars buys $2300 worth of consumer goods in 2020. But you'd need $3,110 2020 dollars to buy the basics you could get for $1000 in 1985.

[kakwa_]

Also, another aspect to consider is what is the basic minimum to be integrated in society and exist socially.

In the 20ies cars were not a social necessity, but beyond the 70ies, not having a car generally means partial social exclusion (more difficulties to get a job, etc).

Today, not having a computer/smartphone/tablet and an internet subscription would impact social integration.

This basic minimum need is not set in stone, it's a shifting target. Rephrasing the problem with "What is the current median revenue Vs What is the basic minimum to be an integrated member of society" would be a better way to put it.

[crooked-v]

Or, in other words, inflation indexes are an average, and like all averages, it's a bad idea to blindly trust it, because sub-groups of the overall data may show much different results.

[thedance]

The problem is not averaging. The problem is these inflation measures specifically exclude major expenses.