| Indeed, it always annoyed me when the CPI a) excludes actual costs of living and b) alongside things like "food" included "flat-screen TVs". Staple foods might cost 25% more, but hey, those TVs are down 20%, so yay! An old company of mine was very proud that everyone's payrise began equivalent to CPI increase, before any other performance related increases. That was nice, but it's a CPI that excludes rent/mortgage payments in a massive property bubble. When your rent that was already 40% of your net income goes up by 25%, CPI is meaningless. When we suggested their base pay raise also consider that aspect, we got a blank stare and "no, no, CPI... <vague hand gestures>" Mind you, it's like the "unemployment rate", for statistical purposes, you're not unemployed if you worked somewhere for one hour plus, paid or unpaid. So the percentage of our population on the unemployment benefit always tracks higher than the official unemployment rate. I mean, I guess that's their measure, and it's useful for statisticians, but it's not meaningful for citizens. |
It's even worse than that because most of the time the TV price don't really goes down by 20%, but by 3% and hedonic adjustment makes it appear as if it went down by 20% in CPI because some people estimated that going from HD to 4K increased the value by 17% …
That's how we get figures saying that computers cost 20 times less than what they used to be when in reality it costs a little less than 2 times less.