[x3sphere]

Wages are definitely up, but if you factor in all the price increases of rent and groceries, I don't see how anything is better for the poorest. I've seen fast food places here hiring @ $20-25 an hour - that would maybe be enough to buy a 1 bedroom condo 4 years ago in less expensive areas, but you certainly can't on that salary now, not at current mortgage rates anyway. So they're basically in the same place it seems.

And if we're strictly speaking about the poorest - they also don't have a 401k or retirement savings, so they aren't benefiting from the increase in asset prices.

[runeks]

> Between 2019 and 2022, low-wage workers experienced historically fast real wage growth. The 10th percentile real hourly wage grew 9.0% over the three-year period. This tremendous real wage growth at the lower end of the wage distribution was exceptional, significantly faster than in any other business cycle peak since 1979.

“Real” meaning “adjusted for inflation”.

[anonymouskimmer]

Adjusted for the inflation on the items that the poorest tend to spend their money on? The inflation statistics I've seen have a few buckets for certain kinds of expenses, but don't break things down into baskets of goods based on income.

https://libertystreeteconomics.newyorkfed.org/2023/01/inflat...

: As there are no official estimates of inflation by demographic and income groups

: In the first post of this series, we present disparities in inflation rates across racial and ethnic groups as well as across income groups between June 2019 and December 2022. We present evidence that during this period, Black, Hispanic, and middle-income households were most affected by rising inflation, experiencing steadily higher price increases relative to the overall average between early 2021 and June 2022. This pattern is largely because a greater share of these groups’ expenditures is devoted to transportation, particularly used cars and motor fuel, categories that led the 2021 inflationary episode. However, over the last five months, as transportation inflation has declined, these gaps have declined as well.

: It is likely the case that the same rate of inflation represents a greater welfare loss for lower-income than higher-income households because of the former’s lower capacity for substituting to less expensive goods, greater liquidity constraints, and larger marginal utility of real income.

[akavi]

> Wages are definitely up, but if you factor in all the price increases of rent and groceries, I don't see how anything is better for the poorest.

That's what inflation adjustment is for.

> The poorest people in the US saw faster inflation-adjusted wage growth than any other income bracket: https://www.epi.org/publication/swa-wages-2022/

[fzeroracer]

Well no, inflation-adjustment is inherently naïve. It assumes that everything rises at the same rate of inflation, which is obviously not true. Rent has surged far faster than inflation for example.

[gottorf]

> inflation-adjustment is inherently naïve. It assumes that everything rises at the same rate of inflation

It doesn't. "Real wages" are adjusted to changes in CPI. It makes no assertions that everything inflates at the same pace, any more than the overall CPI figure does the same.

If your wages went up 20%, and the CPI went up by 10% (composed of, say, a 40% rise in rent and some commensurate declines in other goods and services), your real wages went up by 10%. Of course, how that impacts actual individuals is different based on their circumstances.

[VirusNewbie]

The problem is that CPI does not accurately reflect true inflation. If you chart wage growth to M2, you see it hasn't' kept up, and you also can see that assets have outpaced inflation quite a bit.

[mrguyorama]

>and some commensurate declines in other goods and services

Pray tell, what has declined in price the past 5 years?

[andrewmutz]

Actually right now prices are falling on durable goods:

https://www.cbsnews.com/amp/news/economy-inflation-deflation...

[mrguyorama]

>These items are products such as used cars, furniture and appliances, which saw big run-ups in prices during the pandemic.

So is this an actual reduction in price, or yet again just covid supply squeezes easing off? Does a 2.6% drop in price actually offset the price increases of the past 5 years?

[gottorf]

I'm sorry, that was poorly worded. What I was trying to say is that if the CPI is 10% and one component of it is 40%, it implies the presence of other components that are under 10% (and of course, the possibility of some that might have been negative).

[robertlagrant]

> Wages are definitely up, but if you factor in all the price increases of rent and groceries, I don't see how anything is better for the poorest

Well yes - rent is driven up by more people being around, and groceries by wages and fuel going up. As for fast food jobs - if a fast food job can get you a place to live by yourself that's amazing, but surely that's going to be harder and harder to find as demand stays high and the number of 2-income families, who can just out-bid you easily, also is high.

[antifa]

They've got more to worry from investors making all cash offers than 2-income families.

[robertlagrant]

That's coming from demand being so high.