And by "real wages" you mean "Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over". You chose a number that specifically factored out the negatives like dropping participation rate[1] and underemployment (couldn't find the isolated number for underemployment in 30 seconds of googling, so here's one that's tempered by including unemployment too)[2]. It also glosses over the heart of the problem by using median. If 38% of the population suddenly had their wages drop to $0, it wouldn't show up when looking at the median values.
I also don't see why you're citing the nominal federal minimum wage. The nominal value is totally irrelevant to the conversation. $1 is still nominally $1, but according to the link it is also now $0.51 in purchasing power.
> by "real wages" you mean "Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over"
Yes.
> You chose a number that specifically factored out the negatives like dropping participation rate[1] and underemployment
I chose a consistent dataset. One of many. (Dropping participation rate is affected by stuff like demographics in addition to underemployment.)
If you have a credible source that shows declining real wages since 2000, I'd love to see it.
> don't see why you're citing the nominal federal minimum wage. The nominal value is totally irrelevant to the conversation. $1 is still nominally $1, but according to the link it is also now $0.51 in purchasing power
If $1 is 51¢ today, then $1.40 is 71¢ today. Rising nominal wages is how real wage gains are generated.
>If you have a credible source that shows declining real wages since 2000, I'd love to see it.
My original comment was about growing inequality and my second comment was describing why the metric you cited and median real wages in general don't address that issue. So no, I will not be looking for a better real wages metric, because it is not the appropriate measure to capture inequality. You can find plenty of numbers and charts on that problem here[1].
This is legitimately one of the strangest responses I have ever gotten on HN. You brought real wages into the conversation. My complaints weren't a non sequitur, they were a direct response to you. Now you're criticizing me for engaging with what you said? I guess I should have refused to engage from the start, but you know the proverb about the second best time to plant a tree, so I'm done with this conversation.
I guess I didn't see the inequality focus in your first comment. At least, not beyond the qualitative assets as cash and sundries vs assets as financial assets. I pointed out that real wages are up in response to your claim about people being paid dollars. (The dollars we're paid are worth more. They're individually less. But the total take home is more. Hence real wage.) I think it's a non sequitur to then turn around and say well I was actually arguing about inequality from the start.
Almost all BLS price indices, including CPI, include housing. (CPI measures the “rent of primary residence, owners' equivalent rent, utilities, bedroom furniture” [1].)
That said, this is the second time I've come across this myth on HN in less than a week. Where did you hear that price indices don't track healthcare and housing costs?
The point isn't that CPI excludes healthcare and housing, CPI shelter sub-index https://fred.stlouisfed.org/series/CUSR0000SAH1 and the medical care sub-index https://fred.stlouisfed.org/series/CUSR0000SAM2 have grown ~500% and ~770% respectively in the same time frame. The _overall_ CPI they are blended into grew ~300%, which means real wages are deflated. So if personal spending is weighted towards healthcare and housing (anyone who rents or pays a mortgage below a certain income) then your purchasing power is declining faster than the real wage would suggest.
EDIT: saying real wages is deflated is ambiguous, the headline CPI understates the effective inflation experienced by people whose spending consumption is weighted towards housing and healthcare. So the "real wage" is inflated relative to the lived experience of those people.
> have grown ~500% and ~770% respectively in the same time frame. The _overall_ CPI they are blended into grew ~300%, which means real wages are deflated
If you spend a third of your income on housing and 8% on healthcare [1], then those components–assuming your 5x and 7.7x multiples–will raise your cost of living by 2.25x. That leaves 1.75x for the other components (to get to the overall 3x). That sounds reasonable as a median estimate.
> if personal spending is weighted towards healthcare and housing (anyone who rents or pays a mortgage below a certain income) then your purchasing power is declining faster than the real wage would suggest
Sure. If you spend a lot on imported dates, your purchasing power will currently be declining faster than the median American's. This is a problem. But it's almost by definition not one that can be widespread.
> the "real wage" is inflated relative to the lived experience of those people
Well, yes. There are regional CPIs and income-indexed CPIs and all manners of privately-calculated costs of living. Paying attention to lived experiences or whatever is important, especially in politics. But it's no substitute for broad measures when conducting a national economy.
> Well, yes. There are regional CPIs and income-indexed CPIs and all manners of privately-calculated costs of living.
Great. So we agree, you are just dismissing the distributional analysis and equating fungible goods with inelastic ones. You can't substitute away from something like region-locked housing supply so those folks face higher effective inflation (BLS R-CPI-I).[1]
> you are just dismissing the distributional analysis and equating fungible goods with inelastic ones
No, I'm not. You're the one moving goalposts.
The thread started by someone claiming, wrongly, that housing and healthcare aren't included in CPI. (A common myth.) I showed that was wrong. You said it's underweighted. I pushed back. You're now saying it's underweighted for some people, which, like, is how distributions work.
Variance doesn't make a central tendency meaningless. And the truth is for most Americans, real wages are up. Lived experience and all. It's painfully not for a section of Americans in housing markets locked by policy from expansion or in bad health and luck. That's unfortunate and deserves attention. But it doesn't negate the whole.
> You can't substitute away from something like region-locked housing supply so those folks face higher effective inflation
Straw man. Nobody claimed universality.
If we were having a discussion about the Midwest, I'd quote different numbers and reach a different conclusion. That's how scoping works. Americans, as a whole, have experienced real wage growth since 2000. That doesn't mean literally every single American has. And it doesn't mean that people outside America have.
I also don't see why you're citing the nominal federal minimum wage. The nominal value is totally irrelevant to the conversation. $1 is still nominally $1, but according to the link it is also now $0.51 in purchasing power.
[1] - https://fred.stlouisfed.org/series/CIVPART/
[2] - https://fred.stlouisfed.org/series/u6rate