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PaperclipPerfector  1yr ago (text post)   28480 thread views

Culture War Roundup for the week of September 11, 2023

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overinflated wages

Do you even hear yourself? How long has real wage growth been stagnant in the United States? Workers need to get paid more, even if it affects the shareholders or C-suite compensation packages.

How long has real wage growth been stagnant in the United States?

Median weekly earnings hit a nadir of 345 "1982-1984" dollars in Q4 2017, and increased to 362 such dollars in Q4 2019, their highest value to date by far (previous peak was 354 in Q2 2017). The pandemic made everything go screwy and it hit 393 in Q2 2020, it's now 365.

It's not stagnant; there was a stagnant period from 1999 to 2014, though I note these numbers do not take into account total compensation, so likely what was happening is health care was eating it all.

Thats all heavily dependent on which inflation rate you use to do the calcs.

It's the consumer price index. Pulling out some other shadow inflation figure is special pleading.

No it’s standard practice and the whole Index itself is difficult to measure. We don’t buy the same goods one year to the next.

No it’s standard practice and the whole Index itself is difficult to measure.

Yes, which is why we have a whole chunk of the government in the Bureau of Labor Statistics to do that measurement.

Using the Bureau of Economic Analysis's Personal Consumption Expenditures Price Index instead makes wage growth look higher. Using the GDP deflator, even higher until COVID.

https://fred.stlouisfed.org/graph/?g=18Xgk

Pulling out some random other inflation figure is special pleading.

I never claimed to just pull any number. I didn’t see a source in your first comment so I don’t even know where you are pulling data from or which inflation number you are using.

When automakers can literally cross the border into Mexico and get the same quality work for less than a third of the cost, the auto worker is overpaid.

Or the other auto-worker is underpaid....

Compensation in the US has more or less steadily grown since it started being measured in the 50s.

In pessimist/doomer spaces that want to make the economy seem worse than it is, e.g. Reddit, you frequently see charts that show otherwise. This is pretty much always due to dishonest stats, e.g:

  • Using "household income" instead of per-capita, which is confounded with shrinking household sizes.

  • Using inflators like CPI that doesn't take substitution effects into account (instead of e.g. PCE) and thus overstate inflation a lot if compared over a long period of time.

  • Not counting transfer payments.

  • Counting the decline in hours worked as lowered wages, and not as people choosing to work less when they don't need to.

  • Just completely making shit up, like this tweet that made the rounds a few days ago where real household income is compared to nominal rent prices.

That figure doesn’t account for the four year degree requirement, the grad school requirement for a lot positions, the debt of these two, or the requirement to have a smart phone and laptop, right?

Does the cost of laptops and smart phone really factor in to these figures meaningfully?

Maybe, why not? The average price of a mobile plan is 144 monthly, so 1.7k yearly, so 3% of the median salary.

Is that per person or per plan? My mobile plan costs more than that, but it has 5 people on it.

"Real Hourly Compensation for All Workers" does not attempt to capture every possible thing in society that affects peoples finances, no.

(Though increases in cost of education will be reflected in the inflation, and as such adjusted for. Also the cost of the minimum viable laptop and smartphone required for getting a job is comparatively very low, and people get them anyway even if they weren't required – even the homeless have phones!)

A mandatory four year period of large debt and fewer working hours is a serious cost on the median citizen and I’m skeptical this is actually conveyed in the inflation metric. Because you can’t just take “tuition increased by this amount”, you also have to measure the fact that it’s required for more workers who may otherwise have forgone it completely

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