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z5h

It seems that after inflation, nearly everyone earns more over time. Isn't that good?

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There has been almost no increase in median household income since 1970s.

- http://web.stanford.edu/class/polisci120a/immigration/Median...

- https://fred.stlouisfed.org/series/MEHOINUSA672N

- http://www.usinflationcalculator.com/

This depends on very closely with how precisely you account for inflation.

Accounting for inflation is not scientific. Its a social science. A median household can afford more of and better quality things today than the past, but some measures of inflation will not account for this correctly.

Thanks, I didn't realize this aspect of inflation. Although I'd imagine the straight forward measure is good enough when it is used for relative comparisons between top x% to bottom y%.

In capitalist societies money is power. What share of the total wealth pie you have matters because it dictates your influence and authority in your society. When individuals wield wealth equal to tens of millions of people, their influence - political and economical - is represented as such.

This is why in both theaters you see trends towards oligarchy - the will of the people has no demonstrable influence on the behavior of congress, whereas wealthy interests have correlation. The demands of the many (cheaper housing, accessible healthcare, strong transit infrastructure) are ignored for the wants of the few (real estate investment bubbles and stock buybacks) because the few have so much more influence than they did before in the form of their wealth.

It sounds good in general but the problem we're encountering is that in practice some things that are really very important just don't get cheaper fast enough to keep up. In particular, health care / rent / education costs are all growing faster than wages are increasing and coming to dominate the expenses of the median American.

Earns more relative to what? They earn more than in the past, but they earn less than they would have had growth been distributed the same way it was in 1980.

And this is the crux of the situation. Yes, everyone is better off, but humans still don't like feeling there is injustice.

Its like going to a lunch time business meeting and there is a slice of pizza waiting for everyone. Great! a free slice of pizza. Next week there is still a slice of pizza for everyone but the senior manager now gets a steak dinner. People naturally get upset and the reason is not just because someone got more than someone else. The food didn't come out of no where but was payed for by extra money the company gained through everyone working harder and smarter (productivity gains). And when everyone asks why they don't get something other than pizza they are told that yes the company did better but it was really only because the work this senior manager put in.

Now people are usually okey with not having exactly equal pay and benefits as long as they generally believe that the extra pay is justified because those higher up are working harder or have more valuable experience. I think when you get to the point that the CEO effectively says he is working 1000X harder/smarter than everyone else there is a problem.

And really maybe the CEO is 1000x smarter and works that much harder, but, at the end of the day, perceptions matter.

> The basic problem is that most families used to receive something approaching their fair share of economic growth, and they don’t anymore.

Yes it's good, but it's not good enough.

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