It takes now 53 weeks salary to earn same as 30 weeks in 1985

CEO's wages are "unfair", sure, but not really the solution or cause of any problem.

“I propose the following Cost-of-Thriving Index (COTI): the number of weeks of the median male wage required to pay for rent on a three-bedroom house at the 40th percentile of a local market’s prices, a family health insurance premium [without employer subsidy], a semester of public college, and the operation of a vehicle.”

“To assign an annual cost of college to a family whose tuition payments will be concentrated in a few years, the COTI uses the federal National Center for Education Statistics esti­mate for half of one year’s tuition, fees, room, and board at a four-year public institution. Two children pursuing four-year degrees would require a combined sixteen semesters of college, so a household preparing for those costs would need to save roughly one semes­ter’s worth of cost per year before the children reached college-going age.”

”In 1985, the COTI stood at 30 [weeks] — the median male worker needed thirty weeks of income to afford a house, a car, health care, and education. By 2018, the COTI had increased to 53 [weeks] — a full-time job was insufficient to afford these items, let alone the others that a family needs. A generation ago, the worker could be confident in his ability to provide his family not only with the basics of food, clothing, and shelter, but also with the middle-class essentials of a house, a car, health care, and education. Now he cannot.“

There is definitely something to his argument. In the past in a majority of families, one person could work and provide for a family. At present in a majority I think both parents must work to be able to cover necessities in New Zealand. Many more hours work just to “live”.

Just as we consider TV's to have dropped 97 percent in cost and use this in our inflation estimates. I remember seeing similar analysis that was done on US manufacturing output that showed that productivity boom of computers was hiding an enormous loss in US manufacturing jobs in official US metrics.

I feel like some people are starting to wake up to this. Its just so hard for these kind of official metrics to change when those in charge have every incentive to insist the US economy is doing great and just keeps getting better.

I sort of like how the twitter series summarizes the content, but it could have been done as a tl;dr style intro in the article itself.

$1000 in 1985 dollars buys $2300 worth of consumer goods in 2020. But you'd need $3,110 2020 dollars to buy the basics you could get for $1000 in 1985.

https://www.vox.com/policy-and-politics/2019/1/23/18183091/t...

The basket of goods may include the price of gasoline, but does not include the cost of car insurance, car tabs, toll roads, or a parking space.

The basket of goods may include the cost of an X-Ray, which doubled in 20 years, but does not the cost of buying a health insurance plan (Which quintupled in 20 years).

In this way, the basket of goods is an accurate, but completely misleading metric for inflation.

I don't care how much an X-ray costs, I care how much health insurance costs. I don't care how much buying a new car costs, I care about the total cost of ownership of a car. I don't care about how much a 3-bedroom house in the Mid-west costs, I care about how much I pay my landlord for a tiny apartment in a coastal economic center. I don't care about how much the tuition-only part of my degree costs, I care about the total cost of going to college, which includes unresellable textbooks, mandatory housing, mandatory meal plans, and student fees that fund a new stadium. I don't care about how much an analog land-line phone costs (About 29 bucks, lasts you for life), because everyone I interact with expects me to have a $300 cellphone that breaks every 4 years.

But if you only look at a basket of goods which is based on the cost of an X-ray, a bottle of aspirin, a monthly payment on a new car, rent for a house on the outskirts of JoblessTown, Nowhere, the cost of a single credit-hour of college, and the ammortized cost of an analog telephone, you get a fantastic metric.

Equally, whilst comparing money and inflation etc, you also need to factor in the increase in `standards` and by that, things like TV, phones, transport.... and compare to the past period. Heck, give it a few years and if you don't own a 4k TV, fiber internet and a 5G smartphone - you will be classed as living in poverty in the UK.

Many things have become cheaper over time, which has also seen social patterns change. Less pubs and pub usage, though offset that with restaurant usage and you see how in some ways, it is hard to compare A to B, when their makeup is different that the aspect you can compare, become blurred in interpretation. Thus whilst you could say things like the headline, the nuances become much harder the further you compare.

I get that the statistics show billionaires owning the majority of the wealth while the common-person in America makes $30k/yr but... there are plenty of Americans doing a-ok too. Who is really to blame?

Take a trip down to South Florida. You'll see a lot of Bentley, Rolls-Royce, Lamborghini, Ferrari. Lots of high fashion and packed restaurants. Workers are getting left behind, sure. But some workers are making it too.

Especially those on HackerNews in IT who are fiscally savvy, packing away six-figure salaries responsibly.

I'd gladly sacrifice a smart phone and streaming TV to live in a large house with 3 kids on a single working class income like my father did, but the $200 phone and and $10 netflix wouldn't even cover a weeks rent.

Its only in a few well insulated big cities that the true effects of globalization are kept far enough away to not be immediately obvious.

For starters, you don't mean 1776. You mean one of the years from 1787-1789 when the Constitution was written and first used to instantiate our Federal Government. You certainly don't mean 1776 because the attempt to create the government in that year, the Articles of Confederation, was not at all the current government, and it barely lasted a decade, depending on how one measures it.

Opening a hospital, or any kind of medical practice, is generally regulated. In particular, regulation is done by a dedicated guild of medical professionals. Similar regulation covers legal advice, with bar associations qualifying legal advisors. In both cases, there is a monopoly on service providers. Two observations are important here. First, despite the monopoly, alternative service providers exist in the marketplace; quacks, fly-by-night veterinarians, alternative medicines, homebrew pharmacology, WebMD, etc.; or for law, anything from a smart friend to r/legaladvice. Second, only one of these practices seems to have had a cost disease. Perhaps the cost disease is due to something else! In particular, perhaps it is due to the 1973 HMO Act. You are right to be irritated at the government, but wrong to focus your ire entirely there. HMOs are to blame, too; in fact, they are mostly to blame.

Exercise for you: Rerun the previous paragraph's logic with mail and USPS, and double-check that it still holds.

I don't know where you live, but around where I live, it's legal to build a building, but not inside city limits or on protected wetlands. If you have title to the dirt below, then you can build things above. You might want to consult with local authorities depending on exactly what you're building, but you can generally build it. (Go ahead, I dare you to rattle off all the things that can't be built.)

Just like how banks can and do compete with Freddie and Fannie for securing loans to homeowners, there are plenty of private sources for student loans. Perhaps it is predatory cruel for the government to issue student loans; perhaps student loans are predatory and cruel in general, like payday loans or title loans, in which case we should outlaw them entirely.

It sounds like you might have studied economics. In that case, surely you don't believe in the Efficient Market Hypothesis? Markets are clearly inefficient and there's good theoretical reasons to believe that it takes exponential time for an honestly-run market to find even one Nash equilibrium.

Finally, who cares about economics? You ought to study history. In particular, remember Enron? [0] This is the sort of thing that makes your position look like that of a stupid libertarian standing in the water with his waders and wondering why there's no fish in the river for him.

[0] https://en.wikipedia.org/wiki/California_electricity_crisis

Please consider omitting this self-fulfilling prophecy that implies you are some kind of underdog.

"But society has stuck you with all this extra shit!" is not a good, moral, or acceptable response to "I am less able to pay my bills."

> After being bombarded with questions about food inflation, [The Federal Reserve's] Dudley attempted to reassure his audience by putting rising commodity prices into a broader economic context — but that only made matters worse.

> “When was the last time, sir, that you went grocery shopping?” one audience member asked.

> “Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful,” he said.”You have to look at the prices of all things.”

> This prompted guffaws and widespread murmuring from the audience, with one audience member calling the comment “tone deaf.”

> “I can’t eat an iPad,” another said.

But that's besides the point. A $200 smartphone doesn't balance out food and housing prices.

> one side of the story

Fu that sh.

He explicitly says that right before? "4/ For example, our inflation-adjusted data say car prices have not increased since the mid-1990s."

I believe his argument is more around how we're calculating inflation, i.e. that prices have actually gone up more than economists claim through inflation. Looking at inflation adjusted numbers in the fifth thread would lead to circular reasoning and is besides his point. That said I am not great at dissecting these kinds of twitter threads and may be misinterpreting too; I agree that the way he is arguing it is confusing.

It does look like transportation takes up a similar ratio of earned income as it did before, however, if you look at PCE or CPI, cars have become _less expensive_, when in fact, they are no less expensive.

The 1996 Grand Caravan is not legal to sell new anymore. Many new costly features are now mandatory, in the name of security and environmental protection etc.

This is fine for the comfortable Ivy League class that controls these things, but for poorer segments, it means they have to pay for a much more advanced car than they'd pick if given more choices.

> "...it's actually extremely hard to figure out how to precisely measure changes in standard of living over time."

indeed, those kinds of increases are of "questionable utility", and thus not relevant to the standard of living discussion.

rather than the fed's definition of inflation, it's important to look at the basket of essential goods (and more house and more cars ain't it) when we consider the economic tide for the majority of americans.

More income just increases consumption. People feel they need to "keep up with the Joneses". If everyone in your neighborhood is a two-income household, and yours is too, you're not going to spend like you're a one-income household.

If anything, the key chart in the thread might suggest the opposite: that people are actually better off, or at least basically the same. If we account for a wage gap and assume two-income households (heterosexual households... yes, this is all very hand-wavy), then those four categories of things "only" cost 26.5 weeks of a two-income salary. And if the people buying all this stuff are getting more than they would have (maybe not twice as much, but at least more) in 1985, then perhaps this is ok. The only thing that gives me pause is the increasing costs of healthcare, and perhaps college. I really don't think households are getting more for that money now than they were in 1985 (especially with healthcare costs, which look to have ballooned 7x or 8x in that time).

It is a shame that it's starting to feel mandatory for a married couple to both work in order to be "successful". Honestly, I think the rise of the two-income household has been a net negative for society... and I mean this in a gender-neutral way; it'd be so much better if both men and women could take long stretches (years) of time off work while their partner wins the bread.

I will note, as a sort of weak counterpoint to what you said: the bulk of the cost increases in that chart are college and healthcare, by far. Yes, the cost of transportation and housing have increased, but nowhere near to the same degree. You can (correctly) argue that people are buying more (and better) cars than they used to, and are buying more house than they used to, but the increases in college and healthcare costs easily dominate that chart.

(Also, how is the cost of food not being considered at all?!)

You are observing wet streets, and are postulating that they are the cause of rain.

That's only true for discretionary spending. The article's whole point is that the real cost of a family's non-discretionary spending (Healthcare, education, shelter, and transportation) have gone up, to the point where they are no longer affordable on a single income.

This is not an improvement. Like, maybe it's an improvement for gender equality or something, and there's both tangible and intangible benefits for women supporting themselves, and their families, but its not an improvement for human beings as a whole. We, as a society, are now working more, and getting fewer non-discretionary goods for our work.

It doesn't matter how much the cost of a long-distance phone call dropped, when my family's health insurance costs are $25,000/year.

> Adjusted for CPI, the median cost per square foot for housing only rose by 5% between 1990 and 2010

Minor nit, but it seems like poor form to take someone who's arguing against CPI, and then to use CPI-adjusted numbers in a counter-argument.

[0] https://news.ycombinator.com/item?id=22378311

People in 1985 BCE were consuming baskets of goods akin to us in 2020. The entire CPI metric is extremely sensitive to both the extremely narrow size of the basket and also to the relatively short period of time on which the metric has been measured.

Go buy a burger. Tell me it's not more expensive than it used to be. But ask the burger-flipper and he'll tell you that he has the same rule of thumb, 3x or 3.5x or 4x the cost of the raw ingredients, rounded up, as he did a decade ago or two decades ago. I have had slices of pizza at the same place as my father, at the same hole-in-the-wall pizzeria that he ate at when he was at university in the 70s. That same slice of pizza hasn't changed in quality, but it certainly costs quite a bit more than it used to. All that cost-disease theory can tell us is that we're paying the employees more.

Good work on your cherry-picking for housing numbers. After adjusting for the bubble, though, with a chart like [0], we see that home prices still climbed about 50%, by your own numbers from the Census, and that's just from the 90s.

You wanna know what hasn't gone up? Minimum wage [1]. We aren't putting cash into peoples' hands, and that is what is squeezing them the worst.

> The minimum wage would be $11 in 2016 if its real value had remained at the 1968 level.

Healthcare costs are driven by the existence of HMOs and their protected status under federal law. If you want healthcare costs to stop ballooning, undo the 1973 HMO Act; if you want healthcare to be affordable, get on Bernie's bus and support Medicare For All.

To hear your "story of the incredible consumer growth" one would think that you've never actually seen the crushing poverty that grips so many folks in the USA. We are not in a healthier economy than we were in the 80s, let alone the 60s.

[0] https://en.wikipedia.org/wiki/Home-ownership_in_the_United_S...

[1] https://en.wikipedia.org/wiki/Minimum_wage_in_the_United_Sta...

A C64 was $149 in 1985.