Hacker News Reader

Comment by samtp | Hacker News Reader

> Yet our citizens now live an astonishing six times better than when I was born.

By what metric? From everything I've read the income disparity in America has increased steadily since the 1950s. Are we 6x happier? 6x Healthier? 6x More free?

View on HN

Buffett was born in 1930. The US GDP per capita was about $7,200 then, today it is about $42,000 (both values in 2005 dollars from http://www.measuringworth.com/usgdp/).

Per capita GDP is frequently used to measure standard of living, in addition to per capita income, ref http://eh.net/encyclopedia/article/steckel.standard.living.u... and http://en.wikipedia.org/wiki/Standard_of_living_in_the_Unite...

Are they using the same methods for GDP in both time periods? I doubt it.

Per capita is not a great metric, especially since GDP is not distributed per capita across the country, and there are many ways of measuring GDP.

Even bad metrics can be better than nothing, and they can also be worse than nothing, but if you're going to quantify it, GDP is probably the only way to go. Based on my limited knowledge of 1930, I'd still much rather be living in 2011. Maybe not 6x, but at least 1.5x more. Back then they didn't even have Turing machines down on paper, much less actual physical hardware...

There's more than one way to use GDP. I think that, for describing standard of living, median GDP would be better than average GDP (= GDP per capita).

Averages are sensitive to outlier performance. This is important when the distribution follows a power law, as in the case of wealth distribution.

I'd be much more interested in seeing the differences in median wealth (for the population as a whole, and broken down by race/ethnicity), adjusted for inflation.

The term "wealth" refers to "private assets (such as savings and property) minus debts. It is what you own minus what you owe. In other words, it is net assets. Income, on the other hand, refers to wages, salary, interest that you earn, Social Security benefits, etc."

"In the 22 years between 1976 and 1998, the share of the nation's private wealth held by the top 1% nearly doubled, going from 22% to 38%. During those two decades, the size of the overall "wealth pie" grew, but the ownership of that wealth is now more concentrated than at any time since the 1920s."

Source: http://www.osjspm.org/101_wealth.aspx#6

The stats above are kind of dated, but I'd be willing to bet the disparity in wealth between the richest and poorest in America is even more pronounced now.

Here is a measure of the increase of "U.S. median family net worth by percentile of net worth" from 1989 to 2007:

http://upload.wikimedia.org/wikipedia/commons/e/e2/MedianNet...

From:

http://en.wikipedia.org/wiki/Wealth_in_the_United_States

Wealth distribution isn't the same as wealth though.

I'm not sure what you're getting at by pointing out this obvious difference. Could you elaborate?

You said

"I'd be much more interested in seeing the differences in median wealth (for the population as a whole, and broken down by race/ethnicity), adjusted for inflation."

Which I agree with wholeheartedly.

But then to my disappointment, you posted information about wealth distribution rather than median wealth.

I got the impression you were saying that wealth distribution says something about median wealth. I don't think it does.

The wikipedia links were good though, so thanks.

Knowing a distribution, you know its median. Even if you just know the weight in a quantile (e.g. X% of wealth is in the hands of the top Y% of people), then you can upper bound the median wealth once you know per-capita wealth. And if you're willing to make some assumption about the general shape of the distribution, knowing it tells you even more.

Your original comment is about relative wealth. Therefore, I think his point is that your original comment is irrelevant in the context of a 6x increase in wealth.

You honestly have to ask this question? In the 1950s a significant percentage of our population was without civil rights. Beyond that:

Life expectancy at birth: 69.9 to 77.9 (we live longer)

Infant mortality: 26.0 to 6.7 (less of us are dead on arrival)

% of population over 25 with 4 yrs or more of college education: 7.7% to 29.5% (access to education has improved)

Estimated Hourly Wage PPP, 2009 USD: $16.87 to $25.31 (we are making more money)

Real labor productivity index (in 1960): 100 to 172.8 (we are more productive)

As overdue as it was, women and blacks being able to vote is not "6 times better".

60 years to 80 years life expectancy is not "6 times better".

26 to 7 infant mortality is not "6 times better".

8% to 30% college graduation rate is not "6 times better".

Estimated hourly wages have actually fallen drastically, when estimated apples to apples (i.e. adjusted for inflation).

Labor productivity is mostly based on advances in technology, and in any event, working harder is hardly the same as being "6 times better" off.

In other words, let's stay within the context of what is actually being argued. Plus, it's rude to open your argument with, You honestly have to ask this question? If you have something to say, you can say it without implying that @samtp is too dumb to see the obvious.

If you want to quibble about his use of the "6 times" figure, go ahead.

The fact remains that we live much better today than in 1930, when Buffett was born (during the Great Depression).

If you don't want to "quibble" about it the why do you keep posting? If you think this thread is immaterial, you are free to leave.

I bet the internet makes your life at least 6 times better than what it would have been in 1930.

For what its worth, jakarta's hourly wage number _does_ claim to be adjusted for inflation.

I'd love to see references from both of you on the hourly wage numbers.

Don't stop there...

Language and comprehension skills: Down 76%

Happiness index: Down 65%

Opinions: Up 435%

There's some double-counting here: life expectancy at birth includes infant mortality. (Taking your figures, 1.35 years of the 8-year life-expectancy difference comes from the infant-mortality difference.)

But does any of this equate to a 6x better life? This is extremely subjective, but I'd measure overall happiness, autonomy, and ability to participate in power as key ingredients for a better life. And going by those metrics, I seriously doubt that we are 6x better (or even 2x better).

All of the stats that you provided point to Americans being more productive over a longer period of time. People are becoming better at producing and consuming. However, by only looking at these numbers, you ignore what I feel makes us human. I don't think that the ultimate goal in a person's life is to add to their country's GDP. We are more than a cog in a machine. You can point to improvements centered around work, but what about enjoyment and free time? Surely a better life is one where you have more time to enjoy with family and friends, rather than being able to exceed your company's 3rd quarter sales projections.

And now you know why income disparity has nothing to do with increases in standard of living.

All of that. But also 6x grumpier, it seems.

Average US salary in today's dollars:

1930 - $ 250,000 2010 - $ 50,000

Add to that the declining purchasing power of the dollar, the growing income disparity and the thinning out of the middle and upper-middle class, etc, etc.

Average life expectancy in the US:

1930 - 60 yrs 2010 - 78 yrs

Clearly, Mr. Buffet's statement is PR rather than fact.

I don't understand your salary number. Do you mean that if you earned $250K in 1930, that is equivalent to $50K today? Isn't that good?

The line break disappeared when I posted. With the line break, it was:

Average US salary in today's dollars:

1930 - $ 250,000

2010 - $ 50,000

So, no, it's not good. When adjusted for inflation, the average American has about 5 times less purchasing power.

I understand now but you should have some sources to back that up!

Reply on news.ycombinator.com