Median Male Worker Makes Less Now Than 43 Years Ago
oddline.blogspot.com
oddline.blogspot.com
The biggest flaw in the article seems to be the assumption that the inflation-adjusted income of the median worker should be increasing. Wages will basically track inflation, since the main thing we buy from one another is each others' labour. Meanwhile land gets more expensive but technology gets cheaper. It's pretty much a wash.
A ... textile job in Indonesia still pays the same as it did, roughly ( modulo Baumol Cost Disease stuff - increased admin cost ) in 1950, it's just that that $2.00 or $0.50 per hour isn't worth driving to in the high-cost US.
The longer term trend is also questionable starting around 1973, ala Tyler Cowan. Ah, good old economic numerology.
Productivity is measured in $GDP per man-hour, and is consequently skewed by the effects of capital. Giving someone better tools increases his productivity, but it doesn't mean that he's a better worker or deserves higher wages; the person who deserves the increased income is the guy who provided the tools.
Record number or record percent? It's an incredibly significant distinction.
Source: http://www.census.gov/newsroom/releases/archives/income_weal...
There's a graph showing both numbers at http://bottomline.msnbc.msn.com/_news/2011/09/13/7742437-pov...
I don't have a particular objection to that line as used for government program eligibility, but it's not valid to use it as an actual measure of "poverty", whatever that may be. 2011 poverty and 1959 poverty in the US are pretty much entirely incomparable no matter what definition you use.
I'm a particular fan of using census data to make this point. Consider the "American Housing Survey":
http://www.census.gov/hhes/www/housing/ahs/nationaldata.html
Americans below the poverty line in 2009 are more likely to have things like complete kitchens, complete plumbing, automobiles, air conditioning, and dishwashers than Americans as a whole in 1970. Put another way, if we used the living conditions of someone at the poverty line right now and used that to define the poverty line in 1970, over half of the 1970 population would be below the poverty line.
That's not to say all modern Americans are comfortable. There are still some in true poverty. It's just not very many. (It turns out I've been "in poverty" for most of my life; I just never noticed.)
My point is that the things you talk about occur because it's cheap. Can you find a house these days without complete plumbing? 15 years ago I helped a friend buy a used car for $600, which he could afford on US $11,000 per year as a graduate student.
Oddly enough, people with money don't a dishwasher or complete kitchen, because they can eat out. Money gives options.
In any case, you and the previous poster state that the definition of poverty used in the census is variable. The aforelinked definition is one of two definitions of poverty used by the US, specifically, this is the one used to determine who can participate in assistance programs. You can see that it's defined by the CPI, with no way to be flexible about it, unless a given State wants to raise it by at most 25%.
This is because the US definition is, contrary to with you both say, an absolute definition. Quoting from Wikipedia:
Since the 1960s, the United States Government has defined poverty in absolute terms. When the Johnson administration declared "war on poverty" in 1964, it chose an absolute measure. The "absolute poverty line" is the threshold below which families or individuals are considered to be lacking the resources to meet the basic needs for healthy living; having insufficient income to provide the food, shelter and clothing needed to preserve health.
This in turn is based on the CPI, and aside from a few minor changes "the U.S. government's approach to measuring poverty has remained static for the past forty years."
In other words, you and the previous poster are incorrect.
Neither of these are objective, static measures.
The CPI measures the cost of a "basket of goods" that includes "rent of primary residence". The above census data clearly shows that the characteristics of one's "primary residence" have changed significantly since 1970. "Basic needs for healthy living" in 1970 and "basic needs for healthy living" in 2011 are significantly different; it is inappropriate to treat them as equivalent.
Earlier this year, I helped a friend move out of a place that lacked complete plumbing as well as complete kitchen facilities (as detailed in AHS table 2.4). There are still people who live in those conditions -- just not as many of them. Which is really the point: the thread was touched off by the claim that more people are living "in poverty" today than in the past, but that's a misleading claim because what "poverty" means right now is different from what "poverty" meant then.
Checking with http://www.census.gov/hhes/www/income/data/historical/househ... I also see that the median income in inflation adjusted dollars went up about 9%. (Table H-1, "All Races")
I am very aware that these compare median incomes. I don't know what poor people would have paid for housing in 1970, nor now for that matter. My point is that just because the places are better doesn't mean that it's easier to afford, and it's the latter which is more relevant. Suppose you would rather pay less for a place without a full kitchen, but there are none on the market - what choice do you have?
The details of poverty has changed. It's now cheaper to get a pay-as-you-go mobile phone than it was in 1970 to get a land line when cell phones were a James Bond item. The fact that there are poor in the US, and that the word "poverty" has a real meaning in today's life, has not.
What "objective, static measures" would you say make someone not poor?
My point is simple: the details of poverty have changed (and will keep changing), and because of this, comparing "how many people were poor" to "how many people are poor" is not really a sensible comparison. 1959 poor and 2009 poor are different, not just in minor details, but in significant ways.
The poor in 2009 are, in many ways and overall, better off than the poor in 1959 or 1970. That doesn't make them "not poor", it just makes them "better off" on average, and therefore not directly numbers-to-numbers comparable.
Because if it would let us do that, we'd already have done it.
Your "absolute" terms are still relative, because you can't get around the fundamental and massive changes in technology in all forms across all of society.
Government definitions are suitable for government work, no sarcasm or reference to popular sayings intended. They are not suitable for philosophical debating; all the fact that legal poverty going up really means in the end is that we are in an economic downturn, not that anything (else!) fundamental has changed at the societal level. This isn't a special "poverty" problem, it's just another phrasing of the recession(/depression).
Your argument about "one true objective definition of poverty" is pointless. What you're arguing is that since we're materially better off than the Middle Ages, no one is poor anymore. You want to throw the word "poor" out the window, while I want to say that the word has real meaning, and that meaning is "lacking the resources to meet the basic needs for healthy living; having insufficient income to provide the food, shelter and clothing needed to preserve health."
Your disdain for the government is clear, but without justification since any statement you make can be rejected with an equally disdainful comment on its originator. Better would be to point out how most families of four, making under $22,350 a year really have no problems meeting those basic needs. Books like "Nickel And Dimed" suggest otherwise. I look forward to your large scale research which clearly refutes such anecdotal evidence.
No -- what he's arguing is that we're materially better off than the periods of time in which you and the article are trying to compare to. It's dishonest to make a comparison to some decades ago and then complain when others make comparison to those same time periods.
The word "poor" does have real meaning -- but its meaning is relative. 1959 poor and 2009 poor are not the same thing. The measures used to define poverty (and inflation) are not absolute, objective, or static, despite what wikipedia claims.
While someone who has to decide between food and rent money, despite having a plasma TV bought two years ago, before losing a job due to protracted illness, is poor.
There's a simple resolution to this - what do you define as poor? How many people in the US do you consider are poor? Are people now significantly less poor than they were in 1970, and how do you measure that?
Since you don't like the baseline of Wikipedia, I point you to the US Census Department at http://www.census.gov/hhes/povmeas/publications/orshansky.ht... (next two paragraphs)
Orshansky accurately described her poverty thresholds as a "relatively absolute" measure of poverty(60), inasmuch as they were developed from calculations that made use of the consumption patterns (at a particular point in time) of the U.S. population as a whole. (In the dichotomy between relative and absolute definitions of poverty, one of the essential characteristics of a purely "absolute" definition of poverty is that it is derived without any reference to the consumption patterns or income levels of the population as a whole.(61)) However, while Orshansky's poverty thresholds were not a purely absolute measure, they were also quite clearly not a purely relative measure, such as the 50-percent-of-median-income measure proposed by Britain's Peter Townsend in 1962 and (in the United States) by Victor Fuchs in 1965.(62)
The relativity is that the definitions assume that 1/3rd of income goes to food, which was the case in the 1950s. That is less now, while housing and transportation/energy costs are higher.
So okay, yes, there's some relativity in the definition, but it isn't by far a relative definition.
Likewise, it would be pointless to compare the percent of the US population who are "poor" to the percent of the Sudanese population who are "poor" because you're talking about such different characteristics.
I think the definition of "poor" you gave earlier is OK. It's just not an absolute definition, and you need an absolute definition if you want to compare numbers over time.
Therefore yes, it's possible to make meaningful comparisons of the numbers of people who are poor. It's possible to ask questions like: "Is poverty a temporary condition, or a permanent characteristic of a subpopulation?", and "Is it due to the inability of the culture to generate enough resources, or is it due maldistribution of those resources?"
It's not easy. But your view seems to be that the definition changes so quickly that a person in 1991 and the same person now can't judge if they were poorer now or then. Factors like "income security, economic stability and the predictability of one's continued means to meet basic needs all serve as absolute indicators of poverty", yet you insist that because more people have access to a full kitchen, running water, internet, penicillin, or whatever then it's simply not possible to make valid comparisons.
While I disagree, and am dumbfounded that you don't recognize those non-material, absolute factors as the essential characteristic of poverty.
My contention is that, over the timescales we're talking about, the CPI (or the definition of "basic needs") has shifted enough to invalidate the numbers-to-numbers comparison.
You can still make valid observations and meaningful statements about, for example, the persistence of poverty or distribution of resources over time. There's enough signal to make those sorts of comments. I just don't see any way to make meaningful statements about how poverty rose by 1.2% since 1959, when I can point to several substantial differences in conditions for those in poverty between then and now that encompass far more than 1.2%.
Quite simply, it's not a basic need. Someone living in a studio apartment in NYC with a kitchenette, making $80K a year and living there because it's got a great location, is not poor. Someone who can afford to eat out for every meal, and lives in a place with many food offerings, needs no kitchen.
To test your contention, is a family of four living in the US on less than $23,000 per year - that being roughly the CPI-based poverty level using methods relatively unchanged for 40 years - not a reasonable definition of being poor in the US?
If not, what is a reasonable value, and do you have a way to determine that value which is effective for more than a few years? (Since if not, it will be highly subject to political pressure.)
But it contributes directly to the definition, despite not explicitly being named. Because the definition is tied to CPI, which is tied to housing costs, which are more likely to include the cost of a full kitchen now than in the past especially for people near the bottom. I would argue that for someone in that position, having a full kitchen is better than not. Yet the CPI-based measure treats the cost of having a full kitchen as a negative (inflation), without treating the benefit of the full kitchen as a positive!
You keep misrepresenting my position (and asking questions that depend on your misrepresentation). I'm not saying that people now are not poor. I'm not saying the CPI-adjusted threshold is "wrong" for defining who is poor. What I'm saying is that people who are poor now and people who were poor in the past are not directly, numbers-to-numbers comparable. It's meaningless to say that 1.2% more people are poor now than then, because there are meaningful, relevant differences in conditions between now and then that account for far more than a 1.2% difference. The noise washes out the signal.
Hell, I saw a stat somewhere that there are now more women in medical school than men. That's insane considering that it was not just male dominated 50 years ago, it was considered just a male profession.
My intent is not to sound misogynistic here, just stating a fact. And when those who talk about returning to 1950s values (ahem, some Republicans) think of what that means.
edit: http://www.wolframalpha.com/input/?i=us+unemployment+rate+si...
I'm trying to think up a way to link those spikes in unemployment to notable events in the history of the women's rights movement, but it's not happening.
It seems to me that salaries are simply less flat than they used to be.
Modern government will be remembered as being completely oblivious of the wealth of those they governed, ironically in their own name.
Or maybe we'll be remembered as the stupidest people who ever lived.
Either way, keep this off HN. I come here to get away from reddit.
Also, that site looks suspiciously auto-generated; there is nothing to explain who is behind it nor what its theme and purpose are.
People will talk about the benefit of technology (the flatscreen TV argument) and how that builds quality of life but I think disposable income is the biggest factor in high quality of life.
In Texas, it's stuck at 1990 or 1998 prices, dependent on area.
EDIT: Remember that the CPI tries to compare apples to apples, which means N-square foot houses to ones of similar size. And IIRC the size of the average American's house has at least doubled since then.
- American media