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Comment by rictic | Hacker News Reader

Inflation adjusted incomes are up in the US across the board. The affordability problem is largely the price of housing because it's illegal to build.

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Incomes are up, but the expenses are up as well, especially with the upcoming changes in healthcare for people on the ACA.

Also any comparison of wage growth vs corporate profit growth over the last 30 years shows that wages have not kept pace with the increase in productivity.

So incomes are only just barely keeping up, when they should be booming.

How can inflation adjusted income be up and there still be an affordability crisis?

Inflation also corrodes your savings and investments.

The price of housing can rise even faster than incomes.

Housing is only a part of the basket used to measure inflation. Housing's price rose faster than the weighted basket average, some other goods and services rose slower or even fell.

Housing, schooling, healthcare, daycare, food.

Samsung TV purchasing power has skyrocketed, though, so there's that.

Accommodation costs are the first part of any sensible measure of inflation. If you're not factoring in housing then you're fudging the figures.

Many people don’t see housing inflation - if you bought a house in 2020 and house prices were up 80% since then it doesn’t affect your housing costs, especially in the US where mortgage rates are fixed for length of term even if interest rates sky rocket.

Yes? Who says otherwise?

As long as accommodation isn't 100% of your basket of goods and services you use to measure inflation, accommodation can rise in price faster (or slower) than the basket. This ain't exactly rocket science.

If the mandatory basket item expense raises, it should also become a larger portion of basket, as the basket is supposed to measure the cost of living. So either CPI is not properly measuring the cost of living, or there isn't an affordability crisis.

You cannot have rising inflation adjusted wages and worse spending power, unless the inflation is not being measured meaningfully.

Housing is not part of the inflation calculation. There IS a housing inflation crisis.

Household income is more than just wages. Household income can go up while wages remain stagnant or shrinking because other pieces of the pie are increasing (e.g. work benefits, investments, money from the government). https://fredblog.stlouisfed.org/2016/09/sources-of-household...

Yet more and more people are struggling to afford even basic necessities and one can only dream of the luxury of the 50's when a single working class person was able to pay and cover for housing, car, family and even have enough for leisure. Where has all the economic surplus gone? Right...to the bourgeois, the capital owning class that exceedingly extract more and more of the wealth generated by the society.

because the developing world is producing a lot of things except the housing.

They also don't produce haircuts.

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