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Comment by capisce | Hacker News Reader

Let's not stop there: http://www.neweconomics.org/publications/entry/21-hours

http://groups.csail.mit.edu/mac/users/rauch/worktime/

"An average worker needs to work a mere 11 hours per week to produce as much as one working 40 hours per week in 1950. (The data here is from the US, but productivity increases in Europe and Japan have been of the same magnitude.) The conclusion is inescapable: if productivity means anything at all, a worker should be able to earn the same standard of living as a 1950 worker in only 11 hours per week. "

Cool. How much does the average worker need to spend on health care to achieve the life expectancy of 1950? And how much to watch TVs of 1950s quality, play computer games equivalent to the pinball machines of 1950, etc.?

I am not endorsing our lust for consumption here, but "standard of living" needs some definition.

The issue he skips is that most people won't accept a 1950s lifestyle.

Far too many people live beyond their retirement means, if not just their week to week means. Image is everything to many people, the appearance of having wealth has become more important than a comfortable retirement, let alone a sustainable lifestyle. The number of people I work with in their 30s, 40s, and even 50s, with no real retirement planned is frightening.

That's not relevant to the fact that actual wages have gone down.

It's very relevant to the question of whether real wages actually did go down. If people live better than they did in 1950, and they do it on 2013 wages, then real wages did not actually go down.

There must instead be some mistake in the way real wages are calculated. (Hint: there are many, mostly in the computation of CPI.)

Notionally, this is already accounted for in the CPI, which, where the exact same product is no longer available, uses a similar currently available product and applies a "hedonic quality adjustment" to account for the qualitative changes.

http://www.bls.gov/cpi/cpihqaqanda.htm

Very importantly, CPI does not hedonically adjust health care or housing (two of the major drivers of inflation). The main categories that are hedonically adjusted are clothing and appliances.

http://www.bls.gov/cpi/cpihqaitem.htm

This is a major omission. To see how glaring this is, consider a back injury I suffered in 2012. I paid a pretty penny for surgery/scans which didn't exist in 1980 [1], and it was worth every penny and more. If the injury happened in 1962 I'd be disabled in 1963, and probably 1973. In 2013 I deadlifted 1.5x bodyweight. Without a hedonic adjustment this looks like inflation.

[1] It was actually pretty cheap since I was in India, but in the US it would have cost a lot.

http://online.wsj.com/article/SB1000142405274870489360457619...

The former Goldman Sachs chief economist gave a speech explaining the economy's progress and the Fed's successes, but come question time the main thing the crowd wanted to know was why they're paying so much more for food and gas. Keep in mind the Fed doesn't think food and gas prices matter to its policy calculations because they aren't part of "core" inflation.

So Mr. Dudley tried to explain that other prices are falling. "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."

Reuters reports that this "prompted guffaws and widespread murmuring from the audience," with someone quipping, "I can't eat an iPad." Another attendee asked, "When was the last time, sir, that you went grocery shopping?"

Food and gas make inflation volatile, but they don't much change the long term trend. Inflation in food and gas is actually lower than inflation in core CPI.

http://research.stlouisfed.org/fred2/series/CPIAUCSL http://research.stlouisfed.org/fred2/series/CPILFESL

http://www.newyorkfed.org/research/staff_reports/sr236.pdf

The big issues with CPI over the long term are the lack of hedonic adjustments in medical care and the change in the composition of the basket of goods being measured. These tend to bias CPI up, not down.

Well... "the median male income is now worse on a gross, inflation adjusted basis, than he was in... 1968. While back then, the median income of male workers was $32,844, it has since declined to $32,137 as of 2010.

Source: Table P-5 from http://www.census.gov/hhes/www/income/data/historical/people...

What good or service do you believe the median male has less of today than he had in 1968?

If your claim is correct, it shouldn't be hard to answer this question.

Job security, and a defined-benefit pension. That's worth a lot.

Would you drive a 1950's car, live in a house half the normal size, and give up all medical treatments invented since 1950 to get those things?

Back in the 1950's you has cars much less reliable than today, but you did not have bedroom communities two hours away from your workplace. You had smaller houses without air conditioning, but you also had smaller energy bills.

What I'm saying is that the technological advances have a way of changing the playing field, in such a way that they gains are much smaller than one would have thought.

Homemaking services.

You sure you want the same standard of living as 1950? No A/C, high-maintenance car (1, if any), fast-perishing food, data bandwidth orders of magnitude of orders of magnitude (not a typo) lower, half the living space, health care by which I'd be dead four times over by now, 45RPM records, etc.

Methinks you're getting your 4x standard of living's worth.

There's only a connection between the two if it's our 4x productivity plus same/increased effort that's actually giving us these things.

Personally, though, I might well take give up a car & A/C, live on fresher/less processed food, sleep in a smaller space but spend more time outside, spend more time with paper and less with electronics, and listen to/play live music vs digital recordings. Particularly if I was only working 11 hours a week.

You're assuming costs have remained the same for goods and services consumers demand. The cost of electricity is plummeting due to renewables, digital services and IP have zero marginal cost, Moore's Law, etc. People are eschewing cars, and in the next 5-10 years cars will be a service, not something you own.

The issue is there are still inelastic demand services that need their costs driven down drastically: Education and healthcare. I'd also suggest petroleum being displaced for transportation as well. Reducing the cost of these services reduces the amount of work needed to consume said services.

I argue an 11-15 hour work week is still possible as technology and innovation continue to move forward.

People aren't eschewing cars, outside of a few specific urban areas. SOME people in NYC, SanFran, and a few other cities are eschewing cars. This has always been the case. Renting cars is now just getting a bit easier. But most people in the developed world will continue to buy cars and own them.

http://www.calculatedriskblog.com/2013/08/dot-vehicle-miles-...

"As we've discussed, gasoline prices are just part of the story. The lack of growth in miles driven over the last 5+ years is probably also due to the lingering effects of the great recession (high unemployment rate and lack of wage growth), the aging of the overall population (over 55 drivers drive fewer miles) and changing driving habits of young drivers."

http://www.fhwa.dot.gov/policyinformation/nhts.cfm

Why Young People Are Driving Less and What It Means for Transportation Policy http://www.uspirg.org/reports/usp/transportation-and-new-gen...

The Great Recession will hopefully stop eventually, and then you can expect to see the unemployed 18-35 year-olds get jobs, buy cars (among other things), and drive again.

It won't end, and we don't see people driving in a big way again.

Data has shown that between 55+ retiring and younger potential drivers preferring not to drive, vehicle sales have plateaued. If self-driving cars take off in the next ~5 years, that'll be the death of a large part of the auto industry.

I'm optimistic. Economies go up and down, sometimes in long cycles, but I think this is bound to turn for the better eventually. I'm doing fine financially and have a good job even in this economy, software development still seeming to be a growing field, but I have some friends with other degrees (or no degrees) in a lot worse shape than me. So I hope for them my optimism isn't wrong.

You are missing the point: it's not about recession (which is behind us by now), but about change in habbits/needs. People rely more on digital communications and less on driving.

End result - car sales stagnate.

Yes, I'd very happily take the 1950s standard of living along with a stable 11 hour workweek. Where do I sign up?

If you want it, you can make it happen. You're basically asking for a part-time contract programming gig (or whatever your specialty equates to); I've done those at times for tidy sums. Smaller '50s-ish homes exist and are quite affordable; you could also save up the cash and build your own (I just found a nice half-acre rural lot in driving distance of work for $1700, and a workable 2-story small-frame "house" is available from Home Depot for about $8000 (you add amenities over time)). Cars can be had cheap, downgrade to a cheap prepaid dumphone no-data plan, rediscover frugal living, and you'll work it out. I very nearly did the same, until I got married and she had pricier standards.

And once Obamacare kicks in, there might suddenly be a lot of companies looking for "part time" workers interested in 1950s-level health care plans (to wit: none). You asked at just the right time!

>there might suddenly be a lot of companies looking for "part time" workers interested in 1950s-level health care plans (to wit: none)

You are aware that employer-sponsored plans came about in the 40's as a way to get around wage freezes (wage freezes enacted because of World War 2), correct?

Actually I'm all for 45RPM vinyls.

If working fewer hours is better and increasing minimum wage is better, I don't see why we take stupid baby-steps? Why don't we just have a five hour work-week with a minimum of $500/hr?

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