Since 2016, real (inflation-adjusted) wages have risen quickly for people in the bottom quartile, while for upper-income workers they've been stagnant. Obviously, most people on HN are still better off than manual laborers, but the gap has narrowed substantially (a big reversal from 1995-2015) and that's a good thing.
Wages are tough in this segment because many households are dependent on external non-income benefits. Particularly Medicaid and particularly for children.
So if your $16/hr job pops by 30%, the net impact on the household is much lower in many cases. For teen workers, it’s beer money. For single moms, it’s a net loss as costs for daycare and healthcare have increased 50%.
All of this stuff is relative. I’m a tech exec in a large organization, and essentially live the same lifestyle as my parents, who were in “lower end” jobs relatively speaking in the 80s when I was little.
This seems weird to me. What is your savings rate versus theirs? I say this because on the surface, the same feels true for me, but on closer inspection I spend money like water in ways they had tightly controlled. And yet, I have a higher savings rate than they did.
The biggest difference is housing and healthcare. My healthcare expense is equivalent to their mortgage. My dad family healthcare coverage was $0 until I was in high school. The total cost of my, excellent health insurance is about $35k, which is 90% of the salary of my first professional job in 1999!
Our policy with respect to healthcare is essentially a regressive tax on the working public. Rich people have a limited cost exposure, poor people get limited access to poor care, and everyone else gets increasingly expensive, lower quality care.
I don't know if it's being done as a joke or what, but this is the exact sort of myopic focus on a single economic variable that is being criticized as failing to capture economic reality.
Yeah, we should be comparing spending power as a very slight upgrade to the metric of overall compensation.
And I'm not even sure what this graph is supposed to be showing. The biggest difference is when he 1st quartile stagnates while the 4th quartile loses 4-5%. 95% of $200,000 is still a lot more than even a 100% increase in salary for $40,000. my most generous, lazy interpretation of this chart shows a whopping $15% increase in wages for the first quartile.
This is a bad interpretation of events, and an intentional ignoring of wealth gains.
> Since 2016, real (inflation-adjusted) wages have risen quickly for people in the bottom quartile
This "quick" wage growth, as you point out with your image, is on the order of 1 or 2% for the past few years, and was massacred by recent inflation i.e. if raising the minimum wage raised your standard of living, you've almost exactly kept up with inflation.
Meanwhile, wealth amongst people who hold investments, a group that often includes upper-income workers, has massively increased during that time. The S&P has had a 130% adjusted return since 2016. The share of wealth held by the top 10% is as high or higher than it was in 2016.
The global inflation is exactly the kind of insufficient metric the parent is talking about. What about salaries compared to necessities like food and shelter? Global inflation is only meaningful for upper income workers that have significant disposable income.
Way to completely miss the anecdotal point about rural cultural decay. You can point to a chart showing rising wage growth all day, but if it's happening at the expense of long-lived communities being hollowed out, you're effectively celebrating peoples' destitution.
It is incredible how Internet armchair technocrats will attempt to reduce human existence to a few equations and wonder why broader populations despise the Ivory Tower.
I'm sure those rural workers watching their towns disintegrate around them will be happy to know they are at least making a extra couple bucks an hour.
And all of it gets burnt up as soon as they break out of the work-eat-sleep routine and get confronted with the expenses of going on vacation or just going fishing.
The whole point of this discussion is that our metrics are not properly measuring things. The reported inflation number is a joke. See: anything in life that matters like
- a house
- a car
- an education
- health care
- raising a kid
- basically any life-milestone
but TVs and electronic toys have never been cheaper so it's all okay! Hedonic adjustment!
That graph shows beginning of a recovery from large wage decreased of the last few years. Equality is nice, but the main story is that everyone is doing worse.
https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_pr...