The wealthy are much better off though. If you looked at the wage increase of the top 1%, if has risen by $800,000 a year (https://www.commondreams.org/news/2019/12/09/staggering-new-data-shows-income-top-1-has-grown-100-times-faster-bottom-50-1970) since 1970.
So capitalism is working exactly the way it is supposed to. Exploiting the middle and lower classes for the rich. This is exactly the progress they want.
Important to note here the important difference between "mean", aka the average, and "median", the middle number in a set. Assuming Krueger intentionally used "median", the situation is actually worse than people realize.
The average can be affected by large outliers - like billionaires. IF the "average" American makes $50,000 a year, the median could actually be more like $30,000 (totally made up numbers, as an example).
In other words, the median is the more "accurate" number to use in these comparisons because the income of the extremely wealthy has less of an impact on the result.
There is an economic rule about this
Basically what it says is that new developments - like electricity, cars, computers - cause a temporary increase in demand for labor - and therefore higher wages.
As the technology becomes routine, optimization and automation remove the need for labor - demand for labor decreases and by the rule of the market wages go down.
This development is natural and has nothing to do with who's currently president, policies or anything like that. To quote from the link above:
Stephen Cullenberg stated that the TRPF (Tendency of the rate of profit to fall) "remains one of the most important and highly debated issues of all of economics" because it raises "the fundamental question of whether, as capitalism grows, this very process of growth will undermine its conditions of existence and thereby engender periodic or secular crises."
The only thing that guarantees that the population in the US can continue to live in the long-term is Universal Basic Income - which says that the state should distribute resources among the population even if the people don't work. Basically a form of state-backed social welfare. Without it, the issue will continue to get worse, until people will die on the streets by hunger and cold in masses. UBI is a necessity for the person and for peace.
Yeah, this kind of comparison really drives it home. The inflation figures, while not cooked in some grand conspiracy sense, really completely fail to capture the real price increases experienced by real people.
The limitation of CPI is that it is designed for one specific thing, but we end up using it for others. If you want to measure the value of a commodity over time, like a bushel of wheat or a barrel of oil, CPI is OK for that. A bushel of wheat or a barrel of oil now are pretty similar to ones in 1970. But most goods we purchase are not so directly comparable. The CPI calculation tries to compare like goods to like goods, and it applies adjustment factors to the price of goods that aren't constant through time. For example, the TV you can get in 2024 is far, far better than one you could get in 1970. In CPI terms, this means that the real cost of TVs has plummeted by orders of magnitude.
But it goes beyond electronics. Think of homes. People will wring their hands and decry Americans as greedy by citing the size of new homes today vs in 1970, as they have significantly increased. But it's not a matter of greed; you simply cannot buy a new 1200 ft^2 modest home in post places in the country today. They don't make them anymore. Zoning has so restricted housing construction that all new housing has to be luxury housing. Yes, if you actually could find a duplicate of some c. 1970 1200 ft^2 home built new today, it would likely be quite affordable. But in terms of both size and construction details, it's not legal to build homes like that anymore. But this won't show up in the inflation figure. They'll compare the 1200 ft^2 entry-level home in 1970 to whatever rare example of that they can find that is built today of someone building one of those in unzoned farmland in rural North Dakota, and conclude that house prices haven't risen so much. In reality, no one can actually find those homes near job centers.
Or consider college. The college experience of 2024 is vastly different from that of 1970. The MBA class wormed their way into university administration and kicked all the actual academics out of admin. The MBA class see the kids as "customers" rather than pupils or students. And all the colleges and universities, even the state ones, went into MBA customer-seeking overdrive. Colleges have been luxurified. Big fancy dorms, extravagant student unions and study spaces, decadent gym facilities, etc. College at a state school in 1970 was 4 people crowded in a tiny dorm room, where your 'gym' was the campus running track. CPI looks at what it would cost to run a 1970s-style university in 2024, and concludes that college hasn't gone up in price as much as it has. This is one reason community colleges have remained so relatively affordable. By their nature, they deal mostly with commuter students who wouldn't want to use your stupid fancy gym even if you built one.
And the same thing for vehicles. Automakers have chased higher and higher rates of return by making bigger and heavier vehicles. Yes, if you could find a car made today that was an exact duplicate of a 1970s vehicle, it wouldn't have inflated as much. And that's what CPI shows. But it doesn't capture the actual buying options Americans have at their fingertips.
Ultimately, here is what you are doing when you use an inflation calculator and put in 10,000 in 1970 and calculate to today. You are fundamentally saying, "consider the kinds of goods and services average people bought in 1970. If I bought that exact same basket of goods, literal exact duplicates, what would they cost today?"
And for economists, that kind of analysis is useful. If you want to calculate interest rates and GDP growth, CPI works great for that. But for real people in the real world, they cannot simply live like it's still 1970. The affordable options they had then simply no longer exist in the market. Sometimes things have changed for good reasons like product safety, but more often it is simply because the MBA class has turned everything into a luxury good to maximize return on investment. Everything has become a luxury good aimed at the top 20% of earners. And our policy tools for dealing with inflation have been utterly unprepared for this.
Oh oh I got one too. Your McChicken, since 2014 alone, has risen in price 200% from $1 to $2.99. Along with most of their other items. They're artisan dining now, not fast food.
https://www.voronoiapp.com/economy/How-Have-McDonalds-Prices-Changed-Since-2014-1392
Also, "family income" now includes the wife, kids and dog. It used to be that ONE person could earn enough to pay for housing, food, car, Healthcare, etc.
So "family income" is NOT "keeping up with the cost of inflation" despite what the business world wants us to think.
Don't forget that Medicaid and Social Security Disability still have the same $2,000 MAX asset limit (aside from a car and low-value residence). Back in 1974, that was a down payment on a house. Now that isn't enough to rent a place to live, not enough to fix a car, and if you somehow have more than $2k in assets,( (DHS does bank and tax monitoring) they take your medical and food away, despite being disabled. If adjusted for inflation, it would be about $13k. Enough to put a down payment on a small house. A 2k limit enough for people with disabilities is BARBARIC.
I've written to so many politicians about this archaic rule and Lisa McClain told me that it's that low, so that only the truly destitute use it... despite us paying taxes all our lives to protect us from starving. I was told that the disabled weren't as important as older voters who deserve retirement disability.
And the difference went to fill the coffers of the rich.
Our progress party was compromised, and by compromised I mean bribed to work against progress starting in the 1980s. Today's neoliberals.
Both parties are well paid to protect the rigged economy that exploits you that they spent decades rigging against you from you, while they war about social issue symptoms you get to vote on for the illusion of freedom.
We don't get a vote on shape or priorities of the economy. Well bribed Republicans and Democrats will lock arms, declare martial law, and authorize lethal force on us before they'll let the people end their legal Wall Street bribe gravy train. A shining example of why legality should never, ever be conflated with morality, especially post Reagan.
That's where we're at and why. Jimmy Carter was the last POTUS who wasn't all in on turning their constituents into desperate capital batteries. That is a prerequisite for party support.
Up vs. Down. Large shareholders vs everyone else. Everything else is dancing to their pfife. Pity their class traitor capitalism worshipping sycophants, but our true enemies can be identified by net worth.
The first stat is a little misleading IMO. While the median car cost has increased ~2x (inflation adjusted), an entry level car price has only gone up ~1.2x (1971 AMC Gremlin vs 2023 Kia Rio LX; $1.8k/$14.8k vs $17.8k) and that's more important for measuring relative quality of life.
Of course add on to that the fact that there's easy access to second hand car markets and the number of features included with that base model vs the 1971 AMC Gremlin and it doesn't seem like things are much worse.
Basically, average car prices increasing could just indicate that people are willing to spend more on cars for whatever reason that may be (better features, more car-centric culture, etc.). For this reason I'd like to see similar stats but about entry level options within each category. Probably less sensationalistic but still interesting.
That being said, I bet stats for the housing market and others would still show a notable increase even at the entry level, but I'd still like to verify this before blindly jumping on the sensationalist bandwagon.
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Leaders don't care about you or me. If we collectively can't get off our lazy assess and force changes to happen that benefit us, they won't. It's really that simple. The working class needs to take responsibility for civilization back from politicians and corporations or well all continue to be genocided by the greed of a relatively few powerful human beings.
But screens have gotten cheaper per unit of area!
The only thing I disagree with in this post is using the average cost of an Ivy League education. If they're comparing averages, either use all higher education or state universities.
But this guy will make it great again, surely.
People see all this and then continue worshiping the state, promoting its fiat paper covered in slavemasters, and actively participating in its planetary destruction. The whole system is a scam. It's completely obvious.
It's ok if people want to criticize crypto because it's also garbage capitalism. But that's nothing compared to what the state is doing...
I bought a 3br 2ba 1.7k sqr house in the suburbs in 2017 for 135k and a hybrid car with 10k miles on it for 20k a few years ago. I'm really confused at these numbers. Are people just living outside their means and hoping collectors won't come knocking? I was making 55k at the time and I had no real financial troubles.
