Re: how to compare living standards


"Jim Blair" <jeb@xxxxxxxx> wrote in message
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"MichaelC" <mikecraney@xxxxxxxxxxxxx> wrote in message
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"Jim Blair" <jeb@xxxxxxxx>


MichaelC:

Well, although Mr. Quirk is arguing *against* a consumption
based
measurement, I think it's clear that that mythic "basket of
goods"
was
a
lot
more affordable on the average salary than it is today.


jeb:

??? You have that backwards.

http://econ161.berkeley.edu/TCEH/Slouch_wealth2.html

I'm not sure you're correct. The page you cite has no chart
reflecting
basket costs in the 50's and 60's, which is the period under
discussion.

Hi,

So you think living standards increased from the Industrial Revolution
until
1950-60 and have declined since?

I think it can be argued effectively that living standards, as measured
by
the buying power of the average family on a median income, have in
total,
declined since the period of time prior to the high inflation of the
70's.
What happened from the IR to the 50's isn't under discussion.

Hi,

The numbers don't support that:

http://www.census.gov/hhes/income/histinc/f01.html

These are family income tables; evidently I didn't make myself clear. If a
family had to go from one wage earner to two in the process, thats an
effective drop in standard of living. This is the key point of my original
post in this thread. This is why I earlier emphasized the ratio between a
median wage earner (no plural) and a median house.

....
In an earlier thread, a guy claimed that life expectancy in the US
also
peaked then (or maybe it was in 1970): he "knew" this because (in his
opinion) that was when living standards peaked, so life expectancy
must
have
done the same.

jeb:

When I provided a link to actual data on life expectancy (and it
continues
to rise up to the present), he decided that living standards and life
expectancy are not related.

Point being?

I thought the point was obvious. But I'll try to make it clear. X claims
that "living standards" are in decline, and life expectancy is correlated
with "living standard". When the data shows increasing life expectancy
has
NOT been declining but increasing since 1950 or 1970, X must either
conclude that the data is wrong or that living standards do not correlate
to
"living standards. Since medical record data is hard to challenge, it
must
be that there is no correlation.

And when you claim that "the buying power of the average family on a
median
income" has been declining, and the link above provides data from the US
Census that inflation corrected incomes for US families in every income
bracket has increased since 1950 or '70, either the Census numbers are
wrong
or you are. Which will you choose?

That the information that you chose to bolster your contention is
inappropriate for the point under discussion. In short, you selected the
wrong table, probably because you were thinking in terms of family income
vs. that of a single wage earner. Probably my fault.

(My guess: Buying power does not correspond to "living standards".)


Also, the "basket of goods" must include energy, food,
transportaion,
and
real estate, all of which have inflated disproportionately with real
wages.

???? The CPI factors in all of the above. But "housing cost" rather
than
"real estate".

IIRC, there was a time in the 60's when the "rule of thumb" when
buying
a
house was to purchase between 1X and 2X your annual income. In most
parts
of
the US, if not all, that's no longer possible.

Housing has increased in price faster than overall inflation. When
there
are many factors, some of them must be "above average".
Food costs have risen well below the inflation average, and food is as
important as housing.

There's a matter of scope, here. If my basket of groceries costing $100
rises 10%, that's $10 extra bucks. If the house I want that costs
$200,000
rises 10%, that $220,000. The former is ten bucks, the latter is
$20,000.
Big difference. The weighting is in favor of the larger asset.

The CPI does "weight" the factors, and housing cost is one of the largest.

I keep reading that "Americans can't afford to own a home" as shown by
some
"Affordability Index". Then I read that the home ownership rate has risen
to its highest level ever.

Sure -- because we continue to squeeze more and more income out of those
wage earners, and not to the benefit of the family. But, that can't continue
forever, unless you want to bring back child labor or legalize plural
marriages to bring a third wage earner into the equation.

I also read that Americans can't afford to buy food any more, as shown by
some "food affordability index" and studies of demand for free food from
charities. But everywhere I look I see fat and obese Americans.

So I also don't believe all of the numbers that I read.

On the food, I believe the figures I see walking down the street, not the
ones I read in various "studies".

I don't see food prices as much of a problem. Quality might be, and your
visuals largely reflect behavior.

Mike


.

Relevant Pages

  • Re: how to compare living standards
    ... So you think living standards increased from the Industrial Revolution ... When I provided a link to actual data on life expectancy (and it ... Food costs have risen well below the inflation average, ...
    (sci.econ)
  • Re: how to compare living standards
    ... measurement, I think it's clear that that mythic "basket of goods" was ... So you think living standards increased from the Industrial Revolution until ... a guy claimed that life expectancy in the US also ... Housing has increased in price faster than overall inflation. ...
    (sci.econ)