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0 pointsrurp4mo ago0 comments

I'm sure the Fed chart is accurately measuring what it's measuring but when I was a kid in Southern California it was normal to buy a house and raise kids on a single teacher or construction worker salary. That has become nearly impossible over the past couple decades. Many others have seen similar changes in their own areas and I don't think they're being crazy when they say it has gotten much harder to finance a normal household on a normal salary.

I don't know what the disconnect is with that chart and people's observations. Is that chart controlling for number of incomes and hours worked? If a household income increases by 20% because the members are working a combined 80% more hours that's not great. Category differences in inflation might be another factor. Sure TVs and other niceties are a lot cheaper, but essentials like housing and medical care eat up a huge portion of most budgets.

0 comments

astrange4mo ago

The housing crisis is limited to California and other blue states; most places have the opposite problem.

Also, most US households are homeowners, which means housing prices going up increases their (imputed) income.

> Is that chart controlling for number of incomes and hours worked?

Why should it? It's bad practice to control for random things - that gets you collider bias.

But see:

https://fred.stlouisfed.org/graph/?g=cWvT

https://fred.stlouisfed.org/series/LNS11300060

jcalvinowens4mo ago

> I don't know what the disconnect is with that chart and people's observations.

The disconnect is that CPI consistently significantly underestimates inflation as experienced by real people.

astrange4mo ago

Slightly overestimates. Alternatives like Truflation show it lower.

You may be thinking of Shadowstats, which is run by a crank who just takes the official numbers and adds a number he made up to them.

I don't know why cranks always think inflation is secretly higher. Deflation is a lot worse than inflation, so if you're a doomer, believing in deflation would be more effective.

jcalvinowens4mo ago

The idea that CPI sucks is far from a conspiracy theory... not sure why you're trying to color it like that.

The problem is that the error integrates over time, which IMHO is why graphs like that seem to suggest our standard of living is higher than ever... when a conversation with anyone at a local bus stop will tell you the exact opposite.

1 more reply

dh20224mo ago

That chart for sure includes higher portion of double income households (because now more women are in the workforce than in the 80s). This reconciles your view with the Fed graph

(Edit-misspelled Fed)

astrange4mo ago

Households can have more than two incomes - roommates, children who work, grandparents etc.

In practice, household sizes have gone down over time as more people live on their own, which means the income graph is lower than it otherwise would be.

https://fred.stlouisfed.org/graph/?g=cWvT

As for dual income families, they're mostly a good thing that happens when women can afford to pay for childcare. That is, that book The Two-Income Trap was mostly false. This is part of the topic of Claudia Goldin's economics Nobel, the other part being that the gender wage gap is caused by motherhood interrupting women's careers.

https://www.nobelprize.org/uploads/2023/12/goldin-lecture-sl...

solumunus4mo ago

Inflation measures aren’t fit for purpose. The biggest expense is housing and housing as a proportion of income is what is killing people financially.

astrange4mo ago

Housing is the largest component of both inflation measures.

https://en.wikipedia.org/wiki/Personal_consumption_expenditu...

solumunus4mo ago

I take it back.

j / k navigate · click thread line to collapse

0 pointsrurp4mo ago0 comments

0 comments

astrange4mo ago

The housing crisis is limited to California and other blue states; most places have the opposite problem.

Also, most US households are homeowners, which means housing prices going up increases their (imputed) income.

> Is that chart controlling for number of incomes and hours worked?

Why should it? It's bad practice to control for random things - that gets you collider bias.

But see:

https://fred.stlouisfed.org/graph/?g=cWvT

https://fred.stlouisfed.org/series/LNS11300060

jcalvinowens4mo ago

> I don't know what the disconnect is with that chart and people's observations.

The disconnect is that CPI consistently significantly underestimates inflation as experienced by real people.

astrange4mo ago

Slightly overestimates. Alternatives like Truflation show it lower.

You may be thinking of Shadowstats, which is run by a crank who just takes the official numbers and adds a number he made up to them.

I don't know why cranks always think inflation is secretly higher. Deflation is a lot worse than inflation, so if you're a doomer, believing in deflation would be more effective.

jcalvinowens4mo ago

The idea that CPI sucks is far from a conspiracy theory... not sure why you're trying to color it like that.

1 more reply

dh20224mo ago

That chart for sure includes higher portion of double income households (because now more women are in the workforce than in the 80s). This reconciles your view with the Fed graph

(Edit-misspelled Fed)

astrange4mo ago

Households can have more than two incomes - roommates, children who work, grandparents etc.

In practice, household sizes have gone down over time as more people live on their own, which means the income graph is lower than it otherwise would be.

https://fred.stlouisfed.org/graph/?g=cWvT

https://www.nobelprize.org/uploads/2023/12/goldin-lecture-sl...

solumunus4mo ago

Inflation measures aren’t fit for purpose. The biggest expense is housing and housing as a proportion of income is what is killing people financially.

astrange4mo ago

Housing is the largest component of both inflation measures.

https://en.wikipedia.org/wiki/Personal_consumption_expenditu...

solumunus4mo ago

I take it back.

j / k navigate · click thread line to collapse