How do you define "real terms"? I define it as the cost of a thing in labor hours at the average industrial wage.
Discussion
A clever liberal politician would redefine economic metrics as… “per hours of minimum wage”.
Convert the inflation basket to “hours of minimum wage” and compare that state to state, nation to nation. 🤔
Use that to track inflation.
People would be shocked 🤯 at what they learn! ie why do I live here?
There is a lot of false nostalgia though about how much better middle class lifestyles used to be in the past. The idea that lifestyles have deflated to the worst of our lifetimes is simply not true. I am in my early 40s, and grew up in the 80s middle class, when it going to a restaurant was only for special occasions, or flying on an airplane was more of a once-in-a-lifetime experience. Not to mention the idea I could pull out a portable phone and listen to any song I wanted to, and any time I wanted to.
I just don't think the arguments that the material well-being for the average person has been in precipitous decline since the early 1970s is anywhere close to true. It's a completely false nostalgia.
I think there’s both truth and distortion, like all the best narratives. Old enough to remember a lot of those years you describe. Technology brings a lot of amazing things but affordability right now _is_ bad, especially for ‘American Dream’ staples like house/car/family/education. That being said we’re not destitute and a lot of things are possible - like getting a burrito to your door in 5min and learning about quantum physics from your computer instead of a PhD course.
Yeah. My point is not to sweep real problems under the rug. But it is to push back against some of the narratives I see from people arguing that things are literally the worst they've ever been, and bound to get catastrophically worse, barring a complete upending of our entire society. This is just negativity bias and motivated reasoning writ large.
Yeah. The people that say this are just angry, hoping they’ll get a better roll of the dice next time. As if odds were the only thing predicting success. There’s a ton of opportunity out there. The average American won’t know how to take advantage of it unfortunately.
I agree with that, sorry, I’ve interjected in the middle of a thread.
I think there is some merit in the argument that women entering the workforce have not significantly changed material home lifestyles much other than to inflate property prices, obviously the women have gained tremendous freedom of opportunity which is one thing to celebrate. But family homes didn’t suddenly get twice as large or twice as well equipped. Two worker families didn’t suddenly start selling up and moving into mansions. The houses are the same houses as when only one parent worked, the mortgages just increased. Land was the winner.
When you think about it, equality almost doubled worker density in many cities that itself creates a lot more opportunities for business. Land was the winner again.
For us growing up in the 80’s, Gen X were the first generation where both parents worked.
We came home to empty houses and we watched MTV and played with tech, all in the absence of parents. That’s where Gen X culture comes from, the zero authority adventurism.
I think nostalgia mostly harks back to the 1950’s (before our time) when household incomes were growing +15% yoy in real terms. Hard to convey what that must have felt like knowing you can buy 15% more stuff next year and the year after. I’ve never really known a society like that.
These days all those productivity gains are largely retained by the capitalist class. Largely because working people are quite happy and content with their lives. Your screen time will confirm this.
If things really were declining there would be political turbulence because no matter what anyone says, you get the society that can exist on popular consent and not much more.
That said, I think some countries are going to face sliding living standards over the coming decade. What will German industry look like without cheap Russian energy powering their automation? Lots of German factories are now trapped with sky high opex. What does that mean for exports and balance of payments?
Nothing stays still for long.