elasto wrote:Also, a good deal of the things that low and middle-class workers spend their income on (rent, food, gas, healthcare etc) have collectively got more expensive over the last three decades, not cheaper, even adjusted for inflation.
There's a bit of a misperception on some of these I think.
http://inflationdata.com/Inflation/imag ... _chart.htm
Gas is pretty high right now, but there's a perception that its higher than its ever been, which isn't really the case. Especially if you start counting increase gas milage between now and 1979 or something, while it's certainly more expensive than 1 decade ago, it's not really moreso than it has been historically.
http://allstarcharts.com/inflation-adju ... ng-prices/
Similar with housing, while there was certainly a spike that resulted in some obvious problems, housing costs are quite similar to what they were a few decades ago.
One thing that really serves to skew our perception though is quality differences in the baskets we consume that we don't overly acknowledge.
The gas is actually better and cleaner, the housing is nicer, the food is higher quality with better packaging, the utilities are more reliable, your phone now has the internet on it, your car knows where your friend's house is etc...
The things available for consumption are priced in such a way that buying what you think you should will basically take all your income, whether you're low income or medium-high.
People will generally buy the quality/size/location of house they can afford...not need, but the one they can afford. They'll generally do the same with cars, food, clothing etc... "I make more money, So I'll buy the next level up"
This is especially obvious when you look at something like TVs, computers and other consumer discretionary products.
So quality really messes with CPI baskets and inflation.
In general, everything is much cheaper...but after the quality increases, it's the same or more expensive.
I think the real threat in this generation, referring to people under 30, is that many costs will seem higher due to significantly later entry into the workforce, and a lower tendancy to pair up at young ages.
The other major 'problem' being faced is that the labour market is actually getting more fair... which just means North American jobs, even skilled labour requiring high levels of education, can now be filled by people from countries with significantly lower wage requirements. These people couldn't enter our job markets before, but now have access to doing the same work, driving wages down.
Any time we look at things being more fair in North America or most of Europe, we've got to remember that unless we throw up walls to keep out external forces, 'more fair' means our extremely fortunate position will be re-distributed to other countries.
I think there tends to be a dream-scenario that if wages increased, or things were distributed more evenly, everything would be better and we'd all have a BMW. But prices would just rise, people would spend the new amount on basically the same things, and no one would feel significantly different.
In order to improve quality of life, you must either: Produce more things, or Increase the quality of those things, or else we just have more dollars competing for the same amount of stuff.
There's really not a better known way to increase fair distribution without harming the production and improvement side of the equation that helps everyone in the long run.
It's been said a lot, but an Emperor in the 1300s probably had it worse than a McDonald's employee today.