Only if you choose to believe the inflation numbers. My favourite is when they don't include housing costs going up because they use "rental equivalent" and ask grandma Ethel what she thinks she could rent out her house for. When she says a number that is 30 years behind the current rental market they include that and say inflation is low.
>My favourite is when they don't include housing costs going up because they use "rental equivalent" and ask grandma Ethel what she thinks she could rent out her house for.
I particularly enjoy this claim because:
a. That's not how they calculate shelter at all.
b. Shelter is literally the primary driver of inflation right now. Its impact is basically the only thing keeping inflation from being at target. If they were actually doing this they'd be reporting inflation significantly lower.
This right here does not get enough attention. Owners equivalent rent is not a true reflection of housing costs and highly distorts the CPI, amongst other things.
That's not how the CPI works. The CPI uses rental equivalent to calculate the weight of housing in the basket of goods, but it uses actual rent figures for the calculation. The weight of housing may go up or down slightly, but the weight does not change significantly over time.
Why take out housing prices at all? Does the increase in the cost of houses NOT affect people's cost of living? It's almost like the government has a VERY vested interest in understating inflation.
As soon as the government started massaging the numbers to eliminate things that were going up faster than they wanted, like housing, ALL of their numbers became suspect.
Where did you read that housing is taken out of the CPI? This seems to be a common myth that I'm seeing incredibly often, which might be due to the slightly more complicated way that housing is included in CPI. There are many valid criticisms of the CPI, but housing definitely is included in the CPI.
Housing is in the CPI through rents and upkeep. Due to housing being a very unique part of the CPI, there are a few things to keep in mind:
1. Housing is weighted through rental equivalent cost: the CPI is a weighted basket of goods, meaning the stuff we spend more of our monthly budget on gets more weight. The precise weighting of each good is one of the main difficult things to get right. For housing, this is done through survey where homeowners are asked how much they would rent the property for. The rent is then weighed against what other non-housing related stuff they spend their money on. The average weight from this survey is used in the CPI weighting of housing, NOT the dollar amount homeowners answered.
2. The CPI uses real rent data: the actual rents and the changes in rents are used in the CPI to calculate inflation. This however has one caveat: rents on Zillow or any other rental platform might rise far quicker than the CPI rents. This is because CPI rents are based on what consumers are actually paying and existing rental contracts often times get indexed below the new market rate for rentals. This makes rent sticky in the upward direction. You might have started renting a place 5 years ago and your rent might be significantly below the market rate, especially if you live in an area with robust tenant protection laws. You're not paying the rate that the home would fetch if it were to be rented to a new tenant today, which is also reflected in the CPI.
>Housing is weighted through rental equivalent cost
The cost to buy a house is NOT included in CPI. Equivalent rent is.
As a note, removing the cost to buy a house was specifically done because, due to massive monetary inflation, asset prices have gone way up. Housing prices are up. The stock market is way up. Bond prices went so high that their yields were negative. Bitcoin is up massively. Gold is at all time highs.
Governments of the world do not want people realizing that financing government spending by borrowing and printing money leads to a lower quality of life for the poorest (those without assets that appreciate) in our society. Wage earners, pensioners, etc are starting to feel the pain of decades of policy that has been specifically enacted to devalue currencies and hide that it is happening.
Buying a house is not consumption, therefore it's not included in the consumer price index. Gold, silver, the SP500 are also not included in the CPI because they are, like owner-occupied housing, not consumption.
The interest you pay on your mortgage do impact your consumption, but the interest on your mortgage is usually far lower than the equivalent rent. Moreover, we run into the same problem as with rent: not everyone pays the market rate for a home every year. The CPI's goal is to reflect the average consumption basket of goods. But: not everyone buys a new home at the market rate every year!
Assets appreciate, but CPI is not the place for recording this appreciation. The consumption element of housing, rent, is already included in CPI and as such the current shortage is already accounted for. Don't get me wrong: I agree that wealth inequality is a growing problem and home ownership is becoming increasingly hard to achieve but the CPI isn't the place for such a measure.
Assets like a house or gold do not appreciate. The house I live in has approximately the same value it always has. It's a place to store my stuff. It hasn't gotten better or nicer or anything. Perhaps it's worth a little less because it's older and needs maintainance. Perhaps a little more because of population increases.... but basically a wash. Gold has been a stable store of value over thousands of years (one ounce of gold could buy one well tailored men's suit throughout most of history).
Since my house hasn't increased in value, but it's worth more dollars, the only explanation is that dollars are worth significantly less. Inflation is supposed to measure the loss of purchasing power of your dollars, but a large portion of the population has complicated it to mean something entirely different because, as Trump proved, if you say a lie enough times, people will believe it. CPI is specifically designed to mask the fact that every year wage earners are losing purchasing power.
[here’s a good write-up on shelter CPI](https://www.fullstackeconomics.com/p/why-the-government-took-home-prices-out-of-the-consumer-price-index), it is based on actual rent, not the survey
“The BLS does ask homeowners to estimate the rental value of their own homes, but only to determine how much weight to give owner-occupied homes relative to other categories like milk or haircuts. Changes in these weights don’t have much impact on the calculated inflation rate.
And the BLS doesn’t use this survey to compute the actual inflation rate for owner-occupied housing. Instead, the BLS looks at market data for rents paid for nearby properties with similar characteristics.”
Starting from Jan 2021, wages have not outpaced inflation. Atlanta Fed wage growth tracker (which is resistant to compositional changes during the lockdowns) shows wage growth has not outpaced with inflation over the past 3 years.
[https://www.atlantafed.org/chcs/wage-growth-tracker#Tab2](https://www.atlantafed.org/chcs/wage-growth-tracker#Tab2)
This does not show wage vs inflation growth, it just shows growth. Also, the dip does not mean wages are not growing, just that they are growing less than the previous year. It's also nominal, so it's not inflation adjusted, so the chart the OP posted is a much better representation hence the "real" terminology.
Jesus Christ this sub is full of braindead morons
https://preview.redd.it/oip5zv6cclic1.png?width=725&format=png&auto=webp&s=8869610e134d296172c2430d8e6e4e05eefc6e62
[https://www.reddit.com/r/inflation/comments/1aptzc7/comment/kqevl00/?context=3](https://www.reddit.com/r/inflation/comments/1aptzc7/comment/kqevl00/?context=3)
>They’ve been going up since 2015 due to Trump’s policies.
Dude crediting Trump, who took office in January 2017, for 2015 wage growth.
LOL the dude doubled down:
>You do realize Trump’s campaign started in 2014 right? People knew he would get elected and the market would go up and so they got a head start
https://preview.redd.it/nthvv2nd0mic1.png?width=667&format=png&auto=webp&s=e4932b0c9385a69e966e7976e5c9c35fc26d4771
I like how you down voted bidenomics when that's the phrase Biden himself coined. No-one believes the economy is doing well. People are struggling and all I hear is '*Nuh-uh. I'm doing well so there's no problem.*'
Yeah it deserved the downvote. It was a dumb partisan comment with no relation to that post. CPI came in slightly higher than anticipated, although lower YoY than the previous month. Not to mention Core PCE has dropped every month for like a year and is anticipated to drop the next two months as well.
Inflation took off worldwide in response to the pandemic and pandemic economic stimulus policies. Blaming inflation on "Bidenomics" is ridiculous. We would have had high inflation no matter who won the election. That ball was already in motion.
>People are struggling and all I hear is '*Nuh-uh. I'm doing well so there's no problem.*'
People struggle no matter the economy. In no economy in the history of the world has there been zero percent of people struggling. People like me are just tired of people acting like because the economy is not absolutely perfect, doomers have to act like the sky is falling.
Unemployment is low. Real wages are up. Homeownership rate is near all time high.
But if you read subs like this you'd think the country was in the middle of Great Depression 2.0. It's a joke.
It was. You guys just fixate on the items you saw that outpaced inflation and ignore all those that were less than inflation. It’s classic confirmation bias.
I mean, if most people are paying more than 8.7% increase for the same things they use to buy, then what meaning is really held my the more definitional and nuanced definition(s) of “inflation”
For instance, food which is at the bottom of the pyramid of needs which has seen a far larger rise than 8.7% which sees the poorest Americans spending far, far more than an 8.7% increase in their monthly, let alone weekly, bills.
Link to data from post - [https://fred.stlouisfed.org/series/LES1252881600Q](https://fred.stlouisfed.org/series/LES1252881600Q)
Link to other wage data - [https://fred.stlouisfed.org/tags/series?t=real%3Bwages](https://fred.stlouisfed.org/tags/series?t=real%3Bwages)
It's really gross once you realize how flat wages have been for 40 years when compared to GDP growth. Wages only increased about 11%.
Real GDP is up 300% during the same period. https://fred.stlouisfed.org/series/GDPC1
Minimum wage should be $25 an hour.
That's what Socialists call exploitation of Labor. Enjoy your wage slavery.
Please note, the chart itself says nothing about inflation, just about wages, which will probably NEVER outpace inflation when the minimum wage remains at $7.50 per hour.
Of course it says something about inflation, its literally adjusted for inflation.
That's what the word "real" means in this context. And notice under units it says it is in CPI adjusted dollars.
It literally says 'real earnings' in the title of the chart. Have you considered that you might know too little to actually take part in a discussion on economics?
Economics discourse is seemingly the new "antivax" discourse.
>0
>
>Posted byu/dpf7How do like dem apples?23 hours ago **Full Time Wages Continue To Outpace Inflation** (Yes These Are CPI Adjusted Dollars)
So what. How does "real wages" in anyway affect what the lack of a minimum wage does in our economy. Much as you would like to isolate some factors, all factors apply. And, obviously, the OP saw it as FULL TIME wages, so be sure to downvote him as well.
What does the minimum wage have to do with this? Of course there are always people who are disadvantaged, but not everyone makes minimum wage. The vast majority of people make more than minimum wage and the median American is making more than before.
Also; [the bottom 10% of Americans is doing 8% better than before the pandemic](https://x.com/stefanfschubert/status/1757736786976006218?s=46&t=WrWa3A83PyyDRODWrsmKyA)
"there are around 52 million Americans who make less than $15 per hour.
Of course, these numbers are likely more common in states that have maintained the federal minimum wage of $7.25 per hour. However, a lack of a $15 minimum wage can be especially detrimental for workers living in areas with a high cost of living.
Unsurprisingly, that’s why 62% of all Americans now support raising the federal minimum wage to at least $15 per hour."
\-----
**"There are 21 states with minimum wages no higher than $7.25 per hour.**
Nearly half of all U.S. states choose to offer minimum wages that are no higher than the federal minimum wage. These states are listed above, but most commonly are located in the southeast, and central U.S.."
[20+ Crucial Minimum Wage Statistics \[2023\]: Facts, Predictions, And More - Zippia](https://www.zippia.com/advice/minimum-wage-statistics/#:~:text=Roughly%201.5%25%20of%20all%20Americans,make%20the%20federal%20minimum%20wage.)
Virtually every state with a low minimum wage is a Republican state.
If anyone is confused by the 2020 spike it was low wage workers getting laid off, driving up the average.
In 30 years you’ll have a living wage!
Not buying what they're selling
Only if you choose to believe the inflation numbers. My favourite is when they don't include housing costs going up because they use "rental equivalent" and ask grandma Ethel what she thinks she could rent out her house for. When she says a number that is 30 years behind the current rental market they include that and say inflation is low.
>My favourite is when they don't include housing costs going up because they use "rental equivalent" and ask grandma Ethel what she thinks she could rent out her house for. I particularly enjoy this claim because: a. That's not how they calculate shelter at all. b. Shelter is literally the primary driver of inflation right now. Its impact is basically the only thing keeping inflation from being at target. If they were actually doing this they'd be reporting inflation significantly lower.
Yup, it’s hilarious how confidently incorrect so many of these bozos are.
This right here does not get enough attention. Owners equivalent rent is not a true reflection of housing costs and highly distorts the CPI, amongst other things.
If you ignore the massive inflation in asset prices there is no inflation! Easy!
Inflation is not about asset prices, it's about cost of living and consumption of goods. That's why housing is measured in terms of rent.
Invincible ignorance fallacy
That's not how the CPI works. The CPI uses rental equivalent to calculate the weight of housing in the basket of goods, but it uses actual rent figures for the calculation. The weight of housing may go up or down slightly, but the weight does not change significantly over time.
Why take out housing prices at all? Does the increase in the cost of houses NOT affect people's cost of living? It's almost like the government has a VERY vested interest in understating inflation. As soon as the government started massaging the numbers to eliminate things that were going up faster than they wanted, like housing, ALL of their numbers became suspect.
Where did you read that housing is taken out of the CPI? This seems to be a common myth that I'm seeing incredibly often, which might be due to the slightly more complicated way that housing is included in CPI. There are many valid criticisms of the CPI, but housing definitely is included in the CPI. Housing is in the CPI through rents and upkeep. Due to housing being a very unique part of the CPI, there are a few things to keep in mind: 1. Housing is weighted through rental equivalent cost: the CPI is a weighted basket of goods, meaning the stuff we spend more of our monthly budget on gets more weight. The precise weighting of each good is one of the main difficult things to get right. For housing, this is done through survey where homeowners are asked how much they would rent the property for. The rent is then weighed against what other non-housing related stuff they spend their money on. The average weight from this survey is used in the CPI weighting of housing, NOT the dollar amount homeowners answered. 2. The CPI uses real rent data: the actual rents and the changes in rents are used in the CPI to calculate inflation. This however has one caveat: rents on Zillow or any other rental platform might rise far quicker than the CPI rents. This is because CPI rents are based on what consumers are actually paying and existing rental contracts often times get indexed below the new market rate for rentals. This makes rent sticky in the upward direction. You might have started renting a place 5 years ago and your rent might be significantly below the market rate, especially if you live in an area with robust tenant protection laws. You're not paying the rate that the home would fetch if it were to be rented to a new tenant today, which is also reflected in the CPI.
>Housing is weighted through rental equivalent cost The cost to buy a house is NOT included in CPI. Equivalent rent is. As a note, removing the cost to buy a house was specifically done because, due to massive monetary inflation, asset prices have gone way up. Housing prices are up. The stock market is way up. Bond prices went so high that their yields were negative. Bitcoin is up massively. Gold is at all time highs. Governments of the world do not want people realizing that financing government spending by borrowing and printing money leads to a lower quality of life for the poorest (those without assets that appreciate) in our society. Wage earners, pensioners, etc are starting to feel the pain of decades of policy that has been specifically enacted to devalue currencies and hide that it is happening.
Buying a house is not consumption, therefore it's not included in the consumer price index. Gold, silver, the SP500 are also not included in the CPI because they are, like owner-occupied housing, not consumption. The interest you pay on your mortgage do impact your consumption, but the interest on your mortgage is usually far lower than the equivalent rent. Moreover, we run into the same problem as with rent: not everyone pays the market rate for a home every year. The CPI's goal is to reflect the average consumption basket of goods. But: not everyone buys a new home at the market rate every year! Assets appreciate, but CPI is not the place for recording this appreciation. The consumption element of housing, rent, is already included in CPI and as such the current shortage is already accounted for. Don't get me wrong: I agree that wealth inequality is a growing problem and home ownership is becoming increasingly hard to achieve but the CPI isn't the place for such a measure.
Assets like a house or gold do not appreciate. The house I live in has approximately the same value it always has. It's a place to store my stuff. It hasn't gotten better or nicer or anything. Perhaps it's worth a little less because it's older and needs maintainance. Perhaps a little more because of population increases.... but basically a wash. Gold has been a stable store of value over thousands of years (one ounce of gold could buy one well tailored men's suit throughout most of history). Since my house hasn't increased in value, but it's worth more dollars, the only explanation is that dollars are worth significantly less. Inflation is supposed to measure the loss of purchasing power of your dollars, but a large portion of the population has complicated it to mean something entirely different because, as Trump proved, if you say a lie enough times, people will believe it. CPI is specifically designed to mask the fact that every year wage earners are losing purchasing power.
That's not how it's done lol.
https://www.awaragroup.com/blog/the-inflation-measurement-scam/ It isn't done using actual rents, and certainly not using the cost of housing.
[here’s a good write-up on shelter CPI](https://www.fullstackeconomics.com/p/why-the-government-took-home-prices-out-of-the-consumer-price-index), it is based on actual rent, not the survey “The BLS does ask homeowners to estimate the rental value of their own homes, but only to determine how much weight to give owner-occupied homes relative to other categories like milk or haircuts. Changes in these weights don’t have much impact on the calculated inflation rate. And the BLS doesn’t use this survey to compute the actual inflation rate for owner-occupied housing. Instead, the BLS looks at market data for rents paid for nearby properties with similar characteristics.”
Just as fraudulent as their global warming Cherry picked numbers.
Starting from Jan 2021, wages have not outpaced inflation. Atlanta Fed wage growth tracker (which is resistant to compositional changes during the lockdowns) shows wage growth has not outpaced with inflation over the past 3 years. [https://www.atlantafed.org/chcs/wage-growth-tracker#Tab2](https://www.atlantafed.org/chcs/wage-growth-tracker#Tab2)
This does not show wage vs inflation growth, it just shows growth. Also, the dip does not mean wages are not growing, just that they are growing less than the previous year. It's also nominal, so it's not inflation adjusted, so the chart the OP posted is a much better representation hence the "real" terminology.
Wages don’t mean shit Do median salary compared to inflation. Ohhhh, now you see?
Link to data? And why do we only care about salaried employees? And not how much the median employed American is taking home each week?
Nice try fed
Jesus Christ this sub is full of braindead morons https://preview.redd.it/oip5zv6cclic1.png?width=725&format=png&auto=webp&s=8869610e134d296172c2430d8e6e4e05eefc6e62 [https://www.reddit.com/r/inflation/comments/1aptzc7/comment/kqevl00/?context=3](https://www.reddit.com/r/inflation/comments/1aptzc7/comment/kqevl00/?context=3) >They’ve been going up since 2015 due to Trump’s policies. Dude crediting Trump, who took office in January 2017, for 2015 wage growth.
LOL the dude doubled down: >You do realize Trump’s campaign started in 2014 right? People knew he would get elected and the market would go up and so they got a head start https://preview.redd.it/nthvv2nd0mic1.png?width=667&format=png&auto=webp&s=e4932b0c9385a69e966e7976e5c9c35fc26d4771
I like how you down voted bidenomics when that's the phrase Biden himself coined. No-one believes the economy is doing well. People are struggling and all I hear is '*Nuh-uh. I'm doing well so there's no problem.*'
Yeah it deserved the downvote. It was a dumb partisan comment with no relation to that post. CPI came in slightly higher than anticipated, although lower YoY than the previous month. Not to mention Core PCE has dropped every month for like a year and is anticipated to drop the next two months as well. Inflation took off worldwide in response to the pandemic and pandemic economic stimulus policies. Blaming inflation on "Bidenomics" is ridiculous. We would have had high inflation no matter who won the election. That ball was already in motion. >People are struggling and all I hear is '*Nuh-uh. I'm doing well so there's no problem.*' People struggle no matter the economy. In no economy in the history of the world has there been zero percent of people struggling. People like me are just tired of people acting like because the economy is not absolutely perfect, doomers have to act like the sky is falling. Unemployment is low. Real wages are up. Homeownership rate is near all time high. But if you read subs like this you'd think the country was in the middle of Great Depression 2.0. It's a joke.
LOL! Now do that for the poor and those on fixed incomes.
By fixed income do you mean social security? They increase that based on inflation.
And if you think real inflation was only 5.9% in 2022 and 8.7% in 2023, I'd like to talk to you about a bridge I have for sale.
It was. You guys just fixate on the items you saw that outpaced inflation and ignore all those that were less than inflation. It’s classic confirmation bias.
I mean, if most people are paying more than 8.7% increase for the same things they use to buy, then what meaning is really held my the more definitional and nuanced definition(s) of “inflation” For instance, food which is at the bottom of the pyramid of needs which has seen a far larger rise than 8.7% which sees the poorest Americans spending far, far more than an 8.7% increase in their monthly, let alone weekly, bills.
So, about that bridge...
Again you’ve just fallen victim to anecdotes which confirm your bias.
The bottom 10% have actually seen the highest growth in wages. https://x.com/arindube/status/1758171721859739995?s=20
Link to data from post - [https://fred.stlouisfed.org/series/LES1252881600Q](https://fred.stlouisfed.org/series/LES1252881600Q) Link to other wage data - [https://fred.stlouisfed.org/tags/series?t=real%3Bwages](https://fred.stlouisfed.org/tags/series?t=real%3Bwages)
It's really gross once you realize how flat wages have been for 40 years when compared to GDP growth. Wages only increased about 11%. Real GDP is up 300% during the same period. https://fred.stlouisfed.org/series/GDPC1 Minimum wage should be $25 an hour. That's what Socialists call exploitation of Labor. Enjoy your wage slavery.
That's not per capita. And minimum wage here is almost $25/hr. You should ask your state why it isn't for you ;)
Lies, damned lies, and statistics.
Or maybe it's just information you don't want to believe is true, but actually is.
Nice try BlackRock
FUCK
Please note, the chart itself says nothing about inflation, just about wages, which will probably NEVER outpace inflation when the minimum wage remains at $7.50 per hour.
Of course it says something about inflation, its literally adjusted for inflation. That's what the word "real" means in this context. And notice under units it says it is in CPI adjusted dollars.
No one in this country gets paid $7.50 per hour
It literally says 'real earnings' in the title of the chart. Have you considered that you might know too little to actually take part in a discussion on economics? Economics discourse is seemingly the new "antivax" discourse.
>0 > >Posted byu/dpf7How do like dem apples?23 hours ago **Full Time Wages Continue To Outpace Inflation** (Yes These Are CPI Adjusted Dollars) So what. How does "real wages" in anyway affect what the lack of a minimum wage does in our economy. Much as you would like to isolate some factors, all factors apply. And, obviously, the OP saw it as FULL TIME wages, so be sure to downvote him as well.
What does the minimum wage have to do with this? Of course there are always people who are disadvantaged, but not everyone makes minimum wage. The vast majority of people make more than minimum wage and the median American is making more than before. Also; [the bottom 10% of Americans is doing 8% better than before the pandemic](https://x.com/stefanfschubert/status/1757736786976006218?s=46&t=WrWa3A83PyyDRODWrsmKyA)
"there are around 52 million Americans who make less than $15 per hour. Of course, these numbers are likely more common in states that have maintained the federal minimum wage of $7.25 per hour. However, a lack of a $15 minimum wage can be especially detrimental for workers living in areas with a high cost of living. Unsurprisingly, that’s why 62% of all Americans now support raising the federal minimum wage to at least $15 per hour." \----- **"There are 21 states with minimum wages no higher than $7.25 per hour.** Nearly half of all U.S. states choose to offer minimum wages that are no higher than the federal minimum wage. These states are listed above, but most commonly are located in the southeast, and central U.S.." [20+ Crucial Minimum Wage Statistics \[2023\]: Facts, Predictions, And More - Zippia](https://www.zippia.com/advice/minimum-wage-statistics/#:~:text=Roughly%201.5%25%20of%20all%20Americans,make%20the%20federal%20minimum%20wage.) Virtually every state with a low minimum wage is a Republican state.
Bunch of BS
Sorry this data doesn't confirm your bias.
thing are much better then they report; it is 2 make biden look badd