This is demonstrably false, and speaks of the "tyranny of averages". Yes, worldwide, huge reductions of poverty, largely in Asia, have let to increases. For the average middle class worker in the US, however, things have barely budged in decades. When you take into account growing inequality, and the fact that limited resources (like housing near city centers) will always go to the wealthiest, it's easy to argue the average middle class worker is substantially worse off.
See http://www.pewresearch.org/fact-tank/2014/10/09/for-most-wor... , and this quote: "In fact, in real terms the average wage peaked more than 40 years ago: The $4.03-an-hour rate recorded in January 1973 has the same purchasing power as $22.41 would today."
> "it's easy to argue the average middle class worker is substantially worse off"
it's also easy to argue that the typical metrics used in this comparison are misleading.
A "typical middle class worker" in the early 1970s lived in a house that was built in the 1950s or earlier, around 1200 square feet, 1 bathroom, 2-3 bedrooms, without air conditioning or a washer/dryer, and had one vehicle available to the household [0]. Nowadays, we consider that "the projects", undesirable housing for poor people, while the "middle class" live in considerably larger dwellings with more amenities.
The reason I mention this is that real wage / purchasing power comparisons almost universally use "average housing costs" as a significant part of the metric, and "average housing costs" are in no way measuring the same thing. (
It so happens that I live in my childhood home, which my parents purchased in 1975 for $32,500 -- about 3.1 times the national median household income. I purchased it from them in 2012 for $135,000, a mere 2.7 times the median income.)
If you actually compare the goods a median-wage worker can purchase today to the goods a median-wage worker could purchase in the 1970s, there are definitely some things we have a harder time affording (like routine health care), but with the majority of material goods, you can get much bigger/better/faster/higher quality stuff for the same portion of the budget [1]. A modern middle class income gets you much better than 40-years-ago middle class living conditions.
But all that better stuff Americans can buy is largely due to bigger household incomes from women entering the workforce. Back in the fifties/sixties, a single working class income could support a family of 4-5, comfortably. That's laughable today.
A single working class income can easily support a family of 4-5 in the sort of housing a family from the 50s/60s would have lived in, with the number of vehicles a family from the 50s/60s drove, etc.
If real waves dropped, you should be able to name a good or service (besides obsolete ones like land lines) which we consume less of today than in the past. In fact, most goods/services should satisfy this.
Anyone pushing wage numbers is playing a game of hide the salami, and ignoring the trend towards a larger portion of income being given in forms other than money.
Yeah, but "forms other than money" mostly means healthcare, which has skyrocketed - despite the fact that other developed nations with longer live expectancies have much lower healthcare costs.
More importantly, though, the Fed graph you show is an average (the real hourly compensation one). With growing inequality, using the average hides the fact the improvement for the median worker is much lower.
Yeah, but "forms other than money" mostly means healthcare, which has skyrocketed - despite the fact that other developed nations with longer live expectancies have much lower healthcare costs.
If you feel consumers are overconsuming medicine and driving up the price, there are lots of great ways to fix that. The most effective is high deductibles (currently illegal).
I know you are aware that life expectancy is minimally related to health care consumption, so why do you bring it up?
If you have data showing that median real compensation per hour is lower, show it.
And again, since household income has not moved much (according to figures I cited), you still need to provide an explanation for why we don't seem to consume less. (Hint: the basket of goods in CPI changes and $1 of chained-CPI adjusted wages today buys more than $1 of chained CPI adjusted wages 30 years ago. I.e., CPI != inflation in the long run.)
I care little for how much X has compared to Y. I do not see any use for the comparison, other than for media headlines.
I'd say that singling out smartphones is disingenuous. The advancement of every industry has caused the lives of almost everyone to increase dramatically, the advancement has also created a lot of wealth, which is also the byproduct of an increase in industry.
I've yet to see anyone explain empirically why it's bad that x has more wealth than y. I'm open to being swayed by data.
