I saw this circulating around and thought it was an interesting read.
Some of these are horrendous, some are funny, and a few made me think "Hmm, maybe not a bad idea"
this post was submitted on 12 Oct 2024
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https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1000000&year1=193301&year2=202409
So, you believe everything the government tells you?
The statistic I like to cite [because it's pretty simple to remember] is that the minimum wage in 1960 was $1.00/hour and the cost of the average home was $11,000.00
Lazy argument is lazy. If you have an issue with how inflation is calculated, why are you keeping us in the dark? Tell us what it is.
The reason this doesn't constitute inflation is that most people don't work for minimum wage, and they buy more than just homes. So trying to work out inflation (the relative value of money over time) requires a slightly broader lens.
Except that I'm not focusing on "inflation." I'm concerned with the ever widening gap between the rich and the poor. And by the "poor" I mean the 99%.
Look at the 1960 figures. That meant that a high school graduate with no particular skills could live a pretty good life and support a family working 40 hours a week. Today it's common to require two incomes to keep a family going.
You:
Also you:
Cool, but it's helpful to state your premises up front. That situation was viable well into the 70s, after which Reagan-era policies completely decoupled real income from productivity, and started to fall apart. By the mid 90s it was all but gone.
You're completely correct in the figure for federal minimum wage and average home cost, but that doesn't mean these two figures are relevant. Let me explain.
Let's take a look at the federal minimum wage, in 1960, $1/hr, now in 2024, $7.25/hr; 7.25 times higher. Let's look at the national average cost of a home, in 1960, ~$11,000, now in 2024, ~$320,000; 29 times higher.
Does this mean that the government is lying about historic wages or housing costs since they both didn't increase at the same rate? No.
Wages have notoriously not kept pace with inflation, while housing is considered a stable asset for building generational wealth, outpacing inflation. It can be a hard concept to grasp, but the value of a dollar is much more complex than being directly tied to minimum wage or cost of housing.
You just proved my original argument.
Go back to "$1 million in 1933 is the same as $24 million in 2024."
We both realize that for an individual the $1 million in 1933 is much greater wealth than $24 million in 2024.
The only difference is that I am focusing on the individual's relationship with a dollar and you are taking the larger view.
Not quite. The point I was trying to make was that wages/housing are not necessarily tied inflation i.e. the change in the overall effective value of a dollar. Let's see if we can try to agree on a few points. The effective value of the dollar is not stagnant. It changes each year. The fed tries to ensure inflation rather than deflation to encourage investing/spending of money. As such, the rate at which more money is minted each year and federal rates are controlled to try to hit a healthy amount of inflation each year. Now, if we were to take the average percent of inflation each year between now and 1933, the value of today's dollars would be roughly (today's dollar value)=(1933's dollar value)×[1 + (average inflation rate)]^(2024-1933).
Do we agree on the above but just disagree on what the average inflation rate would be? Or is something above incorrect?
My one and only point is that if someone who had a million in 1933 came to the future and saw what $24 million would buy he'd be outraged.
The official figures are fine if you're talking statistics; they fail when you apply them to the real world.
I think we can all agree on that point.