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Comment by ww520 | Hacker News Reader

But the real average wage adjusted for inflation has decreased for a long time. Deflation has in fact happened in labor cost. Now it's the time to bring the rest in line. It's unsustainable to have ever increasing asset price but lower labor cost. No one can afford to buy them at the end.

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But the real average wage adjusted for inflation has decreased for a long time.

Is this really true? If you blindly apply inflation calculators to wage statistics, you get this result.

But on the other hand, people earning average wages live a much better life (in terms of goods/services consumed) than people in the past. Even the present day poor live what would have been called a "middle class" lifestyle in the 70's.

Something doesn't add up. Can anyone shed light on this?

1.) You're (like most people on this board) are confusing technology gains with monetary phenomenons.

2.) We went from a mainly single-income family in the 70s to dual-income family today. Notice how most household today goes to hell if even one parent is laid off.

Inflation is a rise in price levels relative to currency. I.e., $1 today should be able to buy $1 / inflation factor in the past. However, people buy more today with wages x inflation factor than the previously bought with supposedly a higher level of wages. That shouldn't happen.

No matter how you cut it, that's a problem with the numbers.

Regarding point 2), we also work considerably less than we did in the past. Hours worked per capita have not gone up significantly.

Your premise seems to be that deflation will affect labor cost less than other prices, thus bringing them into "line".

It's pretty obvious that average income has decreased at a greater clip that CPI (see all those people have their income set to 0?) so I don't see how this is a valid premise.

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