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Comment by bloppe | Hacker News Reader

The average real purchasing power in America has been increasing since at least 2010: https://home.treasury.gov/news/featured-stories/the-purchasi...

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This is so weird.. my experience doesn't match with this data at all.

Because money doesn't buy happiness, and a lot of the increase in purchasing power is pointless stuff like the fact that you can buy an iPad that's twice as powerful for half the cost, or get YouTube for free instead of paying $50 for cable, while the things that really matter like housing go up in price relative to wages.

If you want to feel richer, look on Amazon/AliExpress and try to remember what stuff like that used to cost decades ago. It's not BS, it's very real. It's amazing how cheap random knickknacks are now.

But, you're right -- it's a pyrrhic victory because I'd rather own my own home and have a tough time affording a breadmaker and blender than rent forever and easily afford having all the gadgets that I do, and I think most people feel similarly.

Well mostly I was fixating on the health insurance, and how health insurance's growth rate has slowed, but healthcare costs have gone way up in general and health insurance covers almost nothing anymore while deductibles have also gone up (for me). But again it's about rates, and I guess when I look at Figure 3 again it just seems deceptive.. a personal computer purchase for me includes a GPU and those prices did not decline (the total cost of a gaming PC like tripled over that time period). Overall this just seems like it's cheer-leading industries that are shrink-flating: health insurance that covers nothing, shit tvs, cheap crappy PCs, airline fares (ever shrinking leg room?).

Edit: Also probably because I remember when the dollar had WAY more purchasing power, so my baseline is skewed already. But this "increase" in purchasing power is just a return to more normal levels. This data feels more relatable.. slightly less purchasing power since 2019 https://www.bls.gov/cpi/factsheets/purchasing-power-constant...

Yes, agreed, healthcare is another great example alongside housing. Healthcare, housing, and education have famously gone up far faster than wages for decades, while gadgets and knickknacks and furniture, etc, have gone down. Hindsight is 20/20 but most people would rather have more security (which is what healthcare, housing, education give) and less luxury (knickknacks, gadgets) than the other way around

Your link examines the purchasing power of "a dollar", not the purchasing power of the average person. Inflation is always supposed to be positive because deflation is far worse for the economy than inflation is. Average wages have also increased since 2019, hence average purchasing power of people increasing. Inequality has increased, but real purchasing power is still increasing for people at the 75th percentile, so generally almost everybody is getting more wealthy in real terms.

Housing and healthcare costs are outpacing wage increases, it's true. The CPI (which is used to determine real purchasing power) weights them at about ~44% and ~7%, respectively [1]. So together, these constitute about half of the CPI, and yet average real purchasing power is still increasing.

The big factor is where you live. If you live near a wealthy coastal city, you're getting railed by NIMBYs into far higher housing costs than the average American. You're also more likely to be in the minority of Americans who don't already live in a home they own (65% of Americans own their own home), so housing price increases are even worse for you. This group is likely over-represented on HN, but it's not exactly "average".

Cold comfort I'm sure... but migration is a potential solution.

[1]: https://www.bls.gov/cpi/tables/relative-importance/2023.htm

You're right. We get cheap knicknacks instead of cheap housing, electricity, water, food, etc.

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