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Comment by Sevii | Hacker News Reader

There is no 'wages go up 20%'. That's not how the economy works. Wages are renegotiated on an annual basis and most people have to job hop to get anything close to a 20% raise.

Inflation affects everyone rapidly. But to get the claimed wage increase people have to do work to find new jobs.

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> There is no 'wages go up 20%'. That's not how the economy works. Wages are renegotiated on an annual basis and most people have to job hop to get anything close to a 20% raise.

The example was not meant to be a single year. Over the 2020-2024 timeframe we did see movements around that size (though the gap between average wages and inflation was smaller than my example, where I rounded the numbers).

It was only an example though, not a claim.

I think you're being overly critical here.

yeah but it's not a great example, because actually wages aren't going up. maybe people would be able to psychologically handle inflation if it wasn't out-pacing wages. actually, now i think about it, that's not psychological at all, so the whole premise is kind of out the window, isn't it?

Though I disagree with your conclusions, that part is irrelevant to whether the example works.

An example is not bad simply because it's unrealistic. I'm sure you've heard plenty of examples which allow you to understand the main point without being perfectly representative.

The point of this example in particular was to illustrate how wages work alongside inflation. As long as you understand the point--that inflation is relative--the specific numbers don't matter.

the point of the example was to illustrate how people fixate on the increased cost of living fron inflation and ignore their increased earnings, even if the increased earnings out-pace the inflation in their cost of living. my point is that's a bad example because we couldn't say that that's true given that the cost od living has been out-pacing wage inflation for a long time.

so yeah, the example illustrates the idea, but it also underlines how the idea contradicts reality.

No, the point of the example was not to make any specific claim about wages or inflation. The point of the example was to illustrate that wages and inflation are relative. That's it.

If instead OP had said "if wages go up 500%, and prices go up 1,000%, everyone is worse off and got a 500% pay cut", then the main point being made would remain exactly the same. Again, this is because the exact numbers were never relevant, and the example was for explanation purposes.

Now apart from the fact that we are now 6 comments deep in the most pedantic thread I have ever had the displeasure of participating in (this is my fault too, to be fair), you also might be interested to know that cost of living/inflation has not outpaced wages for a "long time" as you so claim.

Here's a graph from the last 30 years, for example, showing earnings keeping up with inflation.

https://fred.stlouisfed.org/graph/?g=iuyN

Or maybe you'd just like to look at more recently, in which case, looking at just the past year, wages have still kept up.

https://usafacts.org/answers/are-wages-keeping-up-with-infla...

Or if your a low wage earner, those wages have especially kept up, outpacing inflation and even high wage earners by significant margin in recent years.

https://www.epi.org/publication/strong-wage-growth-for-low-w...

This is not to say that there is no affordability problem, but no matter what way you put it, your specific claim, that wages have not been outpaced by inflation "for a long time", is demonstrably false.

> No, the point of the example was not to make any specific claim about wages or inflation. The point of the example was to illustrate that wages and inflation are relative. That's it.

i'm sorry but that's just bird-brained

>> They should lift incomes, not suppress prices

> I think this misses the psychology of inflation.

> If wages go up 20%, and prices go up 15%, everyone is better off and got a 5% raise, right?

> Go poll people that experienced that and they won't tell you they're celebrating being 5% richer, they'll tell you they're outraged about the 15% inflation.

> Psychologically they'll believe they earned that 20% raise through hard work. Putting in extra hours to get that promotion. But then the inflation robbed them of their 20% raise, and turned it into a measly 5% raise. They'll be outraged.

how you get from what they said to what you said they said, i have no idea.

as for how real wages have changed overtime, you should be aware that it isn't a straight-forward measurment, and that it is an area of active political contestation.

you can see here: https://www.epi.org/blog/growth-or-not-in-real-wages/

there are ways you can slice it to make things look one way or another. for example, 1979-2017 had almost universal real wage loss for the "some college" demographic.

OP mentioned that inflation is confusing because people often don't realize that inflation is relative to their wages. I'm not denying that.

My issue with your criticism specifically was that you called out the example. It's like if someone had issue with Hitler, but their criticisms only focused on Hitler's choice of clothing.

"Boo Hitler! Not because of his ideology though, but because the collars he wore were too tight!" This is ridiculous because even if your criticism is valid, you are just criticizing the wrong thing.

    > That's not how the economy works.

    > yeah but it's not a great example, because actually wages aren't going up.

    > my point is that's a bad example because we couldn't say that that's true given that the cost od living has been out-pacing wage inflation for a long time.

All of these quotes have you fixating on the numbers. If you take only one thing from this entire reply, let it be this: *the example works regardless of the numbers used*. My whole point is that whether wages rise with inflation or not, the example's (not any surrounding exchange, just the example) only purpose was to illustrate that wages are relative to inflation. It did that.

To take this even further, and make it so even a bird-brain like myself can't possibly misunderstand, let's look at my previous example with the Nazis. Does my analogy stop working if I switch "Hiter" with "Stalin", or him with "bin Laden"?

"Boo Stalin! Not because of the Great Purge, but because of his funny mustache!"

See how the point being made remains exactly the same, regardless of whom you use to illustrate it? Please, please, please try to understand this.

And as this has now become a stress test for how thoroughly I want to humiliate myself through meaningless argument, let me also briefly address your argument on the data.

    > as for how real wages have changed overtime, you should be aware that it isn't a straight-forward measurment, and that it is an area of active political contestation.

Of course it's politically contested, but that doesn't mean we're just nowhere; absence of evidence is not evidence of absence. We have some statistics that can give us some good idea of wages relative to inflation, and the graphs I gave you were a very good start. Especially the one from FRED, where three different earnings metrics are supplied--at the very least this is an okay proxy for income.

    > there are ways you can slice it to make things look one way or another.

Yes, there are different ways to interpret the data. This is why I said that the affordability problem is real.

But this is not the claim you made. Your claim was much stronger, and much less defensible. You said that wages outpacing cost of living/inflation is unrealistic, and critically, that inflation had outpaced wages for "a long time."

This is just false. Inflation generally outpacing wages for "a long time" is just not a conclusion you can make based on the data. We can have more nuanced conversation about this, but here specifically I think you're trying to take your broad, conclusive, and incorrect claim, and equivocate it into a smaller, more defensible, but different claim.

Outside of tech, seeking a 20% increase would be relatively uncommon.

I don't work in tech, and hopping jobs will get you 5% at most, usually. Maybe it's because I'm in the public sector and wages are public information? Either way, it always comes across as VERY out of touch when people here talk about massive increases just by changing jobs.

Not to mention how casually they talk about changing jobs. As though there weren’t pressures (and desires) keeping people at one workplace, and that those people form a large enough percentage of the population that their resentment of inflation has political force.

That's classic HN showing off their privilege. But the golden era of tech is coming to an end. The industrialisation of software is about to begin. Many of the devs here will soon be getting a reality check

That falsely turns your experience into an imagined generality.

There was one year I received 3 raises at Travelocity and nearly doubled my compensation. I was hired as a web designer and after 3 months was involuntarily reassigned to a developer role and told to “figure it out”. I got a negative annual review that year and then ended up in Afghanistan on a military deployment. When I came back to Travelocity I was still classified as a developer but was reassigned from marketing to product development where to wages are higher, but I was earning as a junior designer. After eagerly looking for other internal jobs they gave me a raise to catch me up. Several months later I was promoted to a senior developer position and became the company A/B test engineer, which also came with a raise. A little after that another company gave me a better offer and Travelocity countered. This was like a million years ago.

Because most of my career is in writing JavaScript if I want to continue to increase my wages I would have to do the most beginner level shit work because that is common expectation for JavaScript developers.

> That falsely turns your experience into an imagined generality.

> There was one year I received 3 promotions at Travelocity and nearly doubled my compensation. I was hired as a web designer and after 3 months was involuntarily reassigned to a developer role and told to “figure it out”.

This is obviously an aberration where you are doing exactly what you claimed the gp did.

Moving jobs is the single best way to get a raise and has been for decades. Leveraging the experience at a company (which is relatively static) for a higher wage at another where that new and different experience has more value.

Notably, how company leadership changes are less likely to be from internal candidates than a transplant from another company.

This might be true for software but it isn’t true into management, it isn’t true for any other industry, and it isn’t true for other forms of compensation.

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