U.S. Standard of Living Has Fallen More Than 50%

[one...two...tree 2,762]

NEW YORK (Bullion Bulls Canada) -- In writing about the relentless collapse of Western economies, I frequently point to "40 years of plummeting wages" for Western workers, in real dollars. However, where I have been remiss is in quantifying the magnitude of this collapse in Western wages.

On several occasions, I have glibly referred to how it now takes two spouses working to equal the wages of a one-income family of 40 years ago. Unfortunately, that is now an understatement. In fact, Western wages have plummeted so low that a two-income family is now (on average) 15% poorer than a one-income family of 40 years ago.

Regular readers will recognize the chart below on U.S. average wages.

Using the year 2000 as the numerical base from which to "zero" all of the numbers, real wages peaked in 1970 at around $20/hour. Today the average worker makes $8.50/hour -- more than 57% less than in 1970. And since the average wage directly determines the standard of living of our society, we can see that the average standard of living in the U.S. has plummeted by over 57% over a span of 40 years.

There are no "tricks" here. Indeed, all of the tricks are used by our governments. The green line shows average wages, discounted by inflation calculated with the same methodology for all 40 years. Obviously that is the only way in which we can compare any data over time: through applying identical parameters to it each year.

Then we have the blue line: showing wage data discounted with our "official" inflation rate. The problem? The methodology used by our governments to calculate inflation in 1975 was different from the method they used in 1985, which was different than the method they used in 1995, which was different than the method they used in 2005.

Two obvious points flow from this observation. First, it is tautological that the only way in which data can be compared meaningfully is to use a consistent methodology. If the government thinks it has improved upon its inflation methodology, then all it had to do was take all of its old data and re-calculate it with their "improved" methodology. Since 1970 there is this invention called "computers" which makes such calculations rather simple.

This brings us to the second point: the refusal of our governments to adopt a consistent methodology in reporting inflation statistics can only imply a deliberate attempt to deceive, since it is 100% logically/statistically invalid to simply string together disconnected series of data -- and present it as if it represents a consistent picture. More specifically, we can see precisely what lie our government was attempting to get us to believe.

http://www.thestreet.com/story/11480568/1/us-standard-of-living-has-fallen-more-than-50-opinion.html

Edited June 27, 2013 by Lincolns mullet

[spookyturtle 9,465]

So Booyah was right?

[decocker 7,198]

but do they owe us a living?!/!

[Karee 4,190]

Looks like the workers in the 70s were overpaid.

[Teddy B 17,252]

Never mind.

Edited June 27, 2013 by Teddy B

[I AM NOT THAT GUY 5,715]

U.S. Standard of Living Has Fallen More Than 50%

B.S.

[Gary and Alla 3,694]

NEW YORK (Bullion Bulls Canada) -- In writing about the relentless collapse of Western economies, I frequently point to "40 years of plummeting wages" for Western workers, in real dollars. However, where I have been remiss is in quantifying the magnitude of this collapse in Western wages.

On several occasions, I have glibly referred to how it now takes two spouses working to equal the wages of a one-income family of 40 years ago. Unfortunately, that is now an understatement. In fact, Western wages have plummeted so low that a two-income family is now (on average) 15% poorer than a one-income family of 40 years ago.

Regular readers will recognize the chart below on U.S. average wages.

Using the year 2000 as the numerical base from which to "zero" all of the numbers, real wages peaked in 1970 at around $20/hour. Today the average worker makes $8.50/hour -- more than 57% less than in 1970. And since the average wage directly determines the standard of living of our society, we can see that the average standard of living in the U.S. has plummeted by over 57% over a span of 40 years.

There are no "tricks" here. Indeed, all of the tricks are used by our governments. The green line shows average wages, discounted by inflation calculated with the same methodology for all 40 years. Obviously that is the only way in which we can compare any data over time: through applying identical parameters to it each year.

Then we have the blue line: showing wage data discounted with our "official" inflation rate. The problem? The methodology used by our governments to calculate inflation in 1975 was different from the method they used in 1985, which was different than the method they used in 1995, which was different than the method they used in 2005.

Two obvious points flow from this observation. First, it is tautological that the only way in which data can be compared meaningfully is to use a consistent methodology. If the government thinks it has improved upon its inflation methodology, then all it had to do was take all of its old data and re-calculate it with their "improved" methodology. Since 1970 there is this invention called "computers" which makes such calculations rather simple.

This brings us to the second point: the refusal of our governments to adopt a consistent methodology in reporting inflation statistics can only imply a deliberate attempt to deceive, since it is 100% logically/statistically invalid to simply string together disconnected series of data -- and present it as if it represents a consistent picture. More specifically, we can see precisely what lie our government was attempting to get us to believe.

http://www.thestreet.com/story/11480568/1/us-standard-of-living-has-fallen-more-than-50-opinion.html

I expect the influx of 11 million former illegals will fix this. And the 11 million new illegals to replace the formerly cheap legals will help also.

Interesting that the apex is in the year 2000. Definitely Bush's fault. I like best the "addl. corrections" for real inflation.

[Gary and Alla 3,694]

So Booyah was right?

Sort of

Once Obama dragged our standard of living down 50% ...Australia was better. That's what I take from this. Obama is a self-fullfilling Booyah prophecy. Booyah was just ahead of his time. He knew a lot of things we didn't, obviously

[spookyturtle 9,465]

Sort of

Once Obama dragged our standard of living down 50% ...Australia was better. That's what I take from this. Obama is a self-fullfilling Booyah prophecy. Booyah was just ahead of his time. He knew a lot of things we didn't, obviously

He's probably down under laughing at us.

[Bugs 455]

Looks like the workers in the 70s were overpaid.

This. Our standard of living was insane compared to most of the rest of the world. It still is in fact, since we now have two working parents to keep it up.

And it's not Bush or Obama's fault. It's been a trend going for several decades.

Edited June 28, 2013 by Leon & Mylen

[The Nature Boy 4,224]

This. Our standard of living was insane compared to most of the rest of the world. It still is in fact, since we now have two working parents to keep it up.

And it's not Bush or Obama's fault. It's been a trend going for several decades.

You are not going to make many buds around here saying anything is not Bush's fault. The Obama part will be cool

[Gary and Alla 3,694]

You are not going to make many buds around here saying anything is not Bush's fault. The Obama part will be cool

I have seen charts, modified with "addl. information" to reflect the "actual truth" that show that every bad thing from the dawn of time is "Bush's fault" and that "Obama knows nothing about it and only heard about it at the press conference"