[lansol]

Real people don't care about "real income". They care about if they can get and retain a decent home, job and life. How much debt they are in, that their education is enough, how their social life is, if they can have kids and how they think about their future.

"Real income" is measured against the consumer price index (CPI). CPI is used to gauge inflation, "are people paying more for groceries this year than last?", not living standard. Most of the important questions like "how many years of education do you need for a good job?" or "how many average salaries do you need for a good home?" are all massively worse. So are many metrics of despair.

What real income really shows is that more money now gives you less. That what buys you a loaf of bread doesn't buy you a good life anymore. Because median income might be keeping up with inflation, but not with anything else.

[hdgvhicv]

Adjusting for CPI the median wage in America is up about 10% in the last 20 years.

[nothercastle]

You can’t use cpi directly like that. The model uses hedonic adjustment to say that modern goods are better than old stuff so you are earning more.

For example your $1000 oled tv is better than your $1000 crt tv therefore you your purchasing power has gone up. Or your base truck now comes with nav therefore your truck can be 5k more and still be net neutral. The problem with this system is that in order to stay in the same price catagory on the index you continually need to move down the product tiers. So today’s lowest tier is a decade ago mid tier is 2 decades ago high end. Moving down like that makes you feel poorer because wealth is relative.

[chessgecko]

The real issue is that housing is heavily underweighted in the cpi basket. How many people do you know that are only spending 12.9% of their after tax take home on housing, water and fuel? Only people with paid off mortgages.

[lotsofpulp]

Yet people feel like their purchasing power is going down.

Their expectations might be to live in the top few decile neighborhoods of a metro, where land prices have gone up a few hundred thousand in the previous decade.

It doesn’t matter if the stats say income went up 10% if they or their kids won’t be able to land that house they wanted, or can’t make that appointment with the doctor and instead have to see an NP, or worry about having to move to a more expensive metro to reduce income volatility.

[geye1234]

In the 1970s, a single-income family on a factory worker's wage could buy a 3-bedroom house with a 3x mortgage.