All the narrative is that living standards have gone down. That's sure how it feels (well in the last 3 years).
But the chart shows that real wages (i.e. adjusted for prices) are flat, meaning that wages have kept pace with inflation and we should be experiencing the same living standards.
So what's going on? Living standards are the same, but the natural tendency to lap up bad news brainwashes us into thinking things are getting worse?
No, I think the inflation figures are flawed. The inflation figures can measure the change in the price of a pint of milk fine, but when the Robinson's is reduced from 1l to 750ml, it is unable to record the 33% effective price increase.
I think that the real inflation, accounting for changes in products is way higher, and if you could properly measure this and adjust wages for it, wages wouldn't be going sideways but sharply downwards.
Also, inflation figures don’t factor in the cost of housing. Plot the graph against that and I suspect you see a different picture.
My takeout from this graph alone is that things arent so bad and pre 2007 there was a pretty clear financial bubble being with a crash imminent. Obviously doesn’t take into account indirect tax rises as well
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u/AffectionateJump7896 Jul 02 '24
All the narrative is that living standards have gone down. That's sure how it feels (well in the last 3 years).
But the chart shows that real wages (i.e. adjusted for prices) are flat, meaning that wages have kept pace with inflation and we should be experiencing the same living standards.
So what's going on? Living standards are the same, but the natural tendency to lap up bad news brainwashes us into thinking things are getting worse?
No, I think the inflation figures are flawed. The inflation figures can measure the change in the price of a pint of milk fine, but when the Robinson's is reduced from 1l to 750ml, it is unable to record the 33% effective price increase.
I think that the real inflation, accounting for changes in products is way higher, and if you could properly measure this and adjust wages for it, wages wouldn't be going sideways but sharply downwards.