Friday, July 25, 2008

Did You Get a Huge Increase in Your Real Wage?

Mark Perry presents some interesting data:

Then considering that average hourly earnings have increased by almolst [sic] 40% over the last ten years, the real prices of those products have fallen by an even greater amount, a HUGE amount. In other words, there are many, many products like computers, cameras, new cars, clothing, TVs, appliances, electronics, software, etc. that are significantly cheaper today than ten years ago, especially after adjusting for increases in earnings.


The increase in nominal earnings over the past decade was 38.6% while the reported increase in the CPI was 33.5% so by this data, real earnings have increased by only 3.8% over the past decade. This is not a HUGE increase. Unless you don’t eat consume a lot of electronic products and have figured out how to drive that new car without buying gasoline.

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