One of my favorite quotes about statistics is the following:
“There are three kinds of lies: lies, damned lies, and statistics”.
Here is the problem with people who crunch numbers all day. They sit in their dark rooms manipulating data with excel spreadsheets. They attempt to “normalize” and “seasonally adjust” all of the data. However, every once in a while, it pays to look at the world around you. I will ask rhetorical questions: Do you believe you are worse off then your fathers generation? What about your grandfather? Great grandfather? I don’t think any one who reflects on these questions can remain long in doubt.
It is very difficult to normalize past income to present income. Benefits, time off, inflation, type of jobs, changing regulatory environment and many other factors need to be considered. Here is what I know. The amount of time working to get household items is decreasing.
The decrease is extraordinary. Not surprisingly, areas that show increases have heavy government interference. Whenever the government subsidizes something, it creates more of a demand for it. The government inflates specific sectors of the economy. For instance, the government guarantees student loans at low interest rates and makes it impossible to discharge this debt. What did you think was going to happen? You will find more willing lenders and more willing borrowers.
Living conditions are getting better. We are moving into bigger and bigger homes.
Life expectancy has been rising in nearly all countries.
There are easier and better methods to determining the increase or decrease in the standard of living. Looking at “real income” in a vacuum is utter nonsense.