I swear I had Econ in college, but I don’t remember anyone saying this so succinctly. It’s from a weird place too, but this quote hits home. It’s like population decline, but for money.
It was a truly baffling thing for an American president to say. And University of Michigan economist Justin Wolfers explained on MSNBC that things could get very bad as Trump’s scheme becomes reality. Wolfers ntoed that the idea of how much you can afford to buy with your income is called “real income.” And if real income falls, that’s called a recession. Wolfers went on to explain that if things decline as badly as Trump’s example, where someone who bought 30 dolls could only afford to buy two dolls, that’s called a depression.
Video from MSNBC: https://www.youtube.com/watch?v=sAZxLm6M_V0
I have had this dream for a while now that the major media networks displayed real income changes next to the Dow and other stock tickers. Just so normal people are reminded of how their money is doing compared to rich people’s money.
Do you have the formula for that? I might be up for doing that here on Lemmy locally once a month or so.
I’m not much a math person or econ person. Do you have any ideas on what that would like like? The Econ professor in the video said the real income is aka GDP. He was loosely speaking though, so I don’t know if that’s a one to one. I guess I could put something up and people will tell me how it’s wrong? I don’t mind that.
There is a variable called Gross National Income (GNI) corrected for inflation which is likely the variable Wolfers refers to. You can report it, but it will not be very different from GDP corrected for inflation which the media writes about all the time. Essentially production =income except for some small nuances.
Did you see my first crack at it? I would love your input. I think the “Real GDP” might be not adjusted for inflation? I can’t tell.
For decades, ‘middle class’ in America was one income supporting a family of four. In those days, $1 million was considered a vast fortune. Then Reagan got elected. By 1993, when Bush Sr. left office, ‘middle class’ was two incomes to run the home, and $1 million was what a rich guy spent on a party.
I’ve heard that one dozens and dozens of times. They claim that “Women’s Lib” lowered wages. Ask them to show one time that actual wages were cut and they can’t. Doesn’t stop them from repeating it.
The angle is supply and demand (of labor).
It’s a damn good thing a bunch of boomers died in Vietnam or it probably would’ve been worse, earlier.
TIL every year with a rent increase is a recession. Whenever housing prices increase faster than income that’s a recession. When college tuition goes up faster than incomes that’s a recession.
Wheeeeeen youuuuuur
Bank accounts dry
And it makes-a you cry
Thats Recessiooooon
Your own / personal / recession
Someone to stall your sleep
Someone who creeps
And if real income falls, that’s called a recession.
But by that metric, rich people would never experience a recession. If that’s the case, why do we allow them to cause a recession for the rest of us? Madness.
It’s a huge example of the bystander effect. It would only take a handful of people to change the situation.
By doing what? Posting where the CEOs live so people can … protest. Yea, dox them and/or track movements to organize totally non-violent protests.
Stalk the shit out of them and show up carrying signs. Work in shifts if they come to your area.
It felt like “shoot them in the streets” was plainly obvious a few months ago but that’s harder than an Instagram story.
That isn’t really the definition though. Real income can fall in a recession but it’s not necessarily a recession just because incomes fell. Real income can increase or decrease both during a recession and not during a recession. It’s a lot more complicated than “when your income declines there is a recession”.
It isn’t the definition at all.
Real income is income less inflation.
And a recession is two consecutive quarters of negative GDP growth.
The U.S. has been in a recession since Reagan according to the wording right? Housing and such vs wages shows its been in downfall since.
I was a kid in the Reagan years and I can certainly buy shitloads more now than as a young adult. As you say, housing and wages are shit, but I can afford things that were unthinkable back then. For comparison, I was making minimum wage as a 1990 college kid, basically am now at $15/hr.
I’m probably not making sense, but the goods available to me now are stunning compared to previous decades. And I’m not only talking about compute power, but while we’re there… Dad got me a VIC-20 in the 80s, $1,700 in today’s money. For that much I can outfit a family of four with decent phones and likely pay less monthly than our AT&T bill in the day. And what’s “long distance”?
My water bill was around $20 in the 90s, still is today. I had all the tools to cut my water, gas and power back on, I was that poor. Even at $15/hr. I can easily pay all that along with my wife’s $17hr. (Always had roommates or live-in girlfriends, same difference.)
Education and housing prices have exploded, but not so much other stuff. My first ever real shopping trip was $75 (1990), that’s $175 in 2025. $220 is our usual Aldi bill and I’m buying shrimp, chicken, beef, good stuff. Guess I’m saying that consumer goods and services are shitloads cheaper, or were. Give us a few months.
And as ever, I’m fucked once again on health care. Guess where I live.
So from 1960-1990 (30 years) prices went from about 60 cents to 1.66 per pound for beef. That’s that’s a 270% increase. The median salary went from 5,600 to 29,900. That’s a 533% increase.
From 1990-2020 (30 years, lucky we are skipping covids inflation) prices went from 1.66 to 3.18. that’s 191% increase. Wages went from 29,000 in 1990 to 68,000 in 2020. That’s 234% increase.
So what we see is a wage to consumer goods ratio decrease from 263% to 43%.
So our economic wealth as a country is managing to increase faster and faster, yet the consumer wealth fell off awhile ago. If you follow the stock market youd see the Dow Jones increased from 2,700 to 30,000 from 1990-2020. So comparably we should see a 1,100% increase, not a 43%.
Granted none of this matters at the end of the day. The fact is, we are producing a fuck ton of products, and fewer and fewer are reaping the rewards of such day after day.
If you evaluate accessibility of things after subtracting the baseline requirements to stay alive it gets real sketchy how close many Americans are getting by.
