Ever wondered what are the *real* inflation numbers?

Quote from kashirin:

Yeah, low skilled manufacturing jobs that paid 20-30$hour are change to high skilled Walmart 8 $
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If you think employers save money by paying people less than they did 20 years ago it should get reflected in huge profit margins. If you think so go ahead open some kind of manufacturing business and get rich. Actually, you being a nice guy, would pay your employees above market value of labor. Who cares about competition when you get a chance to help people.
 
Quote from daddyeaux:

by machines??? how about illegals and Chinese???
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:) The fact is that these illegals are even more economical than machines at the moment. But don't worry. This is just a transitory situation. Computers/technology costs decrease exponentially. Illegals costs rise on par with the overall inflation. The two have to meet at some point.
 
At certain point of time employers decided to pay employees less then they used to. That's how it happened, suddenly and without any reason.
 
Quote from Daal:

typewriter manufacturers also got destroyed, you arguing thats a bad thing?
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Good point. The problem is that many people keep clinging to the past while we are living times of accelerating change. Its not even a matter of good or bad (although in my view, this is the most exciting time in history). You have to adapt in order to survive. It's as simple as that. What's today is nothing compared with the speed of the changes that will soon come. Booms and busts will be more frequent and more powerfull than before. It will be brutal. But I am prepared. Let's hope we won't destroy ourselves in the process (a small, but still a significant possibility).
 
Quote from Cesko:

If you think employers save money by paying people less than they did 20 years ago it should get reflected in huge profit margins.
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If you noticed S&P had double digit profit growth during the last several years. And median wages decreased. So definetely margins increased because people are paid less than before
 
Quote from h hubbins:

the shadow stats guy has an undergrad degree in economics. there are plenty of blogs run by ph d economists and if you spent a month looking at several each day you wouldn't find anyone discounting the methodology like this guy.
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Ad hominem agruments do not stregthen your position.

His 'methodology' as you put it is to undo the changes made to the CPI calculation after 1982. That's when they started massaging the numbers to report smaller inflation numbers. All sgs does is take the BLS raw data and apply the pre-1982 formula.

1. It more accurately represents what consumers are actually paying.
2. When you compare sgs' current inflation/cpi numbers to BLS's 1975 numbers, you are comparing apples to apples. When you compare BLS's current inflation/cpi numbers to BLS's 1975 numbers, you are comparing apples to oranges.


the computer you posted and he runs his website on would have cost several hundred thousand dollars the year that 4-runners cost mere thousands.
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That's accounted for in the cpi

4-runners didn't have plush leather seats, air bags or anti-lock brakes either. you had to get out to lock the hubs before shifting into 4 wheel drive on my '86.

the gov't numbers adjust for quality as well.
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That's nonsense. The CPI is the Consumer Price Index. It is supposed to reflect the prices that consumers actually pay for goods and services not some crap spit out by spin doctors.


bottom line- there is no outcry among the phd's in the field about the numbers and if this guy new his statistics and economics well enough then he could get get his theory published in a reputable peer reviewed economics journal. so, if you are paying for his site then drop him a line and ask him when he'll revolutionize the field with a journal (not wsj) article.
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Ad hominem arguments do not enhance your position.
 
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