Wages & Inflation: 20 years

July 13, 2005 6:14am by

Michael Panzner observes that while wages have kept pace with the cost of many goods and services over the past 20 years, Housing, Higher Education, and Medical Care are what are squeezing consumers.

Its pretty astounding that Energy doesn’t make the top 3 over 20 year period.

click for larger chart:
Wagescpi
Chart courtesy Michael Panzner, Rabo Securities

>

I imagine the graphic would look quite different over a 3 or 5 year period

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  1. General Glut commented on Jul 13

    Barry,

    This is great evidence towards why the middle class is an endangered species in the United States. Housing and higher education in particular are the sine qua non of middle class status. As these are priced out of range, the class suffocates for lack of oxygen.

    Gen’l Glut

  2. M1EK commented on Jul 13

    Well, having picked 1985 as the starting point, of course energy looks good – we were still pretty expensive in real dollars there.

  3. Doc Dan commented on Jul 13

    I would note that health care and college tuition are two areas where it is virtually impossible to establish any measure of efficiency or competition. How does the free market hold down costs if you can’t quantify the results? How would Consumer Reports rate these products? All you’re left with is the B.S. annual “scores” from US News.

    Based on current personal experience, I also see the impact on service. People in both the health and higher education areas just don’t give a rat’s a@@ about the people paying the bills.

  4. None of Your Business commented on Jul 14

    Wages & Inflation

    Wages & Inflation is a big topic in economics. This article seems to forget the real value of money however. Even though wages might be keeping up with the CPI, there are things that the CPI doesn’t consider. The most telling thing about the graph in t…

  5. liberal commented on Sep 2

    Doc Dan wrote, I would note that health care and college tuition are two areas where it is virtually impossible to establish any measure of efficiency or competition.

    Same goes for housing, in the sense that the main long-term historic driver of increases in housing prices is the increase in land rent.

  6. afehribach commented on Nov 30

    With the rich getting richer and the poor getting poorer, does using an “average” wage of workers truly give a good picture of the situation for the diminishing middle class?

  7. emily boswell commented on Jan 30

    How would someone work out how much their wages should be going up annually in relation to inflation?

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