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	<title>Comments on: American Consumption</title>
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		<link>http://cafehayek.com/2008/02/american-consum.html/comment-page-2#comment-55728</link>
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		<link>http://cafehayek.com/2008/02/american-consum.html/comment-page-2#comment-55562</link>
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		<title>By: FreedomLover</title>
		<link>http://cafehayek.com/2008/02/american-consum.html/comment-page-1#comment-21835</link>
		<dc:creator>FreedomLover</dc:creator>
		<pubDate>Tue, 12 Feb 2008 00:32:08 +0000</pubDate>
		<guid isPermaLink="false">http://localhost/wordpress/?p=3396#comment-21835</guid>
		<description>&lt;p&gt;Martin:&lt;/p&gt;

&lt;p&gt;I give up, you are one obtuse fucker.&lt;/p&gt;</description>
		<content:encoded><![CDATA[<p>Martin:</p>
<p>I give up, you are one obtuse fucker.</p>
]]></content:encoded>
	</item>
	<item>
		<title>By: Martin Brock</title>
		<link>http://cafehayek.com/2008/02/american-consum.html/comment-page-1#comment-21834</link>
		<dc:creator>Martin Brock</dc:creator>
		<pubDate>Tue, 12 Feb 2008 00:06:59 +0000</pubDate>
		<guid isPermaLink="false">http://localhost/wordpress/?p=3396#comment-21834</guid>
		<description>&lt;blockquote&gt;
Did you imply the President doesn&#039;t work hard?
&lt;/blockquote&gt;

&lt;p&gt;I imply that he earns $400,000 because a law entitles the person holding his office to this income regardless of anything he does.&lt;/p&gt;</description>
		<content:encoded><![CDATA[<blockquote><p>
Did you imply the President doesn&#39;t work hard?
</p></blockquote>
<p>I imply that he earns $400,000 because a law entitles the person holding his office to this income regardless of anything he does.</p>
]]></content:encoded>
	</item>
	<item>
		<title>By: FreedomLover</title>
		<link>http://cafehayek.com/2008/02/american-consum.html/comment-page-1#comment-21833</link>
		<dc:creator>FreedomLover</dc:creator>
		<pubDate>Mon, 11 Feb 2008 22:10:04 +0000</pubDate>
		<guid isPermaLink="false">http://localhost/wordpress/?p=3396#comment-21833</guid>
		<description>&lt;p&gt;jorod:&lt;/p&gt;

&lt;p&gt;We agree that unskilled workers are the problem. I think we can also agree that they lack the ability to get engineering and science educations at this late stage. The real question is how do we fix the American &quot;educational&quot; system to stop teaching bullshit, and start teaching math and reasoning skills?&lt;/p&gt;</description>
		<content:encoded><![CDATA[<p>jorod:</p>
<p>We agree that unskilled workers are the problem. I think we can also agree that they lack the ability to get engineering and science educations at this late stage. The real question is how do we fix the American &quot;educational&quot; system to stop teaching bullshit, and start teaching math and reasoning skills?</p>
]]></content:encoded>
	</item>
	<item>
		<title>By: FreedomLover</title>
		<link>http://cafehayek.com/2008/02/american-consum.html/comment-page-1#comment-21832</link>
		<dc:creator>FreedomLover</dc:creator>
		<pubDate>Mon, 11 Feb 2008 22:02:24 +0000</pubDate>
		<guid isPermaLink="false">http://localhost/wordpress/?p=3396#comment-21832</guid>
		<description>&lt;p&gt;Martin:&lt;/p&gt;

&lt;p&gt;Did you imply the President doesn&#039;t work hard?&lt;/p&gt;</description>
		<content:encoded><![CDATA[<p>Martin:</p>
<p>Did you imply the President doesn&#39;t work hard?</p>
]]></content:encoded>
	</item>
	<item>
		<title>By: jorod</title>
		<link>http://cafehayek.com/2008/02/american-consum.html/comment-page-1#comment-21831</link>
		<dc:creator>jorod</dc:creator>
		<pubDate>Mon, 11 Feb 2008 21:31:54 +0000</pubDate>
		<guid isPermaLink="false">http://localhost/wordpress/?p=3396#comment-21831</guid>
		<description>&lt;p&gt;Skilled workers are doing fine.  Unskilled workers are the problem.  And that is why we need to control immigration and reform primary and secondary education.&lt;/p&gt;</description>
		<content:encoded><![CDATA[<p>Skilled workers are doing fine.  Unskilled workers are the problem.  And that is why we need to control immigration and reform primary and secondary education.</p>
]]></content:encoded>
	</item>
	<item>
		<title>By: Martin Brock</title>
		<link>http://cafehayek.com/2008/02/american-consum.html/comment-page-1#comment-21830</link>
		<dc:creator>Martin Brock</dc:creator>
		<pubDate>Mon, 11 Feb 2008 21:20:39 +0000</pubDate>
		<guid isPermaLink="false">http://localhost/wordpress/?p=3396#comment-21830</guid>
		<description>&lt;blockquote&gt;
No, but technological advances created
opportunities for some (many) to assume a more relaxed attitude about the job.
&lt;/blockquote&gt;

&lt;p&gt;So George W. Bush earns $400,000 per year because he loafs less than other Federal employees?  And Bill Clinton too?&lt;/p&gt;

&lt;p&gt;&quot;Per capita hours fell during 1970-2002 for most OECD countries and by over 20% in France; but they rose in several countries, and by fully 20% in the United States...&quot;&lt;/p&gt;

&lt;p&gt;http://econlog.econlib.org/archives/2004/07/hours_worked_in.html&lt;/p&gt;

&lt;p&gt;So per capita hours worked rose 20% during this period, but people in the middle of the distribution loaf so much that the increase amounts to nothing, even as per capita output doubles.  You&#039;re free to believe whatever you like, of course, but you&#039;re making it up as you go along and don&#039;t have a shred of evidence for it.&lt;br /&gt;
&lt;/p&gt;</description>
		<content:encoded><![CDATA[<blockquote><p>
No, but technological advances created<br />
opportunities for some (many) to assume a more relaxed attitude about the job.
</p></blockquote>
<p>So George W. Bush earns $400,000 per year because he loafs less than other Federal employees?  And Bill Clinton too?</p>
<p>&quot;Per capita hours fell during 1970-2002 for most OECD countries and by over 20% in France; but they rose in several countries, and by fully 20% in the United States&#8230;&quot;</p>
<p><a href="http://econlog.econlib.org/archives/2004/07/hours_worked_in.html" rel="nofollow">http://econlog.econlib.org/archives/2004/07/hours_worked_in.html</a></p>
<p>So per capita hours worked rose 20% during this period, but people in the middle of the distribution loaf so much that the increase amounts to nothing, even as per capita output doubles.  You&#39;re free to believe whatever you like, of course, but you&#39;re making it up as you go along and don&#39;t have a shred of evidence for it.</p>
]]></content:encoded>
	</item>
	<item>
		<title>By: Randy</title>
		<link>http://cafehayek.com/2008/02/american-consum.html/comment-page-1#comment-21829</link>
		<dc:creator>Randy</dc:creator>
		<pubDate>Mon, 11 Feb 2008 21:08:05 +0000</pubDate>
		<guid isPermaLink="false">http://localhost/wordpress/?p=3396#comment-21829</guid>
		<description>&lt;p&gt;&lt;i&gt;&quot;And the distribution of personality types suddenly changed in the 1970s ...&quot;&lt;/i&gt;&lt;/p&gt;

&lt;p&gt;No, but technological advances created opportunities for some (many) to assume a more relaxed attitude about the job.  &lt;/p&gt;</description>
		<content:encoded><![CDATA[<p><i>&quot;And the distribution of personality types suddenly changed in the 1970s &#8230;&quot;</i></p>
<p>No, but technological advances created opportunities for some (many) to assume a more relaxed attitude about the job.  </p>
]]></content:encoded>
	</item>
	<item>
		<title>By: Martin Brock</title>
		<link>http://cafehayek.com/2008/02/american-consum.html/comment-page-1#comment-21828</link>
		<dc:creator>Martin Brock</dc:creator>
		<pubDate>Mon, 11 Feb 2008 20:42:51 +0000</pubDate>
		<guid isPermaLink="false">http://localhost/wordpress/?p=3396#comment-21828</guid>
		<description>&lt;blockquote&gt;
Personality type. Not everyone is driven.
&lt;/blockquote&gt;

&lt;p&gt;And the distribution of personality types suddenly changed in the 1970s ...&lt;/p&gt;

&lt;blockquote&gt;
The average in my office is low $30s. I suspect you live on a coast. Jobs here in the heartland don&#039;t pay nearly as much - but then housing is a lot cheaper...
&lt;/blockquote&gt;

&lt;p&gt;I live in Alabama.  We&#039;re 11th from the bottom in per capita income.&lt;/p&gt;</description>
		<content:encoded><![CDATA[<blockquote><p>
Personality type. Not everyone is driven.
</p></blockquote>
<p>And the distribution of personality types suddenly changed in the 1970s &#8230;</p>
<blockquote><p>
The average in my office is low $30s. I suspect you live on a coast. Jobs here in the heartland don&#39;t pay nearly as much &#8211; but then housing is a lot cheaper&#8230;
</p></blockquote>
<p>I live in Alabama.  We&#39;re 11th from the bottom in per capita income.</p>
]]></content:encoded>
	</item>
	<item>
		<title>By: Randy</title>
		<link>http://cafehayek.com/2008/02/american-consum.html/comment-page-1#comment-21827</link>
		<dc:creator>Randy</dc:creator>
		<pubDate>Mon, 11 Feb 2008 17:47:19 +0000</pubDate>
		<guid isPermaLink="false">http://localhost/wordpress/?p=3396#comment-21827</guid>
		<description>&lt;p&gt;Martin,&lt;/p&gt;

&lt;p&gt;&lt;i&gt;Your theory is not remotely unique to the 50th percentile. Why the 50th percentile and not the 95th percentile?&quot;&lt;/i&gt;&lt;/p&gt;

&lt;p&gt;Personality type.  Not everyone is driven.  &lt;/p&gt;

&lt;p&gt;&lt;i&gt;&quot;How many of your coworkers in your office earn $30k?&quot;&lt;/i&gt;&lt;/p&gt;

&lt;p&gt;The average in my office is low $30s.  I suspect you live on a coast.  Jobs here in the heartland don&#039;t pay nearly as much - but then housing is a lot cheaper...&lt;/p&gt;

&lt;p&gt;&lt;i&gt;&quot;And you don&#039;t like the word &quot;progressive&quot;, but this linguistic preference isn&#039;t very informative.&quot;&lt;/i&gt;&lt;/p&gt;

&lt;p&gt;There&#039;s method to the madness.  Google Mencius Moldbug.  Start with the April archives.&lt;/p&gt;

&lt;p&gt;&lt;br /&gt;
&lt;/p&gt;</description>
		<content:encoded><![CDATA[<p>Martin,</p>
<p><i>Your theory is not remotely unique to the 50th percentile. Why the 50th percentile and not the 95th percentile?&quot;</i></p>
<p>Personality type.  Not everyone is driven.  </p>
<p><i>&quot;How many of your coworkers in your office earn $30k?&quot;</i></p>
<p>The average in my office is low $30s.  I suspect you live on a coast.  Jobs here in the heartland don&#39;t pay nearly as much &#8211; but then housing is a lot cheaper&#8230;</p>
<p><i>&quot;And you don&#39;t like the word &quot;progressive&quot;, but this linguistic preference isn&#39;t very informative.&quot;</i></p>
<p>There&#39;s method to the madness.  Google Mencius Moldbug.  Start with the April archives.</p>
<p></p>
]]></content:encoded>
	</item>
	<item>
		<title>By: Martin  Brock</title>
		<link>http://cafehayek.com/2008/02/american-consum.html/comment-page-1#comment-21826</link>
		<dc:creator>Martin  Brock</dc:creator>
		<pubDate>Mon, 11 Feb 2008 17:33:22 +0000</pubDate>
		<guid isPermaLink="false">http://localhost/wordpress/?p=3396#comment-21826</guid>
		<description>&lt;blockquote&gt;
Imagine that a worker is given a new tool, say a new software package. It makes his job easier. So what does he do with the free time? Well, part of it he employs for the company, and part of it he spends commenting on blogs or BS&#039;ing with coworkers.
&lt;/blockquote&gt;

&lt;p&gt;This could well be true, but it doesn&#039;t explain the divergence.  You&#039;re telling me that higher income earners don&#039;t have computers?  Federal employees don&#039;t have computers?  In reality, median wage earners probably have less access to this sort of thing.&lt;/p&gt;

&lt;blockquote&gt;
So better tools means both higher productivity (and higher GDP) and less time spent actually working (and lower median wages).
&lt;/blockquote&gt;

&lt;p&gt;The question is: why doesn&#039;t the higher productivity translate into higher median income as it translates into higher income at higher percentiles?  Your theory is not remotely unique to the 50th percentile.  Why the 50th percentile and not the 95th percentile?&lt;/p&gt;

&lt;blockquote&gt;
Again, this is entirely anecdotal, but if you work in an office environment as many of us now do, just take a look around...
&lt;/blockquote&gt;

&lt;p&gt;What makes you think that most median income earners work in an office environment?  How many of your coworkers in your office earn $30k?&lt;/p&gt;

&lt;blockquote&gt;
P.S. I do include the Republicans when I use the term Progressive. I judge politicians by what they do, not what they say.
&lt;/blockquote&gt;

&lt;p&gt;And you don&#039;t like the word &quot;progressive&quot;, but this linguistic preference isn&#039;t very informative.&lt;br /&gt;
&lt;/p&gt;</description>
		<content:encoded><![CDATA[<blockquote><p>
Imagine that a worker is given a new tool, say a new software package. It makes his job easier. So what does he do with the free time? Well, part of it he employs for the company, and part of it he spends commenting on blogs or BS&#39;ing with coworkers.
</p></blockquote>
<p>This could well be true, but it doesn&#39;t explain the divergence.  You&#39;re telling me that higher income earners don&#39;t have computers?  Federal employees don&#39;t have computers?  In reality, median wage earners probably have less access to this sort of thing.</p>
<blockquote><p>
So better tools means both higher productivity (and higher GDP) and less time spent actually working (and lower median wages).
</p></blockquote>
<p>The question is: why doesn&#39;t the higher productivity translate into higher median income as it translates into higher income at higher percentiles?  Your theory is not remotely unique to the 50th percentile.  Why the 50th percentile and not the 95th percentile?</p>
<blockquote><p>
Again, this is entirely anecdotal, but if you work in an office environment as many of us now do, just take a look around&#8230;
</p></blockquote>
<p>What makes you think that most median income earners work in an office environment?  How many of your coworkers in your office earn $30k?</p>
<blockquote><p>
P.S. I do include the Republicans when I use the term Progressive. I judge politicians by what they do, not what they say.
</p></blockquote>
<p>And you don&#39;t like the word &quot;progressive&quot;, but this linguistic preference isn&#39;t very informative.</p>
]]></content:encoded>
	</item>
	<item>
		<title>By: Randy</title>
		<link>http://cafehayek.com/2008/02/american-consum.html/comment-page-1#comment-21825</link>
		<dc:creator>Randy</dc:creator>
		<pubDate>Mon, 11 Feb 2008 17:01:41 +0000</pubDate>
		<guid isPermaLink="false">http://localhost/wordpress/?p=3396#comment-21825</guid>
		<description>&lt;p&gt;Martin,&lt;/p&gt;

&lt;p&gt;&lt;i&gt;&quot;Why is it not reflected in less rapid growth in per capita GDP?&quot;&lt;/i&gt;&lt;/p&gt;

&lt;p&gt;Imagine that a worker is given a new tool, say a new software package.  It makes his job easier.  So what does he do with the free time?  Well, part of it he employs for the company, and part of it he spends commenting on blogs or BS&#039;ing with coworkers.  So better tools means both higher productivity (and higher GDP) and less time spent actually working (and lower median wages).  Again, this is entirely anecdotal, but if you work in an office environment as many of us now do, just take a look around...&lt;/p&gt;

&lt;p&gt;P.S. I do include the Republicans when I use the term Progressive.  I judge politicians by what they do, not what they say.&lt;/p&gt;</description>
		<content:encoded><![CDATA[<p>Martin,</p>
<p><i>&quot;Why is it not reflected in less rapid growth in per capita GDP?&quot;</i></p>
<p>Imagine that a worker is given a new tool, say a new software package.  It makes his job easier.  So what does he do with the free time?  Well, part of it he employs for the company, and part of it he spends commenting on blogs or BS&#39;ing with coworkers.  So better tools means both higher productivity (and higher GDP) and less time spent actually working (and lower median wages).  Again, this is entirely anecdotal, but if you work in an office environment as many of us now do, just take a look around&#8230;</p>
<p>P.S. I do include the Republicans when I use the term Progressive.  I judge politicians by what they do, not what they say.</p>
]]></content:encoded>
	</item>
	<item>
		<title>By: Martin  Brock</title>
		<link>http://cafehayek.com/2008/02/american-consum.html/comment-page-1#comment-21824</link>
		<dc:creator>Martin  Brock</dc:creator>
		<pubDate>Mon, 11 Feb 2008 16:38:16 +0000</pubDate>
		<guid isPermaLink="false">http://localhost/wordpress/?p=3396#comment-21824</guid>
		<description>&lt;blockquote&gt;
Actually, that is exactly what I suspect.
&lt;/blockquote&gt;

&lt;p&gt;So put your money where your mouth is.&lt;/p&gt;

&lt;blockquote&gt;
Not that the number of hours on the job has changed, just the number of hours during which actual work is done.
&lt;/blockquote&gt;

&lt;p&gt;That&#039;s conveniently difficult to measure.&lt;/p&gt;

&lt;blockquote&gt;
I see no reason why this should not be reflected in a less rapid growth in median income.
&lt;/blockquote&gt;

&lt;p&gt;Why is it not reflected in less rapid growth in per capita GDP?  Per capita GDP grows.  Income at the 95th percentile grows.  Somehow, only the median income earner suddenly lost interest in rising income in the seventies.&lt;/p&gt;

&lt;blockquote&gt;
As for federal workers, I suspect that the work patterns are changing just as they are elsewhere, but that they are better insulated from the wage impacts by being members of the &quot;progressive&quot; team, if you know what I mean. Then again, outsourcing may soon eliminate that advantage.
&lt;/blockquote&gt;

&lt;p&gt;You&#039;re saying here that Federal employees&#039; rising income, compared with other workers, is more nearly a matter of entitlement.  That&#039;s precisely my point.&lt;/p&gt;

&lt;p&gt;If you want to define &quot;progressive&quot; this way, you may, but the political labeling is irrelevant.  Federal spending rose much faster in the Bush II administration than in the Clinton administration.  You may choose to call the Bushniks &quot;progressives&quot; if this labeling suits you, but most people call them what they call themselves, &quot;conservatives&quot;.&lt;br /&gt;
&lt;/p&gt;</description>
		<content:encoded><![CDATA[<blockquote><p>
Actually, that is exactly what I suspect.
</p></blockquote>
<p>So put your money where your mouth is.</p>
<blockquote><p>
Not that the number of hours on the job has changed, just the number of hours during which actual work is done.
</p></blockquote>
<p>That&#39;s conveniently difficult to measure.</p>
<blockquote><p>
I see no reason why this should not be reflected in a less rapid growth in median income.
</p></blockquote>
<p>Why is it not reflected in less rapid growth in per capita GDP?  Per capita GDP grows.  Income at the 95th percentile grows.  Somehow, only the median income earner suddenly lost interest in rising income in the seventies.</p>
<blockquote><p>
As for federal workers, I suspect that the work patterns are changing just as they are elsewhere, but that they are better insulated from the wage impacts by being members of the &quot;progressive&quot; team, if you know what I mean. Then again, outsourcing may soon eliminate that advantage.
</p></blockquote>
<p>You&#39;re saying here that Federal employees&#39; rising income, compared with other workers, is more nearly a matter of entitlement.  That&#39;s precisely my point.</p>
<p>If you want to define &quot;progressive&quot; this way, you may, but the political labeling is irrelevant.  Federal spending rose much faster in the Bush II administration than in the Clinton administration.  You may choose to call the Bushniks &quot;progressives&quot; if this labeling suits you, but most people call them what they call themselves, &quot;conservatives&quot;.</p>
]]></content:encoded>
	</item>
	<item>
		<title>By: Martin  Brock</title>
		<link>http://cafehayek.com/2008/02/american-consum.html/comment-page-1#comment-21823</link>
		<dc:creator>Martin  Brock</dc:creator>
		<pubDate>Mon, 11 Feb 2008 16:26:18 +0000</pubDate>
		<guid isPermaLink="false">http://localhost/wordpress/?p=3396#comment-21823</guid>
		<description>&lt;blockquote&gt;
I think the bit that you have missed is that the CPI isn&#039;t a very accurate measure. This is the point of comparing tv and internet and computational power and quality of appliances, furniture and transportation between now and various times in the past.
&lt;/blockquote&gt;

&lt;p&gt;It&#039;s the same measure that Cox and Alms use to measure income and consumption, and it&#039;s the same measure that shows incomes at higher percentiles rising with rising GDP while the median income is flat for decades.  It&#039;s the same measure that Williams uses to discuss individual incomes rising over time (tracking the income of the same individuals over time, not a fixed percentile of individual income).  It&#039;s the same measure that Roberts uses to show rising family income.&lt;/p&gt;

&lt;p&gt;I hardly missed the bit about comparing radio to TV and the net.  See above.  I&#039;ve acknowledge this point repeatedly.  It&#039;s irrelevant.  People at the 95th percentile also buy the nicer TVs, and they buy a lot more Treasury notes and equivalents.&lt;/p&gt;

&lt;p&gt;These comparisons don&#039;t explain the income divergence at all.  They&#039;re completely irrelevant.  The Cato study showing the income of Federal employees diverging from the income of other employees (already far lower than the income of Federal employees) comes closer.  I&#039;m not saying that it explains everything, but it&#039;s in the right ballpark.&lt;/p&gt;

&lt;blockquote&gt;
You have accepted that (somewhat) but then asked &quot;why real median income rose with real GDP early in the century and stopped rising with real GDP later in the century.&quot;

&lt;p&gt;But the answer to that question is contained in the earlier set of comparisons.&lt;br /&gt;
&lt;/blockquote&gt;&lt;/p&gt;

&lt;p&gt;No, it isn&#039;t.  Higher income percentiles do track GDP growth.  It&#039;s not like technological improvement affects consumption only at the median and below.  The idea is absurd.  Improvement presumably affects consumption higher in the income distribution earlier.  If so, your analysis implies that inflation adjustments understate growth at higher income levels more than it understands growth at the median, so the divergence is even greater than it appears to be.&lt;/p&gt;

&lt;blockquote&gt;
The way that we compare median incomes (and GDP) between two time periods is using a measure we call CPI. But CPI determines the value of the nominal wages in each period using a basket of goods that does not necessarily take all of those above comparisons into account. Real median income rose with GDP then perhaps because the comparison was better then.
&lt;/blockquote&gt;

&lt;p&gt;I know all about the CPI and how it weights housing and replaces various items in the index from time to time.  It&#039;s a standard measure.  We use the same standard to correct median income that we use to correct income at the 95th percentile.  The latter rises with rising per capita GDP and the former doesn&#039;t.&lt;/p&gt;

&lt;blockquote&gt;
Today&#039;s median wage can buy an awful lot more than the median wage (or even the top 5% wage) of decades past. Median income has been rising an awful lot faster than our statistics are illustrating.
&lt;/blockquote&gt;

&lt;p&gt;No.  That&#039;s really not true.  Median income buys different things, and the differences correspond to improvements, but &quot;an awful lot more&quot; is misleading.&lt;/p&gt;

&lt;p&gt;The median income measurement uses the same inflation adjustment that the 95th percentile (5% below the top) measurement uses.  The latter grows with GDP, and the former does not.  That&#039;s the fact, and the analysts here don&#039;t even attempt to explain it.  They obfuscate it instead.&lt;br /&gt;
&lt;/p&gt;</description>
		<content:encoded><![CDATA[<blockquote><p>
I think the bit that you have missed is that the CPI isn&#39;t a very accurate measure. This is the point of comparing tv and internet and computational power and quality of appliances, furniture and transportation between now and various times in the past.
</p></blockquote>
<p>It&#39;s the same measure that Cox and Alms use to measure income and consumption, and it&#39;s the same measure that shows incomes at higher percentiles rising with rising GDP while the median income is flat for decades.  It&#39;s the same measure that Williams uses to discuss individual incomes rising over time (tracking the income of the same individuals over time, not a fixed percentile of individual income).  It&#39;s the same measure that Roberts uses to show rising family income.</p>
<p>I hardly missed the bit about comparing radio to TV and the net.  See above.  I&#39;ve acknowledge this point repeatedly.  It&#39;s irrelevant.  People at the 95th percentile also buy the nicer TVs, and they buy a lot more Treasury notes and equivalents.</p>
<p>These comparisons don&#39;t explain the income divergence at all.  They&#39;re completely irrelevant.  The Cato study showing the income of Federal employees diverging from the income of other employees (already far lower than the income of Federal employees) comes closer.  I&#39;m not saying that it explains everything, but it&#39;s in the right ballpark.</p>
<blockquote><p>
You have accepted that (somewhat) but then asked &quot;why real median income rose with real GDP early in the century and stopped rising with real GDP later in the century.&quot;</p>
<p>But the answer to that question is contained in the earlier set of comparisons.
</p>
</blockquote>
<p>No, it isn&#39;t.  Higher income percentiles do track GDP growth.  It&#39;s not like technological improvement affects consumption only at the median and below.  The idea is absurd.  Improvement presumably affects consumption higher in the income distribution earlier.  If so, your analysis implies that inflation adjustments understate growth at higher income levels more than it understands growth at the median, so the divergence is even greater than it appears to be.</p>
<blockquote><p>
The way that we compare median incomes (and GDP) between two time periods is using a measure we call CPI. But CPI determines the value of the nominal wages in each period using a basket of goods that does not necessarily take all of those above comparisons into account. Real median income rose with GDP then perhaps because the comparison was better then.
</p></blockquote>
<p>I know all about the CPI and how it weights housing and replaces various items in the index from time to time.  It&#39;s a standard measure.  We use the same standard to correct median income that we use to correct income at the 95th percentile.  The latter rises with rising per capita GDP and the former doesn&#39;t.</p>
<blockquote><p>
Today&#39;s median wage can buy an awful lot more than the median wage (or even the top 5% wage) of decades past. Median income has been rising an awful lot faster than our statistics are illustrating.
</p></blockquote>
<p>No.  That&#39;s really not true.  Median income buys different things, and the differences correspond to improvements, but &quot;an awful lot more&quot; is misleading.</p>
<p>The median income measurement uses the same inflation adjustment that the 95th percentile (5% below the top) measurement uses.  The latter grows with GDP, and the former does not.  That&#39;s the fact, and the analysts here don&#39;t even attempt to explain it.  They obfuscate it instead.</p>
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		<title>By: Randy</title>
		<link>http://cafehayek.com/2008/02/american-consum.html/comment-page-1#comment-21822</link>
		<dc:creator>Randy</dc:creator>
		<pubDate>Mon, 11 Feb 2008 16:24:59 +0000</pubDate>
		<guid isPermaLink="false">http://localhost/wordpress/?p=3396#comment-21822</guid>
		<description>&lt;p&gt;Martin,&lt;/p&gt;

&lt;p&gt;&lt;i&gt;&quot;It&#039;s not like the median income earner works fewer and fewer hours in recent decades while the 95th percentile earner works more.&quot;&lt;/i&gt;&lt;/p&gt;

&lt;p&gt;Actually, that is exactly what I suspect.  Not that the number of hours on the job has changed, just the number of hours during which actual work is done.  My evidence is entirely personal and anecdotal, but I&#039;ve been in the workforce for about 40 years now, and I don&#039;t think people work as hard on average these days.  I see no reason why this should not be reflected in a less rapid growth in median income.  As for federal workers, I suspect that the work patterns are changing just as they are elsewhere, but that they are better insulated from the wage impacts by being members of the &quot;progressive&quot; team, if you know what I mean.  Then again, outsourcing may soon eliminate that advantage.&lt;/p&gt;</description>
		<content:encoded><![CDATA[<p>Martin,</p>
<p><i>&quot;It&#39;s not like the median income earner works fewer and fewer hours in recent decades while the 95th percentile earner works more.&quot;</i></p>
<p>Actually, that is exactly what I suspect.  Not that the number of hours on the job has changed, just the number of hours during which actual work is done.  My evidence is entirely personal and anecdotal, but I&#39;ve been in the workforce for about 40 years now, and I don&#39;t think people work as hard on average these days.  I see no reason why this should not be reflected in a less rapid growth in median income.  As for federal workers, I suspect that the work patterns are changing just as they are elsewhere, but that they are better insulated from the wage impacts by being members of the &quot;progressive&quot; team, if you know what I mean.  Then again, outsourcing may soon eliminate that advantage.</p>
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		<title>By: FreedomLover</title>
		<link>http://cafehayek.com/2008/02/american-consum.html/comment-page-1#comment-21821</link>
		<dc:creator>FreedomLover</dc:creator>
		<pubDate>Mon, 11 Feb 2008 16:17:51 +0000</pubDate>
		<guid isPermaLink="false">http://localhost/wordpress/?p=3396#comment-21821</guid>
		<description>&lt;p&gt;Martin:&lt;/p&gt;

&lt;p&gt;The world marches on and leaves unskilled labor behind. You either hop on the high-skill train or get left behind. Whoever said that the world wasn&#039;t cruel?&lt;/p&gt;</description>
		<content:encoded><![CDATA[<p>Martin:</p>
<p>The world marches on and leaves unskilled labor behind. You either hop on the high-skill train or get left behind. Whoever said that the world wasn&#39;t cruel?</p>
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		<title>By: Martin  Brock</title>
		<link>http://cafehayek.com/2008/02/american-consum.html/comment-page-1#comment-21820</link>
		<dc:creator>Martin  Brock</dc:creator>
		<pubDate>Mon, 11 Feb 2008 15:57:13 +0000</pubDate>
		<guid isPermaLink="false">http://localhost/wordpress/?p=3396#comment-21820</guid>
		<description>&lt;blockquote&gt;
That&#039;s a lot of maybes. Let me add one more... Maybe people just aren&#039;t as driven as they once were. Why should we not expect people to achieve a comfortable balance between work and leisure and then just relax. Maybe the only thing that hasn&#039;t kept up with the times is the length of the standard work week.
&lt;/blockquote&gt;

&lt;p&gt;Work week differences don&#039;t account for increased production for the consumption of a few.  It&#039;s not like the median income earner works fewer and fewer hours in recent decades while the 95th percentile earner works more. Again (and again), look at the Cato study linked earlier in another thread.  I&#039;ll link it again if you want.  Are telling me that Federal employees work longer hours than other employees?  That&#039;s your theory?  I can only suppose that you&#039;ve never worked for the Federal government.&lt;/p&gt;

&lt;p&gt;I suppose the hours worked to earn the median income, entirely from wage labor, has risen in recent decades.    How much will you wager that I&#039;m mistaken?  We love to talk about Julian Simon putting his money where his mouth is.  Will you?&lt;br /&gt;
&lt;/p&gt;</description>
		<content:encoded><![CDATA[<blockquote><p>
That&#39;s a lot of maybes. Let me add one more&#8230; Maybe people just aren&#39;t as driven as they once were. Why should we not expect people to achieve a comfortable balance between work and leisure and then just relax. Maybe the only thing that hasn&#39;t kept up with the times is the length of the standard work week.
</p></blockquote>
<p>Work week differences don&#39;t account for increased production for the consumption of a few.  It&#39;s not like the median income earner works fewer and fewer hours in recent decades while the 95th percentile earner works more. Again (and again), look at the Cato study linked earlier in another thread.  I&#39;ll link it again if you want.  Are telling me that Federal employees work longer hours than other employees?  That&#39;s your theory?  I can only suppose that you&#39;ve never worked for the Federal government.</p>
<p>I suppose the hours worked to earn the median income, entirely from wage labor, has risen in recent decades.    How much will you wager that I&#39;m mistaken?  We love to talk about Julian Simon putting his money where his mouth is.  Will you?</p>
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		<title>By: liberty</title>
		<link>http://cafehayek.com/2008/02/american-consum.html/comment-page-1#comment-21819</link>
		<dc:creator>liberty</dc:creator>
		<pubDate>Mon, 11 Feb 2008 14:20:55 +0000</pubDate>
		<guid isPermaLink="false">http://localhost/wordpress/?p=3396#comment-21819</guid>
		<description>&lt;p&gt;Martin,&lt;/p&gt;

&lt;p&gt;I think the bit that you have missed is that the CPI isn&#039;t a very accurate measure.  This is the point of comparing tv and internet and computational power and quality of appliances, furniture and transportation between now and various times in the past.&lt;/p&gt;

&lt;p&gt;You have accepted that (somewhat) but then asked &quot;why real median income rose with real GDP early in the century and stopped rising with real GDP later in the century.&quot;&lt;/p&gt;

&lt;p&gt;But the answer to that question is contained in the earlier set of comparisons.&lt;/p&gt;

&lt;p&gt;The way that we compare median incomes (and GDP) between two time periods is using a measure we call CPI.  But CPI determines the value of the nominal wages in each period using a basket of goods that does not necessarily take all of those above comparisons into account. Real median income rose with GDP then perhaps because the comparison was better then.  &lt;/p&gt;

&lt;p&gt;Today&#039;s median wage can buy an awful lot more than the median wage (or even the top 5% wage) of decades past.  Median income has been rising an awful lot faster than our statistics are illustrating.&lt;/p&gt;</description>
		<content:encoded><![CDATA[<p>Martin,</p>
<p>I think the bit that you have missed is that the CPI isn&#39;t a very accurate measure.  This is the point of comparing tv and internet and computational power and quality of appliances, furniture and transportation between now and various times in the past.</p>
<p>You have accepted that (somewhat) but then asked &quot;why real median income rose with real GDP early in the century and stopped rising with real GDP later in the century.&quot;</p>
<p>But the answer to that question is contained in the earlier set of comparisons.</p>
<p>The way that we compare median incomes (and GDP) between two time periods is using a measure we call CPI.  But CPI determines the value of the nominal wages in each period using a basket of goods that does not necessarily take all of those above comparisons into account. Real median income rose with GDP then perhaps because the comparison was better then.  </p>
<p>Today&#39;s median wage can buy an awful lot more than the median wage (or even the top 5% wage) of decades past.  Median income has been rising an awful lot faster than our statistics are illustrating.</p>
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		<title>By: Wayne Pruner</title>
		<link>http://cafehayek.com/2008/02/american-consum.html/comment-page-1#comment-21818</link>
		<dc:creator>Wayne Pruner</dc:creator>
		<pubDate>Mon, 11 Feb 2008 14:20:18 +0000</pubDate>
		<guid isPermaLink="false">http://localhost/wordpress/?p=3396#comment-21818</guid>
		<description>&lt;p&gt;Capitalism and our government is based on comsumption. People need to spend and to buy things to keep it all flourshing. This is also a vulnerability. What happens when world population growth is so large that there are not enough resources to produce what everyone wants, much less needs?&lt;/p&gt;</description>
		<content:encoded><![CDATA[<p>Capitalism and our government is based on comsumption. People need to spend and to buy things to keep it all flourshing. This is also a vulnerability. What happens when world population growth is so large that there are not enough resources to produce what everyone wants, much less needs?</p>
]]></content:encoded>
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