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I'm having trouble parsing this. You're saying that because consumer costs don't go up as fast as the GDP, it's detrimental to our middle-wage economy?
Yes!! I have to leave now. If you dont see the reason, I'll explain it later.
Yes!! I have to leave now. If you dont see the reason, I'll explain it later.
No, you're talking wage distribution. i wouldn't necessarily disagree, but given that the working notion of our economy is that everyone gets to keep as many nickels as he can grab and any notion of spreading them around is that g'damned socialist nonsense, I'm amused.
Actually it does not mean that at all.
It just means that they are not the same.
Keeping up is dependent upon whether the ratio of Income PP to GDP PP stays the same, goes down, or goes up. More importantly, avg income pp is only useful statistically as it makes no statement regarding distribution.
GDP per capita (2017) = $59,792
Income per capita (2017) = $31,177
"per capita" means average. It doesn't mean median nor household.
Why are these 2 figures different by 48%?
Because one is based on the entire GDP of the US, and the other is based on total wages of workers.
The GDP of the US is around $18 TRILLION, while the total wages of workers is roughly $6.5 TRILLION.
Quote:
Originally Posted by Hoonose
It also reflects the fact that personal income does not keep up with productivity.
Why should it?
There's no Law of Economics that says it should, nor could there be, and if you're measuring productivity in terms of Dollars, that's an automatic fail, because increasing Dollar value is not proof of increasing productivity.
Quote:
Originally Posted by Supposn
HooNose, you're certainly correct. The CPI does not keep pace with the GDP and the extent that it doesn't do so is detrimental to our median wage, middle-income segment of our population, and drags upon our entire economy.
Quote:
Originally Posted by Quietude
I'm having trouble parsing this. You're saying that because consumer costs don't go up as fast as the GDP, it's detrimental to our middle-wage economy?
Consider the source: an economic non-starter.
The CPI is a measure of the aggregate Monetary, Demand-pull, Cost-push, Wage and Interest Inflation over a given period.
CPI and GDP are independent and unrelated, since GDP can increase while CPI increases, decreases or remains constant, and CPI can increase while GDP increases, decreases or remains constant.
Folks, personal or family income has not kept up with our overall national productivity. Of course there are no such 'rules' and it does not have to be that way. But IMO we should hope it be that way. We should hope that our broad middle class rises with their standard over living if our GDP rises over the years like it has. If I am wrong about this please convince me, so Ill just worry about us rich.
Because one is based on the entire GDP of the US, and the other is based on total wages of workers.
The GDP of the US is around $18 TRILLION, while the total wages of workers is roughly $6.5 TRILLION.
TY. This is the best explanation so far in this thread.
1. If that's the case, shouldn't income PP about 1/3 (not 1/2) of GDP PP?
2. Source for $6.5 trillion wage?
3. Where does the difference between $18 and $6.5 trillion go to?
TY. This is the best explanation so far in this thread.
1. If that's the case, shouldn't income PP about 1/3 (not 1/2) of GDP PP?
2. Source for $6.5 trillion wage?
3. Where does the difference between $18 and $6.5 trillion go to?
Why do you think all GDP goes to wages? It's as simple as that. But to make it even simpler, where do you think corporate profits (AFTER wage costs), stockholder dividends and capital increase comes from? Thin air? Taxes? The tooth fairy?
You might as well be questioning total barrels of oil consumed vs. the much smaller amount of diesel fuel used. By gosh and by golly, where does the rest go?
Why do you think all GDP goes to wages? It's as simple as that. But to make it even simpler, where do you think corporate profits (AFTER wage costs), stockholder dividends and capital increase comes from? Thin air? Taxes? The tooth fairy?
You might as well be questioning total barrels of oil consumed vs. the much smaller amount of diesel fuel used. By gosh and by golly, where does the rest go?
Good answer. Can you break down 11.5 trillion (difference btw GDP and total wage) into the 3 components you stated? Any ball park figure will help.
No, you're talking wage distribution. i wouldn't necessarily disagree, but given that the working notion of our economy is that everyone gets to keep as many nickels as he can grab and any notion of spreading them around is that g'damned socialist nonsense, I'm amused.
Except that rules that have to be followed by threat of violence from our police state to collect said nickles is draconian. In a true free market if you were a robber barron you would be subject to physical harm or death from your dealings and you would not be protected by a police state.
If say you were dealing treacherously with a group of people and you were not protected by a draconian police state you could be killed or have your entire business burnt to the ground. These would be the real life consequences for some of the corporate behavior that we see today but they are insulated from such consequences by our MASSIVE police state.
So long as all the libertarians are ok with dramatically increased terrorism as the wealth inequality increases then we can remain intellectually honest. Also the terrorism, in my estimation, will become increasingly sophisticated the more and more people that are marginalized.
After all burning your business to the ground and shooting you as you run out is not re-distributing it. Sounds like fair game to me, better get used to spending BIG money on private security, and I mean BIG money.
Its very likely nuclear terrorism will be in our future as that is the only thing that gives a small group tremendous leverage.
Good answer. Can you break down 11.5 trillion (difference btw GDP and total wage) into the 3 components you stated? Any ball park figure will help.
You are asking the proverbial stupid question, based on a very flawed understanding of the two indicators you are trying to equate, and I have never seen any discussion start there and end up anywhere useful.
When you can explain how GDP == wages, we'll try again. Good luck.
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