Income Inequality

[SuburbanFarmer]

OMFG

What do you think real income means?

Real income is literally income adjusted for inflation. So to try to correlate real income to changes in inflation is ludicrous. It's literally factored out by design.

Again, we get it. You used some weird-ass terminology to refer to it, and have been railing about it for 3 posts now. We know how it works.

[Speaker to Animals]

x * y = z
a = z/y

Do you see the problem with trying to figure out the correlative relationship between a and y?

[SilverEagle]

Inflation is not a factor in real income. To get real income, you factor inflation out of it. When an economist says real incomes are stagnant or falling, he is saying that adjusted for inflation, we are STILL losing earning power over time.

We can't have a rational discussion about this if you don't understand what these terms mean.

Then you go on to accuse me of making a causal connection between real income and income inequality, when I have done precisely the opposite: there exists no causal connection between the two! Wealth inequality is not in of itself a bad thing at all.

StA I like you and all but for fuck sake are you serious? Inflation is absolutely a factor with real income. You mean to tell me that you buy the governments bullshit inflation numbers? If you use the same measurement the FEDERAL GOVERNMENT used in the 1980's to measure inflation the fucking American median income should be close to $150,000 per year. Which by the way is correct. The CPI measurement they use today is complete fucking bullshit.

No.

I am saying that, by definition, real income is income when you factor out inflation. If inflation is up or down means nothing to the result. You literally factored the effect of inflation out of the fucking thing.

Holy shit, am I the only one who took macro in college?

What is 'Real Income'
Real income refers to the income of an individual or group after taking into consideration the effects of inflation on purchasing power. For example, if you receive a 2% salary increase over the previous year and inflation for the year is 1%, then your real income only increases by 1%. Conversely, if you receive a 2% raise in salary and inflation is at 3%, then your real income shrinks by 1%.

http://www.investopedia.com/terms/r/realincome.asp


When we are discussing real incomes, we don't need to consider inflation. It's already baked into the cake, dude.

its still a factor of real incomes. That is why it's "baked into the cake, dude"

[Speaker to Animals]

OMFG

What do you think real income means?

Real income is literally income adjusted for inflation. So to try to correlate real income to changes in inflation is ludicrous. It's literally factored out by design.

Again, we get it. You used some weird-ass terminology to refer to it, and have been railing about it for 3 posts now. We know how it works.

real income is not some weird-ass terminology. It's a specific term that you would understand if you went to college and studied macroeconomics 101. we can't reasonably discuss these issues without referring to real income. That removes inflation from the discussion, reduces the variables, and allows us to look at the heart of the matter. Otherwise, people can just throw all kinds of unrelated numbers around and we get nowhere.

[SuburbanFarmer]

x * y = z
a = z/y

Do you see the problem with trying to figure out the correlative relationship between a and y?

LMFAO I am making this my signature.

[Speaker to Animals]

StA I like you and all but for fuck sake are you serious? Inflation is absolutely a factor with real income. You mean to tell me that you buy the governments bullshit inflation numbers? If you use the same measurement the FEDERAL GOVERNMENT used in the 1980's to measure inflation the fucking American median income should be close to $150,000 per year. Which by the way is correct. The CPI measurement they use today is complete fucking bullshit.

No.

I am saying that, by definition, real income is income when you factor out inflation. If inflation is up or down means nothing to the result. You literally factored the effect of inflation out of the fucking thing.

Holy shit, am I the only one who took macro in college?

What is 'Real Income'
Real income refers to the income of an individual or group after taking into consideration the effects of inflation on purchasing power. For example, if you receive a 2% salary increase over the previous year and inflation for the year is 1%, then your real income only increases by 1%. Conversely, if you receive a 2% raise in salary and inflation is at 3%, then your real income shrinks by 1%.

http://www.investopedia.com/terms/r/realincome.asp


When we are discussing real incomes, we don't need to consider inflation. It's already baked into the cake, dude.

its still a factor of real incomes. That is why it's "baked into the cake, dude"

It's literally factored out. We take actual income and divide it by the inflation. Again, we literally factor inflation out of the numbers by referring to real income.

[SuburbanFarmer]

OMFG

What do you think real income means?

Real income is literally income adjusted for inflation. So to try to correlate real income to changes in inflation is ludicrous. It's literally factored out by design.

Again, we get it. You used some weird-ass terminology to refer to it, and have been railing about it for 3 posts now. We know how it works.

real income is not some weird-ass terminology. It's a specific term that you would understand if you went to college and studied macroeconomics 101. we can't reasonably discuss these issues without referring to real income. That removes inflation from the discussion, reduces the variables, and allows us to look at the heart of the matter. Otherwise, people can just throw all kinds of unrelated numbers around and we get nowhere.

No it's not weird terminology. Referring to "Factoring Out Inflation to get Real Income" is the weird-ass terminology. We already had the same definition, and you've shit the bed playing with semantics.

[Speaker to Animals]

Again, we get it. You used some weird-ass terminology to refer to it, and have been railing about it for 3 posts now. We know how it works.

real income is not some weird-ass terminology. It's a specific term that you would understand if you went to college and studied macroeconomics 101. we can't reasonably discuss these issues without referring to real income. That removes inflation from the discussion, reduces the variables, and allows us to look at the heart of the matter. Otherwise, people can just throw all kinds of unrelated numbers around and we get nowhere.

No it's not weird terminology. Referring to "Factoring Out Inflation to get Real Income" is the weird-ass terminology. We already had the same definition, and you've shit the bed playing with semantics.

Again, we literally factor inflation out of it. To calculate real income, you divide the actual income by the CPI for that year. You are removing the effect of inflation from the number.

Real income generally compares the purchasing power of income from one year to the cost of goods in another year, and real income can also help you compare wages from two different years, taking inflation or changes to the CPI into account. To compare wages from two different time periods, take the wage from one period and multiply it by the CPI of the other period. Then, divide the product by the CPI from the original time period.

For example, imagine you earned $12 per hour in 2003 and you earned $25 per hour in 2015. If you want to ascertain how your real income has changed over that 13-year period, you need to calculate your 2003 wage in terms of 2015 prices. The CPI for all items in 2003 was 184, while the CPI for 2015 was 236. To continue, multiply $12 (your 2003 wage) by the CPI in 2015. The result is $2,832. Then, divide that number by the CPI from 2003 to get $15.39. This means your 2003 wages are worth $15.39 in 2016, taking inflation into account.

To calculate the change in your purchasing power, subtract the purchasing power of your old wage from the wage to which you are comparing it. In this case, $25 - $15.39 = $9.61. In terms of real income, you earn $9.61 more in 2015 than you did in 2003. To express this change as a percentage, divide the difference by the purchasing power of your old wage. In this case, $9.61/$15.39 indicates your real income increased by 0.624 or 62.4% from 2003 to 2015.

[SuburbanFarmer]

real income is not some weird-ass terminology. It's a specific term that you would understand if you went to college and studied macroeconomics 101. we can't reasonably discuss these issues without referring to real income. That removes inflation from the discussion, reduces the variables, and allows us to look at the heart of the matter. Otherwise, people can just throw all kinds of unrelated numbers around and we get nowhere.

No it's not weird terminology. Referring to "Factoring Out Inflation to get Real Income" is the weird-ass terminology. We already had the same definition, and you've shit the bed playing with semantics.

Again, we literally factor inflation out of it. To calculate real income, you divide the actual income by the CPI for that year. You are removing the effect of inflation from the number.

Real income generally compares the purchasing power of income from one year to the cost of goods in another year, and real income can also help you compare wages from two different years, taking inflation or changes to the CPI into account. To compare wages from two different time periods, take the wage from one period and multiply it by the CPI of the other period. Then, divide the product by the CPI from the original time period.

For example, imagine you earned $12 per hour in 2003 and you earned $25 per hour in 2015. If you want to ascertain how your real income has changed over that 13-year period, you need to calculate your 2003 wage in terms of 2015 prices. The CPI for all items in 2003 was 184, while the CPI for 2015 was 236. To continue, multiply $12 (your 2003 wage) by the CPI in 2015. The result is $2,832. Then, divide that number by the CPI from 2003 to get $15.39. This means your 2003 wages are worth $15.39 in 2016, taking inflation into account.

To calculate the change in your purchasing power, subtract the purchasing power of your old wage from the wage to which you are comparing it. In this case, $25 - $15.39 = $9.61. In terms of real income, you earn $9.61 more in 2015 than you did in 2003. To express this change as a percentage, divide the difference by the purchasing power of your old wage. In this case, $9.61/$15.39 indicates your real income increased by 0.624 or 62.4% from 2003 to 2015.

Nobody needs to "factor out" inflation. They know what their salary was 10 years ago. They have to "factor it IN" in order to make sense of why their purchasing power has gone down.

Whatever bass-ackwards way you want to describe it, we still know EXACTLY WHAT THE FUCK YOU'RE TALKING ABOUT. Please return to discussing the actual issue at hand.

[SilverEagle]

Okay lets get past that already................

StA............What do you think the American median income should be in 2017?