but it bothers me when people use statistics without understanding them.
i don't know if you missed this, but i trained as a sociologist. i know statistics quite well.
Dystopic, the first graph you use looks misleading because it shows absolute amounts, and not growth rates. It's true, the bottom percentile grew by a pitiful absolute amount, but relative to it's starting position, it had a startling growth rate.
i wasn't about to make a new graph at that point, though i ended up doing it for the second graph anwyay (the first one's from wikipedia).
misleading? to whom? the problem with a lot of economics training is that it's overly focused on things from the top down; statistics are tools for answering questions, but statisticians rarely get to decide what questions are asked.
Do you know what an exponential function is? What does a graph look like if you increase the CPI constantly by 2% every year? Inflation is not increasing, it's just that inflation is compounding on inflation.
actually, you're describing a recursive function. moreover, the CPI index itself is adjusted for inflation. why would anyone adjust inflation for inflation? inflation is an estimate on how much the cost of things
should increase; the CPI shows you how much they they did.
the CPI isn't a perfect measure of the cost of living, for sure. if i had time (it's taken me hours to compose this response in the middle of my workday), what i'd really like to see would be:
-all figures adjusted to the same inflation level
-earned income less minimal cost of living (a figure representing disposable income, when positive, or the gap between income and need, when negative)
-broken down by SES, age, race, urban/rural, and region.
one of the problem with a lot of government stats that are used to determine policy is that they obscure a lot of more unique situations by using averages. social workers and local government are assumed to make of the difference, but neither really have the resources to effect any appropriate change.
Third, the standard of living graph that you use was adjusted for inflation. That means that the CPI was already incorporated into that handy little graph. This means that the first graph tells us that even after taking into account inflation (i.e. increases in the CPI), real income increased by 40% for the poorest 10% of the population.
i'm not sure which graph you're referring to, but i think you meant the first. though closely related, historical CPI and inflation are not the same thing. if they were, adjusting CPI for inflation would result in a flat line graph. inflation is
estimated with the CPI, among other things (include currency values and GDP). the point of posting both of those charts what to compare actual earned income to cost of living.
inflation is actually a very abstract concept with no direct means of measurement. try looking up a definition of it, and you'll probably find something like "a mark of economic growth, except when there's too much of it, which means economic collapse." at best, that's an over-simplification. among many things, inflation represents the manipulation of supply and demand to ensure profitability. when the costs of production outweight any profits you'd make by allowing a product to be affordable by lower SES strata, the price is inflated. from a business point of view, it's a matter of optimization.
but there are other points of view. take bananas for example. argo-businesses in the U.S. grow a lot of bananas aborad, especially in central america. it's not uncommon around one of these facilities to see dumptrucks full of bananas dropping their loads into lakes, and only moments later villiage children rushing out into deep and often polluted waters scrounging for a meal. why on earth would they throw bananas away? to keep the costs up and make more money. the "unfortunate" side effect is that some people can't afford those bananas.
and to boot, i'm pretty damn sure they're lower quality than anything you could get locally grown (if you live in a climate that'll support banana trees).
Sure, a car might be 4 times as expensive as twenty years ago, but inflation is not the only factor that contributed to that. Cars now have airbags, seatbelts, CD players, anti-lock breaks, more efficient fuel consumption, and so on.
all those perks don't mean a thing to people who can't afford the car to begin with. it might not seem like it matters with things like food. but consider that families typically have fewer domestic resources now (two working parents, lots of single-parent families, multiple part-time jobs, and more demanding work). this makes from-scratch cooking nearly impossible, and for many convenience food (not necessarily fast food, but also things like preparred meals) is the only
chronologically feasible diet. that kind of food isn't nearly so affordable as a pound of uncooked pinto beans.
If you took improvements in quality into account, you'd get around a 70%-140% estimate for an increase in the bottom 10%'s real income, depending on which economist you ask.
and what would you hear if you asked a poor person?
* * *
i just thought of something i'd meant to bring up. none of these stats include the homeless, partly because the homeless population is largely unquanifiable. and i want to take a step back from numbers for a second.
these forums have seen a fair share of loyalty and admiration, by americans at least, for the U.S. armed service men and women. they do such a service for our country! but a huge portion of most city's homeless are war vets often suffering from PTSD.
some conservatives have a way of saying, "you can help the poor, but do it with your own money," or, "you don't like things, fine, but put your money where you mouth is and do something about it." some of these are the same conservatives calling people like me un-patriotic for criticizing the military campaign in Iraq, saying "support our troops."
well, why don't you put your money where your mouth is? and get these poor homeless vets off the streets and into somewhere they'll be safe and receive what help is possible!
