Saturday, July 28, 2018

Measuring the Economy

GDP is a measure of production, higher GDP is good for the country overall but does not directly mean workers benefit. We also need to look at reports with a skeptical eye as its seasonal. For example certain times of the year farmers harvest and sell more crops than others.
Chart for GDP 2001 to 2018 by quarter
Stockmarket The amount the stocks are increasing or decreasing is a popularly touted measure by whoever is in power.
Inflation is basically a measure of the increased costs for things.
US Inflation 1990 to 2017
Unemployment rate 2008 to 2018
Explained in short article
Explaining the unemployment rate
Average hourly earnings 2017 to 2018
Monthly income 1990 to 2017
Wages adjusted for inflation
Pew study
Real wage growth Study by Glassdoor Economics blog (look at the chart showing national wage)
Check out this CPI calculator to compare salary for different years.


As you can see our wages do increase over time but not as fast as inflation.
That means were making actually less effective money each year.  Basically we cant bu as much for the hours we work as we used to.
We need to change that trend!

What we hear from whomever is in power is how the stock market is rising and usually GDP is increasing or doing well. We even here wages are going up, though that is not adjusted for inflation.
We also here about job growth rates but those numbers dont track whether they are good paying jobs or maybe someone is working two or three jobs to make a living. Also if your not collecting unemployment odds are your not counted as looking for work.

So our representives can spin any of these numbers to make themselves look good.
Rising stock market? That means companies are expected to be profitable. Its a disaster when the whole market drops!
Strong GDP? Means companies are making stuff to sell.  Does not take into account actual sales, nor how many people they employ. A real danger of this measure is GDP can go up even as workers are laid off due to increased automation.
Rising wages? If prices go up faster then your wages that does not help you. Your actually taking an effective paycut!
Job Growth? Are they good paying jobs or minimum wage jobs? If your a factory worker looking for work more waitstaff jobs isnt doing you much good, you want that factory job back!


We need to hold our representatives to give us accurate and useful information. And we need major media to call them out on it and let us know whats really going on. Most Americans dont know how, nor do they have the time to research this stuff.
And we have been headed in the wrong direction for a long time as far as real wages are concerned.

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