I have some issues with CPI that are used in these charts. I don't mean to be like "argh this data disagrees with my worldview therefore it is bad!", but lots of people have made complaints about the CPI not showing the full picture.
I dislike how CPI handles housing costs:
"If a unit is owner-occupied, the BLS computes what it would cost to rent that home in the current housing market."
This does not take into account quality of housing or things like closing costs or insurance payments.
CPI also does not factor in things like pensions or benefits. So we are unable to see what proportion of people's money they are spending on things like their 401(k) which potentially would have been paid for by employers in the past.
Education cost calculations are also not ideal:
"Various types of student financial aid are also considered for eligible colleges. Loans or other types of deferred tuition are not eligible for pricing. Charges for room and board and textbooks are covered elsewhere in the CPI sample."
And lastly, healthcare costs appear to not take into account deductibles:
"The CE tracks consumer out-of-pocket spending on medical care, which is used to weight the medical care indexes. CE defines out-of-pocket medical spending as:
patient payments made directly to retail establishments for medical goods and services;
health insurance premiums paid for by the consumer, including Medicare Part B; and
health insurance premiums deducted from employee paychecks."
For example, how do you calculate the CPI on computers? They’re a million times better now, but are also cheaper. My Macbook is not the same product as my 486 from decades ago.
This affects everything. Take medical care as you said. The outcomes there are much better than before, so how do we calculate inflation on medical expenses?
If you provide a 10% better product/service for a 10% higher price, is that inflation? What if all of society gets richer and insists on the second, better version of your service as a minimum?
If houses get bigger and nicer and our standards for “a house” go up over time, and houses also get more expensive, then what is the inflation on housing?
I think they’re genuinely doing their best with the CPI calcs, even though it’s not possible to get a true number.
Long story short though, life has gotten dramatically better in material terms, for everyone, especially the poor.
Ah yes, the poor, benefiting from the new corporate 'zero hour jobs' meaning you can't count on having hours next week or what your schedule will be other than that hours will be kept at less than full time to make sure you don't accidentally qualify for benefits.
For 'the poor' tt was hard enough to juggle multiple 'part time' jobs that companies created to avoid full time benefits, but now multiple part time 'zero hour' jobs is ridiculous (especially when both expect you to work around/prioritize their non-consistent schedule you get last minute).
I too hated my last minute scheduling when I was working retail while in college, but it's also equally ridiculous that benefits like health insurance are tied to an employer in the first place.
I dislike how CPI handles housing costs: "If a unit is owner-occupied, the BLS computes what it would cost to rent that home in the current housing market."
This does not take into account quality of housing or things like closing costs or insurance payments.
CPI also does not factor in things like pensions or benefits. So we are unable to see what proportion of people's money they are spending on things like their 401(k) which potentially would have been paid for by employers in the past.
Education cost calculations are also not ideal:
"Various types of student financial aid are also considered for eligible colleges. Loans or other types of deferred tuition are not eligible for pricing. Charges for room and board and textbooks are covered elsewhere in the CPI sample."
And lastly, healthcare costs appear to not take into account deductibles:
"The CE tracks consumer out-of-pocket spending on medical care, which is used to weight the medical care indexes. CE defines out-of-pocket medical spending as:
patient payments made directly to retail establishments for medical goods and services; health insurance premiums paid for by the consumer, including Medicare Part B; and health insurance premiums deducted from employee paychecks."
https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an...
https://www.bls.gov/cpi/factsheets/college-tuition.htm#:~:te...
https://www.bls.gov/cpi/factsheets/medical-care.htm#:~:text=...