

I was reading Michael Roberts’ blog the other day, and he pointed out something similar. The official calculations for inflation significantly understate it for various reasons. However, if you look at actual labor hours needed to cover the essentials of life, and you use the median income amount from 1950 (for the US), then that number comes out about $102k per year. Said another way, for a standard of living based on real life, to have the standard of the median American in 1950, you would need to earn over $100k today. But if you take that 1950 median income and just adjust it for official inflation, you only get to like $42k.

I certainly don’t disagree, but I think it’s very useful to highlight how this has changed (IMO) in recent decades. I think there was a time when the boomer generation was earning relatively good incomes that allowed them to live comfortably and accumulate wealth (mainly in houses and the stock market). I think this arrangement between capital and the (predominantly white) working class created a situation where even those workers without much wealth could be “bought off” and swear allegiance to capitalism. This wasn’t sustainable of course, as the postwar industrial boom and then the gains from neoliberalism were never sustainable. Couple that with the fall of the Eastern Bloc and with it the “threat of a good example”, and I would say that this arrangement lasted as late as the GFC at most. I think this helps explain how older people today - even if they are solidly working class - might still be hostile to anything they think is “socialism” while younger generations do not share those opinions, it seems.