How does the World view America these days?

[Hugh Mughnus]

wtf?! who just "burns trees" for fun?

 

=/

 

I'm no hippie, but If I caught someone burning down our forests for fun I would beat the shit out of them with no hesitation.

[chenGOD]

 

 

Materials required to build the houses and cars etc shown in the video are not infinite. An example: mining for metal and hydrocarbons.

 

There is lots of metal and oil in the planet, yes, but as we over-mine the planet companies develop new (and more expensive) techniques for locating and extracting these resources. The cost is passed on to the consumer. The relative scarcity compared to previous generations makes it more expensive for us than before.

 

Same thing with farming. The huge population to feed causes meats to be scarce, relative to previous generations. Cost passed on to customer etc.

 

Average real hourly wages for men aged 17-60 employed full time in Canada has actually increased from $22.55 to $25.03 in the last 30 years. Real wages are adjusted for CPI increases, meaning we are actually enjoying more spending/consumption power than before. That comparison is in 2010 dollars btw and is actually from 1981-2011.

 

 

Edit: I know that's not the same as the USA but I'm sure there's similar stats for the USA?

 

 

 

btw: you gave an example of the full time hourly wage increase in canada. do you know what the cost of home or car in canada was 30 years ago compared to today, or is it around the same price?

 

 

The wage increase I referred to was in "real wages" meaning it was adjusted to consider consumer price index (inflation) increases. The term "real wages" means our earning power despite increases in the cost of consumer goods and shelter/etc.

 

According to my research this actually includes the increased price of vehicles and shelter.

 

Therefore the increase in wages I referred to is normalized according to real inflation (printing more money) as well as increased prices across the board. Let me know if I'm not making sense, but ultimately what I'm saying is Canadian's have more disposable income than 1981 because our "real wages" even when considering the increases in CPI (including transportation/cars and houses) has increased.

 

Like... given the prices in 1981, we made $22.55 per hour. Fast forward to 2011 and adjust for inflation (printed money) and CPI increases, it's the equivalent as if we made $25.03 per hour in 1981.

 

But to directly answer your question I don't have data available RE housing prices. My gf's mom bought her house for $80,000 in 1980. But consider the interest rate on cars etc back then was near 25%.

 

 

Stephen - couple of things:

CPI and inflation are not the same thing. When you adjust for the Bank of Canada's inflation target, it's easy to see that wages have not kept up to inflation here.

 

You say that in 1981 we made $22.55/hr, and in 2011 we made $25.03. I'm assuming you're using this table. So you should note that that is the average wage for men. For women the average wage went from 17.38/hr to 21.85/hr. So yes women rose from 77% to 87% of the average hourly wage.

When we look at the median wage - which is much more useful, things don't look so rosy. In 1981, men earned 21.18/hr, whereas in 2011 they earned 22.27/hr (note this is less than in 1984, 2009, and 2011). Women earned 15.72/hr in 1981, and 19.37/hr in 2011. So at least the median wage for women has grown much better in comparison to men's median wage.

It should also be noted that the above stats are only for full-time work.

There are all kinds of interesting charts and comparisons there, but this one stood out to me as being quite important:

http://www.statcan.gc.ca/pub/11f0019m/2013347/ct012-eng.htm

This is important because in 2011, retail trade was the largest of all sectors for the Canadian labour force at 11.5%. Finance and insurance made up about 5%.

 

Anyhow, from their own chart, StatCan says: "Overall, average hourly wages of full-time workers increased by 14% from 1981 to 2011."

 

 

 

Now inflation.

Now if we want, we can use the bank of canada's very own handy inflation calculator

We can see that a basket of goods that cost $100 in 1981, costs $242.02 in 2011. This is a percentage change of 142%. Which is a bit more than the 14% increase in real hourly wages.

[Hugh Mughnus]

 

 

 

Materials required to build the houses and cars etc shown in the video are not infinite. An example: mining for metal and hydrocarbons.

 

There is lots of metal and oil in the planet, yes, but as we over-mine the planet companies develop new (and more expensive) techniques for locating and extracting these resources. The cost is passed on to the consumer. The relative scarcity compared to previous generations makes it more expensive for us than before.

 

Same thing with farming. The huge population to feed causes meats to be scarce, relative to previous generations. Cost passed on to customer etc.

 

Average real hourly wages for men aged 17-60 employed full time in Canada has actually increased from $22.55 to $25.03 in the last 30 years. Real wages are adjusted for CPI increases, meaning we are actually enjoying more spending/consumption power than before. That comparison is in 2010 dollars btw and is actually from 1981-2011.

 

 

Edit: I know that's not the same as the USA but I'm sure there's similar stats for the USA?

 

 

 

btw: you gave an example of the full time hourly wage increase in canada. do you know what the cost of home or car in canada was 30 years ago compared to today, or is it around the same price?

 

 

The wage increase I referred to was in "real wages" meaning it was adjusted to consider consumer price index (inflation) increases. The term "real wages" means our earning power despite increases in the cost of consumer goods and shelter/etc.

 

According to my research this actually includes the increased price of vehicles and shelter.

 

Therefore the increase in wages I referred to is normalized according to real inflation (printing more money) as well as increased prices across the board. Let me know if I'm not making sense, but ultimately what I'm saying is Canadian's have more disposable income than 1981 because our "real wages" even when considering the increases in CPI (including transportation/cars and houses) has increased.

 

Like... given the prices in 1981, we made $22.55 per hour. Fast forward to 2011 and adjust for inflation (printed money) and CPI increases, it's the equivalent as if we made $25.03 per hour in 1981.

 

But to directly answer your question I don't have data available RE housing prices. My gf's mom bought her house for $80,000 in 1980. But consider the interest rate on cars etc back then was near 25%.

 

 

Stephen - couple of things:

CPI and inflation are not the same thing.

 

Generally people use the terms interchangeably. Laymens terms etc.

 

Edit: here.

 

Inflation:

1. In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. When the price level rises, each unit of currency buys fewer goods and services.

 

CPI:

1. A consumer price index (CPI) measures changes in the price level of a market basket of consumer goods and services purchased by households. The CPI is a statistical estimate constructed using the prices of a sample of representative items whose prices are collected periodically.

Aside from that I believe you are misinterpreting the data.

 

"Real wages" are "real wages".

 

"The term real wages refers to wages that have been adjusted for inflation, or, equivalently,wages in terms of the amount of goods and services that can be bought. This term is used in contrast to nominal wages or unadjustedwages."

 

 

Real wages are specifically referring to consumption power. We are able to purchase a higher amount of goods and services than ever before.

Edited July 27, 2015 by StephenG

[chenGOD]

Thanks, I know what real wages are.

I'm merely pointing out that CPI and inflation are not the same thing. It's telling that that's the only point you felt you could reply to.

 

 

As to misinterpretation of the data, I think we both know that average wage is a terrible measurement because outlier effect. Regardless, the data show that real average wages have increased 14% from 1981-2011 and the cost of a basket of goods has risen over the same period 142%

 

Looking at median real wages, which is a much better tool in this debate, we can see that real wages have remained relatively flat.

[Hugh Mughnus]

Looking at median real wages, which is a much better tool in this debate, we can see that real wages have remained relatively flat.

Fair.

 

So if you use median real wages and they've remained relatively flat then we're doing just dandy and people can stop complaining that everyone is poor and stuff is so expensive etc.

Edited July 27, 2015 by StephenG

[Hugh Mughnus]

It's telling that that's the only point you felt you could reply to.

 

 

All of the points I made stand just fine whether using average or median real wages.

Edited July 27, 2015 by StephenG

[Hugh Mughnus]

 

 

 

Materials required to build the houses and cars etc shown in the video are not infinite. An example: mining for metal and hydrocarbons.

 

There is lots of metal and oil in the planet, yes, but as we over-mine the planet companies develop new (and more expensive) techniques for locating and extracting these resources. The cost is passed on to the consumer. The relative scarcity compared to previous generations makes it more expensive for us than before.

 

Same thing with farming. The huge population to feed causes meats to be scarce, relative to previous generations. Cost passed on to customer etc.

 

Average real hourly wages for men aged 17-60 employed full time in Canada has actually increased from $22.55 to $25.03 in the last 30 years. Real wages are adjusted for CPI increases, meaning we are actually enjoying more spending/consumption power than before. That comparison is in 2010 dollars btw and is actually from 1981-2011.

 

 

Edit: I know that's not the same as the USA but I'm sure there's similar stats for the USA?

 

 

 

btw: you gave an example of the full time hourly wage increase in canada. do you know what the cost of home or car in canada was 30 years ago compared to today, or is it around the same price?

 

 

The wage increase I referred to was in "real wages" meaning it was adjusted to consider consumer price index (inflation) increases. The term "real wages" means our earning power despite increases in the cost of consumer goods and shelter/etc.

 

According to my research this actually includes the increased price of vehicles and shelter.

 

Therefore the increase in wages I referred to is normalized according to real inflation (printing more money) as well as increased prices across the board. Let me know if I'm not making sense, but ultimately what I'm saying is Canadian's have more disposable income than 1981 because our "real wages" even when considering the increases in CPI (including transportation/cars and houses) has increased.

 

Like... given the prices in 1981, we made $22.55 per hour. Fast forward to 2011 and adjust for inflation (printed money) and CPI increases, it's the equivalent as if we made $25.03 per hour in 1981.

 

But to directly answer your question I don't have data available RE housing prices. My gf's mom bought her house for $80,000 in 1980. But consider the interest rate on cars etc back then was near 25%.

 

 

 

Now inflation.

Now if we want, we can use the bank of canada's very own handy inflation calculator

We can see that a basket of goods that cost $100 in 1981, costs $242.02 in 2011. This is a percentage change of 142%. Which is a bit more than the 14% increase in real hourly wages.

 

I don't think you do know what real wages are.

 

Real wages are adjusted for inflation. What you've posted here would suggest we can actually buy less now than in 1981 but that is not true.

Edited July 27, 2015 by StephenG

[Hugh Mughnus]

Also btw from the Bank of Canada website.

 

"The inflation target is expressed as the year-over-year increase in the total consumer price index (CPI)-the most relevant measure of the cost of living for most Canadians."

 

Inflation = CPI increase.

 

It includes volatile items such as housing and oil and gas.

Edited July 27, 2015 by StephenG

[chenGOD]

 

Looking at median real wages, which is a much better tool in this debate, we can see that real wages have remained relatively flat.

Fair.

 

So if you use median real wages and they've remained relatively flat then we're doing just dandy and people can stop complaining that everyone is poor and stuff is so expensive etc.

 

 

This is not the argument people are making - they're combining the chart in the other thread (the one showing working hours have gone down), with the fact that real wages have remained relatively flat, to show that actually things are not that great.

(Sorry all y'all Americans, I'm about to talk about Canada)

Now if we look at the demographic here on watmm, males between 17-34 have actually seen their real wages go down. So you can see where a lot of people on here are coming from.

When you tie that in with the fact that housing prices (whether resale or new) in urban centres (you know, places where people actually want to live), have increased faster than the rate of inflation, you can begin to see where the problem lies (data on housing prices from Canadian Mortgage and Housing Corporation).

 

And this is in Canada, where things are not so bad. In the States, the income gap is growing, and there are no indications that the trend will reverse anytime soon.

 

Edit: for 'Murica the situation is much the same: http://www.pewresearch.org/fact-tank/2014/10/09/for-most-workers-real-wages-have-barely-budged-for-decades/

[Hugh Mughnus]

 

 

Looking at median real wages, which is a much better tool in this debate, we can see that real wages have remained relatively flat.

Fair.

 

So if you use median real wages and they've remained relatively flat then we're doing just dandy and people can stop complaining that everyone is poor and stuff is so expensive etc.

 

 

This is not the argument people are making - they're combining the chart in the other thread (the one showing working hours have gone down), with the fact that real wages have remained relatively flat, to show that actually things are not that great.

(Sorry all y'all Americans, I'm about to talk about Canada)

Now if we look at the demographic here on watmm, males between 17-34 have actually seen their real wages go down. So you can see where a lot of people on here are coming from.

When you tie that in with the fact that housing prices (whether resale or new) in urban centres (you know, places where people actually want to live), have increased faster than the rate of inflation, you can begin to see where the problem lies (data on housing prices from Canadian Mortgage and Housing Corporation).

 

And this is in Canada, where things are not so bad. In the States, the income gap is growing, and there are no indications that the trend will reverse anytime soon.

 

 

All fair points.

 

However inflation includes housing prices. You seem to be separating the two. It doesn't exceed the rate of inflation because it's part of the inflation calculation. You can use other indexes that separate it out though? Edit: unless you mean it's the largest driver of inflation? It likely is.

 

That's why I use real wages as a good indicator. It includes inflation which includes housing and other volatile prices we like to complain about. An increase in real wages is explicitly an increase in consumption power as it factors all these things in.

 

Agreed we are not doing so bad here at all. The states has it much worse.

Edited July 27, 2015 by StephenG

[chenGOD]

Except, there is no increase in wages, and the cost of housing can of course be separated out from inflation. If the cost of housing has been increasing faster than the rate of inflation, then you can see that our ability to buy housing is constrained because real wages are tied to inflation.

[Hugh Mughnus]

Except, there is no increase in wages, and the cost of housing can of course be separated out from inflation. If the cost of housing has been increasing faster than the rate of inflation, then you can see that our ability to buy housing is constrained because real wages are tied to inflation.

=/

 

Home ownership in Canada is historically increasing, first of all. It's gone down a bit recently but historically ownership is trending upwards. Edit: barely. But it is trending upwards.

 

 

Real wages remaining stable means we're in the same position as ever. Again, it factors in the price of housing and everything else. If real wages are the same in 2015 as they were in 1981 then we're in the same position because, relative to the cost of everything, we still make the same. That's the whole point of the real wages measurement.

 

It's a comparison of what we make to what the cost of everything is.....

Edited July 27, 2015 by StephenG

[chenGOD]

I know what real wages are, please stop repeating yourself.

 

The point is that people are spending more of their income on owning a home.

 

 

http://www12.statcan.gc.ca/nhs-enm/2011/as-sa/99-014-x/99-014-x2011002-eng.cfm#a2 Shelter costs and affordability

• About 3.3 million households (25.2%) spent 30% or more of their total income on shelter—which is the threshold defined by the Canada Mortgage and Housing Corporation (CMHC) to measure housing affordability.
• Households with shelter costs exceeding the affordability threshold paid an average of $1,259 per month—exceeding 30% of their household total income by an average of $510 per month.
• Owner households exceeded the affordability threshold by an average of $617 per month, while tenant households exceeded it by $403 per month.
• Almost three-fifths (58.6%) of owner households had a mortgage—representing over four-fifths (83.2%) of owner households exceeding the affordability threshold.
• About half a million (557,435 or 13.7%) tenant households lived in subsidized housing.
• Just over one-third (36.9%) of tenant households in subsidized housing paid 30% or more of total income towards shelter costs.
• Lone-parent households and non-family households were more likely to pay 30% or more of total income towards shelter costs—about twice the proportion of couple-family households.

 

 

 

An additional point to consider is that some Canadians are starting to use homes as investment vehicles:

http://business.financialpost.com/personal-finance/mortgages-real-estate/canadians-dont-just-love-home-ownership-theyre-growing-fond-of-income-properties-too

 

This is taking things backward - we want to eliminate the rentier class.

[Hugh Mughnus]

I'd like to find the proportion of income spent on housing, historically. I'm not finding much. Edit: looks like you've found some numbers.

 

I do know however, that although the principal has increased over the years, lending rates have decreased.

 

I've been told that there was a time where car loans were up in the 20-30% interest rate. I wonder what the mortgage rates were.

 

Also there is one small thing to consider... The proportion of income spent on housing number is slightly off because it doesn't control for those people that are doing well (like in Alberta) that choose to pay off their mortgages quicker with annual lump sum payments. Slightly skews it though admittedly probably not by a ton.

Edited July 27, 2015 by StephenG

[chenGOD]

Yes, well part of the problem is that we have historically low interest rates, with really only one way to move in the long-run. That goes for 'muricah as well. Combined with reduced savings, this is asking for some serious trouble.

[azatoth]

Is this the Canada thread now, eh?

[Hugh Mughnus]

Yes, well part of the problem is that we have historically low interest rates, with really only one way to move in the long-run. That goes for 'muricah as well. Combined with reduced savings, this is asking for some serious trouble.

 

Actually... the real wages calculation already factors in the higher proportion of income spent on housing that you mentioned since that increased expenditure is represented in CPI? No?

Is this the Canada thread now, eh?

 

The Americas, or America, also known as the Western Hemisphere and the New World, are the combined continental landmasses of North America and South America

 

lol

Edited July 27, 2015 by StephenG

[Audioblysk]

You guys are smart for reigning in your banks (moreso than the USA) for how much flack Americans throw at Canada, you guys do have your shit together.

 

It'd be nice to think about owning a home, but even making $60K + bonuses a year, I cannot even fathom getting a decent home in the Seattle area. I'd be spending most of my income in living expenses at that point. I still have roommates lol and we live in a part of the city where I've heard people get shot down the road and hookers get picked up on the corner. It was such a good deal - $1600 a month for a 3bd/2bth with 1800sqft of space.

 

The USA is absolutely bonkers all the time now. Now, gather round' and listen to this idiot say we need guns in movie theaters... with a straight face.

 

 

Yippie ki yay, movie goers.

[azatoth]

The US is like an experiment, of what, I have no idea...but then again it's all like a big experiment, no one has a clue on what's going on. Just bumbling in the the dark.

[chenGOD]

 

Yes, well part of the problem is that we have historically low interest rates, with really only one way to move in the long-run. That goes for 'muricah as well. Combined with reduced savings, this is asking for some serious trouble.

 

Actually... the real wages calculation already factors in the higher proportion of income spent on housing that you mentioned since that increased expenditure is represented in CPI? No?

 

 

No. Think it through.

 

Audio - yeah Pacific NW house prices are ridiculous. Vancouver is off the chain.

 

How bout some good news:

America is not getting fatter anymore

[Hugh Mughnus]

 

 

Yes, well part of the problem is that we have historically low interest rates, with really only one way to move in the long-run. That goes for 'muricah as well. Combined with reduced savings, this is asking for some serious trouble.

 

Actually... the real wages calculation already factors in the higher proportion of income spent on housing that you mentioned since that increased expenditure is represented in CPI? No?

 

 

No. Think it through.

 

 

I did but I'm no expert in this area.

 

Real wages are an inflation adjusted representation of wages. Costs paid for shelter are included in calculating inflation. Real wages therefore include the increased cost of shelter in their calculation.

 

Can you spell it out for me or show me what I'm missing? I'm not being facetious flippant (better word imo tbqh byob), I actually don't understand.

Edited July 27, 2015 by StephenG

[autopilot]

 

How bout some good news:

America is not getting fatter anymore

 

 

Labelling that "good news" is #FatShaming. How dare you.

[Tricone RC]

oh herro again G

 

 

Average real hourly wages for men aged 17-60 employed full time in Canada has actually increased from $22.55 to $25.03 in the last 30 years. Real wages are adjusted for CPI increases, meaning we are actually enjoying more spending/consumption power than before. That comparison is in 2010 dollars btw and is actually from 1981-2011.

<$3 in 30 years - barely counts as an increase... And then factor in student debts etc. Perhaps another factor in (perceived) affluence, assuming real wages have stayed flat, is that today we have to own much more stuff (PC, mobile, tablet etc etc) in order to feel like we're affluent, when compared to 30y ago. So maybe we're earning the same, but having to spend more of it before we feel like we've "made it"

 

 

 

There is lots of metal and oil in the planet, yes, but as we over-mine the planet companies develop new (and more expensive) techniques for locating and extracting these resources. The cost is passed on to the consumer. The relative scarcity compared to previous generations makes it more expensive for us than before.

 

 

Hardly... that's a very Ehrlich-ian standpoint. Coal, O+G and almost all metals are in a huge glut right now, why else have prices in practically all of these crashed, and why else would exploration for all of these be so slow? (I should know lawl)

 

As for house prices et al, that's mainly because land is artificially scarce, not actually. In Canada look at Vancouver and (to a lesser extent) the GTA. Both are hemmed in by greenbelts and agricultural land reserves. If these were freed up, land (and housing) would be fantastically cheaper. Obvs there are other issues at play there - and on balance I doubt it would actually be a good idea to free them up

[chenGOD]

 

 

 

Yes, well part of the problem is that we have historically low interest rates, with really only one way to move in the long-run. That goes for 'muricah as well. Combined with reduced savings, this is asking for some serious trouble.

 

Actually... the real wages calculation already factors in the higher proportion of income spent on housing that you mentioned since that increased expenditure is represented in CPI? No?

 

 

No. Think it through.

 

 

I did but I'm no expert in this area.

 

Real wages are an inflation adjusted representation of wages. Costs paid for shelter are included in calculating inflation. Real wages therefore include the increased cost of shelter in their calculation.

 

Can you spell it out for me or show me what I'm missing? I'm not being facetious flippant (better word imo tbqh byob), I actually don't understand.

 

 

Come on Stephen - I already spelled it out for you. Wages (adjusted for inflation) have remained basically flat. Housing prices have increased faster than inflation. The calculation of real wages doesn't account for proportional spending.

Think of two lines. The wage one basically goes straight, while the housing one goes up.

[Hugh Mughnus]

 

 

 

 

Yes, well part of the problem is that we have historically low interest rates, with really only one way to move in the long-run. That goes for 'muricah as well. Combined with reduced savings, this is asking for some serious trouble.

 

Actually... the real wages calculation already factors in the higher proportion of income spent on housing that you mentioned since that increased expenditure is represented in CPI? No?

 

 

No. Think it through.

 

 

I did but I'm no expert in this area.

 

Real wages are an inflation adjusted representation of wages. Costs paid for shelter are included in calculating inflation. Real wages therefore include the increased cost of shelter in their calculation.

 

Can you spell it out for me or show me what I'm missing? I'm not being facetious flippant (better word imo tbqh byob), I actually don't understand.

 

The calculation of real wages doesn't account for proportional spending.

 

No it doesn't.

 

Shelter is included in CPI calculations and CPI is used in calculating real wages. I don't know how to better explain myself

 

How can the increased cost of housing if used in the CPI calculations not affect the calculation of real wages?

 

Edit: there's a gap in my logic here somewhere that's all.

Edited July 27, 2015 by StephenG