<p>Three points - one which has already been raised much better by denesp:</p>

<ol>
<li><p>Are household sizes the same (we see the answer as no)?  How about amount of earners per household?</p></li>
<li><p>What about the amount of goods and services that these household incomes can buy?  Should wages be increasing if a dollar can get more goods and services, thanks to technology?  Many people like to discuss the rising costs of goods and services, but if you compare a house from 1960 to today (for an example), the amount of amenities a house has today is insane compared to 1960 and we'd expect the cost to rise.  It's important to highlight that we're not comparing apples to apples from the past to today thanks to technology.</p></li>
<li><p>If you look further at statistics you'll see the people move in an out of income categories, so <em>maybe</em> the median has remained the same, but the other levels are increasing (FT had a graph showing other income brackets below and above median are rising).  Given that any particular person will be in the top 30% of incomes at some point in his/her life (usually in the late 40s to early 60s at career peak), we should be looking if the income stagnation has occurred at these levels as well - that would be a possible cause for concern.  Median household income being about the same might be a normal statistical event (though the household size decreasing indicates that these incomes are not stagnant and thus it's a little abnormal).</p></li>
</ol>

CC BY-SA 3.0
2016-07-21T02:58:36.953Z
Sorry but the median cannot stay the same if the other levels are increasing. The median is defined as the level that is in the middle of the other levels...
Fix.B.
CC BY-SA 3.0
2016-07-21T03:11:51.567Z
Price indexes are meant to account for the purchasing power of dollars. That´s what people mean with, say, "2010" dollars. They are trying to make things comprable. However, maybe that´s what is going on: despite the statisticians´ efforts, the price indexes do not reflect purchasing power well. So, yes, that´s one of the possible answers: How much did it cost to watch a netfix movie back in 1990...an infinite amount of money, it was impossible. A BestVideo 2 hour VHs would cost you $10 in 1990 Now we watch maybe a two billion hours of video a day  , that´s 10 billion GDP, a day, uncounted...
Fix.B.
CC BY-SA 3.0
2016-02-05T14:21:48.903Z
2016-02-05T14:21:48.903Z
DoubleVu
<p>It's good that you included "labor-economics" and "wages" in your tags.</p>

<p>The basic answer to your question is that activities like "having a job" - which is how most households earn most of their income - are simply less and less effective a means of "acquiring wealth".</p>

<p>Piketty explains it brilliantly in his book <a href="http://www.amazon.com/gp/product/B00I2W" rel="nofollow">"Capital In the 21st Century"</a>.</p>

<p>Here is a very good summary by Robert Solow, in the New Republic:</p>

<ul>
<li><a href="https://newrepublic.com/article/117429/capital-twenty-first-century-thomas-piketty-reviewed" rel="nofollow">https://newrepublic.com/article/117429/capital-twenty-first-century-thomas-piketty-reviewed</a></li>
</ul>

CC BY-SA 3.0
2016-02-04T20:07:07.777Z
2016-02-04T21:21:55.063Z
2016-02-04T21:21:55.063Z
paulsm4
<p>This is just a suspicion of mine but the following might be a factor. Please feel free to comment:</p>

<p>Due to technological advancement the composition of the workforce between skilled and unskilled workers should have shifted dramatically over the last few decades. Employers would now seek many more skilled vs unskilled employees. I have not run any analysis on this as of yet but I suspect that due to the ease of attaining a higher education the market is getting saturated with skilled workers, outweighing the increase in demand for skilled workers. - The massive increase in university attendance that I suspect might also be due to the current perception that you need a degree to earn good money. A few decades ago it was a luxury to go to university, now seen almost as a requirement for success.</p>

<p>Due to the oversupply of workers for the 'higher paid jobs' that rely on university education, the average wage for these have steadily decreased. </p>

CC BY-SA 3.0
2016-07-21T03:01:43.797Z
Sorry but that´s not it.  There is ample evidence that its still worthwhile to get  a higher education: http://blogs.wsj.com/cio/2014/06/13/is-a-college-education-still-worth-it/
Fix.B.
CC BY-SA 3.0
2016-07-21T07:50:46.297Z
"feel free to comment", yes comments are possible here, but that's not the main idea. StackExchange isn't a discussion forum, but a Question and Answer site. I'd recommend taking the [tour].
clem steredenn
CC BY-SA 3.0
2016-07-21T02:06:44.183Z
2016-07-21T02:06:44.183Z
JKey
<p>because official government published inflation statistics are just as artificial as the fiat currency value they intend to measure. according to those statistics, "a loaf of bread" has gone up in price dramatically in the last 100 years.  but realistically, i think it would have cost hundreds of dollars to get a loaf of bread of the same quality and consistency as <a href="http://cobblestonebreadco.com/products/right-sized-million-dollar-white-bread/" rel="nofollow">cobblestone bakery's "million dollar white bread"</a> way back in 1916. that simple everyday example doesn't even begin to account for the price of important stuff like pharmaceutical grade penicillin.  </p>

<p>it is unfortunate that people use the word "real" to refer to inflation-adjusted numbers, as if they are somehow more realistic. life is getting better due almost exclusively to technological advancement. that advancement makes everyone richer. arguably, it has been more useful to centralized systems (e.g. governments and large corporations) in the past few thousand years. however, i for one am hopeful that the next few hundred years will be characterized by more decentralizing technology (e.g. the internet, bitcoin, etc.) that will be more beneficial to the "common man".</p>

CC BY-SA 3.0
2016-02-05T00:49:38.043Z
Interesting perspective.  I never thought about how much it would cost to make a loaf of bread the same way they did back then.  I mean, technology has made wheat easier to grow and harvest, the baking process - all of it is on an industrial scale now.  To make it like they did 'back in the day' would indeed cost a LOT of money today.
CramerTV
CC BY-SA 3.0
2016-07-21T03:04:27.187Z
@CramerTV, I dont´t think that´s what he meant. It seems he´s just saying that price indexes do not account adequately for quality improvements.
Fix.B.
CC BY-SA 3.0
2016-02-04T17:31:36.067Z
2016-07-21T16:20:58.227Z
2016-07-21T16:20:58.227Z
teldon james turner
<p>The metric of median household income is also used by others to argue the presence of income inequality:
<a href="https://en.wikipedia.org/wiki/Income_inequality_in_the_United_States#Causes" rel="nofollow noreferrer">https://en.wikipedia.org/wiki/Income_inequality_in_the_United_States#Causes</a></p>
<p>However, it seems that it is <a href="https://research.stlouisfed.org/fred2/graph/?chart_type=line&amp;recession_bars=on&amp;log_scales=&amp;bgcolor=%23e1e9f0&amp;graph_bgcolor=%23ffffff&amp;fo=Open%20Sans&amp;ts=12&amp;tts=12&amp;txtcolor=%23444444&amp;show_legend=yes&amp;show_axis_titles=yes&amp;drp=0&amp;cosd=1953-01-01%2C1953-01-01&amp;coed=2014-01-01%2C2014-01-01&amp;height=445&amp;stacking=&amp;range=&amp;mode=fred&amp;id=MAFAINUSA672N%2CMEFAINUSA672N&amp;transformation=lin%2C&amp;nd=%2C&amp;ost=-99999%2C&amp;oet=99999%2C&amp;lsv=%2C&amp;lev=%2C&amp;scale=left%2C&amp;line_color=%234572a7%2C&amp;line_style=solid%2C&amp;lw=2%2C&amp;mark_type=none&amp;mw=2&amp;mma=0%2C&amp;fml=a%2C&amp;fgst=lin%2C&amp;fgsnd=2007-12-01%2C&amp;fq=Annual%2C&amp;fam=avg%2C&amp;vintage_date=%2C&amp;revision_date=%2C&amp;width=670" rel="nofollow noreferrer">not only the median but also the mean that stagnates</a>:</p>
<p><a href="https://i.sstatic.net/awxar.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/awxar.png" alt="Mean vs. median" /></a></p>
<p>(I used family instead of household income because I could not find a time series for mean household income.)</p>
<p>If the problem was <em>only</em> one of inequality then the mean income should still increase.</p>
<p>I think there are several reasons why median household income seems to stagnate.</p>
<p>First of all I think there is a visible upward trend that is only somewhat masked by the 2008 financial crisis. Granted this trend is still smaller than the increase of productivity. Why median household income grows at a slower pace than before is still a question.</p>
<p>I think the problem arises because neither the number of households nor their distribution is constant.</p>
<h2>Changing size of households</h2>
<p>One thing that I believe has an effect is that <a href="https://i.sstatic.net/gZ88b.png" rel="nofollow noreferrer">average household size has decreased</a> over the period you are looking at.</p>
<p><a href="https://i.sstatic.net/gZ88b.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/gZ88b.png" alt="enter image description here" /></a></p>
<p>(I had some trouble opening the <a href="https://www.census.gov/hhes/families/data/households.html" rel="nofollow noreferrer">Census Bureau's xls files</a>.)</p>
<p>So while total household income has in fact increased it is now divided between more numerous, smaller households making both the mean and the median smaller.</p>
<h2>Changing composition of the US labor force</h2>
<p>Another reason might be immigration. According to <a href="https://cis.org/Report/Immigrants-United-States-2010" rel="nofollow noreferrer">this site</a> (I don't know if the statistics are reliable, there are a lot of links on the site I consider to be politically biased) the mean immigrant income is lower than the mean 'native' income. This is not surprising, immigrants need time to adjust and build the social networks necessary to get good jobs. Depending on the measure of productivity you use this can mean that while productivity in any given industry increases the weight of low-productivity industries increases as well. Thereby immigration may decrease mean and median income.
Note that this does not imply anything about the effect of immigration on the welfare of 'natives'. I am not claiming that the median household income of 'natives' is increased or decreased, I am pointing out that the weights used in the calculation are shifting.</p>

CC BY-SA 3.0
2016-02-04T16:28:30.520Z
Great answer densp. The point about shrinking household size, in particular, is something I completely overlooked and a great example of how statistics can be misleading if you don't spend the time to think about what they are actually telling you.
Ubiquitous
CC BY-SA 3.0
2016-02-04T17:50:53.540Z
indeed great answer.  housing sqft is one of the great examples of how a "market basket of goods" is getting better every year.
teldon james turner
CC BY-SA 3.0
2016-02-04T18:12:21.517Z
@jamesturner I am afraid I don't know what you mean.
Giskard
CC BY-SA 3.0
2016-02-04T18:20:39.530Z
@denesp when someone talks about "real" income/prices/etc. they mean nominal (normal) prices, that have been adjusted for inflation (so older dollars are worth more than newer dollars).  that adjustment calculation is done by comparing the nominal price of a "market basket of goods" from one year to the next and assuming both baskets have the same value.  however, when we moved from cassette tapes to cds, the market basket got better. similarly, as people buy larger houses, the median house price goes up, due not to inflation, but it will be measured as inflation.
teldon james turner
CC BY-SA 3.0
2016-02-04T18:22:35.793Z
@jamesturner I think I see now. So by housing sqft you meant the increase in median housing sqft shows that the goods basket is changing. Nice indicator!
Giskard
CC BY-SA 3.0
2016-02-04T21:12:25.847Z
By eyeballing your first chart values, the % difference between median and mean difference has grown every 5 years since 1965: 9%, 11%, 13%, 14%, 18%, 20%, 25%, 29%, 29%, 31%. The mean income increases disproportionately to the median income - so the problem **is** one of inequality.
WannabeCoder
CC BY-SA 3.0
2016-02-04T21:54:57.900Z
It makes sense during the recession people would delay moving out and forming new households see the dip in 2008 then they pick up latter spreading the income over more households
sdrawkcabdear
CC BY-SA 3.0
2016-02-04T22:33:16.217Z
@WannabeCoder I am not at all denying that economic inequality exists. However by your own numbers in the last 15 years the difference between mean and median income went from 25% to 31%. The median income is only left unchanged if the mean income increased by around 5% in 15 years. So there has to be another much larger effect at work as well.
Giskard
CC BY-SA 3.0
2016-02-05T14:08:34.053Z
@denesp Agreed, I should have said the problem is *partly* one of inequality. I merely take objection with your statement potentially misleading casual readers on the state of income inequality.
WannabeCoder
CC BY-SA 3.0
2016-02-05T16:31:28.813Z
@WannabeCoder Neither the question nor the answer is about the state of income inequality so I did not - and still don't - think that I should elaborate on that part. Hopefully once the casual readers encounter something that goes against their confirmation bias they will take the time to try and understand the statement and the arguments. If they still disagree, that is their right.
Giskard
CC BY-SA 3.0
2016-07-21T03:13:34.187Z
The issue with the immigration answer is... you haven´t realized that immigration has been huge in the US many times. So, why is it that now it reduces median wages? Why not in the 20s? the 30s? the 50s?
Fix.B.
CC BY-SA 4.0
2018-08-23T19:34:57.370Z
Real median *personal* income has risen faster than household income, supporting the household-size hypothesis. https://fred.stlouisfed.org/series/MEPAINUSA672N
Max Ghenis
CC BY-SA 4.0
2016-02-04T13:45:07.443Z
2021-08-17T06:53:32.357Z
2021-08-17T06:53:32.357Z
Giskard
<p>This image shows US real median household income.</p>

<p><a href="https://i.sstatic.net/hyB8A.png" rel="noreferrer"><img src="https://i.sstatic.net/hyB8A.png" alt="US Real Media Household Income"></a></p>

<p>It seems remarkable for its lack of growth over the last 20 years. This has been the subject of much political debate (around the "1%" and "occupy Wall Street" movements, etc.) but I am interested in more objective economic analysis of this phenomenon.</p>

<p>Given that people are better educated and are working with better technology (which should make them more productive), and that the real economy has grown more generally, what economic theories can explain the lack of growth in real median household income?</p>

CC BY-SA 3.0
2016-02-04T17:15:14.160Z
One thing to consider - government expenditures are usually calculated as a plus to GDP. This basically means that they are counted twice, so a growing government will increase the GDP metrics, but not the actual incomes people have. I haven't compared the GDP growth in the US with the growth of government expenditures, but it might be an interesting research avenue. If a private company was doing something like this, the IRS would be very interested, I recon... :D
Luaan
CC BY-SA 3.0
2016-07-21T02:54:05.667Z
For all practical purposes the government has shrunk over the last 20 years or so, so its hard to imagine that that´s the issue.
Fix.B.
<labor-economics><economic-growth><inequality><wages><united-states>
Why are real median household incomes stagnant?
Ubiquitous
# Why are real median household incomes stagnant?

(Asked by: username_0 on 2016-02-04)

This image shows US real median household income.

[![US Real Media Household Income](https://i.sstatic.net/hyB8A.png)](https://i.sstatic.net/hyB8A.png)

It seems remarkable for its lack of growth over the last 20 years. This has been the subject of much political debate (around the "1%" and "occupy Wall Street" movements, etc.) but I am interested in more objective economic analysis of this phenomenon.

Given that people are better educated and are working with better technology (which should make them more productive), and that the real economy has grown more generally, what economic theories can explain the lack of growth in real median household income?

**Tags:** labor-economics, economic-growth, inequality, wages, united-states

> **Comments:**
> **username_1**: One thing to consider - government expenditures are usually calculated as a plus to GDP. This basically means that they are counted twice, so a growing government will increase the GDP metrics, but not the actual incomes people have. I haven't compared the GDP growth in the US with the growth of government expenditures, but it might be an interesting research avenue. If a private company was doing something like this, the IRS would be very interested, I recon... :D  
> **username_2**: For all practical purposes the government has shrunk over the last 20 years or so, so its hard to imagine that that´s the issue.  

---

## 5 answers

### Answer by username_9 on 2016-02-04. Score: 22 | Accepted answer

The metric of median household income is also used by others to argue the presence of income inequality:
<https://en.wikipedia.org/wiki/Income_inequality_in_the_United_States#Causes>

However, it seems that it is [not only the median but also the mean that stagnates](https://research.stlouisfed.org/fred2/graph/?chart_type=line&recession_bars=on&log_scales=&bgcolor=%23e1e9f0&graph_bgcolor=%23ffffff&fo=Open%20Sans&ts=12&tts=12&txtcolor=%23444444&show_legend=yes&show_axis_titles=yes&drp=0&cosd=1953-01-01%2C1953-01-01&coed=2014-01-01%2C2014-01-01&height=445&stacking=&range=&mode=fred&id=MAFAINUSA672N%2CMEFAINUSA672N&transformation=lin%2C&nd=%2C&ost=-99999%2C&oet=99999%2C&lsv=%2C&lev=%2C&scale=left%2C&line_color=%234572a7%2C&line_style=solid%2C&lw=2%2C&mark_type=none&mw=2&mma=0%2C&fml=a%2C&fgst=lin%2C&fgsnd=2007-12-01%2C&fq=Annual%2C&fam=avg%2C&vintage_date=%2C&revision_date=%2C&width=670):

[![Mean vs. median](https://i.sstatic.net/awxar.png)](https://i.sstatic.net/awxar.png)

(I used family instead of household income because I could not find a time series for mean household income.)

If the problem was *only* one of inequality then the mean income should still increase.

I think there are several reasons why median household income seems to stagnate.

First of all I think there is a visible upward trend that is only somewhat masked by the 2008 financial crisis. Granted this trend is still smaller than the increase of productivity. Why median household income grows at a slower pace than before is still a question.

I think the problem arises because neither the number of households nor their distribution is constant.

## Changing size of households

One thing that I believe has an effect is that [average household size has decreased](https://i.sstatic.net/gZ88b.png) over the period you are looking at.

[![enter image description here](https://i.sstatic.net/gZ88b.png)](https://i.sstatic.net/gZ88b.png)

(I had some trouble opening the [Census Bureau's xls files](https://www.census.gov/hhes/families/data/households.html).)

So while total household income has in fact increased it is now divided between more numerous, smaller households making both the mean and the median smaller.

## Changing composition of the US labor force

Another reason might be immigration. According to [this site](https://cis.org/Report/Immigrants-United-States-2010) (I don't know if the statistics are reliable, there are a lot of links on the site I consider to be politically biased) the mean immigrant income is lower than the mean 'native' income. This is not surprising, immigrants need time to adjust and build the social networks necessary to get good jobs. Depending on the measure of productivity you use this can mean that while productivity in any given industry increases the weight of low-productivity industries increases as well. Thereby immigration may decrease mean and median income.
Note that this does not imply anything about the effect of immigration on the welfare of 'natives'. I am not claiming that the median household income of 'natives' is increased or decreased, I am pointing out that the weights used in the calculation are shifting.

> **Comments:**
> **username_0**: Great answer densp. The point about shrinking household size, in particular, is something I completely overlooked and a great example of how statistics can be misleading if you don't spend the time to think about what they are actually telling you.  
> **username_7**: indeed great answer.  housing sqft is one of the great examples of how a "market basket of goods" is getting better every year.  
> **username_9**: @jamesturner I am afraid I don't know what you mean.  
> **username_7**: @denesp when someone talks about "real" income/prices/etc. they mean nominal (normal) prices, that have been adjusted for inflation (so older dollars are worth more than newer dollars).  that adjustment calculation is done by comparing the nominal price of a "market basket of goods" from one year to the next and assuming both baskets have the same value.  however, when we moved from cassette tapes to cds, the market basket got better. similarly, as people buy larger houses, the median house price goes up, due not to inflation, but it will be measured as inflation.  
> **username_9**: @jamesturner I think I see now. So by housing sqft you meant the increase in median housing sqft shows that the goods basket is changing. Nice indicator!  
> **username_10**: By eyeballing your first chart values, the % difference between median and mean difference has grown every 5 years since 1965: 9%, 11%, 13%, 14%, 18%, 20%, 25%, 29%, 29%, 31%. The mean income increases disproportionately to the median income - so the problem **is** one of inequality.  
> **username_11**: It makes sense during the recession people would delay moving out and forming new households see the dip in 2008 then they pick up latter spreading the income over more households  
> **username_9**: @username_10 I am not at all denying that economic inequality exists. However by your own numbers in the last 15 years the difference between mean and median income went from 25% to 31%. The median income is only left unchanged if the mean income increased by around 5% in 15 years. So there has to be another much larger effect at work as well.  
> **username_10**: @denesp Agreed, I should have said the problem is *partly* one of inequality. I merely take objection with your statement potentially misleading casual readers on the state of income inequality.  
> **username_9**: @username_10 Neither the question nor the answer is about the state of income inequality so I did not - and still don't - think that I should elaborate on that part. Hopefully once the casual readers encounter something that goes against their confirmation bias they will take the time to try and understand the statement and the arguments. If they still disagree, that is their right.  
> **username_2**: The issue with the immigration answer is... you haven´t realized that immigration has been huge in the US many times. So, why is it that now it reduces median wages? Why not in the 20s? the 30s? the 50s?  
> **username_12**: Real median *personal* income has risen faster than household income, supporting the household-size hypothesis. https://fred.stlouisfed.org/series/MEPAINUSA672N  

---

### Answer by username_3 on 2016-02-05. Score: 6

Three points - one which has already been raised much better by denesp:

1. Are household sizes the same (we see the answer as no)? How about amount of earners per household?
2. What about the amount of goods and services that these household incomes can buy? Should wages be increasing if a dollar can get more goods and services, thanks to technology? Many people like to discuss the rising costs of goods and services, but if you compare a house from 1960 to today (for an example), the amount of amenities a house has today is insane compared to 1960 and we'd expect the cost to rise. It's important to highlight that we're not comparing apples to apples from the past to today thanks to technology.
3. If you look further at statistics you'll see the people move in an out of income categories, so *maybe* the median has remained the same, but the other levels are increasing (FT had a graph showing other income brackets below and above median are rising). Given that any particular person will be in the top 30% of incomes at some point in his/her life (usually in the late 40s to early 60s at career peak), we should be looking if the income stagnation has occurred at these levels as well - that would be a possible cause for concern. Median household income being about the same might be a normal statistical event (though the household size decreasing indicates that these incomes are not stagnant and thus it's a little abnormal).

> **Comments:**
> **username_2**: Sorry but the median cannot stay the same if the other levels are increasing. The median is defined as the level that is in the middle of the other levels...  
> **username_2**: Price indexes are meant to account for the purchasing power of dollars. That´s what people mean with, say, "2010" dollars. They are trying to make things comprable. However, maybe that´s what is going on: despite the statisticians´ efforts, the price indexes do not reflect purchasing power well. So, yes, that´s one of the possible answers: How much did it cost to watch a netfix movie back in 1990...an infinite amount of money, it was impossible. A BestVideo 2 hour VHs would cost you $10 in 1990 Now we watch maybe a two billion hours of video a day  , that´s 10 billion GDP, a day, uncounted...  

---

### Answer by username_4 on 2016-02-04. Score: 1

It's good that you included "labor-economics" and "wages" in your tags.

The basic answer to your question is that activities like "having a job" - which is how most households earn most of their income - are simply less and less effective a means of "acquiring wealth".

Piketty explains it brilliantly in his book ["Capital In the 21st Century"](http://www.amazon.com/gp/product/B00I2W).

Here is a very good summary by Robert Solow, in the New Republic:

* <https://newrepublic.com/article/117429/capital-twenty-first-century-thomas-piketty-reviewed>


---

### Answer by username_5 on 2016-07-21. Score: 0

This is just a suspicion of mine but the following might be a factor. Please feel free to comment:

Due to technological advancement the composition of the workforce between skilled and unskilled workers should have shifted dramatically over the last few decades. Employers would now seek many more skilled vs unskilled employees. I have not run any analysis on this as of yet but I suspect that due to the ease of attaining a higher education the market is getting saturated with skilled workers, outweighing the increase in demand for skilled workers. - The massive increase in university attendance that I suspect might also be due to the current perception that you need a degree to earn good money. A few decades ago it was a luxury to go to university, now seen almost as a requirement for success.

Due to the oversupply of workers for the 'higher paid jobs' that rely on university education, the average wage for these have steadily decreased.

> **Comments:**
> **username_2**: Sorry but that´s not it.  There is ample evidence that its still worthwhile to get  a higher education: http://blogs.wsj.com/cio/2014/06/13/is-a-college-education-still-worth-it/  
> **username_6**: "feel free to comment", yes comments are possible here, but that's not the main idea. StackExchange isn't a discussion forum, but a Question and Answer site. I'd recommend taking the [tour].  

---

### Answer by username_7 on 2016-02-04. Score: -1

because official government published inflation statistics are just as artificial as the fiat currency value they intend to measure. according to those statistics, "a loaf of bread" has gone up in price dramatically in the last 100 years. but realistically, i think it would have cost hundreds of dollars to get a loaf of bread of the same quality and consistency as [cobblestone bakery's "million dollar white bread"](http://cobblestonebreadco.com/products/right-sized-million-dollar-white-bread/) way back in 1916. that simple everyday example doesn't even begin to account for the price of important stuff like pharmaceutical grade penicillin.

it is unfortunate that people use the word "real" to refer to inflation-adjusted numbers, as if they are somehow more realistic. life is getting better due almost exclusively to technological advancement. that advancement makes everyone richer. arguably, it has been more useful to centralized systems (e.g. governments and large corporations) in the past few thousand years. however, i for one am hopeful that the next few hundred years will be characterized by more decentralizing technology (e.g. the internet, bitcoin, etc.) that will be more beneficial to the "common man".

> **Comments:**
> **username_8**: Interesting perspective.  I never thought about how much it would cost to make a loaf of bread the same way they did back then.  I mean, technology has made wheat easier to grow and harvest, the baking process - all of it is on an industrial scale now.  To make it like they did 'back in the day' would indeed cost a LOT of money today.  
> **username_2**: @username_8, I dont´t think that´s what he meant. It seems he´s just saying that price indexes do not account adequately for quality improvements.  

---

