Macro Thought from a Micro Observation
Since 2006, my nominal wage has fallen by a total of 6.5% or about 0.8% per year compounded. I would note that my compensation has probably remained flat.
The average price level has increased by about 18% over this time period. Therefore, my real wage today is about 25% lower than it was in 2006.
Without my commentary on what is “causing” this or my feelings about it, note that:
- My wages are not falling because some rich dudes are refusing to share with me
- My falling wages say nothing at about whether or not I am happier or sadder today than I was in 2006
- You can learn nothing at all from this information about what has happened to my wealth over this time period (on the one hand, we’ve been saving a larger chunk of our lower earnings, but on the other hand, we lost a HUGE pile of money due to the burst of the housing bubble, willingly by the way).
- My ta x and regulatory burdens are higher today, when I am 25% poorer, than when I was 25% richer.
- You can learn nothing about either my on the job productivity or my off-the-job productivity, as an individual, from this observation.
Lots more to say, just thought I’d “share”this info with you during this season of sharing.