I get a raise every year. We don't break it out between cost of living and merit. For about the last seven to ten years it has been less than inflation. I go by the social security increase as to what's fair. So for 10 years everything has gone up massively and I have either been treading water or losing salary. I have never made more money and never been more on the edge financially. It is just brutal. I just can not make any headway. Almost every single dollar in my budget is spoken for. And I am a psycho budgeter and pretty frugal.
It's ok though, the last time I echoed your sentiment a very "friendly" redditor posted just how good incomes have been rising since the 1950s.
It does suck, I've been crushing my performance and for once been getting above the standard 2% raises plus merit bonuses but boy, does it feel like nothing compared to the cost of everything else.
"The economy is great" people seem to forget that millions of people are below median income and struggling. I'm in the same boat, raises are not keeping up with costs and the job market is virtually frozen so it's not like I can just simply get a better paying job.
But we're not allowed to say the economy isn't working for everyone, because number go up.
Anecdotally, my nominal salary has barely budged since perhaps 2023, and is only up about 6% since 2021. After adjusting for inflation my salary is down about 15% over the past five years. (Back of the envelope.) It kind of hurt this year when my manager, with a smile on her face, thanked me and gave me a raise that didn't match year-over-year inflation.
Not indicative of the broader economy, of course. I might well be atypical. But man, it's kind of brutal. If my salary weren't relatively high to start out with I think I'd be in some trouble by now.
I’m not sure where the break even point (ie, no real wage gains since 2019 will be), but we aren’t there. Yet. Further inflation that’s hot, but not 9%, will (contrary to what you would expect) accelerate this point.
As shown in the 3 charts, wages are stickier than prices. Especially during inflationary periods. It should be no surprise that inflationary policies have, as a secondary effect, considerably negative impacts on real wages in the short term.
The only hope is that we replicate the findings of 2022/2023, where nominal wage growth was strong post inflation peak, and where the gains were concentrated at the bottom of the income distribution.
My contention is that the way the CPI is calculated tends to understate the rate of inflation for many workers. Particularly the way the housing component is calculated.
Related to 5., newer papers have found that the bias related to housing is not just upwards; sometimes the CPI housing component is too large.
https://www.frbsf.org/research-and-insights/publications/economic-letter/2022/10/comparing-measures-of-housing-inflation/ and https://chodorowreich.scholars.harvard.edu/sites/g/files/omnuum7686/files/2026-06/CPI_and_Housing.pdf
Right so the issue is that CPI is measuring an average for the entire US population which includes a variety of different people living in a variety of different areas and working a variety of jobs or not working at all.
My contention is that for many younger workers, inflation is worse than the CPI makes it seem. This is because many of these younger workers are living in the most expensive cities, many have student loan debt, they may have a long and expensive commute because they can't afford housing near their job, and they are buying more expensive convenience food because they spend so much time and energy on work and commuting. If they have children they are probably paying exorbitant costs for childcare. And of course buying a house is historically expensive and unaffordable for these people. These are the primary group of people who are complaining about affordability.
The people not complaining about affordability are mostly well-off retirees who own houses and don't need to drive much. Their healthcare costs are the main thing that's inflating for them and even then the government is really bearing the brunt of it.
> Downvoting the only post providing links is a choice. And an attitude I’m simply going to ignore engaging with. Adios.
Friendly reminder that Reddit doesn't give a list of who downvoted you, and lots of comments get downvotes for no apparent reason from lurkers or even bots.
> Friendly reminder that Reddit doesn't give a list of who downvoted you
Yes, but when your posts all get an immediate downvote the second you reply to a given person it becomes abundantly clear who's doing it. I've seen it countless times myself, and generally it leads me to the same conclusion - are you here to feel right or are you here to understand econ?
People on reddit will get mad when you reflect the truth back onto them, and would much prefer their personal funhouse mirror that warps reality to their liking. Great job staying factual.
Hi, I just wanted to say thank you for your comments above - especially the initial summary of the situation and the link to the Harvard paper exploring alternative measures of housing for price indices.
Sometimes this subreddit devolves into random political diatribes and seeing thoughtful comments like yours is why I am still here.
I'm aware that many Americans (typically older and wealthier) own homes. Notice how I specifically am talking about those who don't because they were born too late to afford one. For these people inflation is much worse than the CPI would lead you to believe. That's my whole point.
> For these people inflation is much worse than the CPI would lead you to believe. That's my whole point.
Being that it is an average across the consumption basket, for everyone that has worse inflation than the figures suggest, someone else has better inflation.
That said, being young and in a large city is often not going to result in the conditions you're describing. Real wage gains among that crowd tend to be the highest, specifically the ones that move to larger areas for the purpose of career progression.
Yes, it tends to be lower for older and wealthier homeowners. That's my point.
There is a small cohort of young people who earn very high salaries in those expensive cities. But they are outliers overall. Median individual salary in LA for example is around 72k and that includes lots of older workers who earn more. Median in NYC is around 75k based on the data I could find. So again, the median young person trying to build their life in these places is facing substantial cost of living and inflation pressure.
You're switching gears a bit here, first it was young people in big cities, now it's wealth and age, this is a different dynamic and important distinction. Incomes across age groups are pretty well defined already, and not as significant as you suggest.
Moreover, while there is differentiation in how households experience inflation, the spread is far lower than you're alluding to. Generally around a quarter percentage point or so a year, swelling a bit more than this during higher inflation periods, but capping out at 4/10ths of a percentage point.
I don't think I switched gears at all. My point is unchanged: young people currently face high inflation pressure because the cost of necessities and particularly housing in the locations that they choose to live in has increased well beyond the cost of discretionary items. This is why older homeowners don't feel as much inflation, because their biggest cost is locked in and shields them from it.
And young people are now almost completely locked out of home ownership which isn't captured by the CPI at all and is a big part of why there is so much dissatisfaction.
Regardless, homes nowadays are both significantly larger and have many more amenities than the “heyday”.
So any estimate of housing inflation must hedonically adjust for these changes over time. For instance, inflation adjusted price per square foot of new homes has increased only 17% between 1978 and 2024.
I’d be perfectly fine streamlining the permitting process for low end starter homes. No granite, carpet everywhere including in the bathrooms, etc.
Why do you keep talking about homeowners? I already told you that I am talking about those who didn't luck out with being born at the right time. I was born too late to buy so now I'm renting because it's way cheaper.
I agree that houses got much larger and better. But I don't want a large house. The problem is that they don't build small starter homes anymore, so I don't even have the option. And even then prices and mortgage rates would make it unaffordable.
The point is that you are using a broad measure of inflation that tries to measure nationwide inflation while ignoring that some people face a higher rate of inflation due to their personal circumstances. Which is mainly young people.
That's a weird statement to make. Many young people are being priced out of home ownership so it doesn't matter because they are choosing not to buy? But it clearly does matter, it's a massive political issue. I don't get this comment.
I probably would buy if it was cheaper, that's the whole issue...
So once again you are just ignoring everything I'm saying and focusing only on older homeowners. Seems like you just don't care about young people which is a shitty attitude to have.
Yeah your 66% stat includes people who live with their parents. Which applies to many young people because the cost burden of housing is so high nowadays.
Not sure why you are doing this psychiatrist BS. I'm actually pretty rich and successful, I'm just pointing out the challenges faced by young people today. Buying a house is historically unaffordable today, so the only one lying to themselves here is you.
If you’re successful like you say you are (which you likely aren’t), you’d be keen to understand how detrimental a relative falsehood of “Born too late too afford them” is. Very trite and pretty much calling the sky blue to say young people have it hard, to the end of seeming like personal cognitive security and edification by perpetuating a falsehood. No one is “born too late” to own where they live, anyone can convince themselves otherwise and let it happen. Be the voice saying it’s possible, your success should shine as an example, not evidence to be used saying it’s not.
It is historically unaffordable to buy a house right now. I can actually afford to buy one in cash and I still refuse to pay these ridiculous prices. Renting is cheaper. So for the average young person who isn't rich like I am and has to get a 7% mortgage, they are screwed. Stop with this dismissive BS.
For number 6, I feel like people don’t appreciate that one of the reasons for the wage growth was that workers were empowered by remote work to more easily find jobs for higher pay.
Job switching and the growth in wages it leads to predates remote jobs. By a lot. https://www.atlantafed.org/research-and-data/data/wage-growth-tracker
Working From Home and Wage Dynamics | Journal of Human Resources
"We find no statistically significant relationship between WFH and contemporaneous wages."
The Fed - What Drives the Rise in Remote Work? Preliminary Evidence from Utilization Rates and Wage Trends
"In all, the relatively weak correlation between remote utilization and wage inflation suggests that both worker preferences and firm cost-savings strategies are likely contributing to the rise in utilization"
You don’t need a source to tell you that the remote work boom opened up a lot of job opportunities to people that wouldn’t have been there without it. More options makes switching jobs easier. This is not difficult.
YOU said there was wage growth. The other person offered one specific subset of people being able to switch jobs more easily as one of the factors that contributed to said wage growth.
Keep going off about other people’s reading comprehension though.
"In all, the relatively weak correlation between remote utilization and wage inflation suggests that both worker preferences and firm cost-savings strategies are likely contributing to the rise in utilization"
Cool. I've been getting merit increases of 3% every year since 2021. I've only ever been able to give my guys 3% raises since 2021.
You know how awesome it is to be told by random redditors using averaged metrics that the economy is doing well, actually, and that my wages are going up? When neither I, nor my wife, nor any of my coworkers have seen an increase over 3.5% since 2021? Across multiple industries and job types, mind you.
Not to mention even if, EVEN IF inflation this year was, say, 2.8% and my wage goes up 3% (so I have "wage growth"), none of my wage increases ever kept up with inflation under Biden, so in terms of wage growth over the past 5 years I am in a pretty deep hole?
Like, I know, anecdotes versus metrics, but I literally know nobody whose wages have kept up. So what am I missing here? Because since COVID (and arguably even before), the positive story of the economy that economists have been touting has just simply not been present in my day-to-day life or those around me. The only thing I can think of is the data is skewed, either from low wage work wage increases (possibly due to min wage increases in places like California), or from the top 0.1% doing incredibly well over the past 10+ years.
Not to mention, does this take into account increases in the cost of my benefits? The increase in insurance premiums basically eat half of my raise every year.
I'm not saying anecdotes are superior, I'm asking that if this data is real, why do so many people - myself included - not see it? Because something isn't adding up and being pissy and defensive about it is why we had/have the whole "vibecession" mentality.
Like, economists need to understand that you can't just point at a dataset and your finding from it and walk away. Political economics is a thing for a reason.
BotherEconomy4413 | 5 hours ago
I get a raise every year. We don't break it out between cost of living and merit. For about the last seven to ten years it has been less than inflation. I go by the social security increase as to what's fair. So for 10 years everything has gone up massively and I have either been treading water or losing salary. I have never made more money and never been more on the edge financially. It is just brutal. I just can not make any headway. Almost every single dollar in my budget is spoken for. And I am a psycho budgeter and pretty frugal.
seventysevensevens | 3 hours ago
It's ok though, the last time I echoed your sentiment a very "friendly" redditor posted just how good incomes have been rising since the 1950s.
It does suck, I've been crushing my performance and for once been getting above the standard 2% raises plus merit bonuses but boy, does it feel like nothing compared to the cost of everything else.
millen-malaise | 2 hours ago
"The economy is great" people seem to forget that millions of people are below median income and struggling. I'm in the same boat, raises are not keeping up with costs and the job market is virtually frozen so it's not like I can just simply get a better paying job.
But we're not allowed to say the economy isn't working for everyone, because number go up.
thediesel26 | 8 hours ago
We’re seeing the petro dollar in real time. High oil prices make absolutely everything cost more.
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cunningjames | 6 hours ago
Anecdotally, my nominal salary has barely budged since perhaps 2023, and is only up about 6% since 2021. After adjusting for inflation my salary is down about 15% over the past five years. (Back of the envelope.) It kind of hurt this year when my manager, with a smile on her face, thanked me and gave me a raise that didn't match year-over-year inflation.
Not indicative of the broader economy, of course. I might well be atypical. But man, it's kind of brutal. If my salary weren't relatively high to start out with I think I'd be in some trouble by now.
EconomistWithaD | 8 hours ago
dopechez- | 7 hours ago
My contention is that the way the CPI is calculated tends to understate the rate of inflation for many workers. Particularly the way the housing component is calculated.
EconomistWithaD | 7 hours ago
https://www.frbsf.org/research-and-insights/publications/economic-letter/2022/10/comparing-measures-of-housing-inflation/ and https://chodorowreich.scholars.harvard.edu/sites/g/files/omnuum7686/files/2026-06/CPI_and_Housing.pdf
dopechez- | 6 hours ago
Right so the issue is that CPI is measuring an average for the entire US population which includes a variety of different people living in a variety of different areas and working a variety of jobs or not working at all.
My contention is that for many younger workers, inflation is worse than the CPI makes it seem. This is because many of these younger workers are living in the most expensive cities, many have student loan debt, they may have a long and expensive commute because they can't afford housing near their job, and they are buying more expensive convenience food because they spend so much time and energy on work and commuting. If they have children they are probably paying exorbitant costs for childcare. And of course buying a house is historically expensive and unaffordable for these people. These are the primary group of people who are complaining about affordability.
The people not complaining about affordability are mostly well-off retirees who own houses and don't need to drive much. Their healthcare costs are the main thing that's inflating for them and even then the government is really bearing the brunt of it.
EconomistWithaD | 6 hours ago
65% of Americans own. At a minimum.
Yes. I provided plenty of alternative measures to the CPI that reduce your issue with “averages”. Median. Trimmed mean. Heterogeneous
Downvoting the only post providing links is a choice. And an attitude I’m simply going to ignore engaging with. Adios.
cunningjames | 6 hours ago
> Downvoting the only post providing links is a choice. And an attitude I’m simply going to ignore engaging with. Adios.
Friendly reminder that Reddit doesn't give a list of who downvoted you, and lots of comments get downvotes for no apparent reason from lurkers or even bots.
RIP_Soulja_Slim | 6 hours ago
> Friendly reminder that Reddit doesn't give a list of who downvoted you
Yes, but when your posts all get an immediate downvote the second you reply to a given person it becomes abundantly clear who's doing it. I've seen it countless times myself, and generally it leads me to the same conclusion - are you here to feel right or are you here to understand econ?
lil_meme_-Machine | an hour ago
People on reddit will get mad when you reflect the truth back onto them, and would much prefer their personal funhouse mirror that warps reality to their liking. Great job staying factual.
EconomistWithaD | an hour ago
Thank you.
YPCrumble | 5 hours ago
Hi, I just wanted to say thank you for your comments above - especially the initial summary of the situation and the link to the Harvard paper exploring alternative measures of housing for price indices.
Sometimes this subreddit devolves into random political diatribes and seeing thoughtful comments like yours is why I am still here.
EconomistWithaD | 2 hours ago
Thank you
dopechez- | 6 hours ago
I didn't downvote you.
I'm aware that many Americans (typically older and wealthier) own homes. Notice how I specifically am talking about those who don't because they were born too late to afford one. For these people inflation is much worse than the CPI would lead you to believe. That's my whole point.
RIP_Soulja_Slim | 6 hours ago
> For these people inflation is much worse than the CPI would lead you to believe. That's my whole point.
Being that it is an average across the consumption basket, for everyone that has worse inflation than the figures suggest, someone else has better inflation.
That said, being young and in a large city is often not going to result in the conditions you're describing. Real wage gains among that crowd tend to be the highest, specifically the ones that move to larger areas for the purpose of career progression.
dopechez- | 5 hours ago
Yes, it tends to be lower for older and wealthier homeowners. That's my point.
There is a small cohort of young people who earn very high salaries in those expensive cities. But they are outliers overall. Median individual salary in LA for example is around 72k and that includes lots of older workers who earn more. Median in NYC is around 75k based on the data I could find. So again, the median young person trying to build their life in these places is facing substantial cost of living and inflation pressure.
RIP_Soulja_Slim | 4 hours ago
You're switching gears a bit here, first it was young people in big cities, now it's wealth and age, this is a different dynamic and important distinction. Incomes across age groups are pretty well defined already, and not as significant as you suggest.
Moreover, while there is differentiation in how households experience inflation, the spread is far lower than you're alluding to. Generally around a quarter percentage point or so a year, swelling a bit more than this during higher inflation periods, but capping out at 4/10ths of a percentage point.
https://www.bls.gov/opub/mlr/2024/article/examining-us-inflation-across-households-grouped-by-equivalized-income.htm
dopechez- | 4 hours ago
I don't think I switched gears at all. My point is unchanged: young people currently face high inflation pressure because the cost of necessities and particularly housing in the locations that they choose to live in has increased well beyond the cost of discretionary items. This is why older homeowners don't feel as much inflation, because their biggest cost is locked in and shields them from it.
And young people are now almost completely locked out of home ownership which isn't captured by the CPI at all and is a big part of why there is so much dissatisfaction.
EconomistWithaD | 6 hours ago
Over half of Millenials are homeowners.
Regardless, homes nowadays are both significantly larger and have many more amenities than the “heyday”.
So any estimate of housing inflation must hedonically adjust for these changes over time. For instance, inflation adjusted price per square foot of new homes has increased only 17% between 1978 and 2024.
I’d be perfectly fine streamlining the permitting process for low end starter homes. No granite, carpet everywhere including in the bathrooms, etc.
dopechez- | 5 hours ago
Why do you keep talking about homeowners? I already told you that I am talking about those who didn't luck out with being born at the right time. I was born too late to buy so now I'm renting because it's way cheaper.
I agree that houses got much larger and better. But I don't want a large house. The problem is that they don't build small starter homes anymore, so I don't even have the option. And even then prices and mortgage rates would make it unaffordable.
The point is that you are using a broad measure of inflation that tries to measure nationwide inflation while ignoring that some people face a higher rate of inflation due to their personal circumstances. Which is mainly young people.
https://economics.td.com/us-inflation-income-age
devliegende | 2 hours ago
If you don't own a house then house price inflation is meaningless to you. You're fretting about the price of something you're not buying.
Rents are captured in the CPI and it is as you said cheaper than buying.
dopechez- | 2 hours ago
That's a weird statement to make. Many young people are being priced out of home ownership so it doesn't matter because they are choosing not to buy? But it clearly does matter, it's a massive political issue. I don't get this comment.
I probably would buy if it was cheaper, that's the whole issue...
EconomistWithaD | 5 hours ago
Why keep talking about homeowners?
You didn't type this, in your second sentence, in your first comment?
"Particularly the way the housing component is calculated."
65% are homeowners, which means that changes in housing prices are actually overstating inflation for those groups.
I'm not using a broad measure of inflation. Again, were you to actually read the links I've provided, you would see that.
dopechez- | 5 hours ago
So once again you are just ignoring everything I'm saying and focusing only on older homeowners. Seems like you just don't care about young people which is a shitty attitude to have.
lil_meme_-Machine | an hour ago
“Born too late to afford them”
66% live in owned homes at any given time. Not crazy that lifetime is closer to 90%, or higher.
Doomer, negative, and pessimistic thoughts are self perpetuating. Feel free to lie to yourself, cognitive dissonance is always a choice.
dopechez- | an hour ago
https://www.pewresearch.org/short-reads/2026/06/24/buying-a-home-has-gotten-harder-for-young-adults-in-most-us-metro-areas/
I've stated nothing but facts. Take your weird psychologist BS elsewhere.
dopechez- | an hour ago
Yeah your 66% stat includes people who live with their parents. Which applies to many young people because the cost burden of housing is so high nowadays.
Not sure why you are doing this psychiatrist BS. I'm actually pretty rich and successful, I'm just pointing out the challenges faced by young people today. Buying a house is historically unaffordable today, so the only one lying to themselves here is you.
lil_meme_-Machine | an hour ago
If you’re successful like you say you are (which you likely aren’t), you’d be keen to understand how detrimental a relative falsehood of “Born too late too afford them” is. Very trite and pretty much calling the sky blue to say young people have it hard, to the end of seeming like personal cognitive security and edification by perpetuating a falsehood. No one is “born too late” to own where they live, anyone can convince themselves otherwise and let it happen. Be the voice saying it’s possible, your success should shine as an example, not evidence to be used saying it’s not.
dopechez- | an hour ago
It is historically unaffordable to buy a house right now. I can actually afford to buy one in cash and I still refuse to pay these ridiculous prices. Renting is cheaper. So for the average young person who isn't rich like I am and has to get a 7% mortgage, they are screwed. Stop with this dismissive BS.
elon_musks_cat | 7 hours ago
For number 6, I feel like people don’t appreciate that one of the reasons for the wage growth was that workers were empowered by remote work to more easily find jobs for higher pay.
EconomistWithaD | 7 hours ago
Job switching and the growth in wages it leads to predates remote jobs. By a lot. https://www.atlantafed.org/research-and-data/data/wage-growth-tracker
elon_musks_cat | 5 hours ago
I didn’t say it was a new thing, I’m saying remote work made switching jobs for higher pay easier.
EconomistWithaD | 5 hours ago
Do you have any sources?
Because the following 2 links contradict your hypothesis.
Wage Growth Tracker - Federal Reserve Bank of Atlanta
Telework trends : Beyond the Numbers : U.S. Bureau of Labor Statistics
Edit: additionally:
Working From Home and Wage Dynamics | Journal of Human Resources
"We find no statistically significant relationship between WFH and contemporaneous wages."
The Fed - What Drives the Rise in Remote Work? Preliminary Evidence from Utilization Rates and Wage Trends
"In all, the relatively weak correlation between remote utilization and wage inflation suggests that both worker preferences and firm cost-savings strategies are likely contributing to the rise in utilization"
freshOJ | 4 hours ago
You don’t need a source to tell you that the remote work boom opened up a lot of job opportunities to people that wouldn’t have been there without it. More options makes switching jobs easier. This is not difficult.
EconomistWithaD | 4 hours ago
That’s not what was said. They didn’t assert it was easier for finding jobs. They said it CAUSED statistically significant wage growth.
Please read better.
freshOJ | 4 hours ago
Maybe take your own advice here and re-read the conversation.
EconomistWithaD | 4 hours ago
It’s my conversation you illiterate twat.
“One of the reasons for wage growth…”
What part of that isn’t about wage growth?
freshOJ | 3 hours ago
YOU said there was wage growth. The other person offered one specific subset of people being able to switch jobs more easily as one of the factors that contributed to said wage growth.
Keep going off about other people’s reading comprehension though.
EconomistWithaD | 4 hours ago
And since you're reading is poor, maybe I shouldn't link these, but we shall see.
Working From Home and Wage Dynamics | Journal of Human Resources
"We find no statistically significant relationship between WFH and contemporaneous wages."
The Fed - What Drives the Rise in Remote Work? Preliminary Evidence from Utilization Rates and Wage Trends
"In all, the relatively weak correlation between remote utilization and wage inflation suggests that both worker preferences and firm cost-savings strategies are likely contributing to the rise in utilization"
HerroCorumbia | 2 hours ago
Cool. I've been getting merit increases of 3% every year since 2021. I've only ever been able to give my guys 3% raises since 2021.
You know how awesome it is to be told by random redditors using averaged metrics that the economy is doing well, actually, and that my wages are going up? When neither I, nor my wife, nor any of my coworkers have seen an increase over 3.5% since 2021? Across multiple industries and job types, mind you.
Not to mention even if, EVEN IF inflation this year was, say, 2.8% and my wage goes up 3% (so I have "wage growth"), none of my wage increases ever kept up with inflation under Biden, so in terms of wage growth over the past 5 years I am in a pretty deep hole?
Like, I know, anecdotes versus metrics, but I literally know nobody whose wages have kept up. So what am I missing here? Because since COVID (and arguably even before), the positive story of the economy that economists have been touting has just simply not been present in my day-to-day life or those around me. The only thing I can think of is the data is skewed, either from low wage work wage increases (possibly due to min wage increases in places like California), or from the top 0.1% doing incredibly well over the past 10+ years.
Not to mention, does this take into account increases in the cost of my benefits? The increase in insurance premiums basically eat half of my raise every year.
EconomistWithaD | 2 hours ago
Averages are not absolutes, but I’m unsure why n = 1 anecdotes are superior to real data.
And if you don’t like the objective facts, I’m providing, fuck off and don’t reply to me.
But that laughably poor critical thinking of the “why”, when it’s income deciles, may provide insight into your economic outcomes.
HerroCorumbia | an hour ago
I'm not saying anecdotes are superior, I'm asking that if this data is real, why do so many people - myself included - not see it? Because something isn't adding up and being pissy and defensive about it is why we had/have the whole "vibecession" mentality.
Like, economists need to understand that you can't just point at a dataset and your finding from it and walk away. Political economics is a thing for a reason.