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I have had this dream for a while now that the major media networks displayed real income changes next to the Dow and other stock tickers. Just so normal people are reminded of how their money is doing compared to rich people's money.
Do you have the formula for that? I might be up for doing that here on Lemmy locally once a month or so.
holy shit! Both of you! PLEASE DO THIS! That'd be AMAZING!
I'm not much a math person or econ person. Do you have any ideas on what that would like like? The Econ professor in the video said the real income is aka GDP. He was loosely speaking though, so I don't know if that's a one to one. I guess I could put something up and people will tell me how it's wrong? I don't mind that.
lol that's the BEST way to get the RIGHT answer on the internet. Put something up, say it's X and someone will tell you you're wrong and it's Y. Easier than asking how to do X. :-D
Whelp, here you go. It only does a quarterly GDP or "real income" analysis.
https://sh.itjust.works/post/37116488
I, too, am far from being either of those things, but it sounds like you could just track purchasing power to get a rough idea. Perhaps I'm misunderstanding it, but it seems to me that, if inflation or other factors have eaten into your purchasing power and you haven't gotten a corresponding raise to offset it, you can reasonably conclude that the economy is getting worse for you in your personal circumstances.
Although I think it's great to track that too, I don't think that includes wage earnings and such. Like for the Big Mac Index by the Economist listed. the price of a Big Mac doesn't say much about the income levels of who is buying it. It seems to be more focused on the cost of production instead of the person buying it. Minimum wage is still so low across the country and hasn't been raised for so long, that the price could be kept low. Again, not an economist, but that's my insecure take.
There is a variable called Gross National Income (GNI) corrected for inflation which is likely the variable Wolfers refers to. You can report it, but it will not be very different from GDP corrected for inflation which the media writes about all the time. Essentially production =income except for some small nuances.
GDI is supposed to be basically equivalent to GDP, so it's not a better number to use. Sometimes the numbers diverge (see here for a discussion of this issue in 2022) because they use different methodologies to determine the number, but that's usually a sign that some kind of measurement is off, not that there's some kind of actual divergence in the true numbers of what they purport to measure.
And we moved away from Gross National Product/Income to Gross Domestic Product/Income because it was a better look at the domestic economy. We care more about the production/income within national borders rather than the production/income of a particular nation's residents.
GNI still gives a slightly better measure of income which is what OP was asking for. For instance if an American gets dividend income from a foreign company that’s part of GNI but not GDP, and vice versa if a US company pays dividends to a foreign shareholder. But yeah in practice all of this will be negligible.
Did you see my first crack at it? I would love your input. I think the "Real GDP" might be not adjusted for inflation? I can't tell.
Real GDP is adjusted for inflation. That’s what the term Real means. Nominal GDP is not adjusted. I always think that reporting should primarily focus on real GNI per capita, which is slightly more informative than real GDP, but in practice I think the differences won’t be shocking.
Thanks for taking the time to respond. IMO, economics has some easy concepts that are hidden behind terms. Every industry has it, but all this info is kind of hidden anyway for a noob like me.
Is every 101 college class really just "here's what all the terms mean in this field"? I suspect the answer is yes.
Mine wasn't, it was a university known for being one of the best for economics and had huge classes. I did not do well in that class. It was an advanced 101 class.
There is no formula. You're mainly interested in wages, and those are negotiated.