The above comes from the University of Chicago’s IGM Forum, featuring numerous economists of diverse ideological views. Since our political discussions revolving around stagnant wages and upward mobility largely focus on income only, the absolute nature of wealth is often ignored. This is what a recent article in The Washington Post points out:
But even if we have less money, you know what we do have that we didn’t 15 years ago? Smartphones and social networks, Netflix and HD TVs, apps and whatever other technology you prefer to waste time on. Now, it’s true, you can’t eat an iPad, but it’s also true that these things make our lives better in ways that are hard to measure. Economists try to, but because it’s so uncertain, they’re pretty conservative with their estimates. Specifically, they try to adjust for the quality of a good when they calculate how much its price has changed. If you paid $400 for an HD TV today, for example, and $400 for a regular TV 10 years ago, did you really pay the same price? Technically, yes. But the fact remains that you got something better for the same amount of money than you would have before. And that’s even trickier when you’re talking about things that didn’t even exist back then, like smartphones, that are really every electronic device from the 1990s rolled into one pocket-sized piece. Or as economist Austan Goolsbee puts it, “so much of day is spent doing things that didn’t exist [in 1980] that it’s hard to believe the numbers fully account for new products.”
Then, the clincher:
Try this thought experiment. Adjusted for inflation, would you rather make $50,000 in today’s world or $100,000 in 1980’s? In other words, is an extra $50,000 enough to get you to give up the internet and TV and computer that you have now? The answer isn’t obvious. And if $100,000 isn’t enough, what would be? $200,000? More? This might be the best way to get a sense of how much better technology has made our lives—not to mention the fact that people are living longer—the past 35 years, but the problem is it’s particular to you and your tastes. It’s not easy to generalize.
I’ll stay right where I’m at, thank you.