Cost of living has fallen.

Post Reply New Topic

Cost of living has fallen. I remember in the olden days, the poor used to rent TVs and video players from radio rental.
Any decent computer or console game used to be £30-60( NeoGeos £120). And to get console game entertainment
I used to go to blockbuster videos to rent a game for £3.50 for 3 nights. Now there are hundreds of console game
that are worth less then that used. Anyway this guy explains better.


[youtube]http://www.youtube.com/watch?v=W8SLIt7xZxU&feature=relmfu[/youtube]

That's not the cost of living. That is the price of electronic equipment.

It certainly hasn't fallen here in France for the cost of everyday purchases like food, fuel and utilities. I've no idea about the game market, but I'd hardly say that was representative of the "cost of living".

I think the overall point the guy is trying to make it that quality and quantity of things has gotten better, which isn't usually taken into account when the cost of living is calculated.

But I'm a bit sceptical that it has actually "fallen".

The tendancy is for non-essentials to drop in price whilst the essentials rise in price particularly in heavy user risk so-called Personal Responsibility jurisdictions.

Many relatively poor people (at least in western industrialized nations) have use of things such as automobiles, electric lights, heating and cooling, refrigerators, hot and cold running water free from parasites, and so on that are incredibly awesome compared to what even the richest Pharaohs had. Many not quite as poor people also can own a computer and have access to the internet, all the knowledge of humanity at one's fingertips 24/7, plus the ability to communicate with anyone anywhere in the world instantaneously. Also (if we can afford the ticket or are wealthy enough to own an airplane) we can FLY! Plus, we've been to the moon and the bottom of the ocean and know a lot more about the universe and how it works than the philosophers of ancient times did (at least regarding science and technology). Technology trickles down to the masses... It's easy to take such things for granted if you grew up with them, but they are awesome.

OTOH the gap between the richest rich and most everybody else is greater now than ever before in human history. The difference in wealth between the greatest Pharaoh and the most miserable slave of his time was nowhere near as great as the difference in wealth between the richest rich and most everybody else today, and by many orders of magnitude. To me, that is NOT a good thing. Fair is fair, and how can anyone honestly "earn" that great a difference in wealth without unfairly exploiting other people or the planet's resources, or both?

At the moment, the cost of living is increasing here and our purchasing power is dropping. Officially, we have a high budget deficit that can only be fixed through austerity measures. In reality, our government is hungry for money to send to Brussels where it can be forwarded to creditors for other countries. The notion that our government is spending too much is a bit laughable when you realise they've sent more than our annual education budget in a blank cheque to Brussels just a few months ago.

In total, it was said almost every income group paid more than 40% of their income in taxes. The higher income groups pay higher income taxes, but the lower income groups have to bear the same local taxes, excise and mandatory insurance with a much lower income. That's just what you hand over to the government. They've also deregulated markets, "so prices drop and quality of services increases." Except the opposite is true.

Their measures are hitting people. Base costs that can't be avoided have been rising for years. A lot of people are spending more than half their income on rent, electricity and water. I live with my parents in a house they own, but that's not very good either. Property taxes are bleeding people dry. There's a common saying: "the tax index rises every year; the value of every house drops every year." It's interesting to see that houses are worth, on average, much less now than they were in 2009, but property taxes based on assumed value have increased.

After those costs are accounted for, there is transport. Public transport is cheaper, but not much cheaper. Train tickets can be very expensive considering the average hourly wage of people who often have public transport as their only means of transport. Driving, however, takes the cake. Mandatory car insurance and taxes based on a car's weight and fuel efficiency aside, we have extreme fuel prices. We pay over $2.20 a litre after taxes.

That leaves people with 60% of their income at best and less than half of their income in many cases to spend on things they choose. Of course, there are packaging taxes, punitive excise taxes and enormous fines. The costs of living are immense here. At times, more than half of your income is taken away in taxes, and after that you face some of the world's most expensive fuel, environment taxes passed on to consumers through businesses, and a 'luxury products' value added tax tier for anything up from a small television that's nearing excise tax levels.

I was under the impression the cost of living was determined by prices of essential commodities (food, drink, shelter, utilities and transport).
The cost is rising.

Yeah, like others have said the price of particular items, especially electronic items, is not the same as the cost of living. I think the guy in the video leaves big holes in his assessment -- what about the price of real estate or renting a place to live? Until 2008 it was a truism (in California, anyway) that real estate prices always go up, and pretty fast.
My parents' paid $30,000 for their house in 1975, and now it's worth just under a million. Even adjusting for inflation that's a crazy increase in price. (Gentrification, and the expansion of the "wine country" into their area is the main reason.)

And the video reminds me of a political talking point that was going around that "most poor people in the USA have DVD players." IOW, trying to imply that they're not really poor. Well, sh*t, I bought my mother a brand-new DVD player last Christmas and it cost a whopping $40, including shipping. Now, if most poor people had Blu-Ray's and HD TV's, then I'd be impressed. In 20 years most poor people will have a holographic TV, but it'll still only cost 40 in inflation-adjusted dollars because everyone else will have neural-input TV that lets you experience 4 spatial dimensions at once.

Food and energy have gone up quite a bit

Another thing to consider - house prices may have slashed but so have salaries.

The only examples he gives are appliances (including cars and ipods as appliances) and a chicken. He shows correctly that advances in technology give people far more actual value at a price that is cheaper (relatively, by hours worked needed to buy it) than in the past. As other posters have said, appliances =/= living expenses. He did not address at all the cost of living space (it could be broken down by square foot) water or fuel (although fuel would be hard to compare since it has changed so much with technology).

I wish he actually had discussed services. Is it more expensive relatively to hire a nanny today than 100 years ago? What about a carpenter? He didn't discuss that at all. If he can count an ipod as a living expense, why not a carpenter, gardener and nanny- services that existed in abundance 100 years ago- comparable price? Then there is the truly difficult one to parse out- medical services. Technology has increased the value of these considerably- far more than the appliances he cites. Medical services exist today that did not exist in the past. Then again, the nature of medical problems has changed radically. The need for post-polio care (and many other community acquired infectious diseases) has disappeared (almost, depending on disease) but the need for autoimmune disease care has sky-rocketed. Does staying healthy cost more now than it used to or less? Vaccination and antibiotics have made some aspects a lot cheaper ( or free, in the case of never getting a disease) but on the other hand, our envirom,ent is more toxic in some places, less toxic in others. Might be impossible to compare. But he could have compared the cost of something entirely static, such as the cost of having a broken arm set.

And then there's the food. Food today is demonstrably cheaper. As he demonstrates with the chicken that only requires 14 minutes of average work to buy versus in 1920 when it took 2.5 hours of work at the same pay scale to buy. But it's not the same chicken! Just as technology has upgraded appliances, it has degraded food. To get an equivalent chicken you need to pay a small organic farmer who lets the chicken roam free and eat bugs instead of cheap feed. And that drives the price right back up to where it was in 1920. Here's a sample small farm, chosen at random via google:

http://www.keeneorganics.com/pasturedfr ... order_form

The only cheap food you can get is unhealthy food.....which will drive up your medical costs. Cheap and terrible food was available back in the day, too. You could get cheap milk that could give you tuberculosis and cheap white flour that could give you vitamin deficiencies and cheap beef that had God knows what (or who!) mixed into it (thank you Upton Sinclair). But he isn't citing those. He's citing a relatively expensive chicken whose literal equivalent today would be just as expensive.


All in all, he didn't even scratch the surface and certainly didn't prove his point about anything but technology-driven appliances.