On Tuesday, April 15, 1997 at 4:15 PM Doug Henwood wrote >> I've been looking at the cost of living by dividing the prices of certain crucial items by the average wage. The CPI suggests something like a 16% decline in the value of the U.S. real hourly wage since 1973. But the number of workhours required to meet the average household's yearly expenses (from the Consumer Expenditure Survey) rose 40% - implying a loss of 29% in purchasing power. To buy the average new car, workhours were up 51%. The average new house, 44. To pay for a year at UCLA (Calif resident), $86%. A year at Yale, 93%.<< I ran some numbers for you from Jan., 1978 through Jan., 1997, the longest period for which BLS has the required series with integrity. The CPI increased by 154.6% over that period while "Tuition and Other School Fees" increased by 327.7% and "New Vehicles" were up 95.1%. The price of the vehicles increased by 143.9% but this was somewhat mitigated since 33.9% of the increase was considered due to quality improvements. No quality adjustments were made to Tuition. It is somewhat difficult to comment on you numbers without more specific references. However, as I remember it, the decline in the real hourly wage (your 16% is what I remember) refers to the median wage while the Consumer Expenditure Survey results refer to the avenge household. Since the income distribution has gotten much more unequal recently, the average has increased faster than the median. The result is that it takes the median family the income from more work hours to purchase what the average family purchases. Dave Richardson
