recently read an article that concluded that, when adjusted for inflation, paychecks today have nearly the same purchase power as they did 40 years ago. As a layperson, I take this to mean that, while the ordinary American's standard of life hasn't increased in several decades, it hasn't deteriorated either. I'm struggling to reconcile this figure with the "shrinking middle class" and the need for people to work several jobs to make ends meet, both of which have progressively evolved over the same 40-year period. I assume the answer is growing housing, school, and healthcare costs, but aren't these things factored into the inflation adjustment calculation?
recently read an article that concluded that, when adjusted for inflation, paychecks today have nearly the same purchase power as they did 40 years ago. As a layperson, I take this to mean that, while the ordinary American's standard of life hasn't increased in several decades, it hasn't deteriorated either. I'm struggling to reconcile this figure with the "shrinking middle class" and the need for people to work several jobs to make ends meet, both of which have progressively evolved over the same 40-year period. I assume the answer is growing housing, school, and healthcare costs, but aren't these things factored into the inflation adjustment calculation?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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recently read an article that concluded that, when adjusted for inflation, paychecks today have nearly the same purchase power as they did 40 years ago. As a layperson, I take this to mean that, while the ordinary American's standard of life hasn't increased in several decades, it hasn't deteriorated either. I'm struggling to reconcile this figure with the "shrinking middle class" and the need for people to work several jobs to make ends meet, both of which have progressively evolved over the same 40-year period. I assume the answer is growing housing, school, and healthcare costs, but aren't these things factored into the inflation adjustment calculation?
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