February 15, 2006
You don't need me
Great new blog: The Everyday Economist. It's like a jk who doesn't misuse the work "like." Seriously, Josh Hendrickson has a common-sense, free market view of economics and a clear writing style.
I met him reading his TCS article, Snow Job. With his blog entries, this article presents a convincing case against the current naysayers who claim that real wages are declining. I keep hearing that this is true but it does not seem to pass the smell test.
Hendrickson, and Thomas Sowell (linked off his blog), explain it clearly:
1) Real wages are wages - inflation; CPI is used for inflation;
2) CPI overestimates inflation by 1-1.5% (How many hours do you have to work to buy a mid-range laptop and a mobile phone? This is important to most people, but is not captured at all in cpi.)
3) Real, real wages are not declining. Those who claim they are have a political or economic interest in failure.