Re:No, millennials don't have it worse than previous generat...
by jfengel on Monday June 21, 2021 @10:57AM
(#27579788)
There are several ways to calculate GDP, one of which involves counting the money paid in salary, rather than the money people spend on stuff. In theory, they're supposed to be equal: dollars going in = dollars going out.
"Income" means more than just income. It also factors in profits, and money leaving the economy through trade.
So it's not comparing apples to oranges, but it's still very wrong. Most obviously, the profit is a big factor. GDP can go up and everybody's salaries go down: it means that somebody is making more profit.
And, of course, GDP is the sum. You get the mean by dividing by the population. But that makes the assumption that income is divided equally, which it isn't. Income inequality means that the median can go down while the mean goes up.
In other words, yeah, TFA is BS. But it's worth noting that salaries + profits should equal GDP. (There are some other factors involving taxes and trade, but that's the gist.)
"Income" means more than just income. It also factors in profits, and money leaving the economy through trade.
So it's not comparing apples to oranges, but it's still very wrong. Most obviously, the profit is a big factor. GDP can go up and everybody's salaries go down: it means that somebody is making more profit.
And, of course, GDP is the sum. You get the mean by dividing by the population. But that makes the assumption that income is divided equally, which it isn't. Income inequality means that the median can go down while the mean goes up.
In other words, yeah, TFA is BS. But it's worth noting that salaries + profits should equal GDP. (There are some other factors involving taxes and trade, but that's the gist.)