What happened in 1971? Nothing, just a common year people choose to mismeasure \ stacker news ~econ

What happened in 1971? Nothing, just a common year people choose to mismeasure

2106 sats \ 9 comments \ @tomlaies 17 Oct econ

"What happened in 1971?"

Nothing, that's just a common year people choose to mismeasure productivity and pay series from🧵

Using nonfinancial corporate sector productivity and wages, we see the same picture indicating no stark divergence in 1971.

Read the full thread and shoutouts here: https://x.com/cremieuxrecueil/status/1846740202179486061

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30 sats \ 0 replies \ @nitter 17 Oct bot

https://xcancel.com/cremieuxrecueil/status/1846740202179486061

1 sat \ 2 replies \ @_stacktoshi 17 Oct

Obviously the productivity gains go somewhere. This guy totally leaves out the fact that they’re skewed to the upper end of income earners starting in the early 1970s, which is actually outlined in an article he subsequently provides:

https://www.aei.org/research-products/report/understanding-trends-in-worker-pay-over-the-past-50-years/

The pay of the median worker, however, after rising with economy-wide productivity, has risen much more slowly since the early 1970s.

If it’s slow for the median worker, it’s slower for everyone under him. For someone trying to correct a “misleading” website, he sure knows how to post misleading posts on X!

3 sats \ 1 reply \ @tomlaies OP 17 Oct

Which didn't happen in 1971. That happened in the whole time period. At least 2 decades. At least.

The difference between "it happened in 1971" vs "it's a continuous trend over several decades" isn't a small difference. That's the difference between an orchestrated event and an organic trend.

0 sats \ 0 replies \ @_stacktoshi 17 Oct

Okay, which chart shows that? Why did he link to an article that pinpoints the median diverging in the early 70s?

0 sats \ 0 replies \ @4rge 17 Oct

Me and Bobby Mcgee was released

0 sats \ 0 replies \ @4rge 17 Oct

Stats are fun like that

0 sats \ 2 replies \ @SimpleStacker 17 Oct

I don't really understand the criticism. Just because one graph doesn't show a big divergence doesn't mean the other graphs are wrong.

I re-checked https://wtfhappenedin1971.com/ and it doesn't look like they actually produced most of their own charts. They were mostly taken from other websites... so either everyone was being incompetent or had an agenda, or at least there was some kind of divergence in the early 1970s depending on what data you're measuring.

I'm not saying I believe everything in that website, some of it clearly is put there with an agenda or the axes are manipulated to make the divergence look bigger than it is.

I'm just saying that I don't really understand what the twitter thread is trying to claim.

I'd also argue that I'm pretty skeptical of productivity numbers in general. An econ professor I know likes to say "Does your job create surplus or do you just move it around?" Problem is, people whose job it is to move surplus around still get counted in productivity metrics.

Not to mention, if there's a lot of growth among top earners but stagnation and divergence for low earners, the growth among the top earners will swamp what's going on with low earners due to how we calculate averages.

3 sats \ 1 reply \ @tomlaies OP 17 Oct

I re-checked https://wtfhappenedin1971.com/ and it doesn't look like they actually produced most of their own charts. They were mostly taken from other websites... so either everyone was being incompetent or had an agenda,

It's called cherry picking. You could pick 1970 or 1969 or 1985 instead and find lots of graphs just as well.

or at least there was some kind of divergence in the early 1970s depending on what data you're measuring.

Yes. Exactly. "early 1970s". Not exactly flipping a switch in one year and in one year only.

I'm just saying that I don't really understand what the twitter thread is trying to claim.

Maybe you missunderstood that the claim is a bigger argument than it is. The argument is only that nothing happened in 1971 specifically.

It's long term trends that span many years and multiple decades. Time moves. Time moves every year. Not just in 1971. Time moved in 1972 as well. And in 1973 too.

0 sats \ 0 replies \ @SimpleStacker 17 Oct

But I mean, something did happen in 1971 specifically. And just because divergences can be measured from other starting points, it doesn't mean what happened in 1971 didn't also contribute or exacerbate some of these trends. And it seems pretty clear to me that there was a divergence of some kind in the 1970s. Whether or not that's due to taking off the gold standard is up for debate. (I'm not well versed enough in this to say anything definitively.)