We’re all better off than we used to be. This graph – thanks to Mark Perry – is part of the reason why I regularly write that phrase. 

If the categories in the graph constitute, say, 25% of a typical household budget, then the reduction in spending on those categories of 25% (see graph) is equivalent to a 6% pay increase. Even if salaries aren’t going up, the cost of stuff is going down (and the quality of stuff – not covered in the prices in the graph – is going up (Walkman versus iPod)).

-JD Cross

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