The typical American household must spend an additional $11,434 annually just to maintain the same standard of living they enjoyed in January of 2021, right before inflation soared to 40-year highs, according to a recent analysis of government data.

That seems absurdly high and does not match my personal experience at all.

The analysis, from Republican members of the U.S. Senate Joint Economic Committee

Oh. So people like JD Vance, Tom Cotton and Mike Lee are responsible for this lie, damn lie, and statistical analysis.

I can only assume they included many people the rest of us would consider rather rich in their “typical American household”; If I’m paying an extra few percent in inflation it’s not nearly that much, but for someone making mid-six figures with a lifestyle matching that income a couple of percent can add up to a lot of money.

Edit: I can’t find their methodology on this number specifically but from other methodology they’ve used it looks like they took spending data provided by businesses, did some “adjustments” of it against another set data from consumers that it doesn’t really match up with, made some shit up (favorite line was in the footnote at the bottom: “Our definition of energy is unique”), came up with a number they like for spending per consumer unit (that term was used 39 times in 9 pages), then they adjust that number because consumer units aren’t households even though they’re “defined as one or more persons living together who make joint spending decisions”, and then they adjust that to invent state-level data based on their estimate of consumer units in each state… I think you’re getting the idea on how purposely convoluted this is. They’re smashing two disparate sets of data together in such a way to come up with the numbers they want. But here’s something cool: You could have seen two of the three people behind this speaking at the American Enterprise Institute if you had gotten a fellowship in 2022! Oh well, too late now.

Diving deeper into this then any rational person should have might have driven me a bit batty but it is comforting to know what the GOP sees when they look at us: consumer units. Who’s a good consumer unit? Are you a good consumer unit? Yes you are. You are such a good consumer unit.

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The analysis, from Republican members of the U.S. Senate Joint Economic Committee

Just FYI

But I’m sure the fact that we haven’t raised the minimum wage a single time since 2009 has absolutely nothing to do with this

When pay significantly lags the cost of basics you’re gonna have a bad time.

And inflation was more than 3% last month? Still adding insult to injury.

Eat the rich!

on god

I need $11,400 a day to afford the basics.

really? sure, things are more expensive, sure but I havent been spending an extra $11.5k. if I did that i’d have probably zero savings. dunno where they get these numbers from

I gave the methodology a read, and it’s a real head scratcher. I haven’t sat down and done the math myself, but if I were going to, I would first investigate all the assumptions they had to make, such as:

• using the Personal Consuption Expenditures PCE measure of spending instead of the Consumer Expenditure Survey (CE) , since one includes military and government spending on behalf of households and the other doesn’t
• Using 2019/2020 aggregate spending estimates at the census division level as part of a formula to estimate Jan 2021 spending data. (2020 was not a normal year for spending)
• Using a Gross CE/PCE ratio at the census division level to estimate consumer spending in each census division’s constituent states
• using the PCE growth nationally (remember what it includes) as a substitute for statewide , statewise expenditure growths.
• Again, using census division aggregate data to estimate state level consumer units per household
• providing no validation that their methodology for transforming PCE values into CE values works (it should have been as simple as calculating it for other years, say 2015,2016, and checking the accuracy)
• using Census division CPI instead of state data.

Anyway, this is where I would start picking this mess apart. If I were so inclined.

From this little bit, I’d be concerned about the analysis using suppressed spending in 2020 as the starting point in 2021, as well as including spending from outside the CPI basket and non household entities in CPI estimates. I’d be concerned about over generalizing the states by estimating using their census units. Basically, I’d consider this report skeptically at best if no additional validation can be provided.

No way. That’s nearly $1000 per month. There’s no way. 3 or 4 hundred per month sure.