Young 'to be poorer than parents at every stage of life'(bbc.com)
bbc.com
Young 'to be poorer than parents at every stage of life'
http://www.bbc.com/news/business-34858997
236 comments
Not kidding here, but one of the most helpful things my Dad ever told me as a teenager was "You probably won't have the same standard of living as we've had while you were growing up" because he made good money in a specialized, unionized profession. He saw, first-hand, how his employment and skills were being cheapened not by competition, but by globalization mentalities, which, in his words (paraphrased) "Isn't about bringing them up, but bringing our standard of living down." Oh, and his ever present suspicion of "management" which, history eventually proved true, wanted to take money from his profession and give it to themselves and "investors" - which did happen (I won't go into details but it was staggering).
It was through these discussions and sharing of perspective - just one man's view of the world - that I was taught to value health, happiness, and appreciate a life not defined by the materialism that could've been a real sink-hole for me if I'd tried to achieve even greater "status" than he did.
Just to put a last bit of context on it, every five years of so my parents would think about getting a used Corvette convertible, but they could never justify what seemed like such a wasteful purchase...by comparison, my Dad drove a 1991 Ford Ranger pickup, purchased new, babied as a second vehicle, until eventually selling it with 80,000 miles on it for 3x the book value sometime around 2010.
I'm a big-time car guy and have dreamed of a Lamborghini Countach since forever. But now, having lived in the "real world" for over a decade, I'm just happy to have a nice 4-banger Toyota with good air conidtioning, tinted windows that gets 30 mpg when I keep my foot out of it. Looking at 2008, all I can think about is how greed is a terrible, toxic basis for a value system.
It was through these discussions and sharing of perspective - just one man's view of the world - that I was taught to value health, happiness, and appreciate a life not defined by the materialism that could've been a real sink-hole for me if I'd tried to achieve even greater "status" than he did.
Just to put a last bit of context on it, every five years of so my parents would think about getting a used Corvette convertible, but they could never justify what seemed like such a wasteful purchase...by comparison, my Dad drove a 1991 Ford Ranger pickup, purchased new, babied as a second vehicle, until eventually selling it with 80,000 miles on it for 3x the book value sometime around 2010.
I'm a big-time car guy and have dreamed of a Lamborghini Countach since forever. But now, having lived in the "real world" for over a decade, I'm just happy to have a nice 4-banger Toyota with good air conidtioning, tinted windows that gets 30 mpg when I keep my foot out of it. Looking at 2008, all I can think about is how greed is a terrible, toxic basis for a value system.
The earning power of the emerging asian middle class has doubled in the last 20 years. If that's not "bringing them up" then what is?
To stay on my initial point, a situation where the Asian middle class grows and the US middle class has not eroded in the past 20 years would be an appropriate example.
Frankly, I don't buy the story of an eroding American middle class. A stagnating one maybe. But there just isn't data to support the idea of a regressing one.
People look at the past with rose colored glasses.
People look at the past with rose colored glasses.
Yes, there is data in support of a regressing middle class in the US and it can be most easily seen in the labor force participation rate and the hourly wage "underemployment" demographics of the working class under the age of 35. I mean, if you want to deal in beliefs, then you can believe whatever you want. Speaking of rose colored glasses, a "doubling" of the Asian middle class in the past 20 years doesn't strike me as much improvement if we start talking about the hard numbers and population % still living in abject poverty.
1) The labor force participation rate is declining primarily due to an aging population. And even with the decline it's still much higher than it was at any time before the mid 80s (primarily due to women entering the workforce).
2) The % of the world living in extreme poverty has declined dramatically in the past half century.
http://www.vox.com/2015/8/13/9145467/extreme-poverty-global-...
The story of the last 50 years is really about members of the western middle class finally having to deal with competition from the rest of the world due to globalization. While this has certainly had some downsides for the western middle class it has been an INCREDIBLY HUGE BOON for everyone else. It's very hard to overstate how fast east asia has transformed from poverty to relative wealth and how good this has been for hundreds of millions of people.
Go look at a picture of what Shanghai looked like in 1990 vs today: http://gizmodo.com/5558350/shanghai-skyline-before-and-after
2) The % of the world living in extreme poverty has declined dramatically in the past half century.
http://www.vox.com/2015/8/13/9145467/extreme-poverty-global-...
The story of the last 50 years is really about members of the western middle class finally having to deal with competition from the rest of the world due to globalization. While this has certainly had some downsides for the western middle class it has been an INCREDIBLY HUGE BOON for everyone else. It's very hard to overstate how fast east asia has transformed from poverty to relative wealth and how good this has been for hundreds of millions of people.
Go look at a picture of what Shanghai looked like in 1990 vs today: http://gizmodo.com/5558350/shanghai-skyline-before-and-after
> Speaking of rose colored glasses, a "doubling" of the Asian middle class in the past 20 years doesn't strike me as much improvement if we start talking about the hard numbers and population % still living in abject poverty.
But it's a massive improvement if you talk about the numbers who were living in poverty and now aren't.
Much progress. Much yet to do. Both are true.
But it's a massive improvement if you talk about the numbers who were living in poverty and now aren't.
Much progress. Much yet to do. Both are true.
http://www.pewglobal.org/2015/07/08/a-global-middle-class-is... seems to mention otherwise.
Having seen the changes over last 20 years in India, the middle class is now a lot vulnerable and in the fix with absolutely zero safety net. The earning power of the middle class might have doubled but the expenses and the standard of living has increased manifolds, thus pushing them further to the bottom.
Having seen the changes over last 20 years in India, the middle class is now a lot vulnerable and in the fix with absolutely zero safety net. The earning power of the middle class might have doubled but the expenses and the standard of living has increased manifolds, thus pushing them further to the bottom.
I'm 40 and way poorer than my babyboomer parents. My savings got wiped out in a housing market crash in 2008, they have made over half a million euro in their lives just from their houses becoming worth more over time.
They've also both had work most of their adult life, and their pensions funds have always done well on the stock market, whereas my wife has been without a job since the financial crisis hit and government in the Netherlands went in austerity mode.
They've also both had work most of their adult life, and their pensions funds have always done well on the stock market, whereas my wife has been without a job since the financial crisis hit and government in the Netherlands went in austerity mode.
Similar story here. I cashed out a lot of stocks to make a down payment on a house. Then I had to move to a different city to find work, and lost everything I ever put into the house. I timed the market just right to lose everything, because my other options were to lose more than that.
I have had more employers in 15 years of work than both of my parents accumulated over a combined total of nearly 80 years. I have never, ever been promoted within the same company, but I have been summarily tossed to the curb for no individually-attributable reason--along with several of my office-mates--a total of four times.
I have a lot of envy for what the Baby Boomer generation already got, and in combination with the condescending attitude they have (in aggregate) towards the younger generations, it fuels a lot of resentment.
Their formula of education plus hard work equals success has not been even remotely accurate for me. Education plus hard work equals screw you, buddy, because I already got mine. Enjoy your layoffs and unaffordable housing and tuition increases well in excess of inflation and slashed employer-granted benefits and mountains of political debt, because your parents have decided to sell their house at 20x what they paid for it, buy a plush RV, and split their well-funded retirement between any convenient US state and Snowbirdland, Mexico.
And what really kills me is that I have never seen anyone from my parents' generation working particularly hard. Maybe they did all that before I was born, and just coasted along afterward? Maybe I don't really know what hard work looks like?
Well, anyway, thanks for all the inter-generational tension, Boomers. We'll air it out by having Thanksgiving dinner at your house again this year, because none of your kids can afford homes big enough to hold everyone.
I have had more employers in 15 years of work than both of my parents accumulated over a combined total of nearly 80 years. I have never, ever been promoted within the same company, but I have been summarily tossed to the curb for no individually-attributable reason--along with several of my office-mates--a total of four times.
I have a lot of envy for what the Baby Boomer generation already got, and in combination with the condescending attitude they have (in aggregate) towards the younger generations, it fuels a lot of resentment.
Their formula of education plus hard work equals success has not been even remotely accurate for me. Education plus hard work equals screw you, buddy, because I already got mine. Enjoy your layoffs and unaffordable housing and tuition increases well in excess of inflation and slashed employer-granted benefits and mountains of political debt, because your parents have decided to sell their house at 20x what they paid for it, buy a plush RV, and split their well-funded retirement between any convenient US state and Snowbirdland, Mexico.
And what really kills me is that I have never seen anyone from my parents' generation working particularly hard. Maybe they did all that before I was born, and just coasted along afterward? Maybe I don't really know what hard work looks like?
Well, anyway, thanks for all the inter-generational tension, Boomers. We'll air it out by having Thanksgiving dinner at your house again this year, because none of your kids can afford homes big enough to hold everyone.
Genuine question: why not rent out the house whilst you were in the other city? That would have probably covered the mortgage and got you out of the dip until you could either move back, or the market had picked up again and you could sell without loss.
> We'll air it out by having Thanksgiving dinner at your house again this year, because none of your kids can afford homes big enough to hold everyone.
That and we can't afford to have our own kids...
That and we can't afford to have our own kids...
May I ask what your savings were in that caused them to be be wiped out in 2008? I would have to guess retirement funds invested in mutual funds which were invested in the housing bubble?
We bought a house for 300k, about 60k of it our savings and 240k mortgage. In the next two years, the value of the house went down by 60k.
To be honest that wasn't _all_ our savings, and they were already spent on the house of course, but it was a financial loss equal to most of our original savings.
To be honest that wasn't _all_ our savings, and they were already spent on the house of course, but it was a financial loss equal to most of our original savings.
If the house was your primary residence, and not an investment instrument, you didn't really "lose" anything - other property is now also cheaper, and you always need somewhere to live.
Sure, you're paying more than you would have if you waited, but you were happy to pay XXXXUSD per month to have somewhere to live, and your relative mobility has actually increased if we assume that the housing market fell by a flat percentage.
Sure, you're paying more than you would have if you waited, but you were happy to pay XXXXUSD per month to have somewhere to live, and your relative mobility has actually increased if we assume that the housing market fell by a flat percentage.
I think the problem is when you finally do need to move, and you owe 200k still but will only be able sell the house for 150k. You'll still be making mortgage payments on a house you won't even have then.
Real estate markets are a fickle beast.
After the 2008 crash, I was planning on moving, but abruptly changed my plans when I lost close to a 80K on the value of my home.
Fast forward 6 years and suddenly the market was showing signs of rebounding. I had always been in contact with my real estate agent, but I was considering a large scale remodel and staying put where I was. My agent offered to start looking for something that I might like.
A year later the process went shockingly fast. I was assuming the house would sit for a while since the market was still pretty soft. I cleaned and de-cluttered my house and it went on the market. Within hours I had two listings for the next day - which ballooned to four the morning of. When I got back, I had two offers. The house was on the market less than two days.
I credit the ability to sell my house and make a few grand on it to my agent. It was priced and marketed really well by him and his company. This is the second house he's sold for me. The other house was on the market at the height of the housing boom and sold in less than a week.
After the 2008 crash, I was planning on moving, but abruptly changed my plans when I lost close to a 80K on the value of my home.
Fast forward 6 years and suddenly the market was showing signs of rebounding. I had always been in contact with my real estate agent, but I was considering a large scale remodel and staying put where I was. My agent offered to start looking for something that I might like.
A year later the process went shockingly fast. I was assuming the house would sit for a while since the market was still pretty soft. I cleaned and de-cluttered my house and it went on the market. Within hours I had two listings for the next day - which ballooned to four the morning of. When I got back, I had two offers. The house was on the market less than two days.
I credit the ability to sell my house and make a few grand on it to my agent. It was priced and marketed really well by him and his company. This is the second house he's sold for me. The other house was on the market at the height of the housing boom and sold in less than a week.
Just because the loss hasn't been realized yet doesn't mean it isn't real. Among other things, prior commenter can't move to a different house because s/he no longer has a downpayment and won't be able to refinance to take advantage of lower rates. An increase in housing values is real, and so is a decrease, and it's real even before those losses/gains have been realized by selling (for instance, a HELOC can get the gains out before selling).
In particular my wife has no job now and mortgage lending rules are much stricter now. So although we can make the payments on our current 240k mortgage each month on my income, the maximum mortgage we could get now is something like 180k.
Assuming that I will always move on to another own house, and not a rented one.
I'm never buying again. If they want me to sink 30 years of my life into monthly payments, I'm going to need a job that will last for at least 30 years of steady paychecks.
And I don't believe those actually exist any more.
Also, I no longer trust the justice system to protect my rights as a property owner. Having been primed by software-based DRM to not want to buy something unless I can truly own it, I find that land property in the US is often heavily encumbered with covenants, regulations, local ordinances, mortgage terms, and recurring taxes, to the point where it feels like paying rent and signing a lease feels less restrictive.
And I don't believe those actually exist any more.
Also, I no longer trust the justice system to protect my rights as a property owner. Having been primed by software-based DRM to not want to buy something unless I can truly own it, I find that land property in the US is often heavily encumbered with covenants, regulations, local ordinances, mortgage terms, and recurring taxes, to the point where it feels like paying rent and signing a lease feels less restrictive.
> I'm never buying again. If they want me to sink 30 years of my life into monthly payments, I'm going to need a job that will last for at least 30 years of steady paychecks.
I don't get this. If you rent instead, you'll just be sinking monthly payments into that (maybe more, maybe less than with buying).
And there's no need for a job that lasts 30 years, you just need to keep the ability to make the payment every month. But that is also true when renting.
I don't get this. If you rent instead, you'll just be sinking monthly payments into that (maybe more, maybe less than with buying).
And there's no need for a job that lasts 30 years, you just need to keep the ability to make the payment every month. But that is also true when renting.
You don't understand, because you have probably just done the math on paper, rather than lived it.
Anecdotally, I have realized more value per dollar spent on rented homes than on purchased homes. If I had never purchased a home in the past, renting instead, I believe without a shred of doubt that I would have a greater net worth today.
I cannot make a rational case for home purchase now, because I cannot guarantee so many years of steady paychecks within an acceptable commuting radius of any home I could buy. Look back 30 years before now, to 1985. How many jobs existed then in the U.S. that no longer exist now? Do you think you can predict what the job market will look like in 2045?
If your job was to make buggy whips, would you feel safe making a 30-year financial commitment in 1890? Perhaps, but the Ford Model T came in 1908. Technology develops faster now. I get the impression that jobs that don't even exist this year may become obsolete before 30 years elapse, and yet employers still routinely hire based on specific experience rather than aptitude or trainability.
Perhaps it would have been more accurate to say that I will never take on debt to buy a home again, and I don't expect to ever be able to afford to buy anything without doing so.
Anecdotally, I have realized more value per dollar spent on rented homes than on purchased homes. If I had never purchased a home in the past, renting instead, I believe without a shred of doubt that I would have a greater net worth today.
I cannot make a rational case for home purchase now, because I cannot guarantee so many years of steady paychecks within an acceptable commuting radius of any home I could buy. Look back 30 years before now, to 1985. How many jobs existed then in the U.S. that no longer exist now? Do you think you can predict what the job market will look like in 2045?
If your job was to make buggy whips, would you feel safe making a 30-year financial commitment in 1890? Perhaps, but the Ford Model T came in 1908. Technology develops faster now. I get the impression that jobs that don't even exist this year may become obsolete before 30 years elapse, and yet employers still routinely hire based on specific experience rather than aptitude or trainability.
Perhaps it would have been more accurate to say that I will never take on debt to buy a home again, and I don't expect to ever be able to afford to buy anything without doing so.
It's a bit more complicated than what you're presenting. Let's say I'm a buggy whip maker in 1890. I buy a house. 1908 comes, and I'm out of a job. I can't afford the house. But if I'm living in a town that wasn't too dependent on the buggy whip factory, then there are probably people who are looking to buy houses, so I'm still able to get out of the house without losing my shirt.
The problem comes when the town's economy crashed (because the buggy whip factory was the big business), or the nation's economy crashes (recession/depression/downturn/whatever), and I have to sell my house. Then I can really get burned.
And the next problem: When I buy a house, I can't be sure what the economic environment will be when I need to sell it.
I would say that, over the long haul, if you live in a town where there's enough variety of employment that you can probably continue to find work even if you lose your current job, most of the time owning your own house is a net win. (Be sure to hear all the caveats in that sentence!)
The problem comes when the town's economy crashed (because the buggy whip factory was the big business), or the nation's economy crashes (recession/depression/downturn/whatever), and I have to sell my house. Then I can really get burned.
And the next problem: When I buy a house, I can't be sure what the economic environment will be when I need to sell it.
I would say that, over the long haul, if you live in a town where there's enough variety of employment that you can probably continue to find work even if you lose your current job, most of the time owning your own house is a net win. (Be sure to hear all the caveats in that sentence!)
It's tough to go against the US government who's subsidizing homeowners at renters' expense though. 30-year fixed mortgages are unheard of elsewhere in the world, that's why they all have to be underwritten by Fannie/Freddie in the ultimate end. And with where the interests rate are now, it's tough to resist locking that in for 30 years. And of course, mortgage interest tax deductions on top of that.
Fair enough. I'm lucky to live in a small country.
Takes all kinds. I bought my place after 20 years of payments, on a dozen different jobs. Had savings, so 'between jobs' didn't impact mortgage payments. And I'm out in the county, where if they have zoning rules, there sure as heck aren't any inspectors. So I do as I please. Feels pretty unencumbered to me!
I have been burnt twice on home ownership, and didn't enjoy the pain. Other people will have different experiences.
I do know for certain that I will never sign another mortgage for as long as I live. Those lenders can go FOADIAF.
I do know for certain that I will never sign another mortgage for as long as I live. Those lenders can go FOADIAF.
Exactly, we're all naturally short housing.
https://thezikomoletter.wordpress.com/2012/12/10/you-are-nat...
https://thezikomoletter.wordpress.com/2012/12/10/you-are-nat...
simply owning a recently-purchased house in an affected real estate market could have caused that. if you couldn't cover mortgage due to job loss or a rate hike, you were forced out and lost the money. doubly so if you were also invested in financial markets. a lot of people lost a lot of money.
meanwhile, parents' mortgage is from the 1980s or 1990s and easily affordable in today's money, even if their nominal market value takes a slump, the mortgage is easily covered and the rebound in values 3-4 years later will put you far ahead again. if you were smart enough to hold steady or even double-down when the financial markets were down, well then you're even richer today.
it was essentially a transfer of wealth from one generation to well-positioned members of the previous generation, and of course bankers/traders. but it wasn't a conspiracy... some people are just better positioned for and better able to see a massive market shift like that.
i personally lost some (not that much) money during that time, and my parents gained money. ultimately their money is my money so i'm fortunate in that regard, but the same exact thing happened to me. i did everything 'right', including saving and investing, and still got somewhat shafted personally due to a combination of extrinsic market forces and personal decisions.
meanwhile, parents' mortgage is from the 1980s or 1990s and easily affordable in today's money, even if their nominal market value takes a slump, the mortgage is easily covered and the rebound in values 3-4 years later will put you far ahead again. if you were smart enough to hold steady or even double-down when the financial markets were down, well then you're even richer today.
it was essentially a transfer of wealth from one generation to well-positioned members of the previous generation, and of course bankers/traders. but it wasn't a conspiracy... some people are just better positioned for and better able to see a massive market shift like that.
i personally lost some (not that much) money during that time, and my parents gained money. ultimately their money is my money so i'm fortunate in that regard, but the same exact thing happened to me. i did everything 'right', including saving and investing, and still got somewhat shafted personally due to a combination of extrinsic market forces and personal decisions.
Isn't the Netherlands government spending higher as a portion of GDP today than it was ten years ago?
Is it primarily an issue of where they're spending the money?
Is it primarily an issue of where they're spending the money?
Cost of healthcare is going up all the time, social security as well. My wife was a municipal civil servant and they have to make cuts.
How does the healthcare system work in the Netherlands? I'm entirely unfamiliar with it. Is it more similar to Germany / Switzerland, or closer to the UK model?
Looks to me from a simple Wikipedia search that the Netherlands follows the Bismarck Model (Germany, Switzerland) rather than the Beveridge Model. UK's NHS is one of a kind. Not a lot of countries have or can afford to have the same type of healthcare system as UK.
Keep in mind, though, that tech also has a much faster life-cycle than most professions of the day. We're already seeing large drops in average salary for many tech positions. The average developer salary today is not even close to what a similarly "skilled" profession was even 20 years ago. Now, obviously developers didn't exist 20 years ago, but that's taken from a study that compared population sizes in the US to job percentages in the population. Yesterday's electrician is today's developer and they're not paid similarly at all.
> Now, obviously developers didn't exist 20 years ago
i've got some perhaps surprising news for you, my young friend... 20 years ago was 1995.
sure we didn't have broadband and fancypants angular.js but i'm pretty certain developers were around waaaay back during web 1.0 (to use a turn of phrase).
i've got some perhaps surprising news for you, my young friend... 20 years ago was 1995.
sure we didn't have broadband and fancypants angular.js but i'm pretty certain developers were around waaaay back during web 1.0 (to use a turn of phrase).
Ahhh, crap. I'm old. Are you trying to suggest that 20 years ago wasn't the 1970's?
I was a software developer in the 1970s, too :-) I wrote a cartridge game for Mattel Intellivision, for example.
Ahhh, crap. I'm old. Are you trying to suggest that 20 years ago wasn't the 1960's?
it used to be!
[deleted]
Yeah. I tend to forget too. Then I realize that StarCraft is about to hit 20, and given that I vividly remember playing it for the first time around 1997, I freak out. Where did all those years go? :(.
Like that old meme: I thought it would take longer to get old.
> We're already seeing large drops in average salary for many tech positions.
Are we?
Are we?
We are seeing large drops relative to inflation.
This report outlines how STEM wages have stagnated since about 2000[0]
2015[1] CS graduates have starting salaries that are about 4% lower than 2014[2] graduates. Do that for a few years and it adds up.
Anecdotally, I am a "Senior" software engineer that has been writing software for nearly 20 years (professionally 10), work for a household name software company on the east coast, and having trouble affording any real estate in the area without an insane commute.
[0] http://www.epi.org/publication/pm195-stem-labor-shortages-mi...
[1] https://www.naceweb.org/uploadedFiles/Content/static-assets/...
[2] https://www.naceweb.org/uploadedFiles/Content/static-assets/...
This report outlines how STEM wages have stagnated since about 2000[0]
2015[1] CS graduates have starting salaries that are about 4% lower than 2014[2] graduates. Do that for a few years and it adds up.
Anecdotally, I am a "Senior" software engineer that has been writing software for nearly 20 years (professionally 10), work for a household name software company on the east coast, and having trouble affording any real estate in the area without an insane commute.
[0] http://www.epi.org/publication/pm195-stem-labor-shortages-mi...
[1] https://www.naceweb.org/uploadedFiles/Content/static-assets/...
[2] https://www.naceweb.org/uploadedFiles/Content/static-assets/...
Why would the big companies of SV conspire to fix wages if they didn't want to decrease the cost of labor?
Yes, tech workers are very underpaid, even if their pay is good relative to the rest of the economy right now.
Yes, tech workers are very underpaid, even if their pay is good relative to the rest of the economy right now.
I'm not sure that's connected - if wage fixing were to blame we wouldn't be seeing salary drops, they wouldn't have risen in the first place.
My question is more that I would be very interested to see data supporting the idea that there has been a large drop in developer salaries.
My question is more that I would be very interested to see data supporting the idea that there has been a large drop in developer salaries.
[deleted](2)
Boomer here.
1. I was not particularly well off in my 20s, nor were quite a few of my friends. Yes, the ones who went to law school did pretty well. To be sure, student debt was a vastly smaller problem them.
2. A large number of the people I deal with, and who are within five years of my age either way, are parents of young adults in the work force. There may be occasional bemusement by the younger generation's expectations, but I don't see much resentment.
3. Most of the boomers barely made it into the long economic expansion that followed WW II (though on the other hand you can say we owe our existence to it). You could see things getting tighter and tougher by the beginning of the 1970s. The consumer goods we could afford were a lot shinier and nicer than what our parents had, but the economic security was harder to come by.
1. I was not particularly well off in my 20s, nor were quite a few of my friends. Yes, the ones who went to law school did pretty well. To be sure, student debt was a vastly smaller problem them.
2. A large number of the people I deal with, and who are within five years of my age either way, are parents of young adults in the work force. There may be occasional bemusement by the younger generation's expectations, but I don't see much resentment.
3. Most of the boomers barely made it into the long economic expansion that followed WW II (though on the other hand you can say we owe our existence to it). You could see things getting tighter and tougher by the beginning of the 1970s. The consumer goods we could afford were a lot shinier and nicer than what our parents had, but the economic security was harder to come by.
>Tech is an area of boom in an economy of bust.
For me tech will make you either much poorer or much richer than your parents.
For me tech will make you either much poorer or much richer than your parents.
If you don't spend your time working for risky startups you can pretty much guarantee it'll make you rich. Google isn't going to be able to take back that large salary they pay you.
Yes .. but you'll spend a great amount of it trying to buy that 3 million dollar house in Mountain View. I am not disagreeing with your premise. But I think one can have a better standard of living in a cheaper area far away from tech centers.
There is very little to think about here.
World GDP/World population is ever increasing. As such it should be obvious that sons have a better life than parents except in the presence of: 1- local conflict or 2- in the presence of a class that amasses of an unfair amount of resources.
We are clearly in situation no. 2 and these are exactly the periods in history where revolutions start. When the rich get so greedy they make people's quality of life decrease in a broad scale they invariably are tamed by violent uprisings.
http://www.wolframalpha.com/input/?i=world+gdp+%2F+world+pop...
We are clearly in situation no. 2 and these are exactly the periods in history where revolutions start. When the rich get so greedy they make people's quality of life decrease in a broad scale they invariably are tamed by violent uprisings.
http://www.wolframalpha.com/input/?i=world+gdp+%2F+world+pop...
What do they mean by "to be poorer"? The current generation already is poorer than previous generations. Income has not kept up with inflation and the income gap has widened tremendously. That previous generations could afford a single-family house with 1 person working and with multiple kids. Now, a double income is almost required, even with renting and not owning, and the rate of couples without children is rising too.
How can anyone be surprised that a candidate who decries all these things is having such success? Everyone in the newer generations know that they're getting the short stick and that we gave it to them. Bernie Sanders is just pointing out the obvious.
http://www.dol.gov/wb/factsheets/Qf-ESWM07.htm http://www.bls.gov/news.release/famee.nr0.htm
How can anyone be surprised that a candidate who decries all these things is having such success? Everyone in the newer generations know that they're getting the short stick and that we gave it to them. Bernie Sanders is just pointing out the obvious.
http://www.dol.gov/wb/factsheets/Qf-ESWM07.htm http://www.bls.gov/news.release/famee.nr0.htm
> That previous generations could afford a single-family house with 1 person working and with multiple kids. Now, a double income is almost required, even with renting and not owning, and the rate of couples without children is rising too.
I find it highly ironic that while feminists wanted to enable women to have jobs, capitalism intervened and forced women to have jobs. So we have a reserse, but equally bad situation (earlier women had to be home, now they have to work).
I find it highly ironic that while feminists wanted to enable women to have jobs, capitalism intervened and forced women to have jobs. So we have a reserse, but equally bad situation (earlier women had to be home, now they have to work).
I once read on a crazy dude's website that corporations did exactly this to take advantage of feminism. They saw that women wanted to work so they dropped wages for men and then, on top of that, paid women less for the same jobs so that they could further undercut those looking for work. I thought that was crazy talk but maybe it's not too far off. That may not have been their motivation, but that's the situation that's happened anyways.
Wages for men didn't drop but many things (like housing) slowly became twice as expensive. It's not some grand conspiracy; it's supply and demand.
This a great point. It's not a conspiracy. Housing prices trend to match median income in an area. When you think about it, it makes perfect sense. If your income was significantly higher then current prices of houses you'd immediately buy a house, because why not, it isn't a big percent of your income and therefore isn't a huge risk either way. The moment prices reach what feels uncomfortable you'd think hard about renting vs buying. We are now in the later stage in several tech cities for tech wages.
Right. That was the point I was making. The conspiracy stuff was all nonsense, but somehow we still ended up in the same situation where no one can afford anything.
And we spend more on other things (like child care) because both adults are working.
Oh this definitely happened. Of course it did! I had an econ professor that gleefully talked about how he'd hire female architects to get lower wages / better quality at the same wage.
As you say, it's easily explainable by capitalism, supply and demand:
* People want the nicest house they can buy, there is a shortage of houses in nice neighborhoods
* Women start working, families have more income
* supply is still short, demand has more money
* price of housing goes up, in addition to the fact that families need child-care
* gone is the extra income, cost of housing has increased, no way to turn back. Now everybody needs a double income to afford a nice home.
This idea made Elizabeth Warren famous. It was quite a profound finding. Well, I should speak for myself, when I first red the synopsis of the Two Income Trap it really felt like a slap on the head. It felt it was counter-intuitive, yet explains so much shiftily looking at own's family spending habits.
I also found the book's message darkly subversive sometimes. For example, all things being equal, it is better to spend more of your income on luxuries than on he biggies (housing, transportation, debt). If you do the former, you can easily roll back. If you do the latter, when times get tough, you're hosed. In yo face papaa!
I also found the book's message darkly subversive sometimes. For example, all things being equal, it is better to spend more of your income on luxuries than on he biggies (housing, transportation, debt). If you do the former, you can easily roll back. If you do the latter, when times get tough, you're hosed. In yo face papaa!
Never heard of her, thanks. Sounds interesting.
Seems like a basic rule that has impact on more ideas recently discussed on hacker news: in a market where there is a short supply of high demand items, more money will cause more inflation.
This will also impact ideas around basic income.
Seems like a basic rule that has impact on more ideas recently discussed on hacker news: in a market where there is a short supply of high demand items, more money will cause more inflation.
This will also impact ideas around basic income.
So you're claiming that it wasn't Capitalism that existed from 1950-1980, that enabled families to make it on one income? And further, I can only guess you're implying that Capitalism is a recent phenomenon from the last 30 years, rather than the reason the US was able to become the wealthiest nation with the highest median income and most productive economy by ~1890?
Capitalism and culture interact. Before 1860, part of "capitalism" was also slavery. After that, it wasn't.
The causes for the US development are many, if I had to guess I would mainly bet on the extensive natural resources they had available.
The causes for the US development are many, if I had to guess I would mainly bet on the extensive natural resources they had available.
The southern slave economy 1800-1860 performed very poorly, which is one of the underlying causes of the South wanting to secede from the Union. The industrial northern economy, based on free labor, completely overpowered the slave economy.
As for natural resources, Asia, Africa, and S. America are loaded with natural resources, yet the booms did not happen there.
As for natural resources, Asia, Africa, and S. America are loaded with natural resources, yet the booms did not happen there.
> Asia, Africa, and S. America are loaded with natural resources, yet the booms did not happen there
They are also loaded with people. America was a free-for-all (except the American Indians, of course, who were overpowered by superior technology).
They are also loaded with people. America was a free-for-all (except the American Indians, of course, who were overpowered by superior technology).
How is N. America different from S. America in the 1800s, in people and resources?
Oil? I'm unaware of any big (existing) land-based oil extraction in S. America. Maybe they had them in the past, though.
S. America had enormous silver mines. Venezuela is big on oil production.
I imagine the main resources that USA had are the huge plains to grow food in, in a relatively favorable climate. The industry comes later.
Maybe there was a lot of wealth in silver, I don't know about that. It seems that it had some land-based oil that they started extracting in the beginning of the 20th century, but I've no idea if they were as extensive as in the US (where there was Standard Oil, an immensely wealthy corporation).
Mind you, I'm not saying it was only the natural resources, there are other factors as well - different climate, geography, cultural background (English vs. Spanish/Portuguese), colonial history, ... I somewhere read that it's a curious phenomenon how so many countries in SA had so many dictatorships in sequence...
Maybe there was a lot of wealth in silver, I don't know about that. It seems that it had some land-based oil that they started extracting in the beginning of the 20th century, but I've no idea if they were as extensive as in the US (where there was Standard Oil, an immensely wealthy corporation).
Mind you, I'm not saying it was only the natural resources, there are other factors as well - different climate, geography, cultural background (English vs. Spanish/Portuguese), colonial history, ... I somewhere read that it's a curious phenomenon how so many countries in SA had so many dictatorships in sequence...
It's really hard to argue that S. America, Africa, Asia, etc., all don't have immense natural resources and favorable climates.
A small note. I read a Statfor report that North American Rivers were very important.
What about the systematic destruction and de-industrialization of places like India by the British tho?
Capitalism is unhalting in its slow shift toward efficiency. Every moment in a capitalist economic system there's someone racing one step ahead of someone else toward the bottom, screwing over a worker or consumer to make a penny more profit and beat his competitor. Women in the workforce was just one inevitable step, but a large one: families with two incomes obviously make more money than families with one, so it was inevitable under capitalism that eventually the more efficient double-income family would become required for survival. We're not there yet but we're barrelling full speed toward that goal, and after we reach it we'll find some other way to push even further toward the worst possible dystopia, peak efficiency.
edit: Also you're attributing success to capitalism where it should be attributed to slavery. It's easy to have a very strong economy when you have free slave labor and most economic gains are still limited by manual labor. If you want to conflate capitalism with slavery I think that's not unreasonable since slavery of some kind is essentially the end goal of capitalism but I'd assume that's a move you don't want to make, so don't try to claim success for your economic system off the backs of abused slaves.
edit: Also you're attributing success to capitalism where it should be attributed to slavery. It's easy to have a very strong economy when you have free slave labor and most economic gains are still limited by manual labor. If you want to conflate capitalism with slavery I think that's not unreasonable since slavery of some kind is essentially the end goal of capitalism but I'd assume that's a move you don't want to make, so don't try to claim success for your economic system off the backs of abused slaves.
Income from jobs is less and jobs are less stable, most stuff is more expensive (especially rent!), and the younger generation is suffocated by high-interest high-principal student loans which get paid out even if it means wage garnishing. To be explicit, the bandwith of money inflow has decreased, and the bandwith of money outflow have increased. The big-picture money outflow from rent and student loans go more or less directly to the richest.
> most stuff is more expensive
On the contrary, I think the thing that has deceived us about how much poorer we've become is cheap stuff. TVs are cheaper than ever. We spend less as a percentage of income on food than we've ever done in the past. Even automobiles and computers are more affordable than they've ever been. To a superficial viewpoint, we have more purchasing power than we've ever had (and the CPI includes many of these items which give that superficial viewpoint).
But we see the true regression in purchasing power once we look at things that haven't benefitted from lowered manufacturing costs. Housing, education, health care and the like are showing the true nature of the situation of how poor we've become.
P.S. Yes, I know I took the quote out of context and I'm more agreeing with you than disagreeing with you. But there is a distinction to be made that it's not all stuff that's more expensive, just the important stuff.
On the contrary, I think the thing that has deceived us about how much poorer we've become is cheap stuff. TVs are cheaper than ever. We spend less as a percentage of income on food than we've ever done in the past. Even automobiles and computers are more affordable than they've ever been. To a superficial viewpoint, we have more purchasing power than we've ever had (and the CPI includes many of these items which give that superficial viewpoint).
But we see the true regression in purchasing power once we look at things that haven't benefitted from lowered manufacturing costs. Housing, education, health care and the like are showing the true nature of the situation of how poor we've become.
P.S. Yes, I know I took the quote out of context and I'm more agreeing with you than disagreeing with you. But there is a distinction to be made that it's not all stuff that's more expensive, just the important stuff.
That's a good point, actually. Dropping cost of typical consumer goods and food really masks how much more money gets thrown into credentialism, rent, and healthcare. This fact means that it's easy to pick up a new X and fill your apartment with Y, but it's nearly impossible to pay off your student loans or move out of your parent's house. Low cost of goods allows people to be massively in debt but not starving to death.
Consumption-class goods have become commoditized/cheaper whereas investment-class goods and services have become more expensive.
Don't overlook the increasing share of the GDP that the government consumes. See chart S.03t:
http://www.usgovernmentspending.com/total_spending_chart
That more than explains the lower amount left for people.
http://www.usgovernmentspending.com/total_spending_chart
That more than explains the lower amount left for people.
Saying that is an oversimplification of what is going on would be an understatement.
With two programmer incomes we can't buy a home 35 miles away from Boston. So pathetic.
Amazing how artificially inflated the housing/real estate market is considering the surplus that exists due to overproduction. Last I checked there are around 5 vacant homes for every homeless person in the US. Playing the game of Monopoly as a kid was just getting us ready for reality.
Which incidentally was the goal of the game Monopoly!
https://en.wikipedia.org/wiki/History_of_the_board_game_Mono...
https://en.wikipedia.org/wiki/History_of_the_board_game_Mono...
Sadly it's not surprising. As it was said once on The Wire, "We used to make things in this country, build things. Now we just put our hand in the next guy's pocket." That's the economy that the previous generations left us and that we're perpetuating for our children.
I feel like there is a lot of context lost in this quote without pointing out that it's being said by a union dock worker to a lobbyist he has been paying to bribe politicians with money earned from smuggling prostitutes and heroin into Baltimore for an international crime syndicate.
I agree. The irony of that statement was huge. But it also brings it back to a "chicken or the egg" scenario. That's what I didn't really want to get into. Is the dock worker's union struggling because he's been paying the lobbyists or are they struggling because everyone else was?
Nah man, let him have the simplification for the HN upvotes.
We do build things. We're the 2nd largest manufacturer on the planet.
We just don't need guys on an assembly line tightening the same bolt ten thousand times a day for forty years, like my grandfather did (true story.)
We just don't need guys on an assembly line tightening the same bolt ten thousand times a day for forty years, like my grandfather did (true story.)
"We just don't need guys on an assembly line tightening the same bolt ten thousand times a day for forty years, like my grandfather did"
I would argue that we do need that.
You don't take a child straight from the womb to an r-rated movie, nor do you put a small plant start right into a torrent of rain. Living things need an environment and activities that match their lifecycle.
A society is also a living thing and has strata that are at different points in that continuum ... and if there is nothing appropriate for that strata, that strata will stagnate and die.
So when people look ahead to some golden utopia where we all work half time as knowledge workers and spend the other half on philosophy or maker projects, they ignore the fact that some sect of a society will not have the makeup for that.
You need to have something for them. Your society needs to have depth and breadth.
I would argue that we do need that.
You don't take a child straight from the womb to an r-rated movie, nor do you put a small plant start right into a torrent of rain. Living things need an environment and activities that match their lifecycle.
A society is also a living thing and has strata that are at different points in that continuum ... and if there is nothing appropriate for that strata, that strata will stagnate and die.
So when people look ahead to some golden utopia where we all work half time as knowledge workers and spend the other half on philosophy or maker projects, they ignore the fact that some sect of a society will not have the makeup for that.
You need to have something for them. Your society needs to have depth and breadth.
This is why I think we need a basic guaranteed income - for all the people who would've been bolt-tighteners fifty years ago. We just don't have the work for them anymore.
Sure, we build things... but not without layers upon layers of middlemen to just pass the buck along with interest.
The lack of affordable housing is an intentional policy. Take https://twitter.com/bryan_kirschner/status/66776075183092940...
Intuitively this seems very true to me, but can you recommend somewhere to read more about this? The residential real estate market definitely feels rigged, but I don't know where to find the case for this claim layed out in a cogent way. The linked tweet (being a tweet) is not particularly detailed, nor is the 2-links deep Vox article.
You can consider the greater Toronto area as a case in point. We had greenbelt laws enacted for supposedly environmental reasons. We got shitty, tiny condos all over the city and million dollar detached houses.
What I thought was particularly perverse was builders lamenting that no one wanted 3 bedroom condos, which is why they were building so few. Complete B.S.! Since they charge per square foot, no one can afford the 3 bedroom condos!
I recall reading somewhere how this will eventually affect the fertility rate. As a couple that waited quite a bit longer to have kids, I can see this being accurate.
What I thought was particularly perverse was builders lamenting that no one wanted 3 bedroom condos, which is why they were building so few. Complete B.S.! Since they charge per square foot, no one can afford the 3 bedroom condos!
I recall reading somewhere how this will eventually affect the fertility rate. As a couple that waited quite a bit longer to have kids, I can see this being accurate.
Then you're looking in the wrong place or you are both underpaid, because with two programmer incomes, we bought 8.5 miles from Boston.
Really? I just did a search on Redfin centered around Boston for sales in the last year, SFH (3bd/2ba, etc), and built within the last 25 years and found the averages to roughly be near a million...
Loosening the age to all years, I saw the average to be about 650-700k. That is 140k down payment plus a probably expensive upgrade to the old and aging systems in the house...
Loosening the age to all years, I saw the average to be about 650-700k. That is 140k down payment plus a probably expensive upgrade to the old and aging systems in the house...
Boston was settled in the 1700s. You need to open up your date range.
My house was built in 1870. It needed some work, but has mostly been fine because the previous owners (and probably the one before them too) had kept it pretty up-to-date.
An 140k downpayment sounds about right. It did wipe out all our savings, but that was only because we decided to buy and then sell. The equity in our old home basically offset it.
My house was built in 1870. It needed some work, but has mostly been fine because the previous owners (and probably the one before them too) had kept it pretty up-to-date.
An 140k downpayment sounds about right. It did wipe out all our savings, but that was only because we decided to buy and then sell. The equity in our old home basically offset it.
Please reread, I loosened the date range to all years...
However I find it a bit dishonest on your part to claim it is easy with 2 programmer jobs to afford a 765k house, including a ~150k down payment which puts you at jumbo rate mortgage rates and hide the fact that you used the equity from a previous property and you bought an extremely old house (I've lived in Boston all of my life, no way would I buy a home that old).
However I find it a bit dishonest on your part to claim it is easy with 2 programmer jobs to afford a 765k house, including a ~150k down payment which puts you at jumbo rate mortgage rates and hide the fact that you used the equity from a previous property and you bought an extremely old house (I've lived in Boston all of my life, no way would I buy a home that old).
1) Jumbo rates are basically the same as regular rates in this area. Source: https://www.dcu.org/loans/mortgage-fixed.html
2) We had the downpayment in cash. Selling the old house just let us replenish savings. Doesn't change the fact that it's possible to save 150k with two developers working (actually more, because we had previously saved for a down payment on our old house, and for extensive (100k+) renovations to our previous house).
3) I'm sorry you don't want an old house. Yes, they can have their problems, but so do houses of any age, including brand new ones. They also have charms that newer houses don't. It's a tradeoff. Newer houses are also available. The same day we first saw our house, we looked at another for around the same price built in the 70s a few blocks away (also in Medford). It needed a lot more work (a new kitchen) where our house was move in ready.
Get an inspection and figure out if the problems are deal breakers for you. Expensive problems are part of the "joy" of owning a house.
2) We had the downpayment in cash. Selling the old house just let us replenish savings. Doesn't change the fact that it's possible to save 150k with two developers working (actually more, because we had previously saved for a down payment on our old house, and for extensive (100k+) renovations to our previous house).
3) I'm sorry you don't want an old house. Yes, they can have their problems, but so do houses of any age, including brand new ones. They also have charms that newer houses don't. It's a tradeoff. Newer houses are also available. The same day we first saw our house, we looked at another for around the same price built in the 70s a few blocks away (also in Medford). It needed a lot more work (a new kitchen) where our house was move in ready.
Get an inspection and figure out if the problems are deal breakers for you. Expensive problems are part of the "joy" of owning a house.
Curious, what towns are you looking in and what prices are you seeing? We're about to go through that process too (similar income situation), and were thinking we could afford to live within 5-10 miles (e.g. Medford, Malden, Waltham, Allston/Brighton). Not possible?
We bought a 4 bed in Medford (10 min walk to Davis) in February 2015 for 765k. Later in the spring, we sold our previous 3 bed in Wakefield (10 min walk to commuter rail) for 465k.
Prices are reasonable, but houses sell quick. Both the house we bought and the house we sold had multiple offers the Monday after the first open house weekend.
Prices are reasonable, but houses sell quick. Both the house we bought and the house we sold had multiple offers the Monday after the first open house weekend.
You wouldn't be better off in the Valley either. With home prices topping $1m/1000sqft, only the elite of the elite can afford to buy now.
You can buy a home with as little as 3% down in the valley. That's 30k down for a 1mil home. Sure payments will be a lot at around 4k/month, but you can rent out a room to help out. Its not any less affordable than an apartment really.
Some people can buy a home with only 3% down. FHA loans and some first time buyer programs allow that.
If you're borrowing $970K, you're monthly payment would be a lot more than $4K. When I was looking at mortgages, borrowing $600K was ~$4500/month in mortgage, property taxes and insurance. $970K would be more like $6K per month.
If you're borrowing $970K, you're monthly payment would be a lot more than $4K. When I was looking at mortgages, borrowing $600K was ~$4500/month in mortgage, property taxes and insurance. $970K would be more like $6K per month.
Not to mention that a bank will require that $6k/month payment to be less than 28% of gross income, so that hypothetical small house is out of the question for a household making less than ~$260k a year.
3% down w/3.85% fixed interest 30 year locked in. That's 4.5k/month in mortgage. That's not including maintenance, property taxes...etc.
Something tells me you haven't actually tried to do that. No bank is going to lend 970k with such little equity.
The only program that does do that, FHA, have loan limits and in SF for a single family home that is about 625k...
BUT, in hot markets like SF and the east coast, no seller is going to accept your offer with only 3% down because of the risk the lender having an LTV issue and the sale falling apart. In markets like NYC, Boston, DC, SF, etc you need to come in with a) offer over ask b) at least 20% down.
The only program that does do that, FHA, have loan limits and in SF for a single family home that is about 625k...
BUT, in hot markets like SF and the east coast, no seller is going to accept your offer with only 3% down because of the risk the lender having an LTV issue and the sale falling apart. In markets like NYC, Boston, DC, SF, etc you need to come in with a) offer over ask b) at least 20% down.
I approached a bank, and that was their offer. 3% down on a 1mil home w/a 3.85% 30 year fixed rate. I've also met some people in the bay area putting 0% down and leveraging their RSUs as a down payment.
If people are doing this, it's no wonder there's a crazy bubble going on.
Here's a better plan: Buy a huge house for a fraction of that money in the north of England, rural Spain, anywhere in Japan which isn't Tokyo, etc., and telecommute to work.
Here's a better plan: Buy a huge house for a fraction of that money in the north of England, rural Spain, anywhere in Japan which isn't Tokyo, etc., and telecommute to work.
How do you find these good telecommute jobs? I'm a web developer and would love to telecommute.
Hell of a lot more risky though...
Then buy a smaller home. Homes have increased in size by 50% since the 1970s and more than doubled in size since the 19050s while people per household have decreased.
You aren't poorer than your parents. It's just that your expectations are bigger.
You aren't poorer than your parents. It's just that your expectations are bigger.
Real income per hour has increased.
https://research.stlouisfed.org/fred2/series/COMPRNFB
A double income is not required to keep up with your parents, it is only required to keep up with the (much richer) Joneses.
If we aren't richer than our parents, it should be easy to name a good or service that we consume less of than them. Anyone care to do that?
https://research.stlouisfed.org/fred2/series/COMPRNFB
A double income is not required to keep up with your parents, it is only required to keep up with the (much richer) Joneses.
If we aren't richer than our parents, it should be easy to name a good or service that we consume less of than them. Anyone care to do that?
The chart is ultra-deceptive because it isolates one variable and ignores all the other attendant charts which indicate massive generational loss of wealth. If real income per hour has actually increased, the marginal lifestyle gain from that increase is beyond a doubt, zero.
Millenials own far fewer cars and homes than their parents ever did, in addition to having less (typically negative, due to debt) net worth. To reiterate, if millenials were to liquidate all of their assets (of which they have none anyway), they would still be in the hole for huge sums. I am fairly certain that my parents never had negative net worth; I know for a fact that they also had much more substantial savings and spending ability in their 20s despite coming from humble backgrounds and working menial jobs.
This isn't about keeping up with the Joneses, it's about reaching zero rather than being in the negative.
EDIT: And, as the other replier so far mentioned, millenials consume very little healthcare while being forced by law to spend vast sums to merely have the ability to spend more money (via high deductible plans) to get shitty quality care. For a time in the previous generation's course, it was normal to have mental health care as part of the standard of care, which has slipped away from us-- now, mental healthcare is barely consumed, and is ludicrously expensive when it is covered under the paltry plans at all.
Millenials own far fewer cars and homes than their parents ever did, in addition to having less (typically negative, due to debt) net worth. To reiterate, if millenials were to liquidate all of their assets (of which they have none anyway), they would still be in the hole for huge sums. I am fairly certain that my parents never had negative net worth; I know for a fact that they also had much more substantial savings and spending ability in their 20s despite coming from humble backgrounds and working menial jobs.
This isn't about keeping up with the Joneses, it's about reaching zero rather than being in the negative.
EDIT: And, as the other replier so far mentioned, millenials consume very little healthcare while being forced by law to spend vast sums to merely have the ability to spend more money (via high deductible plans) to get shitty quality care. For a time in the previous generation's course, it was normal to have mental health care as part of the standard of care, which has slipped away from us-- now, mental healthcare is barely consumed, and is ludicrously expensive when it is covered under the paltry plans at all.
Nope - cars per capita went up.
http://www.google.nl/imgres?imgurl=http://1.bp.blogspot.com/...
Homeownership has been 64% or higher since 1970.
https://upload.wikimedia.org/wikipedia/commons/thumb/d/de/Hi...
Houses have just become larger since then.
http://farm8.staticflickr.com/7002/6843606169_618efc8942_d.j...
You are just plain wrong on all counts.
http://www.google.nl/imgres?imgurl=http://1.bp.blogspot.com/...
Homeownership has been 64% or higher since 1970.
https://upload.wikimedia.org/wikipedia/commons/thumb/d/de/Hi...
Houses have just become larger since then.
http://farm8.staticflickr.com/7002/6843606169_618efc8942_d.j...
You are just plain wrong on all counts.
All those statistics include the generations before the millennials. Perhaps It is our parents who are still buying more cars and bigger homes?
your graphs are just plain useless on all counts
your graphs are just plain useless on all counts
The first chart doesn't even go to the point where the generation in question came of age... it ends at 2005, before most millenials were even legal to drive.
Look at 1979 in the second chart... the trendline for the present is dropping beneath it. The size of house isn't relevant.
https://www.washingtonpost.com/news/wonk/wp/2014/02/18/stude...
http://www.investopedia.com/articles/personal-finance/021914... "Over 25% of them had late payments or are dealing with bill collectors, and well over half are still receiving some form of financial aid from their parents. One of the most disturbing findings of this study reveals that seven out of 10 young people define financial stability as being able to pay all of their bills each month."
http://www.millennialmarketing.com/2010/11/whats-not-on-mill...
http://www.usnews.com/news/articles/2014/04/30/homeownership...
http://www.theatlantic.com/business/archive/2011/04/chart-of...
http://www.businessinsider.com/millennial-home-ownership-sur...
http://www.bizjournals.com/albuquerque/blog/real-estate/2015...
...
Look at 1979 in the second chart... the trendline for the present is dropping beneath it. The size of house isn't relevant.
https://www.washingtonpost.com/news/wonk/wp/2014/02/18/stude...
http://www.investopedia.com/articles/personal-finance/021914... "Over 25% of them had late payments or are dealing with bill collectors, and well over half are still receiving some form of financial aid from their parents. One of the most disturbing findings of this study reveals that seven out of 10 young people define financial stability as being able to pay all of their bills each month."
http://www.millennialmarketing.com/2010/11/whats-not-on-mill...
http://www.usnews.com/news/articles/2014/04/30/homeownership...
http://www.theatlantic.com/business/archive/2011/04/chart-of...
http://www.businessinsider.com/millennial-home-ownership-sur...
http://www.bizjournals.com/albuquerque/blog/real-estate/2015...
...
This argument doesn't make sense...people's consumption patterns for various goods fluctuate over time. You want to compare your 20,30,40,50 year old father with your 20,30,40,50 year old self in order to determine relative wealth.
My parents both consumed more education (much cheaper, less supply of students), earned relatively higher wages (inflation-adjusted) in a better job market (less unemployment, more aggregate demand, higher LFP rate), bought into the housing market with an affordable mortgage in a nice area, and are now expecting to collect a decent revenue of social security and health benefits on top of their pension funds.
If this holds true across the population on average, we will consume less education, housing, social security, and medical benefits than our parents. Not to mention have a poorer quality of life. On average. There will most certainly be exceptions.
The solution? Go back to a top 10 school and get that law/medical degree, then spend a decade or so paying off the loans (or have parents pay for it). Or go the high risk/high reward route of a startup and live/work like a college student for 1/20 chance to hit it big and become an angel/VC. Or network your way into finance/consulting/tech management.
My parents both consumed more education (much cheaper, less supply of students), earned relatively higher wages (inflation-adjusted) in a better job market (less unemployment, more aggregate demand, higher LFP rate), bought into the housing market with an affordable mortgage in a nice area, and are now expecting to collect a decent revenue of social security and health benefits on top of their pension funds.
If this holds true across the population on average, we will consume less education, housing, social security, and medical benefits than our parents. Not to mention have a poorer quality of life. On average. There will most certainly be exceptions.
The solution? Go back to a top 10 school and get that law/medical degree, then spend a decade or so paying off the loans (or have parents pay for it). Or go the high risk/high reward route of a startup and live/work like a college student for 1/20 chance to hit it big and become an angel/VC. Or network your way into finance/consulting/tech management.
> ... it should be easy to name a good or service that we consume less of than them. Anyone care to do that?
Social Security and health care come to mind.
Social Security and health care come to mind.
Social security is not a good. Neither is health care - its a category.
Did you mean "the basket of health care goods available in 1970"? I imagine we consume far more than that (e.g., MRIs, statins, etc). Would you be willing to stick to your parents health care choices?
Did you mean "the basket of health care goods available in 1970"? I imagine we consume far more than that (e.g., MRIs, statins, etc). Would you be willing to stick to your parents health care choices?
You're missing the part where people actively avoid going to the doctor unless they're super sick/injured because the doctor is too expensive, even with insurance. The paradigm of consumption of medical services has changed: the doctor will not permit you to visit them, and then not get referred for tests XYZ and drugs ABC; it would be negligent for the doctor to not provide the standard of care to the patient, and the standard of care is immensely expensive relative to yesteryear.
Was medical bankruptcy a thing in the 1970s?
Was medical bankruptcy a thing in the 1970s?
> Social security is not a good. Neither is health care - its a category.
Allow me to quote myself, quoting you: "name a good or service".
> Would you be willing to stick to your parents health care choices?
Do you mean the health care choices they are exercising now? Who do you think is racking up the most MRI hours, 20 year olds or 60 year olds?
I'll put a finer point on it, both services are subsidized by the increasingly resentful youth.
Allow me to quote myself, quoting you: "name a good or service".
> Would you be willing to stick to your parents health care choices?
Do you mean the health care choices they are exercising now? Who do you think is racking up the most MRI hours, 20 year olds or 60 year olds?
I'll put a finer point on it, both services are subsidized by the increasingly resentful youth.
At 30, will you stick to health care invented when your parents were 30?
Again - MRI is a service. Health care is a category.
Again - MRI is a service. Health care is a category.
> At 30, will you stick to health care invented when your parents were 30?
Why would I, why would they? The issue at hand is cost; they pay much less than I do to utilize the same services due to now legally mandated insurance.
> Again - MRI is a service. Health care is a category.
Again... the health care industry is comprised of both services and goods, the unequal consumption of which is what you challenged anybody to point to.
Why would I, why would they? The issue at hand is cost; they pay much less than I do to utilize the same services due to now legally mandated insurance.
> Again - MRI is a service. Health care is a category.
Again... the health care industry is comprised of both services and goods, the unequal consumption of which is what you challenged anybody to point to.
The question is whether you are richer than your parents at the same age. If you have more goods and services (including all those cool medical techs that didn't exist when they were 30), you are richer.
I certainly am - in 1980 I'd probably be a cripple. In 2014, cheap airline fares + modern medicine fixed me up for a few thousand.
I certainly am - in 1980 I'd probably be a cripple. In 2014, cheap airline fares + modern medicine fixed me up for a few thousand.
It sounds like you are projecting your own situation onto an entire generation, completely ignoring the statistics. You aren't richer for having available a resource that you don't need but you are still made to pay for. That is the situation for the vast majority of young people. It is a very screwed up situation where the least able are made to pay the greater part.
Would you give up every treatment not on the market in 1970 if you could pay 1970s prices for healthcare? How many people do you think would?
I note that you still haven't named a good or service that we consume less of.
You've either somehow overlooked the two I initially named - one of which has been actively discussed, or you disagree and have decided to make a sarcastic remark instead of offering a counter argument.
Social security is not a good or service, it's money. You can't consume money. Also, we consume more healthcare today. Also, sarcasm doesn't mean what you think it means. So no, you haven't named a good or service that we consume less of today.
Houses with big lawns in the SF Bay Area. (Per capita.)
I mean, land is a finite resource, and what with population growth that's happened in heat-riddled places like Phoenix, I think the overall per capita quality-adjusted land ownership has declined.
This is more of an orthogonal population matter, though.
I mean, land is a finite resource, and what with population growth that's happened in heat-riddled places like Phoenix, I think the overall per capita quality-adjusted land ownership has declined.
This is more of an orthogonal population matter, though.
I'm probably only slightly less "poor" than my parents were at my age, but I'm vastly more wealthy.
Interested to hear what you mean by this...
"Wealth" in economics is the sum total of all of your physical and intangible assets, including a calculation of discounted future earnings.
So being rich and being wealthy are very similar concepts in economics - large NPV of assets and income. But in normal parlance, rich and poor can also refer to standard of living/quality of life/happiness.
So are you wealthier? Happier? Earning less?
"Wealth" in economics is the sum total of all of your physical and intangible assets, including a calculation of discounted future earnings.
So being rich and being wealthy are very similar concepts in economics - large NPV of assets and income. But in normal parlance, rich and poor can also refer to standard of living/quality of life/happiness.
So are you wealthier? Happier? Earning less?
"Wealth" and being "rich" (or making money) are similar but not the same.
Adjusted according to inflation I make slightly less money than they do - meaning I have less cash in my bank account. But the prices of everything are being driven down so quickly that I live a much fuller life than they did on a per-opportunity basis.
I have access to all the world's information, seemingly infinite entertainment, and a faster computer than they could even imagine in my pocket (not to mention my tablet and laptop). I can travel the world (I actually make money when I do so by Airbnb'ing my house), Amazon drops stuff they couldn't afford on my doorstop for very cheap.
So I make slightly more, but what I have access to is much greater than they did. I'd argue my life is much richer (er, wealthier), despite making slightly less.
Adjusted according to inflation I make slightly less money than they do - meaning I have less cash in my bank account. But the prices of everything are being driven down so quickly that I live a much fuller life than they did on a per-opportunity basis.
I have access to all the world's information, seemingly infinite entertainment, and a faster computer than they could even imagine in my pocket (not to mention my tablet and laptop). I can travel the world (I actually make money when I do so by Airbnb'ing my house), Amazon drops stuff they couldn't afford on my doorstop for very cheap.
So I make slightly more, but what I have access to is much greater than they did. I'd argue my life is much richer (er, wealthier), despite making slightly less.
Gotcha, thanks for clarifying. Yes we do live in an amazing time where the standard of living/availability of goods and services in developed countries is great relative to 40 years ago.
The only thing I would push back on is the increasing cost of some of the more fundamental investments - higher education and housing. Can't (sustainably) enjoy fast computers/airplanes/Amazon without a degree and a home.
The only thing I would push back on is the increasing cost of some of the more fundamental investments - higher education and housing. Can't (sustainably) enjoy fast computers/airplanes/Amazon without a degree and a home.
I suppose it depends on where you live/where you go to school. I went to BYU so my tuition was $2k/yr (then dropped out, so no degree either), and I live in a small town so I pay very little for rent ($800/month for a three bedroom house, work remotely). If you're in SF though, yeah, you're in trouble.
Oh, did your parents have faster internet, bigger TVs, and better cars than you?
Richness, wealth, is not money. It's the things we want. My parents never had $2/lb strawberries in February, or MRI machines, HIV drugs, discount airlines, etc, etc.
We are insanely more wealthy than our parents.
Richness, wealth, is not money. It's the things we want. My parents never had $2/lb strawberries in February, or MRI machines, HIV drugs, discount airlines, etc, etc.
We are insanely more wealthy than our parents.
Faster internet, bigger TVs, better cars, and fancier produce have very little influence on your actual quality of life.
Better medical care does, but it's expensive medical interventions that bankrupts middle class families. Also: Real estate - much further out of reach. Education - much deeper in debt. These are the things that really matter.
I'll give you cheap air travel, though. That stuff is great. Hooray for cheap jet fuel.
Better medical care does, but it's expensive medical interventions that bankrupts middle class families. Also: Real estate - much further out of reach. Education - much deeper in debt. These are the things that really matter.
I'll give you cheap air travel, though. That stuff is great. Hooray for cheap jet fuel.
The safety of automobiles (ABS, airbags, auto-collision-avoidance, better tires, crumple zones, etc) have a HUGE influence on the quality of life (as you're defining it) for populations. Diet is by far the most effective way to provide life-long heath, and we've never had better access to food & nutrition info.
Medical incentives may be messed up in the US, but most people on the planet who have access to healthcare don't have to worry about it bankrupting them.
Medical incentives may be messed up in the US, but most people on the planet who have access to healthcare don't have to worry about it bankrupting them.
This is a tough one for economists. While a Roman emperor had far more gold than any of us could ever buy, he couldn't get clean water, clean sanitation, a tetanus shot, fly in an airplane, etc etc. Regardless of purchasing power, what we can purchase today is much better and more useful than what could be purchased before. Thank you capitalism.
Yeah we need 80% fewer resources per $ of GDP we create than we did 70 years ago, and there's is no indication this will stop anytime soon.
Yes we "need" 2 incomes to buy a house, but that house is nearly TWICE the size of the one our parents had on average, and MUCH fuller with the things we want.
Yes we "need" 2 incomes to buy a house, but that house is nearly TWICE the size of the one our parents had on average, and MUCH fuller with the things we want.
The things we are tricked into 'wanting' by a multi-billion dollar advertising industry that pays top scientists to spend years doing research on how to best manipulate our desires. Nobody needs a house twice as big. It's a pain to clean. Nobody needs all of these things. Both parents working overtime so they can hire a nanny to babysit their child they never seen in an enormous mansion is nobody's idea of progress, or even stagnation. It's far, far worse.
So much bias to unpack in your comment. Nobody needs all of these things? Nobody's idea of progress? According to you? Your strawman example seem awful to me, but I bet there are many many people who would prefer to be workaholics with mansions and nannys to having lots of free time to enjoy their family in a rented apartment. I find it a little contradictory that you seem to simultaneously think we're all brainwashed sheep that really should instead be a bunch of robots that all only value things purely based on utility. How is that different?
If there's so much bias perhaps you could begin by identifying some, much less 'unpacking' any of it. Though it's not clear what you mean by 'bias' -- the way you use it it seems like a generic word for "things you don't like".
Nobody claimed we are brainwashed sheep most of all me -- the claim is that quality of life is reduced, and you suggest it's in exchange for an increase in consumer goods that we want. I respond that we don't actually want these goods; our recent ancestors did not want them, the desire has been manufactured by a well-paid hard-working team of expert psychologists. So we are not now meeting a desire that existed; a desire has been manufactured and then met. So when you compare our circumstances to that of the past you must consider the fact that advertisers had not become yet sophisticated enough to force us to want things we do not truly want, so our wants were different; driven by life, not driven by profit.
If you'd like to pretend you don't understand the difference between "having a happy life, supporting a family and taking care of yourself and those close to you" and "having expensive toys" then you are free to do so, just don't ask me to indulge your absurdity by pretending it's reasonable.
Nobody claimed we are brainwashed sheep most of all me -- the claim is that quality of life is reduced, and you suggest it's in exchange for an increase in consumer goods that we want. I respond that we don't actually want these goods; our recent ancestors did not want them, the desire has been manufactured by a well-paid hard-working team of expert psychologists. So we are not now meeting a desire that existed; a desire has been manufactured and then met. So when you compare our circumstances to that of the past you must consider the fact that advertisers had not become yet sophisticated enough to force us to want things we do not truly want, so our wants were different; driven by life, not driven by profit.
If you'd like to pretend you don't understand the difference between "having a happy life, supporting a family and taking care of yourself and those close to you" and "having expensive toys" then you are free to do so, just don't ask me to indulge your absurdity by pretending it's reasonable.
that house is nearly TWICE the size of the one our parents had on average
This is not true everywhere: http://www.dailymail.co.uk/news/article-2398714/The-incredib...
This is not true everywhere: http://www.dailymail.co.uk/news/article-2398714/The-incredib...
You should thank technological progress instead of capitalism.
In capitalism the idea is to pit people's greed against other people's greed. In alternative methods, people's greed is still there, it just isn't as well checked. Take for instance some of the insane scientific beliefs held in the USSR. Someone in power wanted this to be true, so the scientists made it true-ish.
https://en.wikipedia.org/wiki/Lysenkoism
https://en.wikipedia.org/wiki/Lysenkoism
I don't see them as separate, they are very much interconnected.
Tech progress is learning. The "economy" is the act of economizing; learning to do more with less. It's a virtuous cycle.
Tech progress is learning. The "economy" is the act of economizing; learning to do more with less. It's a virtuous cycle.
It depends really on how you measure wealth. For me a bigger TV or better car truly doesn't matter.
Could our parents afford to own a home, have children, live comfortably off one income? Can we? I guess we have plenty of fun cheap toys made by slave labor that we can't play with because we're always working so if that's how you measure richness then sure.
Could our parents afford to own a home, have children, live comfortably off one income? Can we? I guess we have plenty of fun cheap toys made by slave labor that we can't play with because we're always working so if that's how you measure richness then sure.
I've noticed a pattern activities or hobbies that've been around at least a few decades: you ask "which X should I buy?" and the answer is often, "DO NOT buy common 'consumer' stuff—either pay 5 times as much for one that isn't terrible or buy ANY model from the mid-eighties or earlier and refurb it, at a total cost of ~1-2x as much as the new garbage"
Part—not all, but part—of the supposed increase in quality of life due to cheaper goods is because entry level quality has dropped, for certain categories of goods.
Part—not all, but part—of the supposed increase in quality of life due to cheaper goods is because entry level quality has dropped, for certain categories of goods.
cheaper is sometimes from lower-quality, but don't discount the effect of economies of scale. Every doubling of production volume reduces cost by ~30%. For example, Tesla thinks it's gigafactory will reduce the cost of their battery pack by ~30%, because that one factory will double global battery production. The same thing is happening to solar panels. As production sykrockets, prices plummet.
> Could our parents afford to own a home, have children, live comfortably off one income? Can we?
Yes we can. But it means tradeoffs most people aren't willing to make.
Yes we can. But it means tradeoffs most people aren't willing to make.
You'll notice one of the requirements above is "live comfortably" -- so your answer then is no.
Are you also not saying "where I want"? There are plenty of low-cost geographies. You may need to retrain as a truck mechanic or fisherman and maybe learn a new language to live there though. But the point it its very possible.
I only wish more people could see this post: your posts higher up in the comment thread almost look reasonable but this one really highlights the descent into madness necessary to accept your view. Things haven't gotten worse; your parents needed to work hard to have a good life. We just need to learn a new language, move to a third world country, give up all of our rights and our home, and pick a new profession.
Except in the basics, like housing costs, health costs, and tuition, which have been more or less skyrocketing, and job security and pensions have pretty much gone out the window.
Sure, we have cooler, cheaper toys and food is easier to get, but the rest of it makes it much harder to get by, in general.
Sure, we have cooler, cheaper toys and food is easier to get, but the rest of it makes it much harder to get by, in general.
The article mentions pensions at the end... what's a pension?
Joking aside, I haven't seen outward bitterness regarding their poor lot from the current young generation so much as doubling-down on the rat race in an attempt to still top their parents somehow. It's pretty bad for their mental health, and not very effective so far, but may pay off in the long run.
Joking aside, I haven't seen outward bitterness regarding their poor lot from the current young generation so much as doubling-down on the rat race in an attempt to still top their parents somehow. It's pretty bad for their mental health, and not very effective so far, but may pay off in the long run.
A pension is something companies used to provide to their employees. Employees used to be able to stay their entire career with one company and amass a pretty decent retirement pension with said company.
Then Wall Street got corrupt. They demanded ever more from companies. Each quarter had to show more profit from the last otherwise they punished the company. Wall Street found ways of funneling any profits directly to investors instead of investing in the company (and, more importantly, it's employees). Pensions took a hit. Companies stopped offering them. Some companies 'borrowed' from pensions and lost it all. The employees did suffer. Employee loyalty dropped. Companies took that as an opportunity to treat employees as temporary; replacing them regularly with cheaper ones.
You'll have to wait until tomorrow night to hear the rest of the story. G'Night.
Then Wall Street got corrupt. They demanded ever more from companies. Each quarter had to show more profit from the last otherwise they punished the company. Wall Street found ways of funneling any profits directly to investors instead of investing in the company (and, more importantly, it's employees). Pensions took a hit. Companies stopped offering them. Some companies 'borrowed' from pensions and lost it all. The employees did suffer. Employee loyalty dropped. Companies took that as an opportunity to treat employees as temporary; replacing them regularly with cheaper ones.
You'll have to wait until tomorrow night to hear the rest of the story. G'Night.
This is a BBC article and in the UK, pensions are still very much alive.
We receive a state pension at retirement that is dependent on national insurance contributions over the course of your working life.
You can also contribute to (and have recently probably been automatically opted into) private workplace pensions that your employer will probably match (up to a point).
We receive a state pension at retirement that is dependent on national insurance contributions over the course of your working life.
You can also contribute to (and have recently probably been automatically opted into) private workplace pensions that your employer will probably match (up to a point).
This is true in the US, where the state pension is called social security. Except that conservatives have somehow rebranded this "entitlement" (to which you are entitled because you pay contributions over your working life) to something whiny "entitled" workers are unfairly demanding from the government.
Oh how funny
You just forgot to mention how pensions funds invest heavily in 'evil' Wall Street
And how Wall Street has not been invented in the last couple of years.
And how people happily wound a rope on their necks for a bigger house.
You just forgot to mention how pensions funds invest heavily in 'evil' Wall Street
And how Wall Street has not been invented in the last couple of years.
And how people happily wound a rope on their necks for a bigger house.
I know this sounds terribly cynical but I'm very, very curious to see how the "Give us all our entitlements!" generation of elderly folks are going to convince the middle-aged and younger working class to support their desires and expectations when, practically speaking, that's the same generation who collectively broke the system. My sense is that domestic issues - healthcare, housing, and entitlements - are going to be a lot more pressing subjects than global affairs within 10 years. It's a little "out of sight out of mind" right now, but it will hit all political affiliated middle and younger aged cohorts right in the paycheck...
I could be wrong, but the ridiculous income inequality overlaid with generational power broking for the past 20-30 years could really set off another "great awakening" type of social upheaval. 70 million Baby Boomers. 70 million Millenials. 30 million Gen-X in the middle to take sides.
I could be wrong, but the ridiculous income inequality overlaid with generational power broking for the past 20-30 years could really set off another "great awakening" type of social upheaval. 70 million Baby Boomers. 70 million Millenials. 30 million Gen-X in the middle to take sides.
How does one define poorer?
If you were given the choice to go back in time and live in your parents generation INSTEAD of the present, your life expectancy is lower, you dont have the Internet for information.
Overseas Phone Calls were a luxury back then, so was airplane travel. It seems to me inn absolute terms, the vast majority is better off vs if they were the same age in the 1980's
If you were given the choice to go back in time and live in your parents generation INSTEAD of the present, your life expectancy is lower, you dont have the Internet for information.
Overseas Phone Calls were a luxury back then, so was airplane travel. It seems to me inn absolute terms, the vast majority is better off vs if they were the same age in the 1980's
I think a lot of us would trade long distance calling and Internet access for the ability to go to college without being indebted for life, find a job that didn't make you work at home after hours or on the weekends, and be able to afford a house to maintain and leave for their children.
Being able to afford a new iPhone every other year is not prosperity.
Being able to afford a new iPhone every other year is not prosperity.
Obviously just one anecdote but my parents both had work/on-call in the evenings and weekends, always had a substantial mortgage on the house which they had to sell when they split up. I will get zero inheritance. They are both college educated, smart, hard working people. I made more at 20 years old, then they both made put together at that same time.
I grew up on a farm, limited income but lots of personal freedom. Six of us kids: 5 Engineers and a Nurse. After 1000 generations of dirt farmers, it was a good change. No inheritance except the opportunity to personally succeed. Folks like us were launched by their parents.
But there are others who stayed about where they started (or rather their parents) who can't see much improvement in the last 20 years.
But there are others who stayed about where they started (or rather their parents) who can't see much improvement in the last 20 years.
When (if) you retire, that farmland will probably be worth more than your income over your entire career.
Very likely. The $40,000 acreage next to me just sold for $400,000. That would make mine worth $1M right now!
I wouldn't trade an MRI and micro-lumbar discectomy for a house. Would you give up all medicine invented since 1970 if you could pay 1970 prices?
Also, the average price of college is <1 year of an average college grad earnings (according to a quick Google search). If you are indebted for life because of this, its your own fault.
More people than ever before own houses, and much larger ones than in the past. Your complaints don't seem to fit reality.
Also, the average price of college is <1 year of an average college grad earnings (according to a quick Google search). If you are indebted for life because of this, its your own fault.
More people than ever before own houses, and much larger ones than in the past. Your complaints don't seem to fit reality.
>If you are indebted for life because of this, its your own fault.
So you managed to pay off a college degree with no parental support, no scholarships, no grants, no subsidized federal loans, and at an interest rate of 4%+?
What's your secret? Be born before the 90s?
So you managed to pay off a college degree with no parental support, no scholarships, no grants, no subsidized federal loans, and at an interest rate of 4%+?
What's your secret? Be born before the 90s?
If you consume only 50% of what you earn, you can pay it off in 2-3 years. I consume far less than 50% of what I earn.
Good for you that you can exert self-discipline and have a high paying job.
The rest of us have trouble finding work after graduation (engineers with masters degrees that can't find anything more than 45k) or are paid so poorly that they have no hope of ever paying off their loans (teachers in my high school were still paying their loans in their 50s and 60s, mostly because they wanted to procreate and housing in my town is very expensive).
Or maybe you're right. Maybe it is their fault entirely. Maybe if it's too expensive to be a teacher, nobody should train to be one. Maybe if it's too expensive to have children, then nobody should have offspring.
"Just be as perfect as me" is poor social policy. At best, it's merely smug advice.
The rest of us have trouble finding work after graduation (engineers with masters degrees that can't find anything more than 45k) or are paid so poorly that they have no hope of ever paying off their loans (teachers in my high school were still paying their loans in their 50s and 60s, mostly because they wanted to procreate and housing in my town is very expensive).
Or maybe you're right. Maybe it is their fault entirely. Maybe if it's too expensive to be a teacher, nobody should train to be one. Maybe if it's too expensive to have children, then nobody should have offspring.
"Just be as perfect as me" is poor social policy. At best, it's merely smug advice.
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People live on $20k, so that engineer can certainly pay down his loan in a few years. He is just unwilling to consume as little as his parents did.
More: he is just unwilling to consume as little as his parents did at the same stage of life.
That is, I never saw what my parents' life was like just after they graduated from college. When I was born, they were several years past that. When I was old enough to remember much, they were pretty much into their peak earning phase. If I expect that lifestyle just after graduating from college, yes, I'm going to have a lot of trouble paying down college loans...
That is, I never saw what my parents' life was like just after they graduated from college. When I was born, they were several years past that. When I was old enough to remember much, they were pretty much into their peak earning phase. If I expect that lifestyle just after graduating from college, yes, I'm going to have a lot of trouble paying down college loans...
Psst... interest rates on some federal student loans are 7%, and can go much higher for private loans.
I remember when traveling to Europe was a huge luxury that you'd be lucky to do once in a lifetime. Now I fly to Europe, give an hour presentation, and fly home again. It's unbelievable.
Education, healthcare and housing were more accessible though. But who cares about those things? As long as I have Wikipedia on my smartphone I'm blessed.
>Overseas Phone Calls were a luxury back then
Forget about overseas, INTERSTATE phone calls were a luxury!
The 1980s were a nightmare -- no GPS, no cell phones, no digital cameras.
Forget about overseas, INTERSTATE phone calls were a luxury!
The 1980s were a nightmare -- no GPS, no cell phones, no digital cameras.
We had cooler clothing styles in the 80s, though.
And the US wasn't 19 Trillion dollars in debt either.
Your statement presumes a lot, for instance that sovereign debt under all circumstances, is an existential threat.
The United States has been in deeper debt (as a percentage of GDP) before.
The United States has been in deeper debt (as a percentage of GDP) before.
Yes, the amount of debt was much larger in WW2. https://en.wikipedia.org/wiki/History_of_the_United_States_p...
Only if you are measuring against GDP.
Even adjusting for the value of a dollar in 1950, the $260 billion owed was equivalent only to about 3.5 trillion dollars.
Nothing to sneeze at, but nowhere near 19 trillion.
Even adjusting for the value of a dollar in 1950, the $260 billion owed was equivalent only to about 3.5 trillion dollars.
Nothing to sneeze at, but nowhere near 19 trillion.
A huge amount of debt is always a threat to prosperity (both personal and national).
The fact that so many people seem to think it is "no big deal" is part of the problem (on both a personal and national level).
The fact that so many people seem to think it is "no big deal" is part of the problem (on both a personal and national level).
My grandfather was a carpenter working in a factory that made piano benches. He worked there his entire career.
He was in his early fifties when he retired and was actually retired longer than he worked in terms of time, and when he died he still had 6 digits in assets (not including his house.) He didn't do anything special except live modestly, save, and buy stocks.
Who can say they'll have the same experience working a blue collar job today?
He was in his early fifties when he retired and was actually retired longer than he worked in terms of time, and when he died he still had 6 digits in assets (not including his house.) He didn't do anything special except live modestly, save, and buy stocks.
Who can say they'll have the same experience working a blue collar job today?
I think as a rule of thumb anybody working a blue collar job today is in trouble.
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It's probably related to the relative maturity of an economy.
In a growing economy, the odds of offspring doing better than parents is a function of the economy as many new avenues to prosperity open up. On the one hand is China where children have more opportunity than parents, on the other hand is Japan, a mature economy where growth has plateaued so there aren't massive opportunities for newer generations.
Also, after a certain level of achievement, there isn't much more to be had. So the progress would be incremental, on average, rather than tectonic, after the plateauing.
In other words, it's not expected that in large diversified economies there is the possibility for everyone to become a magnate.
In a growing economy, the odds of offspring doing better than parents is a function of the economy as many new avenues to prosperity open up. On the one hand is China where children have more opportunity than parents, on the other hand is Japan, a mature economy where growth has plateaued so there aren't massive opportunities for newer generations.
Also, after a certain level of achievement, there isn't much more to be had. So the progress would be incremental, on average, rather than tectonic, after the plateauing.
In other words, it's not expected that in large diversified economies there is the possibility for everyone to become a magnate.
The caveat is that it's only true in certain developed nations. Maybe real life proof that free trade is not Pareto optimal.
How do you reach that conclusion? Doesn't it seem more likely, that rapidly expanding population in the face of scarce resources leaves a decreasing share of a smaller pie for the newcomers?
If the problem is that the pie is smaller, shouldn't we see how the GDP per capita goes down?
https://www.google.fr/publicdata/explore?ds=d5bncppjof8f9_&m...
https://www.google.fr/publicdata/explore?ds=d5bncppjof8f9_&m...
Population growth is slowing, and previous generations in developed countries have been richer than their parents, so the evidence seems to point in the opposite direction.
Not really. The developed nations do not have increasing population. Aging, yes. But population is not really growing.
https://twitter.com/BrankoMilan/status/668196138332327936
You should look at this too rayiner. It's my new favorite chart. It explains so so much.
You should look at this too rayiner. It's my new favorite chart. It explains so so much.
[deleted]
I make more than my parents combined ever did, even if you count for inflation. Though they seemed to have a higher quality of life. I suspect this has to do with other factors, mostly my own short commings.
People eat out quite a bit more than their parents did. This is probably the single biggest cost difference between this generation and their parents. $20 a plate at Applebees versus $3 a plate at home.
Factor in time spent cooking. $3 a plate would either mean cooking up a large batch or eating mac&cheese. You couldn't drag me into an Applebees...
But what do you do with the time if you don't cook? Do you sit in front of the TV, searching for something worth watching so that you're not bored? If so, then taking the time to cook is free, because you're essentially valuing your time at zero.
You sit at a table waiting an hour for your food to arrive. I cook a majority of the meals for my family, and they are healthy, cheap, and never take me more than 30 minutes, and most of that is waiting for water to boil or stirring something occasionally.
Here's a post with some actual charts and numbers: http://www.forbes.com/sites/ashleaebeling/2013/03/15/gen-x-a.... The conclusions looks like:
1) People in the age range 29-37 (cherry-picked?) are less wealthy than the previous generation. The Great Recession explains a lot of the difference.
2) All other age groups are wealthier than the previous generation, but the gain is much smaller than it has been in the past.
1) People in the age range 29-37 (cherry-picked?) are less wealthy than the previous generation. The Great Recession explains a lot of the difference.
2) All other age groups are wealthier than the previous generation, but the gain is much smaller than it has been in the past.
this is so dependent on the macro economy in which you live, its almost completely independent of you
http://www.theatlantic.com/photo/2013/08/26-years-of-growth-...
can you imagine having been a 10 year old in Shanghai in 1987?
http://www.theatlantic.com/photo/2013/08/26-years-of-growth-...
can you imagine having been a 10 year old in Shanghai in 1987?
Just a quick informal poll if its allowed.
For users/people who think you are "worse off" vs back then, could you let us know which country you are in?
For users who grew up in Asia/developing countries, I would think the young nowadays have a lot more opportunities/chances to strike it rich.
What seems to be occurring at this stage = there used to be a income/price discrepancy for work done, solely because most work had to be performed by locals. The main change now is a lot more of this work can be given/outsourced to employees who have lower wages in developing countries.
It would be interesting to see the results of the poll.
For users/people who think you are "worse off" vs back then, could you let us know which country you are in?
For users who grew up in Asia/developing countries, I would think the young nowadays have a lot more opportunities/chances to strike it rich.
What seems to be occurring at this stage = there used to be a income/price discrepancy for work done, solely because most work had to be performed by locals. The main change now is a lot more of this work can be given/outsourced to employees who have lower wages in developing countries.
It would be interesting to see the results of the poll.
Ireland here. Peaked maybe two or three decades later than the US did, but yes, my countrymen seem determined to import all the systemic corruption and waste and follow the Americans on their downward spiral, so unless that changes, we are now at the stage where each generation is fewer and in real terms poorer than the last.
Makes sense. More people fighting over the same finite amount of resources, leads to less per person.
Eventually, no matter how imaginary money is, it's used to buy non-imaginary resources.
Eventually, no matter how imaginary money is, it's used to buy non-imaginary resources.
That makes no sense. Resources are fixed but incomes have grow by what? 5 fold in the last 100 years? Lots more people now than then!
In the last 100 years, the advance of science and technology has enabled us to make better use of those resources, making people wealthier. Population growth seems to be catching up with the advance now, leaving less resources per capita.
Or maybe it's just slower times before the next big breakthrough. Infinite energy from fusion, and AI doing all our work would certainly allow us to truly fill up the world.
Or maybe it's just slower times before the next big breakthrough. Infinite energy from fusion, and AI doing all our work would certainly allow us to truly fill up the world.
Houses are bigger, cars are safer, faster and more efficient, medicines are more prevalent, entertainment options have increased incalculably.
I guess I don't feel poorer.
I guess I don't feel poorer.
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The Great Intergenerational War has been a one-way fight thus far.
How do you do, fellow kids?
https://media4.giphy.com/media/ifxLK48cnyDDi/200_s.gif
Gen X stands ready to assume out natural leadership position in the counterrevolution. Our cynicism coupled with your enthusiasm...
https://www.youtube.com/watch?v=bBQVrCflZ_E
How do you do, fellow kids?
https://media4.giphy.com/media/ifxLK48cnyDDi/200_s.gif
Gen X stands ready to assume out natural leadership position in the counterrevolution. Our cynicism coupled with your enthusiasm...
https://www.youtube.com/watch?v=bBQVrCflZ_E
(That said, I suspect most of us HN readers will not be poorer than their parents. Tech is an area of boom in an economy of bust, after all, so factor that in when reading responses on here)