If the reward from working is barely enough to cover the necessities, then there is technically no difference between working as a free citizen, and being forced to work as an indentured servant, other than a vague notion of freedom, which in that case is the freedom to decide between working and living on the streets.
And people don't like being indentured servants. History should have made that clear by now.
People want perspective. In the past, a working man could support a family of five, buy a house, a car and afford vacation once or twice a year, plus save enough to retire comfortably.
Today people, despite burning themselves out in their job, struggle to pay rent in a flat shared with other working people, after loading themselves up with 100k in students debt, and no chance in hell to ever own property of their own.
If the powers that be want people to be willing to work, that work has to pay off.
If it doesn't, well...we're at the beginning of a retirement wave unprecedented in human history. 2 low-birthrate generations to follow. And our entire economic system is designed around constant growth.
I leave doing the math on that as an exercise for the reader.
I think it's important to note that the good old days of a working man being able to support a family of five was only true for a brief period of history in a handful of elite countries. In most of the world, and for most of human history, it hasn't been the case that any single person working 40 hours a week could provide a luxurious lifestyle for a large family. While some lament the loss of this golden age their grandparents experienced, a much greater number of people around the world have seen their living conditions improve markedly since the time of their grandparents.
That doesn't take away from the point that ideally no one should have to work themselves to the bone just to afford a humble lifestyle, but if middle class people in developed countries are really asking for perspective, I think it's worth bearing their relative privilege in mind.
It is funny, people somehow think that a momentary episode of utter economic dominance after all other economic powers had been bombed into dust should be the norm.
And the 50s and 60s weren't that great for e.g. black people or women in the US either.
Gimme a good argument why good conditions should diminish, or deteriorate, despite the fact that workforce productivity, as well as corporate margins, have been growing steadily ever since.
Good conditions didn't diminish. People now buy vastly bigger and more things. Want to live on one salary like a 1950 person, with 1950 level goods, you can.
Also more classes of people now have much better things: women, minorities.
Labor is not the only input to productivity, so there is zero reason labor rewards should match productivity. As capital expenses increased to obtain modern productivity gains, the reward should go towards capital, which enabled purchase of upgrading tooling. Also as people demanded more rights and benefits, some is taken from wages. When you track total cost to employ, which is what an employer pays to have an employee, you can see all the gains. BLS tracks this and many other related variables (like wages, total remuneration, and a host of other costs and benefits employees have gained over the decades.)
And corporate margins are pretty much the same as ever, net profit ~10% of revenue, since time immemorial. That 10% is what provides cushion so businesses don't implode every hiccup, leaving lots unemployed. [1] has some 1950-now data. There's plenty more places to find more. Fairly constant profit is why stock returns have averaged what they did over 100+ years. If now had vastly more profitable companies, it would have vastly increased returns.
>Want to live on one salary like a 1950 person, with 1950 level goods, you can.
No, you can't.
People lived in smaller houses, but the vast majority of the increase of property values is _land_. If you want a house that's anywhere near as cheap as the average was 50 years ago, you get to live somewhere with no jobs. That is not equivalent.
As for everything else, the majority of the modern day luxuries we enjoy amounts to a rounding error next to the actual necessities that people also had back then. Consumer electronics are _cheap_, not having them will not meaningfully increase anyones wealth.
The vast majority is not land. Here's [1] inflation adjusted land cost per acre over the last 50 years. Pick a piece of land at median 1950 sizes and the increase is around $500 in today's dollars. Now please cite why you claim the vast majority of the increase is land.
Want to read what did increase? Houses got bigger as I stated
[2].
On the last chart, change the indicator to Change in Land price (standardised). Note that this is only for 2012 to 2021, not even 10 years, and the _smallest_ increase is 44%, while the highest is 807%!
First, you conveniently ignore my second link which points out that housing prices, across all houses, not the cherry picked most expensive subset you picked, when adjusted correctly, have been pretty flat. Care to address that? It's been well known that housing prices, per sq ft, inflation adjusted, has not risen according to the pop belief that you share. Here's another easy way to see it - median home prices since 1950, inflation adjusted, have not even doubled since 1950 [1]. Median home sizes each decade since 1920 [2] show that house size have far more than doubled. 1950 was 980 sq ft. 1970 was 1500. 2014 was 2657 (latest on their chart). It sure look like if you picked a 1950 house you'd be paying, well, 1950 rates, doesn't it?
Some numbers from each: Feb 1954 house price $206,717 inflation adjusted. April 2023, $392,780 (the largest value). House sizes: 1950 was 983 ft^2. 2014 was 2657 ft^2 (feel free to chase down sizes for now if you like). 1950 was ~$210/ft^2. 2023 likely ~$147/ft^2.
Care to check the math? Sure seems like housing has not increased (well, it actually decreased significantly by this check) when correctly measured.
Houses cost more now because people want more, and also because they make more than in 1950, inflation adjusted.
Next, new houses in most of the country are built on new residential land as cities expand. Where do you think that land comes from? Farmland. Farmland provides a price floor on new housing, as developers buy it up and add subdivisions.
As to your oddly chosen subset of land: your list is not inflation adjusted. It's also the top 100 metro areas, not the median of house prices in the US. Of course you can pick smaller and smaller subsets to get the answer you want.
The median house in 1950 was under 1/4 acre. From the table below on price per acre, it sure would seem land is not the major factor in house costs.
So, can you provide the correct stat or not? Don't pick the highest cost subset of land. Don't pick non inflation adjusted values. And make it the median of all housing.
Here, I'll help. Here is median price per acre of land with housing on it in the US, by state [3]. It also has the median price per acre, including farmland. Use Excel, check the correlation. If you are to do it, you can also population weight these, add median house cost per state (easy to find), etc.
It's pretty clear the cost of a house is not majority the land, except perhaps in a few really dense, extreme outliers like NYC and SF.
No wonder you believe the highest component of house cost is land. You have not presented actual numbers, only picked the subsets that you like.
Try again. Also, please address the now 3 links I presented about housing costs when size adjusted.
>housing prices, across all houses, not the cherry picked most expensive subset you picked, when adjusted correctly, have been pretty flat. Care to address that?
>median home prices since 1950, inflation adjusted, have not even doubled since 1950
"Not even doubled" = basically flat.
Sure buddy. The single biggest purchase most people will ever make, let's call an 80% increase a rounding error.
>No wonder you believe the highest component of house cost is land. You have not presented actual numbers, only picked the subsets that you like.
If you're going to put all this effort into finding stats then you should first work on your reading comprehension. Here's what I actually said:
>the vast majority of the *increase* of property values is _land_.
> Sure buddy. The single biggest purchase most people will ever make, let's call an 80% increase a rounding error.
They're now choosing to buy a > 200% size home. And this is because inflation adjusted median household income has gone up, tada! you guessed it! Over 200%!
And here's some real number voodoo for you - put inflation adjusted median income and median house size over time into Excel and look at the correlation. What do you think happens there?
So, here's the facts, which you don't care to address:
1) House cost is around flat per inflation adjusted sq foot for decades.
2) The main component of median house prices in the US is NOT land, as you claim
3) The reason houses now cost more is because they are bigger (and looks like a slight lower amount per sq foot than 1950), and....
4) the reason houses are bigger is because household wages are equivalently bigger, correlating quite well for at least 70 years, so people choose bigger houses because they can afford them, as well as 2 cars, many TVs, more trips, relative food cost has declined, and on and on.
Now, I cited good data for all of these. Do you still dispute any of them?
Go ahead and cite some good data - median, complete US market, any time period, that supports any of your claims otherwise.
> Here's what I actually said:
>>the vast majority of the increase of property values is _land_.
The link where I gave you average per acre cost for housing completely blows that out of the water. Did you not look at it? Here are the steps:
1. Look at the per state average acre for housing price.
2. Look up median house acres (< 0.25).
3. Look up median house prices.
4. Multiply the acres per house (0.25) by the acre cost to get the amount of land cost per house.
5. Subtract 4 from 3.
6. Note how large 5 is compared to 4.
7. Note that it's mathematically impossible that the small amount in 3 can contribute to the inflation adjusted increase in house prices from 1950.
Here, I'll even do a decent estimate for you: from the list Florida has the median land price of around $35000 per acre for housing. Average house land is still under 0.25 (one site said it's now 0.19). So land per house in Florida is around say $8500. Zillow says average Florida house price is ~390,000. This likely has doubled in price and size since 1950 (and if it's an outlier, then some other place in the US counters it, thanks to the magic of medians).
Tell me again that the current cost of $8500 land in a $390,000 house is the cause of the near doubling in price? Did the land cost negative $400,000 in 1950?
So, keep claiming your claim. It's so mathematically impossible as to be ludicrous at this point. If you want to continue to make that claim, show me the numbers broken down just like gave you.
Or are we done since you keep ignoring facts you dislike, and misrepresent the double prices ~ basically flat by completely ignoring that the doubling in price is also a doubling in size which was my very first point (and a doubling of incomes which is why it all fits).
Can you elaborate on what "labor rewards" means in the context of
```
Labor is not the only input to productivity, so there is zero reason labor rewards should match productivity.
```
That sounds like they're saying, "if you get a tool that makes you twice as productive, you didn't double the production, the tool did, so the tool owner should get the additional proceeds".
Total braindead understanding of how productivity and labor works, but it sounds great if you own the tools.
If you look at average living conditions across the world, they did actually increase dramatically!
This is what people miss about the conversation: That temporary period of brief prosperity was partially due to some of the relative differences across the world. Raising living standards across the world came at a small price of popping that bubble.
Although median disposable income of Americans is still significantly higher than the rest of the world.
It's odd that this is the conversation when there was an extremely high top end tax and the government was taking that money and turning it into infrastructure and jobs.
We saw this dream start to disappear as we un did those things in the name of freedom.
Now, we produce more per capita than we ever did before and we get less of that pie as wages have stagnated and taxes go to corporate hand outs and entitlements (healthcare and social security), which are more or less a corporate hand out since they no longer provide pensions for people that work a life time for them.
It's unclear to me why the conversation is centering better standards of living elsewhere as if we haven't added a couple billion people/consumers to the world in that time.
I don't know whether they should or not, but it's clear that there was a very unusual set of conditions and it is unsurprising it didn't last forever, right or wrong.
On the contrary, it is VERY surprising these conditions didn't last, given that productivity only ever increased since then.
If favorable, but short lived conditions were behind this sudden change, then it would affect the entire economic system, not just the workforce.
How well people are off is a function of how many resources there are to go around. Since the end of WWII, these resources only ever increased. So did worker productivity, aka. the amount of resources produced per worker. So if people are worse off now, that leads to the very easy deduction that the fault lies in how these resources are distributed, not with a scarcity of the resources themselves.
Or to put this another way:
If the previously better conditions were just a fluke that couldn't be expected to last, how come that corporations seem to rake in ever more money as time goes on?
> How well people are off is a function of how many resources there are to go around. Since the end of WWII, these resources only ever increased.
This is a very US-centric view.
Demand for resources across the world has increased dramatically as everyone’s living standard increased.
The situation isn’t going to make sense if you continue to ignore the rest of the world and try to understand the United States as if we lived in a perfectly isolated bubble.
The Roman Empire's prosperity as the spoils of war are evident even to newest student of history. Why then is it surprising that the US also had some prosperity thanks to winning wars, and that there is none of that to be had if there aren't wars being won? Why is it expected that prosperity should last?
It was only ever good conditions for some. If wealth redistributes faster than wealth grows, those some will experience loss while society at large experiences net gain.
>And the 50s and 60s weren't that great for e.g. black people or women in the US either.
This argument is repeated a lot anytime someone mentions the working conditions in the 50s/60s, but how is it any relevant? Is there some natural law that says that mistreatment of blacks for example have to always go hand in hand with livable wages? And that anybody that likes the latter from the 50s/60s must also want the former?
There are enormous amounts of study on the concept that the above-average lifestyle enjoyed at that specific point in history by white men was built on the exploitation of other groups. Frequently, people who name that specific point in time as the model for how they would like the world to be are simply unaware of this tradeoff and have no idea that simply reverting society to that point would make it worse for some groups - this is why it gets mentioned when someone says "let's go back to those good times", to educate these people. Less frequently, they already know this and simply don't care, and it's always useful to give this group an opportunity to be explicit about their priorities.
The "above-average lifestyle enjoyed at that specific point in history" came in the US because Europe was destroyed in WWII, and they got to easily be the world's producer and exporter and dictator of terms for decades. That plus strong unions and growing economy. And the tide also lifted black people with it, that's the era when the civil rights progress was made, for example.
Oh, and Europe also ended up enjoying a similar stability and uplifting economy a few decades later, as the economy recovered there too, without having those other groups to exploit, and even for countries which lost their colonies the decades prior.
The economic rise since the 60s though (in productivity, GDP etc) hasn't translated to similar stability, because the unions were left to die, and neoliberal politics and attitudes became the norm, while the banks and capitalists got a free pass to anything they wanted.
>Less frequently, they already know this and simply don't care, and it's always useful to give this group an opportunity to be explicit about their priorities.
I think it's more that people making your argument are with the side of capitalists, and you want to make a bogus argument as if livable wages and job prospects are racist and only feasible when combined with exploitation, to absolve the current neoliberal order as "the best possible world". So they weaselly mark anybody pointing to those things as pinning for the rasist aspects of 1950s/60s too.
In the United States, if you’re not a white male it probably is. It was also probably pretty good for white women that didn’t want a job and wanted to be a homemaker.
There are changes (systemic and "organic") in the United States that made it worse for everybody, including people that are not white males, while at the same time issues like systemic racial injustices got better.
A vibrant economy and an on the rise domestic production, for example, meant many more working class jobs for everybody, for example, including blacks. Housing and healthcare was more affordable, including for blacks. That's how millions of blacks post-war could enter into middle class, a class that is now squeezed for both blacks and whites.
Amazing, how orthogonal changes can happen in both directions? And that eras are not just defined from a single aspect, and are not just like their mass media caricatures?
That's why facebook allows teenage girls to bully each other into suicide.
Show me the facts and we won't have to agree on sophistry. We used to share the same facts as a society, in the 1950s. Society can't agree on the shape of the earth anymore as a basic fact, and you want to tell me everything is better in all aspects.
True we don't agree, but that was not required to unify society on authorized facts.
It is very clear what the facts are socially when the State media declares them via TV, newspaper and authority figures. The internet gave endless niches, virality and influence to disagreement.
Right now you can ignore any facts I bring up and continue to spread flat earth as a fact (not saying that's your view), when before that behaviour would have been ostracized socially.
Now I have to adhere to literal meanings or conquer with sophistry to find agreement on factual grounding.
For culture wars, I don't care, do whatever you want. Say the earth is flat.
But for collboration, understanding and finding boundaries, it makes things very difficult and worse than the past.
> It is very clear what the facts are socially when the State media declares them via TV, newspaper and authority figures.
And that left little room for dissenting opinions. Dissenting voices could be silenced easily, without fanfare and awareness by society at large. Now, it's not so easy.
> Right now you can ignore any facts I bring up
Indeed.
> before that behaviour would have been ostracized socially
It's still ostracized, even online. Remember "cancel culture"? That's a characteristic of the digital age. Before the Internet, people were finding their niches regardless. They would do it in secret - in barns, basements, or whatever.
> it makes things very difficult and worse than the past
It also makes collaboration very easy. Never before have we been able to connect our ideas to millions of people around the world.
>And that left little room for dissenting opinions. Dissenting voices could be silenced easily, without fanfare and awareness by society at large. Now, it's not so easy.
I think it's the opposite. Dissenting opinions were more powerful and more coherent, when there was a coherent "establishment" baseline to go against. Now they're lost in the noise.
The 50s and even more so the 60s where much more potent when it come to rebellion and dissent. Between the civil rights movements, black activism like the Black Panthers, the student and youth movement, the feminists, the anti-Vietnam movement and so on, the US was really boiling with dissent.
In 2023 rebellion and dissent is either fringe or is partisan with corporate sponsorship. In either case, it's voice is drown.
Same for the press. In the 50s and 60s and 70s journalists would talk back to power much more poignantly, and publish incredible exposes. Now they're mostly shills who repeat establishment and party talk points, and the independent voices are let go.
This point of view is simply not true. The return on labour was massively much higher for previous generations outside of the US as well, including in countries bombed into dust.
Educate yourself on history, there is a world outside the United States. There are struggles that have nothing to do with race relations in the United States.
There were a lot of people working very hard in the 50s and 60s, not having luxurious lifestyles. My grandparents had 6 kids on a farm because they all had to work to make ends meet, and lived in a modest farm house. They grew their own food, and didn't have what some would describe as 'luxury'. My other grandparents had a 1000 square foot home with 5 boys in it. Both parents worked and a vacation consisted of driving 4 hours to a nearby big city once a year, not going to Machu Picchu or the Amalfi Coast.
You talk about the "relative privilege" of middle class people in developed countries as though the cause for their declining standard of living was other people having more, as if their "slice of pie" was being cut in pieces and given away. That's not how economic growth works. When China and India grow, the total productive power of the world economy grows. So now the world ought to be able to support "luxurious" standards of living for more people, but in fact we see fewer people enjoying such lives. So where's the output of all our work going, eh?
In China alone, hundreds of millions of people now have a middle class lifestyle that 50 years ago did not. I suspect that far outweighs the number of people in countries that were already developed 50 years ago who fell from a middle class lifestyle back to subsistence farming.
All of that is true, even in the US. It is a false narrative that the "middle class is collapsing" in the US
There is a very narrow band, and very specific regions in the US where that is true unfortunately for the the rest of us the people and regions where this is the reality those people hold outsized control over the media, and government so it gives the appearance it is a universal reality. The World Is Becoming a Better Place[1]
What Antony Davies fails to account for is the rising cost of housing, and a college education, and he compares us to 100 years ago, which is a nice round number, but the living standard I want to revisit is the 1950's, minus the out-of-control racism and sexism and abuse. By that time electricity was ubiquitous, washing machines were prevalent, people had cars, and college and housing was still affordable for the middle class. By the 1960's, central air condition was being designed into homes.
Also, wasn't this golden age in the US fueled by concentrated demand for industrial goods after the second world war? Without an unprecedented imbalance in the economy I cannot see this happening.
Some people that hate imperialism also demand it's spoils back (?).
First it was "support a family of five", then "luxurious lifestyle" then "humble lifestyle". Except for the "luxurious" one, it was possible pretty much at any time in human history, including now.
The post I am responding to mentioned providing a family of five with a self-owned house, a car, a couple of vacations per year and a comfortable retirement. To many people around the world - still today - that would be considered a luxurious lifestyle.
You are right that it's possible for one person to support a family. For most people working in the tech industry here on HN they could probably figure out a way to do it. But is it realistic for all families everywhere to be able to support themselves with just a single worker? If it were so simple to achieve, we would not see child labor. We would not see any poverty at all. Clearly we are not yet at the point as a species where we can enjoy a post-scarcity or job-free utopia. We could certainly be doing a lot more to work towards that than we are, though, and I think that's a more interesting point of discussion than looking back through rose-tinted glasses on a few decades of post-WW2 America.
If it were so simple to achieve, we would not see child labor.
You have it backwards. We wouldn't see any child labor if employers weren't trying to cut corners on wages while the people at the top of the economic pyramid rake in billions. Ownership is way overcompensated in this society, most owners/CEOs do not provide that much value and are just collecting economic rents because they occupy a position in social/economic networks with high bridging centrality coefficients. It may involve some work to get there, but culture, luck, and marketing also have a lot to do with it too.
I agree that wealth inequality is a problem, and I fully support billionaire taxes and wealth caps. If we were to take all that stored wealth and redistribute it equally amongst the rest of the world, each person might get around US$10000. That would provide enough to take everyone currently living in absolute poverty out of it for a decade or so. Would that solve child labor? Perhaps. Would it allow Americans to afford a house and car and freedom from work for 4 out of every 5 people? I don't think so. So I think the problem is bigger than just the inequality between the fantastically wealthy and everyone else, if the goal is for everyone to have the "golden age" lifestyle.
Are you a CEO? If not when are you becoming a CEO to rake in billions then? It ought to be easy since they don’t do much according to you. They get compensated a lot because it is a lot of responsibility and stress.
Why doesn't the prime minister of UK become the king of Britain, even though it's less work for way more luxury?
(In case you can't reason your way into it, some positions are gained through nonzero amount of luck rather than pure "hard work and grit" or whatever boomer nonsense.)
The post you are responding to didn't have Starbucks coffee every day, did have internet, cable tv, subscriptions to streaming services, a computer with a monthly subscription in every pocket. They didn't even have that option.
The above is just a short list. Live like 1955 and you can support a family of 5 with, a car, vacations every year and a nice retirement. You won't have many of the other luxuries people enjoy today. If you don't want to that us fine, but don't say it can't be done.
No you can't. What does Internet and a computer cost next to rent and going college? Let's say $2,000 for a really nice laptop and another $1,800 for 3 years of Internet access (@ $50/month), round to $4k? Vs $40k, easy, for college?
Before there was starbucks there was a local cafe and coffee shop, before the Internet there were newspapers and magazines to pay for.
It can't be done. We've lost something. We have also gained things. don't get me wrong, I like having the Internet.
If only I could give up Hulu and Netflix, I could afford to go back to college and go on vacation every year? Let me guess, I also just need to eat less avocado toast and I'll be able to afford the downpayment on a house.
Is that actually true?
Subscriptions £30 pm
Starbucks £40 pm
Phone contract £20 pm
ISP £30 pm
That’s £120 pm, or £1440 annually. Doesn’t seem like it would make that much of a dent. Probably the number one thing you’d need to do is cut down on food costs, which is doable, to be fair, as it’s quite easy to spend 10x or 100x more than what you need to stay fed.
It all adds up. If you only have a Starbucks on special occasions it isn't much, but some people have daily habits. Likewise a lot of people have the most expensive cable plan which is a lot more money. Phone plans can also get a lot more expensive if you but top of the line phones every couple years.
The current median home sale price in the US is $416100[0], so with 3% down for a first time homebuyer ($12500), and assuming a Starbucks coffee costs $3.50 including tax, it'd take ~3570 coffees, or a little under 10 years of a daily habit.
That ignores any interest on the savings. So yeah it seems like "small" regular spending in your 20s (e.g. $100/mo total) can add up to an entire down payment in your early 30s.
Alternatively, assuming your rent would be at least $1000/month, you might live with your parents for an extra 13 months (or fewer for higher rents) before moving out on your own.
Now, could you add on the housing price inflation over the last 10 years? Your calculation assumes housing prices stay flat for the next 10 years, which is a tall order.
Also, what would happen to people with not so well off parents?
The avocado toast meme is six years old now, and people said the same thing at the time (hence it becoming a meme). It's fair to say "actually I don't have any subscriptions and don't buy daily coffee or go to restaurants/bars (including fast food or pickup) or drink alcohol or smoke or use any other drugs" but complaining that $3/day doesn't add up to a down payment was wrong then and it's still wrong now even after the housing balloon of the last few years. Simple math demonstrates this.
If someone's parents were able to provide a place to live until 18, why is 19 suddenly impossible? You don't need to be well off to let your kids stay with you a little bit past legal adulthood. Surely there's room for a couch or a bean bag or something to give them a huge leg up right out of the gate, assuming you were in a marginal position where you otherwise needed to immediately kick them out and downsize.
Some people are going to have rough situations and can't rely on a family at all. Some will need to emancipate before reaching 18. How common is that? If it is common, that seems like the real problem to address.
Well, as the parent poster mentioned, interest on the savings are not taken into account. Furthermore, the inflation in the price of the Starbucks coffee is also not taken into account. So, seems like the logic/reasoning still stands.
I gather average productivity growth in most developed countries has been around 2 or 2.5% for the past 60 or so years, working out to at best 3.5 times what it was in the 50s or 60s.
Which still makes it reasonable to ask why it's not feasible today for a single income to be sufficient to support a mortgage on a typical family home in the way it was in those times. What I'd like to know is in what cities around the world has housing not become so unaffordable in that period...
Both the urbanization rate and the homeownership rate were considerably lower in the 1950s and 1960s. Said city housing may have been cheaper, but that is because it wasn't wanted.
Your question is much like asking why we can't afford to feed lobster to prisoners anymore.
Home ownership rates for those under 30 at least have fallen considerably in many Western countries (certainly in Australia). And yes urbanisation has increased but not that dramatically. What hasn't really happened though is any significant new cities forming, meaning more and more competition for being located in desirable areas of existing cities, which is surely one of the bigger drivers of decreased affordability.
> Home ownership rates for those under 30 at least have fallen considerably in many Western countries
Yes, it seems the under 30 crowd would rather go to college/university instead these days. A degree can cost about as much as a modest home. Almost nobody attended college in the 1950s. Hobbies always come with tradeoffs.
> And yes urbanisation has increased but not that dramatically.
15-20 points, at least in the USA. That is quite dramatic. If today's cities saw 15-20% of their population leave for rural areas, prices in those cities would drop like a rock.
> What hasn't really happened though is any significant new cities forming
Very true, and fantastically increased farm profitability since the 2007 time period has driven farmland values through the roof, which has made it much more cost prohibitive for cities to expand like they used it do.
> Yes, it seems the under 30 crowd would rather go to college/university instead these days.
Fairly sure housing affordability is a bigger problem for those without tertiary degrees though!
> 15-20 points, at least in the USA
I'd think if there was an era where urbanisation was highest it would be in the 50-60 years prior to the 60s, and I'm not aware of house prices dramatically increasing in that time (happy to be shown otherwise though!). But in that earlier period many quite modest-sized towns grew massively to become the cities they are today (*), so arguably there weren't quite so many people all trying to crowd into the same few cities.
(*) though in Australia at least, something of the opposite has happened in the last ~75 years - many modest-size towns have lost their populations to larger cities.
> Fairly sure housing affordability is a bigger problem for those without tertiary degrees though!
US data suggests that college graduates have seen the largest decline in homeownership over the past 10 years.
That said, you are right that college filters out those with disabilities and other life challenges, and that means those without degrees are infinitely more likely to have something like a crippling mental disability which would prevent them from owning a home. Which, indeed, makes drawing any aggregate parallels between graduates and non-graduates rather useless.
> I'd think if there was an era where urbanisation was highest it would be in the 50-60 years prior to the 60s
In fact, there was a bit of a counter-urbanization movement during the period. Cities were considered to be for the poor. Anyone with means wanted to live on large estates out in the countryside. There was also that whole "White Flight" thing. All that goes back to the people not wanting the houses.
It's easy to forget now that we've put in incredible effort to make cities more livable, but cities were industrial hell holes during the 50s and 60s. Not to mention that crime was starting to become a big problem by the 60s. They were not desirable places in the slightest. Today's cities are entirely different.
It is true that things are much more affordable when they are considered undesirable.
That's actually now perhaps getting closer to a better (if harder to demonstrate) theory - that housing has become unaffordable largely because we've made cities (and their surrounding suburbs) so much more desirable places to be in than they were 60 or 70 years ago.
>I think it's important to note that the good old days of a working man being able to support a family of five was only true for a brief period of history in a handful of elite countries. In most of the world, and for most of human history, it hasn't been the case that any single person working 40 hours a week could provide a luxurious lifestyle for a large family.
Keyword "luxurious".
People first and foremost want to be able to have a roof, food, some leisure time, and so on, not luxury.
And people could have a lot of that for more than "a brief period of history in a handful of elite countries". Between common wrong tropes, movies, and ignorance of history, the past is hugely downplayed as to these aspects.
The "industrial revolution" era of Marx and Dickens time, actually worsened (for the first 2 centuries or so) the working conditions and increased the working hours for huge swaths of the population. People had to be forced (via law, violence, and destruction of their prior livelihood) to go work in factories (and many fought hard for keeping their rural way of life).
A roof, food and leisure time are historically luxurious. Poverty is the natural default. Anything more than that requires a lot of hard work as a society, and has only been realized in the tiny sliver of humanity that is recent (last ~200 years) western society. Everywhere else and at all other times has been starvation, strife and constant work to subsist. And you die by 40 on average.
Studies of how remaining hunter/gatherer tribes around the world have/had been living suggests that's not really true - shelter, food and leisure time were almost always readily available. What wasn't was modern medical technology, which has been almost solely responsible for massively reducing deaths in childbirth and early infancy and giving us the average lifespans we enjoy today.
Even among civilizations that founded around agriculture, there's little evidence that homelessness, starvation or lack of free time were the constant reality for the masses, even if there's no question what life they did have would be considered incredibly basic by modern developed-world standards.
its also the case that people want different things. Even if all work could be remote, there will still be people that will pay most of their income to live in NYC or SF, because when you are living in those places you are not just paying for a roof over your head. You are getting opportunities professionally and culturally that do not exist elsewhere
The US has a GDP per capita of $80K, so if it were distributed equally, everyone would “get” $80K. Since in reality the distribution is very skewed a lot of people would earn more.
Of course, that’s if we artificially constrain this to the US. The world-wide GDP per capita is only $12K. So if we’d be really equitable with the whole world, we’d all have to make do with a lot less.
That is just math and does not account of what this would cause to the economy.
Is the same old discourse, if poor people get more money they will put it back in the economy and consume it generating a bigger economy and better life quality for everyone.
And gdp is kindaaaa useless as wealth pays an important role.
Economic inequality in income grew since the 80' and that's simply a fact
Of course. Afaik there are no numbers we could use to estimate the effect on GDP of such redistribution.
We could indeed hypothesize that GDP would increase due to poorer people having more to spend. On the other hand, in this scenario the successful business owners no longer earn outsized reward for their risk, so perhaps entrepreneurship and innovation is stumped. It’s very hard to predict the effect on GDP
> The US has a GDP per capita of $80K, so if it were distributed equally, everyone would “get” $80K
Pedantically, you actually want GNI, not GDP, here. (But they are close enough in practice for the US–and identical on a worldwide basis since there is no foreign income—that it doesn’t materially change anything else in your comment.)
> In the past, a working man could support a family of five, buy a house, a car and afford vacation once or twice a year, plus save enough to retire comfortably.
I think this is a bit of a rose-colored rear-view mirror, and to the extent it's true it's a pretty brief period of time historically. Most people in most times had to work pretty hard. If you were a farmer, you worked pretty much all the daylight hours every day. Immigrants in the early part of the 20th century worked very hard, often the man running a small business or doing factory work and the woman cleaning, sewing, cooking, bookkeeping, etc. for hire. And all of that is when the men weren't off fighting a war as a conscripted soldier.
The "working man" who could support a family on his income alone was a product of the post-WWII economy. And he didn't really have to save for retirement, he had a defined-benefit pension (the kind that bankrupted many of their employers in subsequent years).
The fact that today, people can feel pretty picky about the terms of the work they do is a sign that times are pretty good, despite what people may think and say.
> and to the extent it's true it's a pretty brief period of time historically.
That is true, but understandably, people are not thrilled about the prospect of their conditions being worse than those their predecessors experienced.
Especially not if, at the same time, they experience an uninterrupted period of economic growth and ever growing profit margins for the corporations they work for.
It's not worse than their predecessors. That belief is a combination of looking at the past with rose colored glasses and extrapolating the issues of a handful of cities to the entire country.
By objective standards, it isn't worse. Unfortunately, people don't care about objective standards, once they're not hungry cold and in pain they mostly derive their happiness from how well off they are compared to other people they encounter. By that metric more are worse off now.
This is what we should be discussing - the blatant taking-for-granted of how good things objectively are in favor of a cultural delusion that we are oppressed.
We are living in the best of times as measured by infant mortality, lifespans, literacy, poverty, and technology.
Depends on your frame of reference. In America, things have gotten worse in terms of lifespans, maternal health/mortality, and generally healthcare - when compared to 5 years ago. Partially due to the pandemic, but it remains to be seen if this is the start of a downward spiral or if things will recover soon.
Psychologically, people seem to experience less hope and optimism that the future will be better. That is an important concept as well - regardless of whether you think people are delusional - their subjective perceptions still matter.
this is the problem of believing things are "better".
it's better in terms of people not having to do brutal physical labor.
but it's worse it's ever been in terms of mental labor and mental health. For older folks they may not understand, and we as a society as a whole not understand, how much mental impact growing up with social media and endless amounts of stimulation has an affect on the entire generation. Social media is still incredibly new only several decades old, with every year getting more and more stimulating. We have no idea the consequences of such over a long term impact on mental health.
You may think "just don't go on it" but it's a whole different story for younger kids, when everyone in your peer group is on social media. If your entire social network is dependent on social media, "just don't use social media" becomes incredibly difficult, and you become exposed to algorithms designed to ceaselessly deliver dopamine to your brain.
On top of that work, has become a lot more and more mentally draining vs physically draining, making it way harder to factor how tiring it is. As someone who studied Neuroscience in undergrad, the biggest takeaway for me learning it was Neuroscience is still an extremely new science, and our understanding of the brain is very very limited, funnily enough despite how much advancements we made with ai. So understanding people's mental exhaustion is very difficult to measure.
Endless mental dopamine delivery, combined with rapid technological pace requiring younger individuals to learn more and more, faster and faster,
I argue, that "times are not as good" as people think they say. There is a different kind of pain involved from working long hours in more natural/stable but physically arduous tasks in the fields or whatnot, vs 8 hours in some confined space indoors of having to constantly learn something new of an ever-changing landscape of new technology without stability where you can be rendered useless in a span of a couple years (ie artists and ai image generation). The pain of being in some confined space is not new to the older generation, but it certainly is getting worse because of how faster automation is rendering certain knowledge and jobs useless much faster than it ever did.
How much time have you personally spent doing physically arduous tasks in the fields? Most soft and pampered Americans have no concept of how difficult that life is. Many agricultural workers end up with crippling injuries that cause chronic pain; look how many of them seek relief from alcohol and opioids.
Social media may cause some problems but it won't leave me with a slipped vertebrae from bending over pulling weeds all day.
I have heard the argument that a negative effect of the post WW2 "feminist" movement (by that I mean women in the work force) has had the long term effect of causing prices to simply adjust to the dual income household, to the point that now it is a necessity. It is a privileged family today that can afford to live comfortably on only one salary.
I think piketty would disagree. Productivity per worker has gone up but the share of profits going to workers has gone down. This is not some kind of inflation driven by scarcity.
I agree with you that gains in income will be absorbed.
Providers of necessities can demand large portions of people’s income due to lack of supply. It’s a basic monopoly. We see that in real estate, health care, education, elderly and child care.
They can’t charge endlessly because at some point people are priced out. Homelessness, lack of education, delaying medical care until an emergency and relying on laws that non-payers cannot be denied treatment.
But they can travel up the supply demand curve and take from everybody that can still afford it, because the supply is constrained. TVs are cheap, because of competition from overseas. Land or health care prices are not.
That's sort of a tricky question since most of the income and wealth of the upper crust of modern society is not expressed as a salary. The simple answer is no, but the fact that it's such a complex answer is itself indicative of a systemic problem.
And while I'm not a professional economist it does seem that you are correct in that demand-pull based inflation (cost of goods) tends to only happen in periods of economic expansion, while cost-push inflation (size of money supply) tends to be the driver in slower times.
Except that with machines doing more of the on the job labor at the same time that women are entering the work force en-mass, there was more competition for fewer jobs which depressed wages.
There is always an infinite amount of jobs. Whenever too few people hoard too much wealth is when economic activity slows down and some jobs are no longer worth doing.
Theres another level to this going on in certain places too. Its not enough to have both partners working. Now in places like the bay area if you want to be competitive in the housing market, both partners have to be working high income jobs not just working at all. Even if you have a great title, if your partner doesnt, you will be lapped by people who have vastly more buying power than either of you can ever muster together.
I wonder if this creates some serious perverse incentives in the dating scene in these parts of the country. Like people who understand this economic situation and unfortunately write off what might have been great partners because their line of work will never afford the standards of living their dual high income peers are able to achieve.
The best thing that most younger people in the Bay Area can do to improve their quality of life is to move somewhere else. Decades of bad government and an influx of grifters have eroded the advantages it once had. You might take a temporary income hit by leaving but most regular workers will end up better off in the long run.
We can argue about what should be done to improve the situation in the Bay Area, but realistically any major changes will take decades to work through the political process. That's going to be too slow to matter for any younger people who are trying to build a decent life right now.
As for dating, the skewed gender ratio in "Man Jose" also makes things difficult in a way that transcends economics.
And I don't, by any measure, mean that all of it does, but nowadays we have luxuries we simply didn't have before, are these not fruits of that increased productivity?
I know I am living a privileged comfortable life, yes. I am certain many people in my chosen profession as a software dev do.
But I also know that there are alot more people struggling to provide basic necessities for their families, despite working 40+h per week. And I am not talking about cellphones here. I am talking about a roof over ones head, clothes on ones back, food on the table and medical services.
Women entering the formal workplace and gradually more and more jobs becoming available to both genders has also inflated traditionally “female” occupations like teachers, nurses, and childcare. When someone who could have trained as a lawyer had to instead become a teacher that kept teacher salaries lower. Nuns serving as teachers made Catholic schools affordable. Now many Catholic schools have a one two punch of the economic opportunity cost of becoming a nun being higher than ever and declining enrollment.
Privileged? I worked very hard to get that point of "privileged" to have had two single-job families. In the beginning I worked at different jobs out of necessity and in part, to see what suited me and what suited the work. I learned many different skills that helped me in my personal life - construction, housebuilding, coding (since 1978), electronics, welding, machining, technical diving, industrial rope access, organizational risk management, and leading large teams on world-class, one-of-a-kind projects. I was raised just below or at the poverty level.
I believe the level of lifestyle you may want precludes you from making a single-income household. I am very content with few things even when the times are good. A hike or walk with the family outside doesn't cost much unless you're shopping and eating out all the time while sipping $5 lattes. Plus childcare would cost a pretty significant chunk of rhe second household income, so why not let one parent be with the kids fulltime?
That would only make sense if productivity divided by half.
On the other hand, people's requirements have simply inflated to much higher standards, while technology semi-automated some of the housekeeping stuff - washing clothes, dishes, making food, heating, cleaning.
I recall a Twitter thread where a lawyer mentions she couldn’t afford the apartment she rented as a law student now that she was an actual lawyer 10-15 years later.
A working man can still support a family of five, buy a house, a car and a vacation once or twice a year. He just needs to be realistic.
House: you can still find houses with plenty of room for ~$100k. It just needs to be in an affordable area: think McKeesport, not San Francisco.
Car: for $5k you can get a 2005 Ford Focus or Honda Civic. They're reliable cars that will get you from A to B perfectly fine, easy to repair and fuel efficient.
Education: a Computer Science degree from WGU costs $18k for the average student, and can be as low as $4k if you accelerate.
Career: plenty of remote software jobs paying above $100k, which can fund a good life in most of the US.
I get it though, the average person wants a nice house in a wealthy area with good schools and low crime and two new cars and gets a degree from a school they can't afford in a field without high paying jobs, and they cannot even code. That's completely their fault, no sympathy from me.
For those people, there's an easy solution: just don't have kids. Kids are crazy expensive, and not required for a good life.
I hope what you say is true- mass retirements followed by a plummeting birthrate. We surely do not need so many people, when the overwhelming majority are useless. Robots will be here soon anyway to replace most of the workforce
> For those people, there's an easy solution: just don't have kids
I think most people have started to notice that this is the actual purpose of all these insane policies against workers in the industrialized world. Every vise imaginable is being used to squeeze young people. From rent and real estate extortion, taxes and tributes, to inflation. Then the solution given to them is "Oh just don't have children. You don't deserve to procreate since you have to keep working for us to be comfortable."
There is another word for the kind of policy being supported by you.
Progress on robotics has been extremely slow. I doubt that we will see a robot that can repair a broken air conditioner in our lifetimes.
But I agree that a lot of the whining is due to expectations that are decoupled from reality. A recent survey of college students showed that they expected to earn an average starting salary of $103K. Most are in for a rude awakening.
>>a working man could support a family of five, buy a house, a car and afford vacation once or twice a year, plus save enough to retire comfortably.
I would say my family history is that of a "working man" that closly fits that narraive..
My grandfather was a WWII vet, after military service was a factory worker that raised 4 kids, in their own home.
Let me eliminate some of that illusory rose tint from your worldview. That home with 2 adults and 4 kids was a 950 square foot 1 bathroom box on .25 acres of land, with no garage, basement, or luxury of any type. my family still owns this property.
In comparison me a single man, lives in a 1300 sqft home.. by myself, with 2 car garage, full basement, etc. My home is considered "basic" by modern standards, some would even consider it below minimum standards for a family of 4...(I bought this home from such a family because they felt it was too small for them)
No builder would ever consider building either my home (which was built in the 60's, nor my grandparents home (built in the early 50's) as today home sizes need to be 1500-2000 square foot, each bedroom needs it own bath, kitchens need to be near professional quality, etc etc etc etc etc.
In short home prices are sky high because buyers would never consider, and probally could not legally, raise 4 kids in a 1 bath 950 sqaure foot home.
We often to not actualy compare apples to apple when we look at the conditions of the past. Sure a man could buy a home for his family in 1950... That home was about 1/2 the size of todays home, and had FAR FAR FAR FAR FAR FAR less amenities and comforts of the modern home
> In short home prices are sky high because buyers would never consider, and probally could not legally, raise 4 kids in a 1 bath 950 sqaure foot home.
I live in a place the same size as you, minus the garage and the land, as a family of 3 so far.
There are plenty of potential homebuyers who would kill for this, and I know of nowhere in the USA that it would be illegal. The problem is that cities limit the number of homes that can be built to ludicrous low density setups like "one house on 2 square acres", and there are enough homebuyers who will pay for the house three times that size with a bathroom per bedroom that the builder doesn't bother to worry about the potential buyers who are not being served and have to move out beyond the edges of public transit to afford anything. And these density limits remain because old people swan around moaning that it's inhumane to build studio apartments when everybody wants a 12 sq acre bathroom, and why are there people in tents on the street?
> And these density limits remain because old people swan around moaning that it's inhumane to build studio apartments when everybody wants a 12 sq acre bathroom, and why are there people in tents on the street?
Also Prop 13 in California that transfers wealth from new buyers to boomers who bought a home when it was cheap, and to wealthy buyers who can afford to buy a teardown and rebuild it around a single remaining wall.
But really, almost all of society’s current problems are pushed onto the public by the political power wielded by elderly boomers and retirees. The rest of us would like to do something about climate change and LGBT issues and cost of education but none of that affects boomers either. The elderly are fundamentally disconnected from the future of society because they will not participate in it, and unfortunate most people are not actually mature enough to demand sacrifices without an expectation they will share in the benefits. The meme about “old men planting trees in whose shade they know they will never sit” is not true, and it’s unfair to punish the living and their future from the hand of the dead. To use the term a bit differently than usual, the constitution is not a suicide pact.
We have a lower age limit on voting and there is perpetual talk about raising it to try and curb the political influence of the younger cohort (much like class war, one side is playing hardball, while the other side doesn’t even know they’re playing). Instead, we should keep it the same and add a cap at the age at which you can first draw early social security benefits.
I have heard all the retorts, what about the good boomers etc. But it’s just not good policy to have what are effectively transient participants (similar to how immigrants don’t get to vote) without a long-term stake in society being the ones in political control, even if some of them are well-intentioned.
Again, boomers keep trying to push exactly this change in reverse by trying to raise the voting age. They know there’s a class battle being fought here, but as usual the other side has talked themselves out of even playing the game, like if you don’t acknowledge it then it goes away.
Obviously this depends entirely on the country and region.
My grandfather immigrated to Australia in 1948, got a job assembling cars at the Ford plant, and worked there until he retired.
My Grandmother never worked. They bought a very nice house, had two boys, never really had any debt, plenty of money in retirement.
A generation later my Dad was earning $10k/year as a teacher, and my mum and dad bought their first very nice home for $30k.
So today how many people earning $100k/year can buy a home for $300k?
(As reference, my partner earns $78k/year and bought a modest home for $480k the month before covid. Now there is not a single home in this small town for less than $600k.)
My home when I bought it was about 2x my annual income, my home today is worth on the market about 2x my current annual income.
The average factory worker (or teacher) in my area could easily afford to buy my home in a standard 2 person income situation.
Now if you go into the new construction area's of this city, the houses there start at 2x the price of my home. I am a relatively high income earner though that is offsite by the fact I live alone so no dual income. On paper I could afford one of those homes, but I would never go that far into debt, which is why I own the home I do. I bought in a modest neighborhood and a modest home.
Currently average home prices in my area are 3.5x median household incomes, which is up from 2.25x in 2016... This is largely drive by the new construction of these high end homes fueled by low interest rates.
> This is largely drive by the new construction of these high end homes fueled by low interest rates.
I doubt it.
How many such modest houses in your modest neighborhood are available now? How much has the housing supply in your town grown, and how much has the population grown? Are all these buyers actually making a direct choice between these two kinds of houses, or is only one of those choices actually available to buy?
>How many such modest houses in your modest neighborhood are available now?
In my zipcode +/- 10% of my home value... 30 or so....
>How much has the housing supply in your town grown, and how much has the population grown?
No idea on supply... We average about 1% population growth per year. Slight decrease during the pandemic, slight increase in the last couple of years.
In the same zip code there are 18 New Construction properties for sale, all 2 - 3x my home price. Which would not include the homes being built for buyers under contract.
As a percentage of income that 78/480 is probably less in the monthly payment than the 10/30 or at least in the same ballpark, since interest rates back then were probably much higher for the 10/30 loan, assuming equal percentage down payments and same terms and what not.
Back in the day when Dad earned $10k/year and saved 30% he had the full house price in ten years ($30k), so it was much easier to have a much larger percentage as a downpayment, or in fact, not get a loan at all.
Now saving 30% a year of a $78k income means you have to save for 20 years to have the full price of the house. ($480k), so you're forced to get a loan, and likely a much bigger loan
Here's some perspective. In lower cost areas of the country it's still totally possible for a single worker to support a family of five, buy a house, a car, and afford a vacation. But in that idealized version of the past that you're describing the normal standards of living were much lower. The typical worker's house was small with everyone sharing one bathroom. The car was unreliable and dangerous. The vacation was a road trip to go camping. Now it seems everyone's expectations have risen.
I do agree that demographic changes are going to cause economic problems. That is basically unavoidable now.
A big part of this seems to be the idea that a highly-educated urban professional ought to have a better life than a journeyman plumber in a rural area. The reality is that there is a lot more supply of educated professionals and a lot more demand for city life, so it should not be surprising that wages in formerly-elite jobs are being depressed and cost of living is shooting up. In the meantime, the plumber's economic situation has largely improved with the booming economy and the dwindling supply of plumbers.
If you want a high quality of life today and aren't worth $10+ million, the best way to get it is to get out of a city.
"then there is technically no difference between working as a free citizen, and being forced to work as an indentured servant"
A common fallacy. There are light-years of difference. An indentured servant is bound to serve a particular master. A free worker, even earning only enough for necessities, is still free to decide how to meet those necessities, and who to work for under what terms. That's a lot of freedom. No, of course they will not have as many choices as a rich person. But they are very far from indentured servitude.
For most jobs real wages haven't gone up at all adjusted with inflation. Others have mostly gone down in wages, most specifically service type jobs which are critical for basic needs. When you can't afford to live why bother?
This. I don't understand why this is up for debate. Working hard does not buy a house, a convenient apartment, a promotion to higher income, equity at low prices, a lifestyle where one can find partners and settle down, kids, kids education.
We are talking about the basics, not avocado toast or international vacations.
The juice just ain't worth the squeeze in America any longer.
I would make two observations here. First, costs are up. Not just housing and school, but also cars. Additionally, people are required to have smart phones. Most clothing is of poor quality and will need to be repurchased. Food is of poor quality if it’s cheap and therefore health costs get higher.
Second, in a low interest rate environment, any crazy idea gets funding. This squanders time and resources as many bad ideas get funded which would otherwise be laughed away. The low interest rates also encourage monetary inflation which first pushes up asset class prices, and later filters into retail prices. Wages are always the last segment to see price rises as pressure must be put on businesses to raise the price of labor. Essentially, when a company cannot get employees they will begin raising pay for open positions or they will go out of business. This pressure takes time to build. We see it now in fast food and groceries, and we saw it some time ago in the blue collar trades.
The major fix for this is higher interest rates… significantly higher. People would need to be willing to accept a slower growth rate in exchange for more predictable and more stable long term growth.
> The major fix for this is higher interest rates… significantly higher. People would need to be willing to accept a slower growth rate in exchange for more predictable and more stable long term growth.
And the upper rungs of corporations will have to accept lower compensation.
It's not up for debate. The ruling class is making it a valid point without offering a solution to the problem. It's a lot easier to whine and complain versus actually tackling the issues at hand.
"If the reward from working is barely enough to cover the necessities, then there is technically no difference between working as a free citizen, and being forced to work as an indentured servant, other than a vague notion of freedom, which in that case is the freedom to decide between working and living on the streets."
What an incredibly privileged perspective. Do you think that actual indentured servants would agree with you on this?
> If the reward from working is barely enough to cover the necessities, then there is technically no difference between working as a free citizen, and being forced to work as an indentured servant, other than a vague notion of freedom, which in that case is the freedom to decide between working and living on the streets.
Slave/indentured servant -> live-in servant -> servant -> service worker -> self-employed service worker (contractor)
At each step along this 'evolution', the beneficiaries of the labour have freed themselves from the burden of supplying some of the resources needed by the worker (shelter, food, holidays, sick pay, health insurance, safety and other equipment, education/training, etc). In theory this has been balanced by increased monetary compensation. When that compensation isn't enough for the worker to meet these needs, what should we expect? That they become indebted?
Likely true. But there are plenty of large businesses that are effectively the same. Larger than a lot of government departments, holding a monopoly-like position in some good/service, can't be killed. These orgs are just as good as government at overpaying people.
IMO the productivity loss is misidentified as a government issue, it's actually a large org issue.
> People want perspective. In the past, a working man could support a family of five, buy a house, a car and afford vacation once or twice a year, plus save enough to retire comfortably.
Maybe during the 1950s, when two (2) World Wars had blasted multiple empires to dust and essentially gutted a generation of workers aka males between the ages of 18-40.
Sure enough the US, still standing after entering the wars late and not seeing huge casualties or direct combat in-country, was positioned to lead a post-war economic boom.
Now it's back to pre-war conditions, which curiously enough, resemble the Guilded Age, and its associated strikes
You’re going to get a bunch of static because of the objectivist leanings of all the “temporarily impoverished tech billionaires” on HN and pg’s rare miss of an essay about the scarce reagents of the United States manufacturing economy during the Cold War.
But you’re fundamentally right. It’s really easy to manipulate indices like the CPI (and oh boy do they have some interesting ideas about what people need in life), and it’s really easy to exploit summary statistics like the arithmetic mean to drag “average standard of living” metrics around with a few categories of goods (mostly consumer electronics) to push the absurd notion that anyone outside the investor class is doing as well as they were 10, 20, 30, 40, … years ago.
The United States burns 45% of its corn and smaller but still ridiculous percentages of its other big agricultural outputs as ethanol at a net disaster on carbon emissions. We let poor and homeless people interact with courts and ERs in vast numbers who need housing assistance, basic medical care, and sometimes substance abuse treatment at (people debate this exact number) somewhere in the hand-wave 10-100x range of a markup. Cops and judges and the amortized cost of lawsuits against police departments and ER doctors and ER nurses and ER equipment have a cost structure closer to a military than cheap, tax-subsidized housing and registered nurses.
The United States has absurd surpluses of arable land, exploitable energy, deep-water harbor capacity, riverine transport capacity, exploitable mineral resources, highly desirable and massively under exploited coastal real estate, you name it, it’s easier to list things that are in any way intrinsically scarce here…Coltan maybe?
The United States is in a position unique in history in which its sovereign debt is denominated in its own currency and that currency is the world’s reserve currency and that sovereign debt is the “risk-free return” r-nought embraced by modern global finance. This means that we can tailor the money supply exactly to the level of productivity that it’s used to represent, which means that being a politician or economic regulator is as easy of a job (if your goal is the public welfare) as it definitionally can be.
The United States is basically the only developed nation with no intrinsic demographic challenges (the ones that are ravaging all the other developed nations) because there is a seeming boundless supply of (statistically) young, law-abiding, productive people who still have kids wanting to immigrate here across a porous land border.
Scarcity or want of really any kind is a very, very, very expensive “luxury” (it’s not quite a Veblen good but it’s certainly conspicuous consumption) that we as a society seem prepared to spend whatever it takes to get.
Once you strip the paint jobs off of either Foucault-style postmodernism or Randian objectivism (a challenge that Noam Chomsky describes as a real feat of linguistic manipulation) you’re left with effectively the same actionable value system of there being 2 kinds of people in this world: for the lefty kleptocrats the individual is robbed of agency and identity because they are the product of constructed forces external to them (I mean, except for us of course), for the righty kleptocrats the individual is robbed of agency and identity because they aren’t smart or motivated enough to invent Reardon Metal and therefore insignificant (I mean, except for us, of course).
The action item that falls out is the same in both cases: drive capture to keep the “right people” running things.
The result is the same in both cases: if you do a halfway honest plot of productivity and genuine standard of living against the decades, you get divergent lines that seem to be training for an Olympic gymnastics qualification.
The most dangerous man in the world isn’t a Navy SEAL or a Zeta, the most dangerous man in the world is a man with nothing to lose, which is why we’re up to 4 mass shootings a day (by Mother Jones’s definition but pick one), which is per-capita more than Syria.
This little brochure is a bit hand-wavy on the math and takes a bit of poetic license, it’s not meant to be the book that someone needs to write about this. So it’ll be a trivial exercise to pick it apart in that god-awful “>”-prefixed bad-faith style, but it’s not going to be a fundamental intellectual or epistemological or ethical error that’s going to motivate people to do so, it’s that this is not a comfortable thing to see in the mirror.
> The action item that falls out is the same in both cases: drive capture to keep the “right people” running things.
This rings true, and seems an insightful point. But I lost the plot in the following:
> The result is the same in both cases: if you do a halfway honest plot of productivity and genuine standard of living against the decades, you get divergent lines that seem to be training for an Olympic gymnastics qualification.
I don't really get how this "result" follows, or what prescription you're hinting at. Are you just saying we're very productive but fail to distribute among the citizens? That seems like a garden variety left talking point, which is a bit.. anti-climactic. Not that I even agree or disagree overmuch, but the tone of your post made me think you were building towards a more heterodox take. Am I missing something?
Yeah, that’s a fair point I suppose. It’s kind of a limitation of it bot being the aforementioned book someone needs to write.
Establishing the financial economics of productivity and its relationship to the Western Liberal Enlightenment conceptualization of the public good along a non-differentiable surface of capture from WWII to the present is a masters thesis alone.
The level of ambient violence in a surveillance kleptocracy with a nascent domestic security apparatus breaking through that of a country in the grips of a 7-sided civil war, this being the tip of the iceberg because the non-violent people with no hope are suiciding with fentanyl at some staggering multiple of that, and this being caused by capture is hard to prove but easy to see absent an agenda.
I don’t want to see a climax more intense than how far we’ve already traveled down that road.
What is freedom if you are working for a top down authoritarian hierarchy ? Be it legal person or a real one. Do we get to enjoy any democracy at work ?
I mean maybe I have work ethic or am lucky. But I don’t struggle to pay mortgage, buy cars, or go on vacations and I am the sole breadwinner for my family… but I also started programming in 3rd grade in the 90s, didn’t go to college so have no debt, and live a pretty non materialistic punk rock life.
And you happen to be in a field that boomed (several times) during your career and was (and to some degree still is) a quite dynamic environment.
I'm glad it worked out for you (and me) but we must acknowledge that luck is indeed a significant contributor.
Let's imagine that instead of getting into programming you began working odd jobs in a field that is generally low income. Some would make it to the top but most will not move forward despite working hard.
From a personal anecdote I have a close relative who is an incredible hard worker in a job adjecant to elder care. As far as I can tell their work ethic is higher than my own (no time for water cooler talks or "code is compiling") but unless things change drastically they will never make more than minimum wage.
It's fair to say that natural skill plays a big role. Despite best effort they wouldn't be abel to get a programming or othe office job because just finishing their apprenticeship took increadible effort and diligence.
In their mid twenties their parents still support them (a little bit) and being anything close to a sole bread winner is highly unrealistic.
There are economic reasons why some people are paid better but I'd say "pure luck" is a larger portion then most of us would like to admit.
Some people get a yacht and a nice holiday home for their 12 hours shifts and some get to pay their rent.
That's part of it. But yeah, say you got massively unlucky, like a ministroke or a really bad car crash, affecting your ability to bring in cash and that took much of your savings.
Safety nets are needed, and typically are underfunded. With one in place, most people can rebound to their most able.
> but I also started programming in 3rd grade in the 90s, didn’t go to college so have no debt, and live a pretty non materialistic punk rock life.
Likely luck then; would you be in the same place if you didn't happen to be interested in a field that makes big money with no formal education needed?
You could remove all the arcane laws, regulations, and zoning which make constructing new houses ludicrously expensive. Most people would be perfectly happy to live even in a shoddy log cabin built by them and their family if it meant they would could save those hundreds of thousands or even millions of dollars they would've spent otherwise to improve their lives in other ways. This alone could be enough to shave decades off the career of the average person.
You could disallow corporate ownership of dwellings of any sort, and heavily tax ownership of more than two homes per family unit.
You could provide significant tax benefits to lifestyles that approach self-sufficiency, such as people in rural areas that grow their own food.
You could mandate a quota of completely remote workers for many industries, encouraging the diffusion of people and opportunities across the country, instead of everyone rushing to expensive cities in hopes of finding work.
I don't know enough about the US market to speak too strongly here, but I'd have to imagine based on my experience elsewhere that if you wanted to buy a flat from a property developer right now you could.
I would have thought that "build to let" would be the rarer case, but like I said I might be blind to the idiosyncrasies of the US here
It seems like the primary consumer of our money is the artificial lack of housing inventory brought upon by the ability of folks to own more than one property.
I suggest (and have suggested numerous times) that we disallow ownership of property for profit. Create a system that allows people to “buy” property short term through government loan structures that have very low interest rates and allows them to create an equity building mechanism early on. On paper it would have all the benefits of purchase with all of the benefits of leasing as well.
The flood of new available property would absolutely crash our current economy, since it’s so extended on property ownership, but we did it wrong and we need to correct.
Employers aren't printing up more money. Yes, labor costs going up impact profits but what about labor costs of management? That has gone up significantly:
"From 1978 to 2021, CEO pay based on realized compensation grew by 1,460%, far outstripping S&P stock market growth (1,063%) and top 0.1% earnings growth (which was 385% between 1978 and 2020, according to the latest data available). In contrast, compensation of the typical worker grew by just 18.1% from 1978 to 2021"
The housing market is probably permanently ruined for individual family buyers as long as they are competing with businesses/individuals buying multiple residential properties as investments.
Subsidies or government backed contributions won't be the answer. Universities have a societal function and could conceivable operate without profit in mind, but they still chose to be greedy and act like for-profit businesses once government backed loans became a thing. The government tried to fix access to education by directly injecting cash via students instead of fixing it through the universities. Taking the same approach with home buyers would be a mistake because real estate obviously is meant to be for-profit and acts that way, so they will obviously raise prices as well.
So you'll probably need to fuck over a lot of banks, investors, construction and real estate companies to get housing prices accessible to the wider population and change economic interactions in that market. I wouldn't count on that though - the government will probably choose to fix it through backed loans or subsidies again, if they do anything.
Wouldn't be Hacker News without a constant stream of worthless single-sentence dismissals from insufferably smug self-professed Economics 101 graduates
Someone who understood basic economics wouldn't assert that investors are ruining the housing market for individual family buyers without explaining how the housing market or one particular housing market is different from all the other markets were investors are helpful for bringing products and services to individuals and families. I am sympathetic for example to the argument that the housing market in Vancouver and perhaps other parts of Canada is being distorted to the detriment of families by wealthy Chinese wishing to establish a safe trove of assets outside the reach of the Chinese government. But there are more barriers to Chinese investors (and Chinese visitors) in the US than in Canada, and the US is 9 times more populous than Canada, so that makes any particular severity of distortion cause by Chinese investors at least 9 times less likely in the US than in China. Non-Chinese investors who have an accurate understanding of the other investments available to them, on the other hand, will tend to invest in housing only when they seriously expect the demand for housing to increase--"expect" as in actually willing to put money on the outcome, not merely to opine on the outcome in internet forums--so their investment helps out families on net by helping to increase the supply of housing to meet the increase in demand.
>Does it really bother you someone could be ignorant of something here?
I'm not sure I understand the question. If you'd phrase your comment as a question about economics, I wouldn't've replied like I did (with a complaint in the form of sarcasm). Most humans are vulnerable to misinformation if it is repeated sufficiently often by a sufficiently diverse set of writers or speakers, and certain economically-impossible or -implausible arguments are repeated often enough on HN that I consider it worth my time to try to counter.
>Someone who understood basic economics wouldn't assert that investors are ruining the housing market for individual family buyers without explaining how the housing market or one particular housing market is different from all the other markets were investors are helpful for bringing products and services to individuals and families.
So the housing market is different because housing serves as shelter. Investors owning multiple properties are eschewing the actual utility of the asset and only focused on its value. From the perspective of a society wanting to house its citizens and improve quality of living, it's a very inefficient use of the asset and the land that its on.
Because investors often have more cash than ordinary family buyers, they are able to outbid family buyers. This happens regularly and is one of the core reasons for the argument made initially.
Because investors might buy and sell housing more often than a family who actually inhabits a home, this increases the money velocity in the market and drives prices upwards as more sales are made. Canada is a good example of this: https://laws-lois.justice.gc.ca/eng/acts/P-25.2/page-1.html
All of this means that some portion of the house's price is only based on speculation (other parts being land, construction quality, location, amenities, etc.). This means that investors that buy houses to speculate are simply increasing prices with no material improvement to the asset.
If we were talking about stocks or assets-that-aren't-also-necessities, these reasons wouldn't be a problem.
I'd argue that housing's being a necessity makes it even more important for there to be a reliable and predictable supply--something investors help with, IMO, except for unusual pathological cases.
Chinese home buyers IIRC have a cultural aversion to having strangers living in any home they might want to live in themselves in the future. But with the except of the Chinese investors (which IMO cannot be numerous enough to distort the huge US housing market) investors either rent out or sell the housing they own, so I don't understand in what sense you think investors are "eschewing the actual utility of the asset": someone still gets to live in the house, even if it is not the owner of the house.
>All of this means that some portion of the house's price is only based on speculation (other parts being land, construction quality, location, amenities, etc.).
I concede that that can be an accurate statement (though it is not how I would put it) on a temporary basis, but I point out that when an investment causes current housing prices to increase, there will invariably be a time in the future when the same investment causes housing prices to be lower than they otherwise would be by approximately the same amount. And the I ask you, Why do you care more about situation of families now than about their situation in the future?
Those investors could move to starting or investing in companies that produce housing and material for them, but get out of owning houses themselves. This keeps them close to the market they want to invest in.
A common sentiment is that wages haven't kept up relative to costs of living, so we have problems now that need to be solved because we are already 'behind'. If that's true, it will further mean that families in the future will have less equity due to delays in purchasing a home relative to previous generations who could more easily afford necessities and luxuries.
So ideally we should give a break to home buyers now to help compensate for that at the expense of larger investors and organizations who can frankly afford the loss (collectively). The alternative is to keep investors happy and rich with profits at the expense of the population's needs and financial trajectory.
The investors entering the market today will make prices go up today, but have the effect of reducing prices in the future (either or renters or buyers, depending on how to investor chooses to recover his investment). Investment in housing in past decades has reduced the price families need to pay now. There a zero investors in housing who are not out to either provide housing for rent or to eventually sell housing.
>because this isn't what we see happening.
What we see happening has alternative explanations, for example: there are millions of very-high-paying jobs in the Bay Area, which is course is generally a good thing, but it has the undesirable effect of making it hard or impossible for families that do not have one of these very-high-paying jobs to live here because there are strong barriers to the creation of new housing, which forces the people with the high-paying jobs to spend more than want to spend on housing, which (happily for them) they are able to do (because of their high income) but which sadly makes it impossible or very onerous for lower-income families to live in the Bay Area. Most of these barriers are in the form of regulations imposed by local governments. Where I live for example in Marin County, growth is controlled (kept below the level investors as a group would prefer to have it at) in part by denying new housing projects the ability to connect to the Marin Municipal Water District, I have heard.
Inflation can be combatted by taxing it out of the economy - the issue is who do we tax. One should always tax the rich first - like robbing banks that's where the money is
The money is in the middle class though. Sure the rich have a bunch, but the middle class has far more. In real terms taxing the rich won't bring in enough money to count unless you redefine rich to cover most middle class.
True, taxing and inflation hit the middle class the hardest.
The upper classes don't have "income", they borrow funds based on their assets and have tax specialists that can launder any income. They don't have mortgages either.
The economic system seem to be more than capable of plunging itself into an inflation with stagnating wages already...and still rake in money left right and center.
Is that gross revenue before paying for diesel, the loan on the truck, the employer side of Social Security tax, health insurance? If it’s as simple as you say to earn $160K-$180K why isn’t everyone doing it? In an efficient market arbitrage opportunities usually close quickly.
Assuming the figures are accurate, perhaps because most everyone doesn't want to? Some love it, but sitting in a truck day in, day out, far from civilization while only infrequently coming back home to see your family is not for most.
You could say the same about programming. Any five year old can program, but most people have absolutely no desire to do it, thus it takes a whole whack load of money to convince the general population into the industry. The HN crowd who see it as a fun hobby, who like to spend their evenings writing open source code for free, are outliers.
You just need to own a million dollar truck, have no life and be at risk of bankruptcy if the economy goes wrong. Also work 12-14 hrs and get paid for 8.
If you were lucky. Many did not get a pension at all though. And many others had a pension that went bankrupt so they go nothing. The 1980s (starting before then) were reforms on a system that wasn't working well for many.
Unfortunately only about a third if Americans have a 401k, if we subtract those young it gets a little better (the young can pay off student loans then redirect that money to retirement, at least in theory), but still almost half of Americans don't have one.
I don't know how to find numbers, but I think that is better than pensions every were. It still isn't very good though.
You are relatively well paid. Most people in the US received total less than $500k cumulative post-tax income by 35. Median incomes don't reach that level. Here are median personal income figures over the last 17 years: https://en.wikipedia.org/wiki/Personal_income_in_the_United_...
Those are aggregated across age, and younger people tend to earn less, so the median total income working 18 to 35 will be lower than if you add up the age-independent figures. But even if that weren't true, and if people could miraculously save 100% of everything for 17 years, live on nothing but air and get totally free housing, most people still wouldn't have seen 500k by 35.
As well, necessary expenses (housing, food, transport etc) take up a higher proportion of their income than yours, because of lower income while necessary expenses don't decrease proportionately. So the proportion they can realistically save is lower than yours. For many it's a struggle to save anything, but even for those who can and are willing to sacrifice a lot, $500k by 35 is dream money.
Active fund management are not enough to make up the difference. Most people if they want $500k in a 401k by 35, have to earn significantly more than they actually do. Of course if everyone did that, prices would rise to compensate and $500k in the 401k wouldn't be worth as much.
If the reward from working is barely enough to cover the necessities, then there is technically no difference between working as a free citizen, and being forced to work as an indentured servant, other than a vague notion of freedom, which in that case is the freedom to decide between working and living on the streets.
And people don't like being indentured servants. History should have made that clear by now.
People want perspective. In the past, a working man could support a family of five, buy a house, a car and afford vacation once or twice a year, plus save enough to retire comfortably.
Today people, despite burning themselves out in their job, struggle to pay rent in a flat shared with other working people, after loading themselves up with 100k in students debt, and no chance in hell to ever own property of their own.
If the powers that be want people to be willing to work, that work has to pay off.
If it doesn't, well...we're at the beginning of a retirement wave unprecedented in human history. 2 low-birthrate generations to follow. And our entire economic system is designed around constant growth.
I leave doing the math on that as an exercise for the reader.