11 ms·

What do they mean by "to be poorer"? The current generation already is poorer than previous generations. Income has not kept up with inflation and the income

• austenallred 11y ago
  I'm probably only slightly less "poor" than my parents were at my age, but I'm vastly more wealthy.
  • roymurdock 11y ago
    Interested to hear what you mean by this... "Wealth" in economics is the sum total of all of your physical and intangible assets, including a calculation of discounted future earnings. So being rich and being wealthy are very similar concepts in economics - large NPV of assets and income. But in normal parlance, rich and poor can also refer to standard of living/quality of life/happiness. So are you wealthier? Happier? Earning less?
    • austenallred 11y ago
      "Wealth" and being "rich" (or making money) are similar but not the same. Adjusted according to inflation I make slightly less money than they do - meaning I have less cash in my bank account. But the prices of everything are being driven down so quickly that I live a much fuller life than they did on a per-opportunity basis. I have access to all the world's information, seemingly infinite entertainment, and a faster computer than they could even imagine in my pocket (not to mention my tablet and laptop). I can travel the world (I actually make money when I do so by Airbnb'ing my house), Amazon drops stuff they couldn't afford on my doorstop for very cheap. So I make slightly more, but what I have access to is much greater than they did. I'd argue my life is much richer (er, wealthier), despite making slightly less.
      • roymurdock 11y ago
        Gotcha, thanks for clarifying. Yes we do live in an amazing time where the standard of living/availability of goods and services in developed countries is great relative to 40 years ago. The only thing I would push back on is the increasing cost of some of the more fundamental investments - higher education and housing. Can't (sustainably) enjoy fast computers/airplanes/Amazon without a degree and a home.
        • austenallred 11y ago
          I suppose it depends on where you live/where you go to school. I went to BYU so my tuition was $2k/yr (then dropped out, so no degree either), and I live in a small town so I pay very little for rent ($800/month for a three bedroom house, work remotely). If you're in SF though, yeah, you're in trouble.
• enlightenedfool 11y ago
  With two programmer incomes we can't buy a home 35 miles away from Boston. So pathetic.
  • dkonofalski 11y ago
    Sadly it's not surprising. As it was said once on The Wire, "We used to make things in this country, build things. Now we just put our hand in the next guy's pocket." That's the economy that the previous generations left us and that we're perpetuating for our children.
    • Phlarp 11y ago
      I feel like there is a lot of context lost in this quote without pointing out that it's being said by a union dock worker to a lobbyist he has been paying to bribe politicians with money earned from smuggling prostitutes and heroin into Baltimore for an international crime syndicate.
      • ericzawo 11y ago
        Nah man, let him have the simplification for the HN upvotes.
      • dkonofalski 11y ago
        I agree. The irony of that statement was huge. But it also brings it back to a "chicken or the egg" scenario. That's what I didn't really want to get into. Is the dock worker's union struggling because he's been paying the lobbyists or are they struggling because everyone else was?
    • brandonmenc 11y ago
      We do build things. We're the 2nd largest manufacturer on the planet. We just don't need guys on an assembly line tightening the same bolt ten thousand times a day for forty years, like my grandfather did (true story.)
      • 11y ago
• tomp 11y ago
  > That previous generations could afford a single-family house with 1 person working and with multiple kids. Now, a double income is almost required, even with renting and not owning, and the rate of couples without children is rising too. I find it highly ironic that while feminists wanted to enable women to have jobs, capitalism intervened and forced women to have jobs. So we have a reserse, but equally bad situation (earlier women had to be home, now they have to work).
  • dkonofalski 11y ago
    I once read on a crazy dude's website that corporations did exactly this to take advantage of feminism. They saw that women wanted to work so they dropped wages for men and then, on top of that, paid women less for the same jobs so that they could further undercut those looking for work. I thought that was crazy talk but maybe it's not too far off. That may not have been their motivation, but that's the situation that's happened anyways.
    • wvenable 11y ago
      Wages for men didn't drop but many things (like housing) slowly became twice as expensive. It's not some grand conspiracy; it's supply and demand.
      • dkonofalski 11y ago
        Right. That was the point I was making. The conspiracy stuff was all nonsense, but somehow we still ended up in the same situation where no one can afford anything.
        • wvenable 11y ago
          And we spend more on other things (like child care) because both adults are working.
      • evanmoran 11y ago
        This a great point. It's not a conspiracy. Housing prices trend to match median income in an area. When you think about it, it makes perfect sense. If your income was significantly higher then current prices of houses you'd immediately buy a house, because why not, it isn't a big percent of your income and therefore isn't a huge risk either way. The moment prices reach what feels uncomfortable you'd think hard about renting vs buying. We are now in the later stage in several tech cities for tech wages.
• cryoshon 11y ago
  Income from jobs is less and jobs are less stable, most stuff is more expensive (especially rent!), and the younger generation is suffocated by high-interest high-principal student loans which get paid out even if it means wage garnishing. To be explicit, the bandwith of money inflow has decreased, and the bandwith of money outflow have increased. The big-picture money outflow from rent and student loans go more or less directly to the richest.
  • WalterBright 11y ago
    Don't overlook the increasing share of the GDP that the government consumes. See chart S.03t: http://www.usgovernmentspending.com/total_spending_chart http://www.usgovernmentspending.com/total_spending_chart That more than explains the lower amount left for people.
    • zbyte64 11y ago
      Saying that is an oversimplification of what is going on would be an understatement.
  • curun1r 11y ago
    > most stuff is more expensive On the contrary, I think the thing that has deceived us about how much poorer we've become is cheap stuff. TVs are cheaper than ever. We spend less as a percentage of income on food than we've ever done in the past. Even automobiles and computers are more affordable than they've ever been. To a superficial viewpoint, we have more purchasing power than we've ever had (and the CPI includes many of these items which give that superficial viewpoint). But we see the true regression in purchasing power once we look at things that haven't benefitted from lowered manufacturing costs. Housing, education, health care and the like are showing the true nature of the situation of how poor we've become. P.S. Yes, I know I took the quote out of context and I'm more agreeing with you than disagreeing with you. But there is a distinction to be made that it's not all stuff that's more expensive, just the important stuff.
    • roymurdock 11y ago
• yummyfajitas 11y ago
  Real income per hour has increased. https://research.stlouisfed.org/fred2/series/COMPRNFB https://research.stlouisfed.org/fred2/series/COMPRNFB A double income is not required to keep up with your parents, it is only required to keep up with the (much richer) Joneses. If we aren't richer than our parents, it should be easy to name a good or service that we consume less of than them. Anyone care to do that?
  • woodman 11y ago
    > ... it should be easy to name a good or service that we consume less of than them. Anyone care to do that? Social Security and health care come to mind.
    • yummyfajitas 11y ago
      Social security is not a good. Neither is health care - its a category. Did you mean "the basket of health care goods available in 1970"? I imagine we consume far more than that (e.g., MRIs, statins, etc). Would you be willing to stick to your parents health care choices?
      • cryoshon 11y ago
        You're missing the part where people actively avoid going to the doctor unless they're super sick/injured because the doctor is too expensive, even with insurance. The paradigm of consumption of medical services has changed: the doctor will not permit you to visit them, and then not get referred for tests XYZ and drugs ABC; it would be negligent for the doctor to not provide the standard of care to the patient, and the standard of care is immensely expensive relative to yesteryear. Was medical bankruptcy a thing in the 1970s?
      • woodman 11y ago
        > Social security is not a good. Neither is health care - its a category. Allow me to quote myself, quoting you: "name a good or service". > Would you be willing to stick to your parents health care choices? Do you mean the health care choices they are exercising now? Who do you think is racking up the most MRI hours, 20 year olds or 60 year olds? I'll put a finer point on it, both services are subsidized by the increasingly resentful youth.
• jp555 11y ago
  Oh, did your parents have faster internet, bigger TVs, and better cars than you? Richness, wealth, is not money. It's the things we want. My parents never had $2/lb strawberries in February, or MRI machines, HIV drugs, discount airlines, etc, etc. We are insanely more wealthy than our parents.
  • merpnderp 11y ago
    This is a tough one for economists. While a Roman emperor had far more gold than any of us could ever buy, he couldn't get clean water, clean sanitation, a tetanus shot, fly in an airplane, etc etc. Regardless of purchasing power, what we can purchase today is much better and more useful than what could be purchased before. Thank you capitalism.
    • jp555 11y ago
      Yeah we need 80% fewer resources per $ of GDP we create than we did 70 years ago, and there's is no indication this will stop anytime soon. Yes we "need" 2 incomes to buy a house, but that house is nearly TWICE the size of the one our parents had on average, and MUCH fuller with the things we want.
      • wfo 11y ago
        The things we are tricked into 'wanting' by a multi-billion dollar advertising industry that pays top scientists to spend years doing research on how to best manipulate our desires. Nobody needs a house twice as big. It's a pain to clean. Nobody needs all of these things. Both parents working overtime so they can hire a nanny to babysit their child they never seen in an enormous mansion is nobody's idea of progress, or even stagnation. It's far, far worse.
        • jp555 11y ago
          So much bias to unpack in your comment. Nobody needs all of these things? Nobody's idea of progress? According to you? Your strawman example seem awful to me, but I bet there are many many people who would prefer to be workaholics with mansions and nannys to having lots of free time to enjoy their family in a rented apartment. I find it a little contradictory that you seem to simultaneously think we're all brainwashed sheep that really should instead be a bunch of robots that all only value things purely based on utility. How is that different?