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Wages must rise. They have not risen for nearly four decades in real terms. Major life expenses are unaffordable to all but the wealthy, such as housing. This
by internaut 10y ago
Wages must rise. They have not risen for nearly four decades in real terms. Major life expenses are unaffordable to all but the wealthy, such as housing.
This single fact explains lots of things in the present. It appears we're trapped in a local maximum while journalists and politicians blithely ignore the plateauing of growth, wages and technology outside of computation.
If you think everything is getting better and better, you've taken your eyes off the road for a while now.
- huherto 10y ago> Wages must rise I would say that housing should be less expensive. These prices are impossible even with a good salary. You need two good salaries to buy one house and still have money for your other expenses.
- tdb7893 10y agoI said this somewhere else in this thread but just move to the Midwest. There is plenty of space and depending on where you want to live houses can be super cheap.
- jdavis703 10y agoThere are many problems with moving to the Midwest. It's like someone suggesting moving to Puerto Rico to save on money since a place with a vastly different culture is not simply interchangeable (and I'm saying this as someone who has lived all over the U.S.). Edit: for the downvotes lets remember that Puerto Rico is part of the U.S. and that Puerto Ricans are American (i.e. estadounidense).
- kesselvon 10y agoYou can have most of the amenities of coastal urban life in places like Chicago; which even has its own coast and doesn't have the outrageous COL that places like San Francisco, LA, or NYC have. Sure you're not going to make the same crazy salaries, but you're also not spending 5k for a 1br apartment in the Mission
- jdavis703 10y agoWhat would you spend for a nice apartment by good transit?
- fovc 10y agoMy peer group just out of college in consulting paid $1000 - $1600 for nice places. Low end of the range would be shared with 2-3 others and maybe 40 min outside the loop. High-end would be for a 1BR 15-20 min out. You could also live in West Loop (think lofts) in brand new places for even less
- jdavis703 10y agoI imagine that heating and electric adds a couple hundred though? (in CA I pay about $20/month for gas/electric, but remember paying hundreds when I lived back east).
- vonmoltke 10y ago> in CA I pay about $20/month for gas/electric How the hell do you pay so little? I pay $25/month just to have a gas connection.
- jdavis703 10y agoI'm rarely home and have a small studio apartment. I don't have AC (most homes I know don't have it in Oakland), and there's almost no point in running fans when I'm gone.
- vonmoltke 10y agoThat's my point. I could leave my house for a month, shut off everything that uses electricity and gas, and still have to pay more than twice what you pay just in connection charges. Do utilities in California just not charge flat rates for connections?
- tcoppi 10y agoI've also lived all over the US, and the culture difference between NY or SF and nowhere, ID is, many times, less than the difference can be between many places in the US and Canada.
- jdavis703 10y agoI suppose a lot of that depends on your ethnic background. I've been to places and been like, "woah I just stepped in to the 1950s." Certainly not everywhere (Chicago comes to mind) are like this, but again Chicago is also a pretty expensive city.
- pnathan 10y agoFar too many race and culture issues in the Midwest IMO. Not to mention lack of software jobs & economy propped up by ag cycles & federal farm bills. Lots of articles about the issues in rural America, won't repeat them here. Much rather live in Seattle, NYC, Boston, etc. Much better living, profoundly more jobs (both in number and variety), far better culture, better politics, much more environmentally friendly.
- amyjess 10y agoI live and work in the suburbs of Dallas. I'm also an openly LGBT Jew, and nobody gives me any problem. And the large Asian populations (Chinese, Indian, and Korean especially) in the suburbs here shows that lots of people of other races choose to live here over other places in the country. It's debatable over whether or not North Texas counts as "the midwest" (really, Texas can be divided into five sections, which go into separate regions), but I like to think of it as such. We're in Tornado Alley, and most of Dallas feels like a typical middle-American suburb.
- pnathan 10y agoI am pretty sure everyone agrees Texas is a different country. ;-) TBH I've heard Texas has a pleasingly libertarian vibe about many personal choices, but you are required to love HS football.
- jdavis703 10y agoWhat I don't understand is why the government isn't building housing to sell. You'd put workers back to work, and prevent some of these crazy expensive prices. It seems like all developers want to build are mcmansions and luxury apartments they can sell for tremendous profits. Where are the cheap starter homes and condos?
- prostoalex 10y agoThe price tag on the final construction is defined by three things - cost of land, cost of labor, and cost or building materials (which includes things such as equipment rentals). Where would a government construction company experience massive price advantage that cannot be replicated by a private entity? Their cost of equipment is same as everybody else's, their labor costs are probably higher due to extra layers of bureaucracy and stronger union contracts.
- jdavis703 10y agoThere's a lot of city owned land in the Bay Area, that would effectively cost the government nothing. Not to mention abandoned lots that should face stiff liens, and eventual seizure if nothing is done about it. Then they contract with the same builders that the private sector uses. But instead of building apartments with granite countertops and bathtubs with water jets, they use simple finishings (or just don't finish things at all, like in my apartment, the floor is polished concrete and the ceilings reveal the structural elements).
- prostoalex 10y agoThe primary reason for housing shortage is not real estate developer laziness and apathy. If Vegas, Florida or empty Chinese towns taught us anything, developers will build given a chance to appropriate a large budget or a cheap loan. How much of that city owned land is zoned residential, has no building restrictions and is set up for electricity, gas, water and roads? Most developers also present a choice of finishings, if you're committing to a brand-new construction, where one can go from custom Italian marble to basically nothing. KB Homes and Lennar are particularly known for no-frills simpler-designs cheaper units, check out South or East San Jose and anywhere in Morgan Hill / Gilroy vicinity.
- edc117 10y agoExcept the government has basically made it their priority to prop up the existing housing prices as much as possible, and keep it that way. For every young person desperate for an affordable house, there is an older person that is counting on their house's current value to be able to retire. It's a mess.
- jdavis703 10y agoI really don't understand how that works. You can't (reasonably) sell the siding and plumbing in your house for groceries and medical bills... So how do people use their house for retirement (you know besides not paying rent or mortgage)?
- huherto 10y agoIt is a mirage. You think you are making money but you cannot use it. Unless you retire in an inexpensive place. Or die. You will have a lot of money when you die and can sell your house.
- fovc 10y agoYou go to the bank and say "my neighbor's house just sold for $X. My house is better. Can I have a loan for $X * .8?" Also see reverse mortgages [1] [1] https://en.m.wikipedia.org/wiki/Reverse_mortgage https://en.m.wikipedia.org/wiki/Reverse_mortgage
- prostoalex 10y agoVia a HELOC or a reverse mortgage, which becomes a thing for people 70 and older. Alternatively, selling to cash out and move to some spot favored by American retirees, such as Costa Rica or Palma de Mallorca, where the dollar (as well as Social Security check) goes much further.
- a_thro_away 10y agoAgreed, but your local governments will not let that happen because they want your money. They fight every single day to maintain a false market value of your house, basing its value simply upon the few percent who are willing or able to pay an ever upwards higher prices. A value based upon construction labor rates that skyrocket because of their daily increasing mandated certifications, insurances and fees and taxes and laws, and a value based on construction materials subject to more of their certifications and upwards marching specifications (a 5 inch well for four people? while water usage per person is halved during the same period?). And finally, by them "adding taxable value" to your property (at your cost), for example, by forcing new massively expensive sewer and water systems, often, because historically they permitted very small lots. When those lots have sanitary problems and the land value falls low, they won't let go of the tax money from those properties, instead, charging everyone to upgrade the entire infrastructure at massive costs (for which they then get an admin fee forever, as well as keeping the taxes). Finally, outsourcing the infra. services to a third party, at what, cost plus? No, housing will never get cheaper.
- internaut 10y agoEven if house prices were not so inflated wages would still be stagnant. That's a much bigger problem for the economy than house prices because it is harder to solve for. Reasonable house prices are just a solution to the most immediate problem facing us today, that is all. Judging by the downvotes, many people are totally in denial about this. It is pathetic. I'm a red blood tooth and nail capitalist. If I say wage stagnation is real you had better believe it.
- yummyfajitas 10y agoIf you'd like wages to rise, ban non-wage compensation (e.g. health insurance) rather than subsidizing it. Compensation has risen consistently, it's just been mostly (untaxed) non-wage compensation. https://fred.stlouisfed.org/series/COMPRNFB https://fred.stlouisfed.org/series/COMPRNFB
- internaut 10y agoI have strong doubts about this. It is not that I don't believe non-wage compensation exists, it is that the same pattern exists in most other Western countries, not just America. It tends to begin a decade or so later in my own country and others (explained by us playing economic catch-up), but it is the same pattern. You can't explain this with a little redistribution here or there. Remember we're talking about (in this article's context) mostly younger people bearing the brunt of this, so it is not as if they are incurring major medical bills on average, thereby not requiring that health subsidy, so that is a hypothetical rather than a fact. I suspect this is all better explained by lack of technological change (ex-computation) with logical follow through in the growth statistics and wages. Let me give you an anecdote. Most graduated students from universities make less income per year than I did from my summer job. Read that twice. And I wasn't making much more than min wage at the time. That can partly be explained by oversupply, but fundamentally this is such a contradiction to the education/wealth meme (go to Yale or go to Jail, you don't want to get a job at Mikky-Ds) that it has slipped under most older people's radar altogether. The fact is actually that most college students would have been better off working minimum wage, living with their parents. They would be in a considerably better position today if that had taken that advice. This is changing rapidly, more people are waking up to the realities of the job markets. There is no longer any point in going to college. The jobs just don't pay enough for it to make any sense. I went to an elite university and I'm saying it. People who have the good fortune to have rich parents should not be counted as part of the statistics because there is a limit to the number of people who can work internships from Dad's townhouse in the most expensive cities in the world. You adjust ROI for cost of living and you quickly discover any students in 'good jobs' have wealthy parents capable of covering their living expenses in places like London, New York. This was not always the case, but it is now. Today's intelligent student is better off starting their own company. Not because it is easy or likely to succeed, but because they are all out of options.
- internaut 10y agoDear Downvoter > They have not risen for nearly four decades in real terms. This is a fact. http://www.pewresearch.org/fact-tank/2014/10/09/for-most-workers-real-wages-have-barely-budged-for-decades/ http://www.pewresearch.org/fact-tank/2014/10/09/for-most-wor... Do your god damn research.
- sctb 10y agoThe guidelines ask you not to do this, so please don't. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- internaut 10y agoAlright. I was having a 'people are wrong on the internet' moment. What does get my goat though is that a comment can spin off a hundred replies and the initial comment is invisible. I've seen it happen a few times now to other people. It is controversy/mystery and then a back and forth without context and I find myself highlighting the initial comments to discover what actually happened. It even happens to the OP's initial statement! Blank and a slew of comments. That might be the flamewar detector in action though. That seems like a flaw in the algorithm. If the thread is worth reading instead of a flamewar then surely the initial comment ought to be (more likely to be) visible for reading? I get that the initial comment could be nonsensical and the offspring of it could be still useful but it seems weird since those replies wouldn't have happened without it. You've heard the saying that it is easier to get good information by saying something wrong on the Net and being corrected, rather than by requesting said information. Seems like the present algorithm goes against a 'Law of the Internet'.