25 ms·

Barely Half of 30-Year-Olds in the U.S. Earn More Than Their Parents Did at 30

243 points by Vannatter 10y ago

godelski 10y ago
I always forget, what is the workaround for WSJ?
- iaw 10y ago
  Should be able to click "web" link.
- DanBC 10y ago
  Right click the web link to open in an incognito window. Open the top result of the resulting search.
  - godelski 10y ago
    Actually worked without incognito for me.
- duaneb 10y ago
  Google article and click from Google: https://www.google.com/search?q=Barely+Half+of+30-Year-Olds+Earn+More+Than+Their+Parents https://www.google.com/search?q=Barely+Half+of+30-Year-Olds+...
- yonran 10y ago
  The paper itself: “The Fading American Dream: Trends in Absolute Income Mobility Since 1940.” Raj Chetty, David Grusky, Maximilian Hell, Nathaniel Hendren, Robert Manduca, Jimmy Narang. Graphs are in the back. http://www.equality-of-opportunity.org/papers/abs_mobility_paper.pdf http://www.equality-of-opportunity.org/papers/abs_mobility_p...
- godelski 10y ago
  This is why I like this site. Multiple answers that are actually different methods. Thanks guys.
dbg31415 10y ago
Screen capture for those who had trouble with the pay wall. http://i.imgur.com/9eihuWG.jpg http://i.imgur.com/9eihuWG.jpg
- joeblau 10y ago
  Click "web" under the article and to the left of "comments" then click the first link on Google.
deleted 10y ago
[deleted]
LeanderK 10y ago
never got behind the paywall, so i have to ask: What about the distribution? Is it more of an general stagnation or did the wealth concentrate more? Also, if the gap widened, got the few lucky (high-earners reproducing itself) or is social mobility intact?
h4nkoslo 10y ago
Of course they don't; every time wages rise in a particular sector, this is seen as a "labor shortage" that has to be corrected. In order to differentiate themselves into a higher "class" of labor equivalent to what their parents were doing, those same 30-year-olds were forced to spend another 4-8 years in expensive schooling before they could enter the job market. The solutions in the article are laughable. "Better education", ie more expensive & longer. More transfer payments (how does this address wage growth?). Reduce entrance to the labor pool and allow people in that labor pool access to jobs regardless of the paper they hold.
djb_hackernews 10y ago
Compound that with the percentage of income 30 year olds spend on housing, education, health care and child care compared to their parents and we have a recipe for disaster.
- notadoc 10y ago
  Most consumers are tapped out, bad news for a consumer driven economy. There can only be so much more debt accrued.
  - CodeCube 10y ago
    This feels correct, anecdotally ... but is there data to support this claim? For example, savings rates going down, credit/debt going up, and consumer spending going down?
    - tcoppi 10y ago
      Here's savings rate data: https://fred.stlouisfed.org/series/PSAVERT https://fred.stlouisfed.org/series/PSAVERT Note that this is savings rate net of taxes. It has been on a mostly steady decline since it has been calculated, with some spikes and a leveling out slightly higher than the rate before the last recession.
      - warkdarrior 10y ago
        What happened from December 2012 to January 2013 for the personal savings rate to drop from 11% to 5%?
    - falcolas 10y ago
      You also have to watch for savings going up and credit going down, to reflect people who are sick of being in debt and shying away from it wherever possible.
      - CodeCube 10y ago
crazy1van 10y ago
Is this in inflation adjusted dollars? Maybe I missed it, but I don't think the article specified.
- godelski 10y ago
  It does mention that it is adjusted for inflation. And as a side you wolframalpha is great for checking. You can do searches like "1 1970 dollar" and you get $6.34 back.
hajile 10y ago
About half earn more, about half earn less. Wouldn't that imply that the average earnings are about the same? If so, I don't know that I'd complain because that indicates stability.
- matchagaucho 10y ago
  Yeah, the title seems sensationalized relative to the actual data. It looks like a stable regression towards the mean.
  - godelski 10y ago
    Was the title changed? Says "Barely Half of 30-Year-Olds Earn More Than Their Parents". Which is exactly what the article talks about... Though earning more than your parents was part of the American dream.
    - malisper 10y ago
      If you reword the title to "More than Half of 30-Year-Olds Earn More Than Their Parents" it sounds completely different.
      - godelski 10y ago
        This is true, but I wouldn't say the title is misleading. Especially when earning more than your parents is part of the American dream, that is social mobility. Which is discussed.
- dlss 10y ago
  > About half earn more, about half earn less. Wouldn't that imply that the average earnings are about the same? Actually no, though this is a fairly standard misunderstanding of statistics. For an easy counter-example imagine generation one being [0, 100] and generation two being [1, 2]. Average wealth goes down, while every element is higher than 50% of the previous generation.
blakesterz 10y ago
This chart from the article is rather painful: https://si.wsj.net/public/resources/images/BN-RD331_CHETTY_16U_20161208111711.jpg https://si.wsj.net/public/resources/images/BN-RD331_CHETTY_1... (I think that'll work without the workaround)
- infogulch 10y ago
  That chart is the core of the article and answers several questions from the comments here: yes it's inflation-adjusted, the ratio has gone down over time (90% of people born in the 1940's earned more than their parents at 30, and it's gone down to 50% now).
  - refurb 10y ago
    Is that really that surprising? People born in the 1940's would have lived through a massive economic upswing post WW2. While their parents probably experience the Great Depression through their 30's.
    - AnimalMuppet 10y ago
      It would be interesting to see the same chart extended back another 50 years...
rqebmm 10y ago
I object to the subtitle "It becomes harder to reverse this trend" like it's an inexorable march without any possible cause. Just look at the difference in context between today and the 1972 reference date for the start of the study. Globalization and automation have taken a huge chunk out of the manufacturing sector, but the US economy has by now (at an aggregate) replaced those positions with knowledge/retail/service sector positions. What did those manufacturing jobs have that the new jobs don't? Powerful unions, a strong social safety net, and a government that accomplished both because it didn't think taxing rich people was heresy. United States political parties used to split along Labor/Capital lines until the Civil Rights movement in the 60s shifted politics to a racial fault line. Over the last 50 years Capital quietly co-opted both parties while the populace was duking it out over things like segregation, voting rights, and Affirmative Action, and people have finally realized what happened while they weren't paying close attention. Trump didn't win "because racism". It's not an accident that a significant subset of voters "somehow" liked Obama, Bernie Sanders AND Donald Trump, while hating all of Jeb Bush, Hillary Clinton, Marco Rubio, John Kasich, AND Ted Cruz. These people are tired of Capital (aka "globalist elites" or "corporate overlords" depending on the side of the aisle you sit on) winning every battle. They viewed the entire election cycle as a dog-and-pony show between hand-picked corporate surrogate A and hand-picked corporate surrogate B. They chose Option C. "Literally Anyone Else, Yes Even That Guy".
- soundwave106 10y ago
  The problem with Trump from that perspective is that Donald Trump is not exactly on the side of powerful unions, strong social safety nets, and taxing rich people. He did leverage anti-elite sentiment, but he did it unfortunately with walls and "keep the Muslims out", not unions, safety nets, and progressive taxation. Donald Trump as far as I know is largely anti-union, not on the side of more progressive taxation, and not on the side of strong safety nets. I do agree that people are aware of the economic problems (hence the Sanders crossover in particular), I just think that identity politics right now is more powerful than economic politics in the United States. It seems like the issues that dominate the media headlines on "the left" and "the right" -- and, in fact, the angry rants on my Facebook feed, anecdotally, are very identity politics oriented. Unfortunately I think politicians take advantage of this. A classic example of this being North Carolina's "transgender bathroom" controversy. In my opinion, the provision that was far worse of that law was the aspect that limited individual cities from raising the minimum wage (economic politics). But it did not dominate the headlines, the identity politics did. You are right that people are tired of Big Capital / globalist elites. They have reason to be. But to reverse this trend, we need stronger protection of the service industry (which is in effect the new manufacturing job) and we need stronger education systems to promote knowledge work. As long as identity politics obscures economic policies, I'm not sure how this is possible.
hollerith 10y ago
People who will have children ("eventual parents" for the purpose of this comment) are healthier, smarter and wealthier than people who will never have children. If the question is whether things have gotten harder for the average person, it is misleading to compare a group consisting only of eventual parents with a group composed of both eventual parents and non-parents. A better comparison would be 30-years-olds of today versus 30-year-olds (whether the 30-year-old has or goes on to have children or not) of the past. ADDED LATER. A careful study or newspaper article on the question of whether people have it harder or easier than they did 30 years ago or 45 years ago would try to avoid comparing populations that a reasonable person would expect to differ for reason other than things in the country getting harder or easier. Whether or not my sentence above containing the phrase "are healthier, smarter and wealthier" is true, clearly one might reasonably expect systemic differences between people who have children or will go on to have children and people who do not. Even if the "nonparent" group were on average more intelligent than the "parent" group, that would also be a reason to avoid omitting the "nonparents" from the older cohort in the study. The fact that the OP does not even try to avoid those systemic differences suggests that either the author is not sufficiently skilled at statistics to be writing about what he or she is writing about or someone is trying to argue for some conclusion he or she is attached to, e.g., "it is awful how hard things have gotten in this country for the average person" or the article author is making the headline more dramatic than the situation actually is in order to get more clicks.
- rubidium 10y ago
  While I appreciate you pointing out a potential source of sampling error, the data accounts for this. See: https://si.wsj.net/public/resources/images/BN-RD331_CHETTY_16U_20161208111711.jpg https://si.wsj.net/public/resources/images/BN-RD331_CHETTY_1...
  - hollerith 10y ago
    How does that chart have any bearing on my previous comment? I am completely mystified by your reply.
    - 10y ago
uiri 10y ago
People who are 30 now were 22-23 in 2008-9 during the Great Recession. This particular cohort (plus/minus a year or two) of graduates will likely have slightly depressed lifetime earnings relative to those a couple years older or a couple years younger. I would expect this year and next to represent the bottoming out of this trend.
- djedipus 10y ago
  This is based on a history of recessions. Unfortunately this one is different (really)... We've never had interest rates so low for so long. It's possible, and I consider it likely, that those younger will be even more affected. Consider the possibility that parents run out of money and living in the basement isn't even an option. Also consider there is a decent chance for another recession before this one is even over.
  - vibrato 10y ago
    The last recession ended in 2009.
    - solaxun 10y ago
      On paper, yes. Consumer deleveraging lasted for a long while after the 'end' of the recession though. If people are paying off debt with their money, that doesn't really help grow the economy. Google 'debt deflation'
    - 234dd57d2c8db 10y ago
      Yes, for large corporations and banks of which directly benefited from the FLOOD of free credit (aka money) and ballooning asset prices provided by the FED, the recession ended. For the rest of us, all we got were higher asset prices and more taxes. More than 50% of people in this country do not have 1000 bucks to cover an emergency, whether medical (LOL like 1k would do anything here) or a broken water heater, etc. More and more people are living on the edge, while large companies announce stock buybacks and mergers funded with cheap credit printed by the FED paid for with our money and our futures. Yeah, glad the recession is over.
was_boring 10y ago
What makes me upset is that the economic realities do not match what is taught in large swaths of America. We are taught (at least in my community, and I am 30 now still living within 20 miles of where I grew up) that a very achievable ideal is a middle class existence with one parent working, and a small house in the suburbs. I am in the top 1% income earners for my generation and do not even come close to this. I think it's important for young parents to start breaking this cliche that economic prosperity is an American standard. Instead we should be teaching that life is hard and you should count your lucky stars if you are able to afford anymore more than an apartment.
- refurb 10y ago
  very achievable ideal is a middle class existence with one parent working, and a small house in the suburbs I guess it depends where? There is a large swath of the mid-West where this is true. Near a big city? Probably not.
- rubidium 10y ago
  You must be exaggerating or living in New York/San Fran. Here in the midwest is is very reasonable for a top 20% income for 30 yr old age bracket to have only one parent work. If you're top 1% you can definitely afford a house in the suburbs and have one parent stay home.
  - sp332 10y ago
    Living near NYC/SF does include "large swaths of America".
    - kevinstubbs 10y ago
      I guess it depends how you define "large swath". Is it a certain amount of landmass or population, a percent of total landmass or population, or some other metric? I think this line is needlessly pedantic. It's reasonable to interpret rubidium's comment as just meaning "the expensive housing in the NY and SF areas are too expensive to be feasible for top 20% earners, as the OP said, but by and large, a middle class existence is possible for most land in America." Population centers with expensive housing may be inaccessible for the regular middle class (when top 20% income earner means only 60k/year or so based on 2010 data[0]). This isn't really the right data to use, because the pay for people in SF is different than say, somewhere in Missouri. With that being said, it seems clear that the American dream of a middle-class existence with only one working adult, isn't realistic everywhere for everyone. I might be meandering here, but I think this reasoning is actually flawed or biased, because it was never true to begin with. A factory worker could never afford to live in the upscale street, right? The only difference now is that instead of a factory worker not being able to live on the upscale street, there are whole neighborhoods, downtown areas, and maybe even suburbs that are unaffordable to a typical middle-class family. I haven't looked for data to support these ideas, and am very open to points for and against. [0]: http://whatsmypercent.com/ http://whatsmypercent.com/
____nope 10y ago
It's really frustrating that articles like this never state if they are comparing inflation-adjusted numbers or not.
- x1798DE 10y ago
  If they weren't using inflation-adjusted numbers, I'm pretty sure that would be MUCH bigger news. Assuming people have their kids at 25, that would mean, in inflation adjusted terms, that would correspond to a 40% DROP in inter-generational income for the population mentioned here. Just assume that all newspaper headlines will use the version that maximizes sensationalism.
- jat850 10y ago
  "In our baseline analysis, we measure income in pre-tax dollars at the household level when parents and children are approximately thirty years old, adjusting for inflation using the CPI-U-RS." It wasn't easy to spot but was mentioned.
  - drcode 10y ago
    So essentially this whole debate centers around how realistic one thinks the CPI-U-RS rates are... If you think they underestimate the purchasing power of money in 2016, then you'll disagree with the conclusions of the washpost article.
lasermike026 10y ago
WSJ, I heard they did news once.
Infernal 10y ago
Is it just me, or does this seem like an effort to spin positive news negatively? Why not "Median income for 30-year-olds has increased since their parents were 30"? Or "Over Half of 30-year-olds earn more than their parents did at 30?"
- pessimizer 10y ago
  If your child is two feet six inches tall at two years old, and two foot seven at 32 years old, they did get taller, but at a far slower rate than you would expect. It's as if there had been no productivity gains in 30 years for the poor median 30 year old, while the fictional average 30 year old is doing better than ever.
cnnsucks 10y ago
This is WSJ red meat political controversy stuff. The story devolves into the usual "tax the rich" and anti-welfare state debate as any other political click-bait. I thought HN wasn't doing that for a week... I actually agree with the premise and many of the conclusions, and if it popped up on Drudge or Breitbart or whatever I'd be fine with it, but why here? Why must every popular site devolve into either a virtual political cage match or another addition to the echo chamber?
- dang 10y ago
  > I thought HN wasn't doing that for a week We weren't, but since a week turned out to be longer than needed and I was worried about the cost of continuing, we ended the experiment early: https://news.ycombinator.com/item?id=13131251 https://news.ycombinator.com/item?id=13131251. So it's back to the normal guidelines now. (The worry about continuing was because there was evidence that some people thought the change was permanent, and that was not the intention.)
  - cnnsucks 10y ago
    Yesterday I reviewed all the headlines and saw none of the usual political click-bait sprinkled among them with their inevitable 200+ post flame wars. It was wonderful; like having a cast removed or getting a tooth fixed. I hope your experiment leads to a similar policy.
    - grzm 10y ago
      I had the same impression that there were fewer inflammatory comments, but am trying to keep two things in mind: one is that I know that I'm biased and would like to see quantitative data, and that there were submissions flagged on which I would have liked to see discussion by those on Hacker News. I think the data would be interesting regardless, but I don't think it would be meaningful because it wouldn't represent the HN that I'd like to see. I'd like to figure out tactics that reduce inflammatory discussion that still permit constructive discussion on contentious submissions.
- 10y ago
kefka 10y ago
Well. I guess the "No Politics week" wasn't going to last. This goes to the core of socialized healthcare, Social Security, Universal Basic Income, and the dismantling ofsaid systems that exist. The Baby boomers pulled the ladder up when they climbed up, and left us all in the lurch paying for them. You know, "Get the government outta my life, but dont you dare touch my medicare".
- dang 10y ago
  > I guess the "No Politics week" wasn't going to last. We ended it early for reasons I explained here: https://news.ycombinator.com/item?id=13131251 https://news.ycombinator.com/item?id=13131251.
  - kefka 10y ago
    Ah. I must have missed that.
- jbmorgado 10y ago
  I'm sure it's got nothing to do with the fact that rich people now pay a lot less effective taxes than in our parents youth and that income inequality is at an all time high... no, of course not, the problem was that our parents "pulled the ladder while going up". Shrug.
barrkel 10y ago
While this is interesting, technically it's political.
- dang 10y ago
  It is, but having learned as much as we were going to, we ended the no-politics experiment early: https://news.ycombinator.com/item?id=13131251 https://news.ycombinator.com/item?id=13131251. Back to the normal guidelines now.
jbattle 10y ago
I wouldn't be surprised if large number of parents of the 30-in-197X'ers were massively impacted by ww2. Imagine growing up during the great depression and 'losing' 2-4 years of your young adulthood in the army. You'd expect that'd set you back earnings-wise by the time you hit 30. It'd be a surprise if the folks turning 30 in 1972 didnt make more than their parents, if you compare depression+world war to the postwar rebound (especially in the USA)
randyrand 10y ago
Could my parents afford an iPhone? No of course not. Among many other things. $$$ isn't the only quality of life indicator. When doing this calculation, you of course adjust for these things. an iPhone would cost billions of dollars in 1970. Is that the figure we should use? Probably not. But it means that these calculations are largely arbitrary since we don't know the true value of an iPhone to a person in 1970.
- vacri 10y ago
  No smartphones, no internet, no entertainment-on-demand, fewer rights for minorities, fewer rights for women, less capable medicine, more expensive food and clothing, fewer shopping hours, less safe transport, less safe workplaces, more expensive and shorter-ranged travel, less environmental protections, etc, etc, etc. All this stuff is conveniently ignored when comparing against previous generations.
  - mywittyname 10y ago
    I'm not sure why you're being down-voted so much. It's undeniable that our quality of life have improved dramatically since 1940.
    - vacri 10y ago
      People whose identity is wrapped up in how hard they have it can have trouble when it's pointed out that maybe it's not so bad after all.
- qntty 10y ago
  Who cares about iPhones? They could afford education, healthcare and housing. These calculations are far from arbitrary. We have a reasonable idea of the sorts of things that people need to live a decent life, and these things have gotten more expensive. (Ok, so another commenter pointed out that maybe housing isn't as expensive as it's made out to be, but it's certainly not cheaper.)
  - 10y ago
vacri 10y ago
Isn't this to be expected? That overall, the population will maintain its purchasing power relative to itself, and inflation will rise to match in a relatively stable environment?
rdlecler1 10y ago
And then this generation needs to pay for the entitlements (and debt) that their parents enjoyed.
labster 10y ago
sigh This week of political detox on HN is not really working out, is it.
- detaro 10y ago
  it has been cancelled... https://news.ycombinator.com/item?id=13131251 https://news.ycombinator.com/item?id=13131251
philip142au 10y ago
This statement means that they earn the same as their parents, right?
- metaobject 10y ago
  I suppose it means they earn as much as, or less than, their parents.
gragas 10y ago
Suppose 30-year-olds make exactly the same as their parents did at 30. Then we would expect that barely half of 30-year-olds earn more than their parents did at 30. This title is stupid. It implies "oh hur dur the economy is so bad" when in reality it says nothing.
- paulddraper 10y ago
  Wow! Most 30-year-olds are making more than their parents did at the same age! --- I'm more worried about the near universal editorializing of real news than the less common totally fake variety.
  - gragas 10y ago
    Have you ever noticed that the only people who talk about fake news all the time are the people who lost nearly all of the recent elections? "Don't worry, the reason we lost is because everyone who's on the other side is really stupid and believes fake news"
    - dang 10y ago
      Please keep partisan politics out of threads here.
- Retric 10y ago
  Economic growth is not 0. So, really it says that 1/2 the population is flat our worse off. Further, a rising tide lifts all boats is a complitly false analogy, and anyone using that phrase to talk about the economy is lying.
  - gragas 10y ago
    >Economic growth is not 0. The numbers are in real USD, not nominal. So in reality, it's a huge fallacy to say that we're so much worse off that in the 1970s. We're almost exactly the same as the 1970s. The main difference to point out here is that the 1970s 30-year-olds made much more real USD than their parents' generation, while 30-year-olds today are making almost exactly the same. Just because income isn't growing as much doesn't mean the 30-year-olds today are worse off.
shados 10y ago
I know it's not what's happening...but if we were to close the salary gap between the rich and the poor (so poor people made more money, and rich people make less), instead of keeping the gap the same but shifted up, or widening the gap...wouldn't this happen? So in theory, it wouldn't be that bad a thing. Now, if it's just that the gap stays the same but things are shifted down, well obviously that's bad.
BuckRogers 10y ago
Well, I just tried to get a job in my company's QA department writing unit tests. Come to find out, my company ONLY hires non-leadership/senior positions in Belarus and Bangalore. I have friends in management, they can't bypass it. Rule was set high up. The job I interviewed for is managing teams over in those places, and I'm not entirely qualified because I haven't worked in QA. So I'm just left no where. I always thought if I worked hard and did the right things, I could get ahead. It's not true. I don't know if I'll ever achieve my goals without moving to India to get a job, then working my way back to the USA. But it certainly might be related as to why only half of 30 year olds earn more then their parents did. I'm going to keep trying but I've worked so hard and have a great reputation at work. I've done so much on my own time. I for one, am fairly demoralized.
Klockan 10y ago
Note that the median income for males have been in decline since the 70's, it isn't strange that they get frustrated with the current situation. http://economix.blogs.nytimes.com/2012/10/22/the-uncomfortable-truth-about-american-wages/?_r=0 http://economix.blogs.nytimes.com/2012/10/22/the-uncomfortab...
somecallitblues 10y ago
How can they earn more when all the money is at the hands of Trump and others who make up 1%? The current capitalism is not distributing the wealth very well and it's certainly nearing a disaster. I wish the left had an answer but they don't. They're stuck with political correctness and more extreme are can't see that they don't have an answer to capitalism and that everything they've tried in the past has failed, and working class have found a billionaire to be their champion and think that migrants and non-white and non-Christian people are to blame for their suffering. And nobody is willing to attack the current system and inequality it's created. Especially in US.
- jhoechtl 10y ago
  Everything you wrote is so true!
- humanrebar 10y ago
  > I wish the left had an answer but they don't. The left is the 1% as well. How much money do the Clintons have? A lot. How much Wall Street support did Obama have? A lot. If Hollywood isn't the 1%, what are they? > ...working class have found a billionaire to be their champion... Thiel is interesting partly because he's a business leader that talks about politics and isn't explicitly liberal. That is, he's an exception that proves the rule. > ...and think that migrants and non-white and non-Christian people are to blame for their suffering... Some do. But most have more complex motivations involving economics, democracy, and fighting (in their minds) corruption and hypocrisy. The Left won't make any positive progress here unless they try to understand their neighbors. This is why "Love Trumps Hate" rings really hollow to most of the people I ask about these things.
  - ionised 10y ago
    The problem is the political landscape has lurched so far to the right that we've hit a point where some people actually consider Obama and Clinton to be 'left'.
    - humanrebar 10y ago

243 points by Vannatter 10y ago

godelski 10y ago

I always forget, what is the workaround for WSJ?

iaw 10y ago
Should be able to click "web" link.
DanBC 10y ago
Right click the web link to open in an incognito window. Open the top result of the resulting search.
- godelski 10y ago
  Actually worked without incognito for me.
duaneb 10y ago
Google article and click from Google: https://www.google.com/search?q=Barely+Half+of+30-Year-Olds+Earn+More+Than+Their+Parents https://www.google.com/search?q=Barely+Half+of+30-Year-Olds+...
yonran 10y ago
The paper itself: “The Fading American Dream: Trends in Absolute Income Mobility Since 1940.” Raj Chetty, David Grusky, Maximilian Hell, Nathaniel Hendren, Robert Manduca, Jimmy Narang. Graphs are in the back. http://www.equality-of-opportunity.org/papers/abs_mobility_paper.pdf http://www.equality-of-opportunity.org/papers/abs_mobility_p...
godelski 10y ago
This is why I like this site. Multiple answers that are actually different methods. Thanks guys.

dbg31415 10y ago

Screen capture for those who had trouble with the pay wall. http://i.imgur.com/9eihuWG.jpg http://i.imgur.com/9eihuWG.jpg

joeblau 10y ago
Click "web" under the article and to the left of "comments" then click the first link on Google.

deleted 10y ago

[deleted]

LeanderK 10y ago

never got behind the paywall, so i have to ask: What about the distribution? Is it more of an general stagnation or did the wealth concentrate more? Also, if the gap widened, got the few lucky (high-earners reproducing itself) or is social mobility intact?

h4nkoslo 10y ago

Of course they don't; every time wages rise in a particular sector, this is seen as a "labor shortage" that has to be corrected. In order to differentiate themselves into a higher "class" of labor equivalent to what their parents were doing, those same 30-year-olds were forced to spend another 4-8 years in expensive schooling before they could enter the job market. The solutions in the article are laughable. "Better education", ie more expensive & longer. More transfer payments (how does this address wage growth?). Reduce entrance to the labor pool and allow people in that labor pool access to jobs regardless of the paper they hold.

djb_hackernews 10y ago

Compound that with the percentage of income 30 year olds spend on housing, education, health care and child care compared to their parents and we have a recipe for disaster.

notadoc 10y ago
Most consumers are tapped out, bad news for a consumer driven economy. There can only be so much more debt accrued.
- CodeCube 10y ago
  This feels correct, anecdotally ... but is there data to support this claim? For example, savings rates going down, credit/debt going up, and consumer spending going down?
  - tcoppi 10y ago
    Here's savings rate data: https://fred.stlouisfed.org/series/PSAVERT https://fred.stlouisfed.org/series/PSAVERT Note that this is savings rate net of taxes. It has been on a mostly steady decline since it has been calculated, with some spikes and a leveling out slightly higher than the rate before the last recession.
    - warkdarrior 10y ago
      What happened from December 2012 to January 2013 for the personal savings rate to drop from 11% to 5%?
  - falcolas 10y ago
    You also have to watch for savings going up and credit going down, to reflect people who are sick of being in debt and shying away from it wherever possible.
    - CodeCube 10y ago

crazy1van 10y ago

Is this in inflation adjusted dollars? Maybe I missed it, but I don't think the article specified.

godelski 10y ago
It does mention that it is adjusted for inflation. And as a side you wolframalpha is great for checking. You can do searches like "1 1970 dollar" and you get $6.34 back.

hajile 10y ago

About half earn more, about half earn less. Wouldn't that imply that the average earnings are about the same? If so, I don't know that I'd complain because that indicates stability.

matchagaucho 10y ago
Yeah, the title seems sensationalized relative to the actual data. It looks like a stable regression towards the mean.
- godelski 10y ago
  Was the title changed? Says "Barely Half of 30-Year-Olds Earn More Than Their Parents". Which is exactly what the article talks about... Though earning more than your parents was part of the American dream.
  - malisper 10y ago
    If you reword the title to "More than Half of 30-Year-Olds Earn More Than Their Parents" it sounds completely different.
    - godelski 10y ago
      This is true, but I wouldn't say the title is misleading. Especially when earning more than your parents is part of the American dream, that is social mobility. Which is discussed.
dlss 10y ago
> About half earn more, about half earn less. Wouldn't that imply that the average earnings are about the same? Actually no, though this is a fairly standard misunderstanding of statistics. For an easy counter-example imagine generation one being [0, 100] and generation two being [1, 2]. Average wealth goes down, while every element is higher than 50% of the previous generation.

blakesterz 10y ago

This chart from the article is rather painful: https://si.wsj.net/public/resources/images/BN-RD331_CHETTY_16U_20161208111711.jpg https://si.wsj.net/public/resources/images/BN-RD331_CHETTY_1... (I think that'll work without the workaround)

infogulch 10y ago
That chart is the core of the article and answers several questions from the comments here: yes it's inflation-adjusted, the ratio has gone down over time (90% of people born in the 1940's earned more than their parents at 30, and it's gone down to 50% now).
- refurb 10y ago
  Is that really that surprising? People born in the 1940's would have lived through a massive economic upswing post WW2. While their parents probably experience the Great Depression through their 30's.
  - AnimalMuppet 10y ago
    It would be interesting to see the same chart extended back another 50 years...

rqebmm 10y ago

I object to the subtitle "It becomes harder to reverse this trend" like it's an inexorable march without any possible cause. Just look at the difference in context between today and the 1972 reference date for the start of the study. Globalization and automation have taken a huge chunk out of the manufacturing sector, but the US economy has by now (at an aggregate) replaced those positions with knowledge/retail/service sector positions. What did those manufacturing jobs have that the new jobs don't? Powerful unions, a strong social safety net, and a government that accomplished both because it didn't think taxing rich people was heresy. United States political parties used to split along Labor/Capital lines until the Civil Rights movement in the 60s shifted politics to a racial fault line. Over the last 50 years Capital quietly co-opted both parties while the populace was duking it out over things like segregation, voting rights, and Affirmative Action, and people have finally realized what happened while they weren't paying close attention. Trump didn't win "because racism". It's not an accident that a significant subset of voters "somehow" liked Obama, Bernie Sanders AND Donald Trump, while hating all of Jeb Bush, Hillary Clinton, Marco Rubio, John Kasich, AND Ted Cruz. These people are tired of Capital (aka "globalist elites" or "corporate overlords" depending on the side of the aisle you sit on) winning every battle. They viewed the entire election cycle as a dog-and-pony show between hand-picked corporate surrogate A and hand-picked corporate surrogate B. They chose Option C. "Literally Anyone Else, Yes Even That Guy".

soundwave106 10y ago
The problem with Trump from that perspective is that Donald Trump is not exactly on the side of powerful unions, strong social safety nets, and taxing rich people. He did leverage anti-elite sentiment, but he did it unfortunately with walls and "keep the Muslims out", not unions, safety nets, and progressive taxation. Donald Trump as far as I know is largely anti-union, not on the side of more progressive taxation, and not on the side of strong safety nets. I do agree that people are aware of the economic problems (hence the Sanders crossover in particular), I just think that identity politics right now is more powerful than economic politics in the United States. It seems like the issues that dominate the media headlines on "the left" and "the right" -- and, in fact, the angry rants on my Facebook feed, anecdotally, are very identity politics oriented. Unfortunately I think politicians take advantage of this. A classic example of this being North Carolina's "transgender bathroom" controversy. In my opinion, the provision that was far worse of that law was the aspect that limited individual cities from raising the minimum wage (economic politics). But it did not dominate the headlines, the identity politics did. You are right that people are tired of Big Capital / globalist elites. They have reason to be. But to reverse this trend, we need stronger protection of the service industry (which is in effect the new manufacturing job) and we need stronger education systems to promote knowledge work. As long as identity politics obscures economic policies, I'm not sure how this is possible.

hollerith 10y ago

People who will have children ("eventual parents" for the purpose of this comment) are healthier, smarter and wealthier than people who will never have children. If the question is whether things have gotten harder for the average person, it is misleading to compare a group consisting only of eventual parents with a group composed of both eventual parents and non-parents. A better comparison would be 30-years-olds of today versus 30-year-olds (whether the 30-year-old has or goes on to have children or not) of the past. ADDED LATER. A careful study or newspaper article on the question of whether people have it harder or easier than they did 30 years ago or 45 years ago would try to avoid comparing populations that a reasonable person would expect to differ for reason other than things in the country getting harder or easier. Whether or not my sentence above containing the phrase "are healthier, smarter and wealthier" is true, clearly one might reasonably expect systemic differences between people who have children or will go on to have children and people who do not. Even if the "nonparent" group were on average more intelligent than the "parent" group, that would also be a reason to avoid omitting the "nonparents" from the older cohort in the study. The fact that the OP does not even try to avoid those systemic differences suggests that either the author is not sufficiently skilled at statistics to be writing about what he or she is writing about or someone is trying to argue for some conclusion he or she is attached to, e.g., "it is awful how hard things have gotten in this country for the average person" or the article author is making the headline more dramatic than the situation actually is in order to get more clicks.

rubidium 10y ago
While I appreciate you pointing out a potential source of sampling error, the data accounts for this. See: https://si.wsj.net/public/resources/images/BN-RD331_CHETTY_16U_20161208111711.jpg https://si.wsj.net/public/resources/images/BN-RD331_CHETTY_1...
- hollerith 10y ago
  How does that chart have any bearing on my previous comment? I am completely mystified by your reply.
  - 10y ago

uiri 10y ago

People who are 30 now were 22-23 in 2008-9 during the Great Recession. This particular cohort (plus/minus a year or two) of graduates will likely have slightly depressed lifetime earnings relative to those a couple years older or a couple years younger. I would expect this year and next to represent the bottoming out of this trend.

djedipus 10y ago
This is based on a history of recessions. Unfortunately this one is different (really)... We've never had interest rates so low for so long. It's possible, and I consider it likely, that those younger will be even more affected. Consider the possibility that parents run out of money and living in the basement isn't even an option. Also consider there is a decent chance for another recession before this one is even over.
- vibrato 10y ago
  The last recession ended in 2009.
  - solaxun 10y ago
    On paper, yes. Consumer deleveraging lasted for a long while after the 'end' of the recession though. If people are paying off debt with their money, that doesn't really help grow the economy. Google 'debt deflation'
  - 234dd57d2c8db 10y ago
    Yes, for large corporations and banks of which directly benefited from the FLOOD of free credit (aka money) and ballooning asset prices provided by the FED, the recession ended. For the rest of us, all we got were higher asset prices and more taxes. More than 50% of people in this country do not have 1000 bucks to cover an emergency, whether medical (LOL like 1k would do anything here) or a broken water heater, etc. More and more people are living on the edge, while large companies announce stock buybacks and mergers funded with cheap credit printed by the FED paid for with our money and our futures. Yeah, glad the recession is over.

was_boring 10y ago

What makes me upset is that the economic realities do not match what is taught in large swaths of America. We are taught (at least in my community, and I am 30 now still living within 20 miles of where I grew up) that a very achievable ideal is a middle class existence with one parent working, and a small house in the suburbs. I am in the top 1% income earners for my generation and do not even come close to this. I think it's important for young parents to start breaking this cliche that economic prosperity is an American standard. Instead we should be teaching that life is hard and you should count your lucky stars if you are able to afford anymore more than an apartment.

refurb 10y ago
very achievable ideal is a middle class existence with one parent working, and a small house in the suburbs I guess it depends where? There is a large swath of the mid-West where this is true. Near a big city? Probably not.
rubidium 10y ago
You must be exaggerating or living in New York/San Fran. Here in the midwest is is very reasonable for a top 20% income for 30 yr old age bracket to have only one parent work. If you're top 1% you can definitely afford a house in the suburbs and have one parent stay home.
- sp332 10y ago
  Living near NYC/SF does include "large swaths of America".
  - kevinstubbs 10y ago
    I guess it depends how you define "large swath". Is it a certain amount of landmass or population, a percent of total landmass or population, or some other metric? I think this line is needlessly pedantic. It's reasonable to interpret rubidium's comment as just meaning "the expensive housing in the NY and SF areas are too expensive to be feasible for top 20% earners, as the OP said, but by and large, a middle class existence is possible for most land in America." Population centers with expensive housing may be inaccessible for the regular middle class (when top 20% income earner means only 60k/year or so based on 2010 data[0]). This isn't really the right data to use, because the pay for people in SF is different than say, somewhere in Missouri. With that being said, it seems clear that the American dream of a middle-class existence with only one working adult, isn't realistic everywhere for everyone. I might be meandering here, but I think this reasoning is actually flawed or biased, because it was never true to begin with. A factory worker could never afford to live in the upscale street, right? The only difference now is that instead of a factory worker not being able to live on the upscale street, there are whole neighborhoods, downtown areas, and maybe even suburbs that are unaffordable to a typical middle-class family. I haven't looked for data to support these ideas, and am very open to points for and against. [0]: http://whatsmypercent.com/ http://whatsmypercent.com/

____nope 10y ago

It's really frustrating that articles like this never state if they are comparing inflation-adjusted numbers or not.

x1798DE 10y ago
If they weren't using inflation-adjusted numbers, I'm pretty sure that would be MUCH bigger news. Assuming people have their kids at 25, that would mean, in inflation adjusted terms, that would correspond to a 40% DROP in inter-generational income for the population mentioned here. Just assume that all newspaper headlines will use the version that maximizes sensationalism.
jat850 10y ago
"In our baseline analysis, we measure income in pre-tax dollars at the household level when parents and children are approximately thirty years old, adjusting for inflation using the CPI-U-RS." It wasn't easy to spot but was mentioned.
- drcode 10y ago
  So essentially this whole debate centers around how realistic one thinks the CPI-U-RS rates are... If you think they underestimate the purchasing power of money in 2016, then you'll disagree with the conclusions of the washpost article.

lasermike026 10y ago

WSJ, I heard they did news once.

Infernal 10y ago

Is it just me, or does this seem like an effort to spin positive news negatively? Why not "Median income for 30-year-olds has increased since their parents were 30"? Or "Over Half of 30-year-olds earn more than their parents did at 30?"

pessimizer 10y ago
If your child is two feet six inches tall at two years old, and two foot seven at 32 years old, they did get taller, but at a far slower rate than you would expect. It's as if there had been no productivity gains in 30 years for the poor median 30 year old, while the fictional average 30 year old is doing better than ever.

cnnsucks 10y ago

This is WSJ red meat political controversy stuff. The story devolves into the usual "tax the rich" and anti-welfare state debate as any other political click-bait. I thought HN wasn't doing that for a week... I actually agree with the premise and many of the conclusions, and if it popped up on Drudge or Breitbart or whatever I'd be fine with it, but why here? Why must every popular site devolve into either a virtual political cage match or another addition to the echo chamber?

dang 10y ago
> I thought HN wasn't doing that for a week We weren't, but since a week turned out to be longer than needed and I was worried about the cost of continuing, we ended the experiment early: https://news.ycombinator.com/item?id=13131251 https://news.ycombinator.com/item?id=13131251. So it's back to the normal guidelines now. (The worry about continuing was because there was evidence that some people thought the change was permanent, and that was not the intention.)
- cnnsucks 10y ago
  Yesterday I reviewed all the headlines and saw none of the usual political click-bait sprinkled among them with their inevitable 200+ post flame wars. It was wonderful; like having a cast removed or getting a tooth fixed. I hope your experiment leads to a similar policy.
  - grzm 10y ago
    I had the same impression that there were fewer inflammatory comments, but am trying to keep two things in mind: one is that I know that I'm biased and would like to see quantitative data, and that there were submissions flagged on which I would have liked to see discussion by those on Hacker News. I think the data would be interesting regardless, but I don't think it would be meaningful because it wouldn't represent the HN that I'd like to see. I'd like to figure out tactics that reduce inflammatory discussion that still permit constructive discussion on contentious submissions.
10y ago

kefka 10y ago

Well. I guess the "No Politics week" wasn't going to last. This goes to the core of socialized healthcare, Social Security, Universal Basic Income, and the dismantling ofsaid systems that exist. The Baby boomers pulled the ladder up when they climbed up, and left us all in the lurch paying for them. You know, "Get the government outta my life, but dont you dare touch my medicare".

dang 10y ago
> I guess the "No Politics week" wasn't going to last. We ended it early for reasons I explained here: https://news.ycombinator.com/item?id=13131251 https://news.ycombinator.com/item?id=13131251.
- kefka 10y ago
  Ah. I must have missed that.
jbmorgado 10y ago
I'm sure it's got nothing to do with the fact that rich people now pay a lot less effective taxes than in our parents youth and that income inequality is at an all time high... no, of course not, the problem was that our parents "pulled the ladder while going up". Shrug.

barrkel 10y ago

While this is interesting, technically it's political.

dang 10y ago
It is, but having learned as much as we were going to, we ended the no-politics experiment early: https://news.ycombinator.com/item?id=13131251 https://news.ycombinator.com/item?id=13131251. Back to the normal guidelines now.

jbattle 10y ago

I wouldn't be surprised if large number of parents of the 30-in-197X'ers were massively impacted by ww2. Imagine growing up during the great depression and 'losing' 2-4 years of your young adulthood in the army. You'd expect that'd set you back earnings-wise by the time you hit 30. It'd be a surprise if the folks turning 30 in 1972 didnt make more than their parents, if you compare depression+world war to the postwar rebound (especially in the USA)

randyrand 10y ago

Could my parents afford an iPhone? No of course not. Among many other things. $$$ isn't the only quality of life indicator. When doing this calculation, you of course adjust for these things. an iPhone would cost billions of dollars in 1970. Is that the figure we should use? Probably not. But it means that these calculations are largely arbitrary since we don't know the true value of an iPhone to a person in 1970.

vacri 10y ago
No smartphones, no internet, no entertainment-on-demand, fewer rights for minorities, fewer rights for women, less capable medicine, more expensive food and clothing, fewer shopping hours, less safe transport, less safe workplaces, more expensive and shorter-ranged travel, less environmental protections, etc, etc, etc. All this stuff is conveniently ignored when comparing against previous generations.
- mywittyname 10y ago
  I'm not sure why you're being down-voted so much. It's undeniable that our quality of life have improved dramatically since 1940.
  - vacri 10y ago
    People whose identity is wrapped up in how hard they have it can have trouble when it's pointed out that maybe it's not so bad after all.
qntty 10y ago
Who cares about iPhones? They could afford education, healthcare and housing. These calculations are far from arbitrary. We have a reasonable idea of the sorts of things that people need to live a decent life, and these things have gotten more expensive. (Ok, so another commenter pointed out that maybe housing isn't as expensive as it's made out to be, but it's certainly not cheaper.)
- 10y ago

vacri 10y ago

Isn't this to be expected? That overall, the population will maintain its purchasing power relative to itself, and inflation will rise to match in a relatively stable environment?

rdlecler1 10y ago

And then this generation needs to pay for the entitlements (and debt) that their parents enjoyed.

labster 10y ago

sigh This week of political detox on HN is not really working out, is it.

detaro 10y ago
it has been cancelled... https://news.ycombinator.com/item?id=13131251 https://news.ycombinator.com/item?id=13131251

philip142au 10y ago

This statement means that they earn the same as their parents, right?

metaobject 10y ago
I suppose it means they earn as much as, or less than, their parents.

gragas 10y ago

Suppose 30-year-olds make exactly the same as their parents did at 30. Then we would expect that barely half of 30-year-olds earn more than their parents did at 30. This title is stupid. It implies "oh hur dur the economy is so bad" when in reality it says nothing.

paulddraper 10y ago
Wow! Most 30-year-olds are making more than their parents did at the same age! --- I'm more worried about the near universal editorializing of real news than the less common totally fake variety.
- gragas 10y ago
  Have you ever noticed that the only people who talk about fake news all the time are the people who lost nearly all of the recent elections? "Don't worry, the reason we lost is because everyone who's on the other side is really stupid and believes fake news"
  - dang 10y ago
    Please keep partisan politics out of threads here.
Retric 10y ago
Economic growth is not 0. So, really it says that 1/2 the population is flat our worse off. Further, a rising tide lifts all boats is a complitly false analogy, and anyone using that phrase to talk about the economy is lying.
- gragas 10y ago
  >Economic growth is not 0. The numbers are in real USD, not nominal. So in reality, it's a huge fallacy to say that we're so much worse off that in the 1970s. We're almost exactly the same as the 1970s. The main difference to point out here is that the 1970s 30-year-olds made much more real USD than their parents' generation, while 30-year-olds today are making almost exactly the same. Just because income isn't growing as much doesn't mean the 30-year-olds today are worse off.

shados 10y ago

I know it's not what's happening...but if we were to close the salary gap between the rich and the poor (so poor people made more money, and rich people make less), instead of keeping the gap the same but shifted up, or widening the gap...wouldn't this happen? So in theory, it wouldn't be that bad a thing. Now, if it's just that the gap stays the same but things are shifted down, well obviously that's bad.

BuckRogers 10y ago

Well, I just tried to get a job in my company's QA department writing unit tests. Come to find out, my company ONLY hires non-leadership/senior positions in Belarus and Bangalore. I have friends in management, they can't bypass it. Rule was set high up. The job I interviewed for is managing teams over in those places, and I'm not entirely qualified because I haven't worked in QA. So I'm just left no where. I always thought if I worked hard and did the right things, I could get ahead. It's not true. I don't know if I'll ever achieve my goals without moving to India to get a job, then working my way back to the USA. But it certainly might be related as to why only half of 30 year olds earn more then their parents did. I'm going to keep trying but I've worked so hard and have a great reputation at work. I've done so much on my own time. I for one, am fairly demoralized.

Klockan 10y ago

Note that the median income for males have been in decline since the 70's, it isn't strange that they get frustrated with the current situation. http://economix.blogs.nytimes.com/2012/10/22/the-uncomfortable-truth-about-american-wages/?_r=0 http://economix.blogs.nytimes.com/2012/10/22/the-uncomfortab...

somecallitblues 10y ago

How can they earn more when all the money is at the hands of Trump and others who make up 1%? The current capitalism is not distributing the wealth very well and it's certainly nearing a disaster. I wish the left had an answer but they don't. They're stuck with political correctness and more extreme are can't see that they don't have an answer to capitalism and that everything they've tried in the past has failed, and working class have found a billionaire to be their champion and think that migrants and non-white and non-Christian people are to blame for their suffering. And nobody is willing to attack the current system and inequality it's created. Especially in US.

jhoechtl 10y ago
Everything you wrote is so true!
humanrebar 10y ago
> I wish the left had an answer but they don't. The left is the 1% as well. How much money do the Clintons have? A lot. How much Wall Street support did Obama have? A lot. If Hollywood isn't the 1%, what are they? > ...working class have found a billionaire to be their champion... Thiel is interesting partly because he's a business leader that talks about politics and isn't explicitly liberal. That is, he's an exception that proves the rule. > ...and think that migrants and non-white and non-Christian people are to blame for their suffering... Some do. But most have more complex motivations involving economics, democracy, and fighting (in their minds) corruption and hypocrisy. The Left won't make any positive progress here unless they try to understand their neighbors. This is why "Love Trumps Hate" rings really hollow to most of the people I ask about these things.
- ionised 10y ago
  The problem is the political landscape has lurched so far to the right that we've hit a point where some people actually consider Obama and Clinton to be 'left'.
  - humanrebar 10y ago