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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

• 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
        True that. I was like this for a good number of years, and it's only been recently that I've started using credit for a few things.
    • notadoc 10y ago
      Sure, take a look at student loan debt for one glaring example. Or the debt-to-income ratios required to get a home today versus 30-40 years ago. Credit card debt growth, medical debt growth, saving rates declines, etc.
  • neonhomer 10y ago
    Don't you mean "bad news for a debt driven economy"?
  • tonyedgecombe 10y ago
    You can always inflate debt away (if you control your currency).
• harryh 10y ago
  Price per square foot for housing has remained remarkably constant over time. People are spending more on houses than they used to because they are buying bigger houses.
  • shorodei 10y ago
    Got data on this? In my anecdotal experience price per square foot has shot up in urban places, which is where the jobs for young people tend to be concentrated.
    • harryh 10y ago
      http://www.aei.org/publication/todays-new-homes-are-1000-square-feet-larger-than-in-1973-and-the-living-space-per-person-has-doubled-over-last-40-years/ http://www.aei.org/publication/todays-new-homes-are-1000-squ...
      • jpmattia 10y ago
        It looks like they applied CPI directly to the cost of housing. That is not correct. CPI has a component of "owner's equivalent rent", which should be removed before cost-correcting the price of housing. Otherwise, you are removing the increase of the item you are searching for an increase of (Housing accounts for 1/3 of the CPI correction.) Their graph is instead showing that the buying power of a dollar is roughly constant when 1/3 of the CPI basket-of-goods is corrected with CPI. Calculated Risk has a more sane analysis, you will note that the graphs are corrected with "CPI less Shelter": http://www.calculatedriskblog.com/2016/11/real-prices-and-price-to-rent-ratio-in.html http://www.calculatedriskblog.com/2016/11/real-prices-and-pr... He doesn't include price/sqft, but note that there is a 44% increase in real prices between the 90s and now. Square footage has not gone up by that much in 20 years. As a side note: AEI is a fairly political org, I wouldn't rely on their accuracy for anything involving stats, or math in general.
    • massysett 10y ago
      "the inflation-adjusted price of new homes has been relatively stable since 1973 in a range between about $105 and $125 per square foot" However this is only new homes, not used homes. http://www.aei.org/publication/todays-new-homes-are-1000-square-feet-larger-than-in-1973-and-the-living-space-per-person-has-doubled-over-last-40-years/ http://www.aei.org/publication/todays-new-homes-are-1000-squ...
• vijayr 10y ago
  This is only going to get worse with software eating the world and automation of every possible task that we can. It has already started with companies like Amazon (in their warehouses) using robots extensively.
  • eridius 10y ago
    Up until we finally get our collective heads out of our asses and implement something like Basic Income.
    • vijayr 10y ago
      That isn't going to happen easily. My experience: I've talked about this to many people (highly educated, smart people) - most of them are adamant on the idea that human beings absolutely have to work to deserve anything, even food and water. This might very well be anecdotal, but very few people get ideas like Basic Income intuitively. It would likely take tremendous amount to first make people understand, then accept radical ideas. I'm all for doing work, but never understood worship of hard work for hard work's sake.
      • eridius 10y ago
        I agree that it won't happen easily. Which is why I phrased it the way I did. But I do think that it must happen eventually (and really, it's just a stepping stone on the path to a post-scarcity society).
      • FreedomToCreate 10y ago
        All humans have a psychological need to be needed. The current way to best feel this is to provide income for yourself and your family through work, and provide a service for your employer. This is extremely satisfying for a majority of people. Take away work and these two things collapse. To get UBI to work, we need a new way for people to feel needed.
        • hood_syntax 10y ago
• rhino369 10y ago
  The cherry on top is that our parents generation, who made more and had access to cheaper house, education, healthcare, etc., still barely saved for retirement. Unless, god forbid, your parents drop dead early, we are going to be stuck supporting them for a long time.
  • crdoconnor 10y ago
    If the 0.1% can successfully convince people to blame their grandparents and magical robots for stealing all of the country's wealth then this trend is likely to continue.
    • rhino369 10y ago
      It's not their fault we make less, but they should have personal responsibility for their own retirement, especially since the massive amount of growth in housing value and the stockmarket over their lifetime.
      • Jach 10y ago
        Social Security lifted the responsibility of saving for their own retirement. It's not much use to blame them for following incentives.
        • lawpoop 10y ago
          You make it sound as if before Social Security, people saved for retirement because they recognized they had to. But of course they didn't-- because they didn't earn enough to save-- just like people nowadays. Social Security is insurance against destitution in old age. It really doesn't function to take away any saving incentive. It just keeps old people from being homeless and starving. http://www.wsj.com/articles/SB109520630433518093 http://www.wsj.com/articles/SB109520630433518093 http://query.nytimes.com/gst/fullpage.html?res=9B0CEFDE1E38F930A15752C0A9639C8B63 http://query.nytimes.com/gst/fullpage.html?res=9B0CEFDE1E38F...
          • deleted 10y ago
• branchless 10y ago
  Hacker news says: become a landlord! Yet amazingly compsci grads can't extrapolate this out and see that it cannot work at scale.
  • seanp2k2 10y ago
    Hey, distributed systems is hard. The network is reliable // the market is rational.
    • branchless 10y ago
      "the market" (basically everyone) is rationally responding to the state and banks using credit creation via land to appropriate labour. That's killing productivity as people realise working doesn't pay and filching of others does.
• koolba 10y ago
  Don't forget student loan payments and smart phones.
• WalterBright 10y ago
  Don't forget the vast expansion of government spending. That wealth it dissipates has to come from somewhere.
• D_Alex 10y ago
  Housing: Today's 30yo live in nicer houses, that are on the whole located in nicer places. Eg. in cities that have less pollution and more facilities than they had before. Education: Okay, that kind of sucks. But in here Australia, as an example, costs of repayments for the education are way less than the reductions in tax rates over the last 30 years. We had a 60% marginal tax rate when I started work... Health care: again, the amount and level of health care received today is far higher, and it seems that things are now "health care" that were something else 30 years ago... eg. my health fund has rebates for gym, massages meditation etc. Child care: this is a little odd... have child care workers' earnings increased? Are there less kids/carer in kindergarten? Or are we just putting kids in kindergarten more, instead of leaving them with Grandma? Finally: I would trade all of the advantages that the previous generation enjoyed for smartphones and internet. The quality of life today is, IMHO, incomparably higher that 30 years back.
  • randomdata 10y ago
    > Education: Okay, that kind of sucks. I'd argue that education has never been cheaper. Schooling is where the costs have often grown dramatically. And as far as schooling goes, the interesting thing here is that while the degree attainment rate (in the US, Canada, and I expect even Australia) has effectively doubled since 1980, the supposed benefits, such as a higher income, that prompted more people to attend an institute of higher learning have not been realized. The youth, post-secondary schooled at a much higher rate than previous generations, are not making more money or better off as this article and many other sources of data point out. With those promises not fulfilled, I am left wondering why the cost of schooling is even found among the likes of housing and health care? It's an enjoyable pastime, for sure, but not something essential to support (a long) life like the others.
• outericky 10y ago
  The sense of entitlement is a lot higher these days. I grew up in a 900 sqft house with 1 bathroom. Yet all my peers (myself included) seek out homes 2x, 3x or bigger. Same with cars.... my parents bought used, reliable cars. Today we want fancy things. Growing up we had cable tv and a phone line. Probably spent $50/month total. The family cellphone bill, home broadband, various tv services easily top out over $300/month. We went out to eat once a month. Tops. It was a treat. Nowadays people (myself included go out 1, 2 or more times per week. Earnings aside, current generations are spending way more because they want more.
  • maxxxxx 10y ago
    Good luck finding a 900 sqft house now.
  • noobermin 10y ago
    I don't mean to sound like just being contrary to you, but your anecdote doesn't square with the article. If half earn less than you did then that would mean they wouldn't afford what they want according to you and want you wanted at your age, so either way, they're hosed.
    • paulddraper 10y ago
      You seem to think that income always corresponds to expenses.
  • mistermann 10y ago
    A 900 sq ft condo let alone home will run you $750k+ lots of places.
    • dennyis 10y ago
      It's really not that many places when you take the whole US into account.
  • paulddraper 10y ago
    This. US home ownership has gone up and down between 64% and 69% in the past 30 years, currently at the low end of that. But at the same time, the average new house went from 1,600 to 2,500 sqft. Thirty years ago, how many people plopped down $5k for a TV? $700 for a phone? $150/month for telecom? Life expediency has increased by 6 years from 1975 to 2010. And to top it off, we're working less than we ever have. Average hours per year: 1,900 (1950), 1,800 (1970), 1,725 (1990), and 1,700 (2010). Despite the "back in my day" doomsaying, on average, our quality of life has never been better. --- My two cents why: Cent 1: In a globally connected world, we are painfully obvious of the millions of people living more comfortably than us. When it was just Mr. Jones down the block, it didn't feel so bad. Cent 2: Culture and priorities have changed. Rural population has been dropping for decades. People are more likely to rent a 500 sqft apartment in a large urban center than rent/buy a 900 sqft house in a town of 20k. Not a bad thing, just a different thing, and we have to take into account the whole picture.
• amelius 10y ago
  The increase of housing costs is also a result of double incomes. So while housing is more expensive than a generation ago, at least we have double incomes now. But of course, this increases costs for child care, as nobody is home to watch the kids.