5 ms·

It's pretty obvious why: the jobs situation sucks (they don't pay well or are non-existent), college/other debt is higher, more education than ever is needed to

by gte910h 16y ago

It's pretty obvious why: the jobs situation sucks (they don't pay well or are non-existent), college/other debt is higher, more education than ever is needed to get the few jobs there are. If the jobs were there that were there in the 90's or 80's, which required less investment, had more reasonable starting salaries compared to housing/medical/car costs, many people being drifters and living with mom and dad wouldn't. I do think the tech industry is still doing better than most though, and requires relatively smaller amounts of training, so I'm not sure HNers empathize with what it's like for non-tech people.

ultrasaurus 16y ago
I think the first time you get laid off (or fired maybe) you change your plans dramatically too.
deleted 16y ago
[deleted]
yummyfajitas 16y ago
I'm not sure that housing/medical/car are more expensive. I don't know about comparing 2010 to 1990, but I do know that if you compare roughly 2000 to 1970, all of those expenses went down. See Elizabeth Warren's book "The Two Income Trap", which shows that basically everything besides taxes and expectations went down in cost (you need to read carefully, she plays down the tax numbers by presenting them in a confusing manner). [edit: to clarify, housing/medical/car are more expensive. But incomes went up as well. As a percentage of income, those expenses went down.]
- masterj 16y ago
  >I'm not sure that housing/medical/car are more expensive. I don't know about comparing 2010 to 1990, but I do know that if you compare roughly 2000 to 1970, all of those expenses went down. ... I'm fairly certain she showed that medical expenses + housing + need for a second vehicle accounted for the majority of the change in expenditures for the average nuclear family. I haven't read the book yet, but I've watched her talk. This is where she talks about changes in expenses: http://www.youtube.com/watch?v=akVL7QY0S8A#t=15m0s http://www.youtube.com/watch?v=akVL7QY0S8A#t=15m0s Edit: Skip to here if you can't spare four minutes extra for some exposition: http://www.youtube.com/watch?v=akVL7QY0S8A#t=19m30s http://www.youtube.com/watch?v=akVL7QY0S8A#t=19m30s
  - yummyfajitas 16y ago
    No she didn't. According to her data, income rose 75%. Mortgage increased by 70%, but note that houses are bigger and have more amenities. Two cars in the early 2000's costs 55% more than 1 car in 1973. Health insurance increased 60% and pays for far more procedures and treatments than in 1973. Taxes increased 140%. You are confused because she presents the numbers in a strange way. She presents the increase in mortgage/car/health insurance as a percentage increase: [mortgage 2000 / mortgage 1973 - 1] x 100% = 70% increase. She then presents the increase in taxes as a percentage of income: 33% of income in 2000 - 24% of income in 1973 = 9% of income. Her raw data is great, but her presentation is really confusing. I'm rather leery of her conclusions - she is great at gathering data, but terrible at analysis. [edit: really curious why a simple presentation of the data is getting downmodded.]
    - masterj 16y ago
      I'm not sure that housing/medical/car are more expensive. She presents the increase in mortgage/car/health insurance as a percentage increase According to her data, income rose 75%. Mortgage increased by 70% Yes, they are more expensive for the same family in real terms. Essentially, the second income has gone to housing. According to her data, income rose 75% But with an additional person in the workforce. Mortgage increased by 70%, but note that houses are bigger and have more amenities. House size increased, but only marginally, an extra bathroom or bedroom. Health insurance increased 60%, and pays for far more things than in 1973. While I haven't read the book, she said the exact opposite in her talk. That hospitals are sending people home "quicker and sicker" and hospital stays or having a sick worker are much more dangerous and expensive for the modern family due to lack of coverage and the need for the second income. When a child or grandparent gets sick, someone needs to take care of them. In the past this was the stay at home parent, but now a worker must be out of work, but as we've already seen, they need the income in order to make the house payment. She then presents the increase in taxes as a percentage of income: 33% of income in 2000 - 24% of income in 1973 = 9% of income. Taxes increase because the second worker's income is taxed after the first worker's, at a higher rate. And her main point, from what I understood it, is that the need for a second worker in the workforce to keep the same standard of living made the family much less stable and susceptable to tragedy, something presenting the costs as a percentage of family income fails to demonstrate.
- rskar 16y ago
  I guess I'll need to read Warren's book; an interview with co-author Amelia Tyagi (at http://motherjones.com/politics/2004/11/two-income-trap http://motherjones.com/politics/2004/11/two-income-trap) is giving me a rather different impression from your take above. Choice quotes: "So we looked at the data for two-income families today earning an average income. What we found was that, while those families certainly make more money than a one-income family did a generation ago, by the time they pay for the basics -- an average home, a health insurance policy, a second car to get Mom to work, child care, and taxes -- that family actually has less money left over at the end of the month to show for it." "...[A] big part of the two-income trap is that families have basically bid up the cost of living. Housing is a big example. A generation ago, an average family could buy an average home on one income. Today you can't do that in three-quarters of American cities. We all know that housing prices are going up, but what most people don't realize is that this has become a family problem. Housing prices are rising twice as fast for families with kids. ... Average mortgage expenses have gone 70 times faster than the average father's income, and the only way families are keeping up is by bringing in two incomes." "The point is that families today are spending their money no more foolishly than their parents did. And yet they're five times more likely to go bankrupt, and three times more likely to lose their homes. Families are going broke on the basics --housing, health insurance, and education. These are the kind of bills that you can't just trim around the edges in the event of a downturn."
  - yummyfajitas 16y ago
    See my response to masterj. She presents the numbers in a rather confusing manner, sometimes listing percentage increases, sometimes a percentage of income. Virtually everyone who reads her book/watches her talks is confused. I presented the raw data in a homogeneous manner in my response to masterj, which will hopefully reduce the confusion.
    - illumin8 16y ago
      She's being directly quoted by the grandparent. How can you get a direct quote wrong? In any case, I think we generally agree with her data. The 2 income trap is real, and the US seems to have fallen for the ridiculous trap that is expensive housing. The sad thing is that it will take a societal shift away from obsessing with McMansions in order to affect any meaningful change, and it's unlikely to happen in our lifetimes because the realtors are the #3 top donor to government (See opensecrets.org - the NAR is #3)
- illumin8 16y ago
  I saw her speech. It's great by the way, but you're wrong about healthcare. Healthcare is more expensive in every way than it was in the 70s. She shows how everything in our society is less expensive now, except the places where we are spending all our money: Housing, Healthcare, and Education. And how ridiculous it is for families to have 2 incomes just to afford a house in a neighborhood that has "good schools". This is the 2 income trap. 2 income families are twice as likely to suffer the loss of one of those incomes, and if their mortgage requires 2 incomes to pay, there goes their house. For some reason the US has fully bought this ridiculous obsession with housing. A $3,000 or $4,000 a month mortgage that takes 50-75% of their monthly income is considered "normal" somehow, and keeping up with the neighbors in conspicuous consumption is considered normal as well. No wonder it is unsustainable and our economy is suffering.
  - yummyfajitas 16y ago
    The house is 60% bigger [1], and according to Warren's data, costs 70% more. Most likely, it also includes more amenities such as washer/dryer (which were uncommon in 1970). We spend more, but also get more. See my other post which gives numbers on healthcare. I agree that college costs are out of control. People choose to take on a riskier financial profile in order to consume more. That doesn't mean things are more expensive. [1] http://www.infoplease.com/askeds/us-home-size.html#axzz0wycZzk3U http://www.infoplease.com/askeds/us-home-size.html#axzz0wycZ...
    - elai 16y ago
      Things like washers and driers only add a very small amount to the typical house price.
    - watmough 16y ago
      You're picking [1] to the exclusion of Warren's own numbers. Per Warren's numbers, the increase in house size was essentially restricted to one additional room. Certainly not the 60% increase in size you posit. The cost increase in housing was non-uniform, and the largest increases in cost were driven by houses in good school districts and we're talking tens of thousands of dollars across school catchment areas in the same metro. Thus the increases in house prices were disproportionately leveled on families with school-age children.
- gte910h 16y ago
  From what I understand of Warren's tax numbers: They're higher because its the income of 2 people required to pay for all the necessities, which is in part of the tax scale designed to catch higher earners. Basically, the stuff costs more, but the lower end of the tax brackets aren't adjusted for inflation based off household income, as the tax burden has shifted to the middle class from the upper class.
OasisP 16y ago
Exactly. I am 2 years behind career-wise due to the recession. While other people who graduated a year or two before me are qualified for senior-level positions, I am stuck with dead-end opportunities that don't expand my skill set. Luckily I don't plan to be an employee for life, but if I did want to be a company woman I'd be screwed.

by gte910h 16y ago

ultrasaurus 16y ago

I think the first time you get laid off (or fired maybe) you change your plans dramatically too.

deleted 16y ago

[deleted]

yummyfajitas 16y ago

I'm not sure that housing/medical/car are more expensive. I don't know about comparing 2010 to 1990, but I do know that if you compare roughly 2000 to 1970, all of those expenses went down. See Elizabeth Warren's book "The Two Income Trap", which shows that basically everything besides taxes and expectations went down in cost (you need to read carefully, she plays down the tax numbers by presenting them in a confusing manner). [edit: to clarify, housing/medical/car are more expensive. But incomes went up as well. As a percentage of income, those expenses went down.]

masterj 16y ago
>I'm not sure that housing/medical/car are more expensive. I don't know about comparing 2010 to 1990, but I do know that if you compare roughly 2000 to 1970, all of those expenses went down. ... I'm fairly certain she showed that medical expenses + housing + need for a second vehicle accounted for the majority of the change in expenditures for the average nuclear family. I haven't read the book yet, but I've watched her talk. This is where she talks about changes in expenses: http://www.youtube.com/watch?v=akVL7QY0S8A#t=15m0s http://www.youtube.com/watch?v=akVL7QY0S8A#t=15m0s Edit: Skip to here if you can't spare four minutes extra for some exposition: http://www.youtube.com/watch?v=akVL7QY0S8A#t=19m30s http://www.youtube.com/watch?v=akVL7QY0S8A#t=19m30s
- yummyfajitas 16y ago
  No she didn't. According to her data, income rose 75%. Mortgage increased by 70%, but note that houses are bigger and have more amenities. Two cars in the early 2000's costs 55% more than 1 car in 1973. Health insurance increased 60% and pays for far more procedures and treatments than in 1973. Taxes increased 140%. You are confused because she presents the numbers in a strange way. She presents the increase in mortgage/car/health insurance as a percentage increase: [mortgage 2000 / mortgage 1973 - 1] x 100% = 70% increase. She then presents the increase in taxes as a percentage of income: 33% of income in 2000 - 24% of income in 1973 = 9% of income. Her raw data is great, but her presentation is really confusing. I'm rather leery of her conclusions - she is great at gathering data, but terrible at analysis. [edit: really curious why a simple presentation of the data is getting downmodded.]
  - masterj 16y ago
    I'm not sure that housing/medical/car are more expensive. She presents the increase in mortgage/car/health insurance as a percentage increase According to her data, income rose 75%. Mortgage increased by 70% Yes, they are more expensive for the same family in real terms. Essentially, the second income has gone to housing. According to her data, income rose 75% But with an additional person in the workforce. Mortgage increased by 70%, but note that houses are bigger and have more amenities. House size increased, but only marginally, an extra bathroom or bedroom. Health insurance increased 60%, and pays for far more things than in 1973. While I haven't read the book, she said the exact opposite in her talk. That hospitals are sending people home "quicker and sicker" and hospital stays or having a sick worker are much more dangerous and expensive for the modern family due to lack of coverage and the need for the second income. When a child or grandparent gets sick, someone needs to take care of them. In the past this was the stay at home parent, but now a worker must be out of work, but as we've already seen, they need the income in order to make the house payment. She then presents the increase in taxes as a percentage of income: 33% of income in 2000 - 24% of income in 1973 = 9% of income. Taxes increase because the second worker's income is taxed after the first worker's, at a higher rate. And her main point, from what I understood it, is that the need for a second worker in the workforce to keep the same standard of living made the family much less stable and susceptable to tragedy, something presenting the costs as a percentage of family income fails to demonstrate.
rskar 16y ago
I guess I'll need to read Warren's book; an interview with co-author Amelia Tyagi (at http://motherjones.com/politics/2004/11/two-income-trap http://motherjones.com/politics/2004/11/two-income-trap) is giving me a rather different impression from your take above. Choice quotes: "So we looked at the data for two-income families today earning an average income. What we found was that, while those families certainly make more money than a one-income family did a generation ago, by the time they pay for the basics -- an average home, a health insurance policy, a second car to get Mom to work, child care, and taxes -- that family actually has less money left over at the end of the month to show for it." "...[A] big part of the two-income trap is that families have basically bid up the cost of living. Housing is a big example. A generation ago, an average family could buy an average home on one income. Today you can't do that in three-quarters of American cities. We all know that housing prices are going up, but what most people don't realize is that this has become a family problem. Housing prices are rising twice as fast for families with kids. ... Average mortgage expenses have gone 70 times faster than the average father's income, and the only way families are keeping up is by bringing in two incomes." "The point is that families today are spending their money no more foolishly than their parents did. And yet they're five times more likely to go bankrupt, and three times more likely to lose their homes. Families are going broke on the basics --housing, health insurance, and education. These are the kind of bills that you can't just trim around the edges in the event of a downturn."
- yummyfajitas 16y ago
  See my response to masterj. She presents the numbers in a rather confusing manner, sometimes listing percentage increases, sometimes a percentage of income. Virtually everyone who reads her book/watches her talks is confused. I presented the raw data in a homogeneous manner in my response to masterj, which will hopefully reduce the confusion.
  - illumin8 16y ago
    She's being directly quoted by the grandparent. How can you get a direct quote wrong? In any case, I think we generally agree with her data. The 2 income trap is real, and the US seems to have fallen for the ridiculous trap that is expensive housing. The sad thing is that it will take a societal shift away from obsessing with McMansions in order to affect any meaningful change, and it's unlikely to happen in our lifetimes because the realtors are the #3 top donor to government (See opensecrets.org - the NAR is #3)
illumin8 16y ago
I saw her speech. It's great by the way, but you're wrong about healthcare. Healthcare is more expensive in every way than it was in the 70s. She shows how everything in our society is less expensive now, except the places where we are spending all our money: Housing, Healthcare, and Education. And how ridiculous it is for families to have 2 incomes just to afford a house in a neighborhood that has "good schools". This is the 2 income trap. 2 income families are twice as likely to suffer the loss of one of those incomes, and if their mortgage requires 2 incomes to pay, there goes their house. For some reason the US has fully bought this ridiculous obsession with housing. A $3,000 or $4,000 a month mortgage that takes 50-75% of their monthly income is considered "normal" somehow, and keeping up with the neighbors in conspicuous consumption is considered normal as well. No wonder it is unsustainable and our economy is suffering.
- yummyfajitas 16y ago
  The house is 60% bigger [1], and according to Warren's data, costs 70% more. Most likely, it also includes more amenities such as washer/dryer (which were uncommon in 1970). We spend more, but also get more. See my other post which gives numbers on healthcare. I agree that college costs are out of control. People choose to take on a riskier financial profile in order to consume more. That doesn't mean things are more expensive. [1] http://www.infoplease.com/askeds/us-home-size.html#axzz0wycZzk3U http://www.infoplease.com/askeds/us-home-size.html#axzz0wycZ...
  - elai 16y ago
    Things like washers and driers only add a very small amount to the typical house price.
  - watmough 16y ago
    You're picking [1] to the exclusion of Warren's own numbers. Per Warren's numbers, the increase in house size was essentially restricted to one additional room. Certainly not the 60% increase in size you posit. The cost increase in housing was non-uniform, and the largest increases in cost were driven by houses in good school districts and we're talking tens of thousands of dollars across school catchment areas in the same metro. Thus the increases in house prices were disproportionately leveled on families with school-age children.
gte910h 16y ago
From what I understand of Warren's tax numbers: They're higher because its the income of 2 people required to pay for all the necessities, which is in part of the tax scale designed to catch higher earners. Basically, the stuff costs more, but the lower end of the tax brackets aren't adjusted for inflation based off household income, as the tax burden has shifted to the middle class from the upper class.

OasisP 16y ago

Exactly. I am 2 years behind career-wise due to the recession. While other people who graduated a year or two before me are qualified for senior-level positions, I am stuck with dead-end opportunities that don't expand my skill set. Luckily I don't plan to be an employee for life, but if I did want to be a company woman I'd be screwed.