10 ms·

Can we conclude that this is the wistful daydream equivalent of the "Maserati Problem"[1]? I can definitely say that if 30 years we're looking at half a million

Can we conclude that this is the wistful daydream equivalent of the "Maserati Problem"[1]? I can definitely say that if 30 years we're looking at half a million dollars as a "cost of living adjustment", that world will for the people who don't make that kind of money be Thunderdome. I mean wages have barely kept up with inflation. In the last 40 years (between 1967 and 2007), median wages have only gone up US$10000 (from 40k to 50k). How the hell are all of our parents going to fare when you need 500,000 to maintain an upper-middle class lifestyle? I see the numbers adding up (and it is a nicey-nice spreadsheet), it just doesn't make any kind of a sense. I guess that's why I'm only middle-class. I don't see this heinous future coming for all of us. [1] http://news.ycombinator.com/item?id=1444003 http://news.ycombinator.com/item?id=1444003

yummyfajitas 16y ago
How the hell are all of our parents going to fare when you need 500,000 to maintain an upper-middle class lifestyle? If the past 40 years are a guide to the future, then the lifestyle we currently define as "upper-middle class" will be redefined as "poverty" and will be available to virtually everyone, including people who can't even be bothered to find a job. People will continue to complain about the declining middle class, how the median family can barely afford to live in a 4000 sq ft house with a robotic kitchen/laundry/bathroom and about how unaffordable their stem cell therapy and cloned organs are [1]. They'll watch TV news reports lamenting the bad economy on their 108,000p 10' 3d full immersion TV's, while the uber rich (income inequality will go up as well) do much the same thing, but in a 100,000sq ft house and a 50' TV. Also, the quality of stem cell therapy and robotic surgery available to the rich will be slightly greater. [1] They will of course lump all medical goods and services together under the catch-all term "health care". [edit: clarified that I'm thinking about 40 years here.]
- cageface 16y ago
  If the past is a guide to the future, then the lifestyle we currently define as "upper-middle class" will be redefined as "poverty" and will be available to virtually everyone, including people who can't even be bothered to find a job. For many reasons I doubt that the last few hundred years are going to tell us much about the next hundred. So many critical trends are following exponential curves that can't continue on indefinitely.
  - yummyfajitas 16y ago
    I was only looking at the past 40 years, much like the original poster. My edit clarifies this point.
    - cageface 16y ago
      Even in that window of time if the underlying pattern is this: http://en.wikipedia.org/wiki/File:Bacterial_growth_en.svg http://en.wikipedia.org/wiki/File:Bacterial_growth_en.svg 40 years doesn't tell you much about the next 10. Growth rates in recent times have depended largely on finite resources, many of which are now becoming scarce. It may be that we innovate around all of this, but it's far from certain.
      - eugenejen 16y ago
        But the bacteria growth in Petri dishes is limited by resource, and bacteria has no way to change the situation. Maybe we are really limited by available resources. We know for sure that we have limited supply of the solar energy. At the other hand, we are just using what is available on the surface of the Earth. Maybe we are going to figure out how to utilize more resources outside the surface of the Earth, or efficient way to use and recycle resources.
  - joe_the_user 16y ago
    Exponential curves indeed can't continue indefinitely. At the same, most of the reasoning about the future by even intelligent people still tends to involve linear extrapolation rather than exponential extrapolation - that's what makes sense to us. Thus it's more likely for a standard prediction is go wrong in the direction of the exponential trends continuing rather than in the direction of the trends stopping. Moreover, one or another exponential trends might stop but the overall mine that Moore's Law comes out of, miniaturization, is not going to be exhausted at least until human construction reaches the nano scale.
    - cageface 16y ago
      That's exactly why I think trying to predict what the world is going to be like in 40 years is just about impossible. The only thing you can say with much confidence is that it's likely to be very different from the way it is today.
- jshen 16y ago
  this is a libertarian fantasy and nothing more. Wages for most people have been stagnant or declining while energy prices are steadily rising. This is a huge problem
  - yummyfajitas 16y ago
    Please tell me which point I'm wrong on. Do most people not live in larger houses, enjoy greater automation of housework, enjoy larger and better entertainment technologies, and benefit from medical procedures which did not exist in 1967?
    - jshen 16y ago
      I'm disputing the prediction that the future, if we remain on our current course, will be more of the same. Here's what you said, "If the past 40 years are a guide to the future". I'm disputing the idea that income inequality doesn't mean anything because the "poor" will have a higher standard of living that the middle class does today. Again, incomes are on the decline for most americans, and energy prices are rising. There is no way that we will get more of the same if that remains true. Also, most people I know live in smaller houses than their parents, but that's purely anecdotal and based on the obvious fact that there are more people living on the same amount of earth. I happen to live in a major city.
      - pchristensen 16y ago
        "most people I know live in smaller houses than their parents" But do they live in smaller houses than their parents lived when they were your friends' age?
        jshen 16y ago
        yes, but I live in L.A. and I'm sure it's different in most parts of the country. I make way more money than my parents or grandparents, even when adjusted for inflation, but I live in a much smaller place than they did.
- bitanarch 16y ago
  That's not even imaginative enough. We'll be living in space and the rich will own whole solar systems with strong AI civilizations dedicated to working for them and worshipping them. The poor will barely be able to afford immortality and a space ship for going to work. Your great-granddaughter will complain, "Dad, why can't our Spaceballs One even move a diddly little gas giant while those people have whole solar systems to play with?" "Oww... blame our great-grandfather, he spent all his startup money on a measly 4000 sq ft house 200 years ago. Douchebag thinks he'd only live for 90 years."
- Deezul 16y ago
  I think you're making a mistake trying to apply something like Moore's law to a middle class lifestyle. Niche technological advancements don't necessarily translate to higher standards of living. If you're thinking the middle class life will simply scale the way hard drives and TV resolutions do you're in for a big surprise. I understand that many of the things we think we "need" or want become very relative over time. But if we include basics like needing food, shelter and then add in middle class health care, mobility, security, leisure and luxury, you are talking about an expensive ticket. Yes we have made impressive advancements and maybe someday we'll have things like 100% robotic aggregation/farming and no longer need to think a lot about how we'll get our food. But I don't think the middle class life will simply becoming the default option anytime soon. What about overpopulation? Increase demand from developing nations for this "middle class"? What about our numerous energy issues? I'm also not sure what your frame of reference is for the past. I must be stuck in the rebound towards an up trend because I know for a fact that a houses were much more affordable for my parents who lived on one carpenters paycheck, even while I make a higher salary after inflation and have the assistance of my spouses income.
  - yummyfajitas 16y ago
    I'm not attempting to apply Moore's law, merely the past 40 years of growth to the next 40 (just as the original poster tried to do). In any case, the point I'm making is that "middle class life" needs a time period to be attached. "Middle class health care 1970" would be pretty cheap today - any medicine available back then is out of patent, and dying of untreatable cancer is pretty cheap. "Shelter 2010" is 60% bigger than "shelter 1970". "Luxury" in 1970 would be a 32" color TV, as opposed to a plasma screen with playstation today. Basically, "Middle class 1970" == "poverty 2010". It might be the case that middle class 2010 is as good as it gets - I'm not trying to make predictions. I'm just pointing out that if, as the OP suggested, the next 40 years are as bad as the last 40 years, then we will be doing pretty good.
    - jimbokun 16y ago
      ""Middle class health care 1970" would be pretty cheap today - any medicine available back then is out of patent, and dying of untreatable cancer is pretty cheap." I question whether availability of drugs is the best indicator of overall health. We are also a lot more sedentary, the quality of our food is probably not as a good, and we are a lot heavier. Given that, how many drugs do we need to just break even, health wise, with where we were in 1970? "as opposed to a plasma screen with playstation today" It would be an interesting psychology study to figure out if a kid with an Atari in the 1970s was objectively less happy and fulfilled than a kid with a plasma screen and playstation today. I suspect it is the relative excitement of being one of the first to get a game before your friends is a bigger factor. I guess it's a little late to start that study at this point, however. My overall point is that I think comparing quality of life across eras is more complex than just comparing square footage, drug prices, and pixel counts. Unless I misunderstand your point.
- noodle 16y ago
  it seems to me that predicting the distant (20+ years) future based on the past never really works out.
  - Unseelie 16y ago
    That's because you're assuming the wrong frame of reference on your singularity. http://www.kmeme.com/2010/07/singularity-is-always-steep.html http://www.kmeme.com/2010/07/singularity-is-always-steep.htm... If you were to drop back to 1970 and estimate the next 20 years by the 2010 scale, things are almost identical. If you measure 2000-2010 on the 1970 scale, things are a hard takeoff.
- joe_the_user 16y ago
  Hmm, Biking through Oakland the other night, I saw a guy pushing a shopping cart with one hand and talking on his cellphone with the other. A good deal of your lifestyles of the no-longer-needed description might true except ... the 4000 sq ft house. For the now-permanently-unemployed, it would be a 40 sq ft "home" or perhaps a car or suped-up shopping cart. But still with lots of gadgets. Space (at the least) isn't going to be made cheaper by mass production even if everything else will.
  - fragmede 16y ago
    Any city that's learned to grow vertically would disagree with you. If you thought real-estate was expensive in New York now....
    - Unseelie 16y ago
      NYC is expensive because its more expensive to build skyscrapers than houses. Its not cheaper because of mass production, there's just enough incentive to spend more money than it takes to build houses because of the local population density.
myoung8 16y ago
Tony's calculations are wrong because he assumed constant inflation. There will be periods of deflation, and many think that one is starting now. It also won't be the last.
- jerf 16y ago
  It's not a terrible thing to do though, because it also reflects uncertainty in your income, albeit in a way that people aren't used to seeing. There is a non-zero chance that 10 million dollars today will end up being 3 million dollars next year, and I don't mean "next year" metaphorically, and I'm not even talking about the nastiness of the current economy, either; that's always true, regardless of the state of the economy, just the odds change.
- webwright 16y ago
  No, he doesn't assume that. He assumes an average rate of inflation with the mean average being above zero, because it's always been that way. http://www.usinflationcalculator.com/inflation/historical-inflation-rates/ http://www.usinflationcalculator.com/inflation/historical-in... When you're talking about decades of retirement, the compound annual growth rate of inflation is all that really matters. There isn't clear consensus on inflation/deflation in the near term. While last year saw deflation, a lot of economists think that printing money like we are will cause unusual deflation.
portman 16y ago
The US inflation rate over the last 40 years is readily available from the US Department of Labor based on the Consumer Price Index. http://www.bls.gov/data/inflation_calculator.htm http://www.bls.gov/data/inflation_calculator.htm $35,594 in 1970 got you the same as $200,000 today. So why does it strain credulity to believe that $200,000 today will be equivalent to $500,000 in the year 2050? Inflation was much higher over the previous 40 years.
- tokenadult 16y ago
  More to the point, of course, is how much you will have to work to have that number of nominal dollars.
  - achompas 16y ago
    Right. People are going crazy over the $500k number 40 years out but, in real dollars, that could easily convert to a middle-class wage today.
    - jerf 16y ago
      Actually, one of my (many) issues with political discourse today is that thanks to inflations, "the rich" has been defined down brutally over the past 30 to 40 years. Anyone currently making $250/year, yeah, if they're hurting it's their own damn fault for overreaching, but that is very rapidly becoming merely upper middle class. Meanwhile, neither our legal/tax nor our social definitions of "rich" are being updated at anywhere near the proper speed. I recall somewhere seeing that if you take the term "millionaire" at the time that it was coined, it would today take 130 million to have that same level of wealth. I can't seem to scare up a reference, but it's at least broadly correct even if I'm off by 10 or 20%. If you don't retire a millionaire in 2030/2040 money, you're going to be in real trouble. You're probably in trouble if you retire merely as a millionaire.
      - tokenadult 16y ago
        And yet many of the things that average people enjoy today could not be obtained with any amount of money when my grandfather was alive. Where I live, today, an annual income of U.S.$250,000 is very comfortable indeed (and rather rare).
petercooper 16y ago
Whoa, that 40->50k over 40 years stat seemed ridiculous to me so I looked it up and you're right. This strikes me as bizarre because in the UK, both prices and wages have blown through the roof over the same period. I wonder what the deal is here (though the USD-GBP rate was significantly different decades ago).
- deleted 16y ago
  [deleted]
- nl 16y ago
  Those numbers are adjusted for inflation.
alister 16y ago
Can we conclude that this is the wistful daydream equivalent of the "Maserati Problem" I'll go out on a limb and say that even normal retirement planning (50 years into the future) is a Maserati Problem. Everybody that makes very long-term projections about money -- whether it's the gloomy "interest on $4m won't last 40 years" variety to the rosy "save $300 a month and the compound interest will make you a millionaire in 50 years" -- commits the same error: They neglect the fact that wars, revolutions, devaluations, confiscations, and other economic disasters have wiped out all savings at frequent points throughout history. There should be some trillionaires walking around whose ancestors started saving in the Renaissance when modern banking began -- but there aren't. So if you're talking time scales of 50 years, there is significant probability that your carefully calculated spending or savings plan is self deceit.
- nostrademons 16y ago
  "There should be some trillionaires walking around whose ancestors started saving in the Renaissance when modern banking began -- but there aren't." Carlisle Cullen. ;-) Anyway - this is a really good point, but I'll point out something else. Most of the wealthy would-be trillionaires whose fortunes got wiped out passed down another inheritance: their genes. Those same disasters that wipe out the savings of the rich tend to kill the poor, who simply can't afford transportation away from disaster areas, bribes for border guards and security forces, political connections to ensure safety for their children, or information savvy to know when a crisis is coming. Most of today's middle class is descended from the kings and nobility of the high middle ages. The peasantry just mostly died out, leaving no descendants.
  - cynicalkane 16y ago
    Most of today's middle class is descended from the kings and nobility of the high middle ages. The peasantry just mostly died out, leaving no descendants. Source?
    - nostrademons 16y ago
      My Google-fu is failing me at the moment. It was from an absolutely fascinating article that suggested that the middle-class arose because of downward social mobility in post-Plague Europe. With the serfs mostly killed off by Black Death, the 3rds and 4th sons of the nobility typically couldn't support a feudal household, and so they had to take jobs as merchants or artisans in the emerging market economies. Along the way, they brought with them some of the values of the nobility (most notably, not having kids until they could support the lifestyle they were accustomed to as children), which allowed Europe to escape the Malthusian trap of the Dark Ages. IIRC, the genealogical records (of most present-day Europeans and Americans being descended from the nobility) was presented as fact, but the causal link with the rise of the middle class was more tenuous. I'll look again after I've gotten some actual work for $realjob done.
portman 16y ago
"In the last 40 years (between 1967 and 2007), median wages have only gone up US$10000 (from 40k to 50k)." That figure that you're citing is IN CONSTANT 2003 DOLLARS. The nominal median household income in 1967, without adjusting for inflation, was $7,260.87. [1] So a "middle class" income has increased from $7,260 to $50,000 in 40 years. Hopefully this clarification will make the author's nicey-nice spreadsheet make sense now. [1] http://www.census.gov/hhes/www/income/data/historical/household/index.html http://www.census.gov/hhes/www/income/data/historical/househ...

yummyfajitas 16y ago

How the hell are all of our parents going to fare when you need 500,000 to maintain an upper-middle class lifestyle? If the past 40 years are a guide to the future, then the lifestyle we currently define as "upper-middle class" will be redefined as "poverty" and will be available to virtually everyone, including people who can't even be bothered to find a job. People will continue to complain about the declining middle class, how the median family can barely afford to live in a 4000 sq ft house with a robotic kitchen/laundry/bathroom and about how unaffordable their stem cell therapy and cloned organs are [1]. They'll watch TV news reports lamenting the bad economy on their 108,000p 10' 3d full immersion TV's, while the uber rich (income inequality will go up as well) do much the same thing, but in a 100,000sq ft house and a 50' TV. Also, the quality of stem cell therapy and robotic surgery available to the rich will be slightly greater. [1] They will of course lump all medical goods and services together under the catch-all term "health care". [edit: clarified that I'm thinking about 40 years here.]

cageface 16y ago
If the past is a guide to the future, then the lifestyle we currently define as "upper-middle class" will be redefined as "poverty" and will be available to virtually everyone, including people who can't even be bothered to find a job. For many reasons I doubt that the last few hundred years are going to tell us much about the next hundred. So many critical trends are following exponential curves that can't continue on indefinitely.
- yummyfajitas 16y ago
  I was only looking at the past 40 years, much like the original poster. My edit clarifies this point.
  - cageface 16y ago
    Even in that window of time if the underlying pattern is this: http://en.wikipedia.org/wiki/File:Bacterial_growth_en.svg http://en.wikipedia.org/wiki/File:Bacterial_growth_en.svg 40 years doesn't tell you much about the next 10. Growth rates in recent times have depended largely on finite resources, many of which are now becoming scarce. It may be that we innovate around all of this, but it's far from certain.
    - eugenejen 16y ago
      But the bacteria growth in Petri dishes is limited by resource, and bacteria has no way to change the situation. Maybe we are really limited by available resources. We know for sure that we have limited supply of the solar energy. At the other hand, we are just using what is available on the surface of the Earth. Maybe we are going to figure out how to utilize more resources outside the surface of the Earth, or efficient way to use and recycle resources.
- joe_the_user 16y ago
  Exponential curves indeed can't continue indefinitely. At the same, most of the reasoning about the future by even intelligent people still tends to involve linear extrapolation rather than exponential extrapolation - that's what makes sense to us. Thus it's more likely for a standard prediction is go wrong in the direction of the exponential trends continuing rather than in the direction of the trends stopping. Moreover, one or another exponential trends might stop but the overall mine that Moore's Law comes out of, miniaturization, is not going to be exhausted at least until human construction reaches the nano scale.
  - cageface 16y ago
    That's exactly why I think trying to predict what the world is going to be like in 40 years is just about impossible. The only thing you can say with much confidence is that it's likely to be very different from the way it is today.
jshen 16y ago
this is a libertarian fantasy and nothing more. Wages for most people have been stagnant or declining while energy prices are steadily rising. This is a huge problem
- yummyfajitas 16y ago
  Please tell me which point I'm wrong on. Do most people not live in larger houses, enjoy greater automation of housework, enjoy larger and better entertainment technologies, and benefit from medical procedures which did not exist in 1967?
  - jshen 16y ago
    I'm disputing the prediction that the future, if we remain on our current course, will be more of the same. Here's what you said, "If the past 40 years are a guide to the future". I'm disputing the idea that income inequality doesn't mean anything because the "poor" will have a higher standard of living that the middle class does today. Again, incomes are on the decline for most americans, and energy prices are rising. There is no way that we will get more of the same if that remains true. Also, most people I know live in smaller houses than their parents, but that's purely anecdotal and based on the obvious fact that there are more people living on the same amount of earth. I happen to live in a major city.
    - pchristensen 16y ago
      "most people I know live in smaller houses than their parents" But do they live in smaller houses than their parents lived when they were your friends' age?
      - jshen 16y ago
        yes, but I live in L.A. and I'm sure it's different in most parts of the country. I make way more money than my parents or grandparents, even when adjusted for inflation, but I live in a much smaller place than they did.
bitanarch 16y ago
That's not even imaginative enough. We'll be living in space and the rich will own whole solar systems with strong AI civilizations dedicated to working for them and worshipping them. The poor will barely be able to afford immortality and a space ship for going to work. Your great-granddaughter will complain, "Dad, why can't our Spaceballs One even move a diddly little gas giant while those people have whole solar systems to play with?" "Oww... blame our great-grandfather, he spent all his startup money on a measly 4000 sq ft house 200 years ago. Douchebag thinks he'd only live for 90 years."
Deezul 16y ago
I think you're making a mistake trying to apply something like Moore's law to a middle class lifestyle. Niche technological advancements don't necessarily translate to higher standards of living. If you're thinking the middle class life will simply scale the way hard drives and TV resolutions do you're in for a big surprise. I understand that many of the things we think we "need" or want become very relative over time. But if we include basics like needing food, shelter and then add in middle class health care, mobility, security, leisure and luxury, you are talking about an expensive ticket. Yes we have made impressive advancements and maybe someday we'll have things like 100% robotic aggregation/farming and no longer need to think a lot about how we'll get our food. But I don't think the middle class life will simply becoming the default option anytime soon. What about overpopulation? Increase demand from developing nations for this "middle class"? What about our numerous energy issues? I'm also not sure what your frame of reference is for the past. I must be stuck in the rebound towards an up trend because I know for a fact that a houses were much more affordable for my parents who lived on one carpenters paycheck, even while I make a higher salary after inflation and have the assistance of my spouses income.
- yummyfajitas 16y ago
  I'm not attempting to apply Moore's law, merely the past 40 years of growth to the next 40 (just as the original poster tried to do). In any case, the point I'm making is that "middle class life" needs a time period to be attached. "Middle class health care 1970" would be pretty cheap today - any medicine available back then is out of patent, and dying of untreatable cancer is pretty cheap. "Shelter 2010" is 60% bigger than "shelter 1970". "Luxury" in 1970 would be a 32" color TV, as opposed to a plasma screen with playstation today. Basically, "Middle class 1970" == "poverty 2010". It might be the case that middle class 2010 is as good as it gets - I'm not trying to make predictions. I'm just pointing out that if, as the OP suggested, the next 40 years are as bad as the last 40 years, then we will be doing pretty good.
  - jimbokun 16y ago
    ""Middle class health care 1970" would be pretty cheap today - any medicine available back then is out of patent, and dying of untreatable cancer is pretty cheap." I question whether availability of drugs is the best indicator of overall health. We are also a lot more sedentary, the quality of our food is probably not as a good, and we are a lot heavier. Given that, how many drugs do we need to just break even, health wise, with where we were in 1970? "as opposed to a plasma screen with playstation today" It would be an interesting psychology study to figure out if a kid with an Atari in the 1970s was objectively less happy and fulfilled than a kid with a plasma screen and playstation today. I suspect it is the relative excitement of being one of the first to get a game before your friends is a bigger factor. I guess it's a little late to start that study at this point, however. My overall point is that I think comparing quality of life across eras is more complex than just comparing square footage, drug prices, and pixel counts. Unless I misunderstand your point.
noodle 16y ago
it seems to me that predicting the distant (20+ years) future based on the past never really works out.
- Unseelie 16y ago
  That's because you're assuming the wrong frame of reference on your singularity. http://www.kmeme.com/2010/07/singularity-is-always-steep.html http://www.kmeme.com/2010/07/singularity-is-always-steep.htm... If you were to drop back to 1970 and estimate the next 20 years by the 2010 scale, things are almost identical. If you measure 2000-2010 on the 1970 scale, things are a hard takeoff.
joe_the_user 16y ago
Hmm, Biking through Oakland the other night, I saw a guy pushing a shopping cart with one hand and talking on his cellphone with the other. A good deal of your lifestyles of the no-longer-needed description might true except ... the 4000 sq ft house. For the now-permanently-unemployed, it would be a 40 sq ft "home" or perhaps a car or suped-up shopping cart. But still with lots of gadgets. Space (at the least) isn't going to be made cheaper by mass production even if everything else will.
- fragmede 16y ago
  Any city that's learned to grow vertically would disagree with you. If you thought real-estate was expensive in New York now....
  - Unseelie 16y ago
    NYC is expensive because its more expensive to build skyscrapers than houses. Its not cheaper because of mass production, there's just enough incentive to spend more money than it takes to build houses because of the local population density.

myoung8 16y ago

Tony's calculations are wrong because he assumed constant inflation. There will be periods of deflation, and many think that one is starting now. It also won't be the last.

jerf 16y ago
It's not a terrible thing to do though, because it also reflects uncertainty in your income, albeit in a way that people aren't used to seeing. There is a non-zero chance that 10 million dollars today will end up being 3 million dollars next year, and I don't mean "next year" metaphorically, and I'm not even talking about the nastiness of the current economy, either; that's always true, regardless of the state of the economy, just the odds change.
webwright 16y ago
No, he doesn't assume that. He assumes an average rate of inflation with the mean average being above zero, because it's always been that way. http://www.usinflationcalculator.com/inflation/historical-inflation-rates/ http://www.usinflationcalculator.com/inflation/historical-in... When you're talking about decades of retirement, the compound annual growth rate of inflation is all that really matters. There isn't clear consensus on inflation/deflation in the near term. While last year saw deflation, a lot of economists think that printing money like we are will cause unusual deflation.

portman 16y ago

The US inflation rate over the last 40 years is readily available from the US Department of Labor based on the Consumer Price Index. http://www.bls.gov/data/inflation_calculator.htm http://www.bls.gov/data/inflation_calculator.htm $35,594 in 1970 got you the same as $200,000 today. So why does it strain credulity to believe that $200,000 today will be equivalent to $500,000 in the year 2050? Inflation was much higher over the previous 40 years.

tokenadult 16y ago
More to the point, of course, is how much you will have to work to have that number of nominal dollars.
- achompas 16y ago
  Right. People are going crazy over the $500k number 40 years out but, in real dollars, that could easily convert to a middle-class wage today.
  - jerf 16y ago
    Actually, one of my (many) issues with political discourse today is that thanks to inflations, "the rich" has been defined down brutally over the past 30 to 40 years. Anyone currently making $250/year, yeah, if they're hurting it's their own damn fault for overreaching, but that is very rapidly becoming merely upper middle class. Meanwhile, neither our legal/tax nor our social definitions of "rich" are being updated at anywhere near the proper speed. I recall somewhere seeing that if you take the term "millionaire" at the time that it was coined, it would today take 130 million to have that same level of wealth. I can't seem to scare up a reference, but it's at least broadly correct even if I'm off by 10 or 20%. If you don't retire a millionaire in 2030/2040 money, you're going to be in real trouble. You're probably in trouble if you retire merely as a millionaire.
    - tokenadult 16y ago
      And yet many of the things that average people enjoy today could not be obtained with any amount of money when my grandfather was alive. Where I live, today, an annual income of U.S.$250,000 is very comfortable indeed (and rather rare).

petercooper 16y ago

Whoa, that 40->50k over 40 years stat seemed ridiculous to me so I looked it up and you're right. This strikes me as bizarre because in the UK, both prices and wages have blown through the roof over the same period. I wonder what the deal is here (though the USD-GBP rate was significantly different decades ago).

deleted 16y ago
[deleted]
nl 16y ago
Those numbers are adjusted for inflation.

alister 16y ago

Can we conclude that this is the wistful daydream equivalent of the "Maserati Problem" I'll go out on a limb and say that even normal retirement planning (50 years into the future) is a Maserati Problem. Everybody that makes very long-term projections about money -- whether it's the gloomy "interest on $4m won't last 40 years" variety to the rosy "save $300 a month and the compound interest will make you a millionaire in 50 years" -- commits the same error: They neglect the fact that wars, revolutions, devaluations, confiscations, and other economic disasters have wiped out all savings at frequent points throughout history. There should be some trillionaires walking around whose ancestors started saving in the Renaissance when modern banking began -- but there aren't. So if you're talking time scales of 50 years, there is significant probability that your carefully calculated spending or savings plan is self deceit.

nostrademons 16y ago
"There should be some trillionaires walking around whose ancestors started saving in the Renaissance when modern banking began -- but there aren't." Carlisle Cullen. ;-) Anyway - this is a really good point, but I'll point out something else. Most of the wealthy would-be trillionaires whose fortunes got wiped out passed down another inheritance: their genes. Those same disasters that wipe out the savings of the rich tend to kill the poor, who simply can't afford transportation away from disaster areas, bribes for border guards and security forces, political connections to ensure safety for their children, or information savvy to know when a crisis is coming. Most of today's middle class is descended from the kings and nobility of the high middle ages. The peasantry just mostly died out, leaving no descendants.
- cynicalkane 16y ago
  Most of today's middle class is descended from the kings and nobility of the high middle ages. The peasantry just mostly died out, leaving no descendants. Source?
  - nostrademons 16y ago
    My Google-fu is failing me at the moment. It was from an absolutely fascinating article that suggested that the middle-class arose because of downward social mobility in post-Plague Europe. With the serfs mostly killed off by Black Death, the 3rds and 4th sons of the nobility typically couldn't support a feudal household, and so they had to take jobs as merchants or artisans in the emerging market economies. Along the way, they brought with them some of the values of the nobility (most notably, not having kids until they could support the lifestyle they were accustomed to as children), which allowed Europe to escape the Malthusian trap of the Dark Ages. IIRC, the genealogical records (of most present-day Europeans and Americans being descended from the nobility) was presented as fact, but the causal link with the rise of the middle class was more tenuous. I'll look again after I've gotten some actual work for $realjob done.

portman 16y ago

"In the last 40 years (between 1967 and 2007), median wages have only gone up US$10000 (from 40k to 50k)." That figure that you're citing is IN CONSTANT 2003 DOLLARS. The nominal median household income in 1967, without adjusting for inflation, was $7,260.87. [1] So a "middle class" income has increased from $7,260 to $50,000 in 40 years. Hopefully this clarification will make the author's nicey-nice spreadsheet make sense now. [1] http://www.census.gov/hhes/www/income/data/historical/household/index.html http://www.census.gov/hhes/www/income/data/historical/househ...