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Squeezed: Why Our Families Can’t Afford America

251 points by petethomas 8y ago

yosito 8y ago
Stretched would be more accurate.
cyberpunk0 8y ago
Death of the American dream was a decent doc about this subject. All of this has been engineered into place over a long period of time.
- metalliqaz 8y ago
  The ownership class declared a shadow war on the New Deal and has won the long game.
  - danieltillett 8y ago
    The New Deal was just a head fake while they dealt with the real enemy - communism. I do have to give the owners credit (or more accurately their advisers) for how they played the long game - a work of genius that has totally won.
    - Applejinx 8y ago
      Pyhrric victory. In so winning, the capital class makes overthrow and revolution impossible to avoid. The threshold point goes ever higher, and by the time you're putting the screws to the borgeouisie and formerly comfortable middle class people it's too late: you're trying to exclude those who have enough power and leisure time to effectively mobilize against you. 'Totally won' means there's nowhere to go but down.
      - lotsofpulp 8y ago
        Technology can be used so that no matter the number of poor people that want to revolutionize, they will be defeated. You can pick out and get rid of the leaders before they even get a chance to get going, and even if they do, you have control of a very capable military and police force. Resource depletion and pollution might be their formidable enemies.
        germinalphrase 8y ago
        There’s a speculative fiction story there - it involves a wall and drones, a post-scarcity walled garden society and a slowly poisoned and dying slum.
- skrebbel 8y ago
  > has been engineered into place You're conveying an image of handwringing illuminati in a room who are out to get us. Is that what you mean? If not, who has been engineering this and why?
  - jinfiesto 8y ago
    That's a little overstated. The Powell memo all but declared a war on the working class.
    - throwaway7312 8y ago
      This memo? http://reclaimdemocracy.org/powell_memo_lewis/ http://reclaimdemocracy.org/powell_memo_lewis/ Hadn't heard of it. Just read it. Interesting stuff. It's very clearly a call-to-arms for business leaders against Marxists/communists. Not the working class. Most Communists, at least in the West, spring from the middle- and upper-middle class, not the working class. And Communist countries, historically, tend to make their working classes worse off, not better. Equating a defense against communism with an attack on the working class would seem a stretch.
      - jinfiesto 8y ago
        Yes. With regards to it being a call to arms for business leaders against Marxists/communists, that's accurate to a certain degree. If you look at what gets lumped in with marxists/communists though, it becomes pretty apparent that the memo was meant to be an assault on everything that could be "unfriendly" to business. In the Powell memo, you can see some of the precursors to what's happening today. For instance, I think the demonization of academia in right-wing circles as well as the death of organized labor (unions) probably start with this memo (I'm not the only person who thinks this. Chomsky as elaborated on this at length.) The Powell memo was also started the process of making lobbying both widespread and acceptable to society (even when it was legal, it used to be frowned upon.) I think most people would agree that lobbying is a cancer on our democracy.
  - rectang 8y ago
jaggederest 8y ago
All the explanation you need in two graphs: https://fred.stlouisfed.org/graph/fredgraph.png?g=ki8y https://fred.stlouisfed.org/graph/fredgraph.png?g=ki8y https://fred.stlouisfed.org/graph/fredgraph.png?g=ki8A https://fred.stlouisfed.org/graph/fredgraph.png?g=ki8A Cost of education over real median household income, and house price index over real median household income. Education is more than twice as expensive as the start of the century, and houses are almost twice as expensive as the start of the century.
- metalliqaz 8y ago
  They are good graphs, but I think explanation is better given by graphs of where wage growth has gone. I don't have it handy, but I recall a very nice graph that showed nearly all wage growth since the mid 70's has gone to the top 10%
  - hectormalot 8y ago
    Since the graph is by median (not the mean), this should really disturb the graph. I think they are spot on: a person on the center of the income distribution has seen housing and education cost double when compared to his/her income. And probably healthcare as well. I’ll admit, income inequality has increased as well, but that by itself could be fine if the relative living cost for the average person had not increased that much
  - tafycent 8y ago
    One interesting and slightly mitigating factor to consider is that during the same period of time far more people have moved from middle to upper class or lower to middle class than have moved down in income class. Part of the reason inequality is increasing is that as a whole we're largely moving up in standard of living, but the bottom tail of the distribution isn't really moving. And I'd argue that you wouldn't really expect it to. It's a lot more difficult to drag the destitute out of poverty than to increase the standard of living for most, but not all, people
- coliveira 8y ago
  You're forgetting health care costs, which have skyrocketed since the 80s. Interestingly, all of these costs are not part of official inflation numbers, so real inflation for middle class is much higher than the reports say.
metalliqaz 8y ago
> some sharp points about how workers are expected to “deny their biology” and “how little American businesses and legislators care about care,” These are two wonderful, succinct statements that perfectly describe the American experience.
tracer4201 8y ago
My total comp this year is ballpark $240K. I'm still paying student loans. I'd like to buy a home, but in my area, there's nothing in a reasonable commmute from work under $750-$800K and anything less is getting bought in cash for some ridiculous amount over asking price. You might argue that $800K is justified on a $240K income. I have anxiety from the thought that I could lose my job, and the barrier to entry in my field at other companies is so high that I would burn through my savings/investments and not be able to pay mortgage, taxes, + insurance.
- cylinder 8y ago
  You can easily afford that mortgage. It's $4100/mo. Aren't you netting $12-$14k/mo after income tax? Not sure what the property taxes are where you are. Everyone faces the same anxiety when buying, but what's the alternative? Is your rent that much cheaper? If you lose your job, you still have to rent a place to live. You're also missing out on a big capital gains tax exemption. If you do lose your job, you can rent it out. $800k is nothing in a city with $240k jobs. You should see other big cities in the world!
  - jacquesm 8y ago
    > If you do lose your job, you can rent it out. Will you pay him back the difference if he can't? If not then why such definitive statements about what someone else should be comfortable with. I could easily borrow a million or more from the bank to buy a house, but that wouldn't make it a wise decision. Instead I live in a house far smaller and more modest than what I could be living in and I feel better for it knowing that in a downturn (when most likely more people are experiencing a downturn) I will not have to change my life-style one bit.
  - bradstewart 8y ago
    While I agree with you, the big difference (I think) is that you burn a significant portion of your savings on the down payment. So that cash is no longer available to cover your monthly costs if you lose your job.
- pmorici 8y ago
rio517 8y ago
This. I was lucky enough to fall for a German woman who was studying in the states. We married and moved to Berlin when we realized having a family in the US would be a struggle. We could have moved to the suburbs, but we really hate car culture and wanted to live in a biking city. I worked in tech - didn't have to learn German or jump through hoops to get a job. Now, on a single high 5 figure salary, I'm 15 minutes biking to work and live in one of the nicest parts of the city. We have two kids in free day care. My wife works part time, and she is finishing a year off of 60% paid maternity leave. She really doesn't earn much after taxes, but we save all her income - more than 15k per year. Salaries are lower here and things are getting more expensive for sure. But for 400k+ EUR, we should be able to buy a place for a family of four and bet set for a long time.
- sneak 8y ago
  Having lived in Berlin for ten years, I can say with certainty that wages there are less than half equivalents in our industry in the US, and income taxes are much higher. Cost of living in some places, like Berlin, is lower (for now), but that only matters if you intend to be a low income earner over your career. I would rather have 50% higher expenses and 100-300% higher income, myself. There’s more to lifelong financial planning than “can I afford house payments?”.
  - liotier 8y ago
    Nice - until you have kids and health problems... Then you appreciate how much Europe makes these a non-problem - at least financially.
    - sophistication 8y ago
      Is that really a problem for engineers earning >~60K a year?
      - jventura 8y ago
        If your health problems do not prevent you from working, it’s not a problem.. But keep in mind that even non-engineers and poor people have those benefits.
timwaagh 8y ago
i would love to participate in this discussion. unfortunately i cannot, because although i do not have to complain about money, unfortunately my financial situation is not so amazing it would be smart to throw away money on a NYT subscription.
- chrisseaton 8y ago
  There is a rule in this site against complaining about pay walls.
  - timwaagh 8y ago
    my bad. i thought the rule was against pay walls itself. maybe something changed. edit: cannot find any rule on this in the guidelines. perhaps you could give me a reference.
    - chrisseaton 8y ago
      > ... please don't post complaints about paywalls. Those are off topic. https://news.ycombinator.com/newsfaq.html https://news.ycombinator.com/newsfaq.html
- sdf43543t345 8y ago
  * delete cookies or * block cookies = free NYT
pmorici 8y ago
Is it just me or do these articles about economic hardship always seem to use the most unsurprising examples for their prototypical struggling subject. The example they use here is freelance writer. Hasn't that job title always had poor prospects? I remember a similar article posted here about people struggling to find work after the 2008 crash and their example was a person who had been laid off but instead of trying to find a new job they purposely blew through their savings for a couple years and were then surprised when they went to look for work and something didn't immediately materialize.
- ForHackernews 8y ago
  One of the other examples in the same article is a middle-aged aerospace engineer, so maybe that's more to your liking.
  - pmorici 8y ago
    Sure, that's more plausible to the central point they are trying to make.
  - troupe 8y ago
    An aerospace engineer who decided to become a personal chef and went into deep dept at a culinary school. I'm guessing this individual is a bit different than the engineers I know.
    - bittercynic 8y ago
      If you're an in-demand engineer, you're likely surrounded by in-demand engineers, and that might seem like the norm to you, but that path might not be available to everyone. I think it's worth thinking about the conditions that could lead to a person seemingly torpedoing herself with an expensive, debt-ridden culinary certificate. Things really have gotten tougher for many Americans over the past few decades. Some people make it extra tough on themselves by refusing to handle downward mobility gracefully and taking the best options available to them. On the surface, borrowing money for culinary school seems like an objectively (very) bad choice, but people are complicated, and I'd be interested in understanding what brought her to this.
dalbasal 8y ago
There are all sorts of aspects to this. In terms of the bigger, longer term trends, I think the dynamic described by Thomas Picketty is the most important aspect. Long term trends towards increased wealth disparity. On the other hand, at the micro level people actually experience, I think the cultural dynamic is more important. It determines how people feel about the economy. The people she talks to believed their educations and backgrounds (most of them grew up in middle-class homes) would guarantee some financial stability Upward mobility is ideologically important to any major, modern political camp. Few deal with downward mobility in any way. Individuals will have a much tougher time politically tolerating being poorer than their parents (or their cohort) than just being poor. Losing is more emotional than winning and the grudge lasts longer than the opposite. Ideologically, I think most of us would say that social class should not be inherited. Emotionally, few of us can live with downward moves in the economic hierarchy. It creates an unmistakable feeling of having been robbed of one's birthright.
- branchless 8y ago
  Nope this guy has a good job. Not about mobility. This is about rentiers. People need to read "Progress and poverty" by Henry George. Land prices are the issue.
  - dalbasal 8y ago
    Not having a job isn't the only way to move down a tier. I think what a lot of cohorts are feeling (the economy is broken) comes down to (1) middle class upbringing (2) did the things middle class kids are supposed to do, like college, "professional white collar job" (3) results are worse than expected. People's expectations can be set all sorts of ways, but the most obvious is comparatively to the group they believe they are or shoybe part of. Ie, parents, friends... This is all at the personal level. There are also macro trends and dynamics in the economy overall. Haven't read George, but Picketty (recent Nobel laureate) has a very good theory for this. I don't know how George uses "rentier" but "returns to capital" probably encompasses.
  - pierotofy 8y ago
    Book can be downloaded from http://www.gutenberg.org/ebooks/55308 http://www.gutenberg.org/ebooks/55308
mruniverse 8y ago
Is it worth reading or is it just about how things are more expensive and we don't make enough?
- throwaway7312 8y ago
  It's that, + "middle class going broke after being conned by Trump University & the gig economy."
  - mruniverse 8y ago
    I like the writing from Paul Krugman. He tries to explain systemic reasons for inequality.
EZ-E 8y ago
Where did the money go?
teekert 8y ago
Honestly as a Dutch man with a family but only one income (the norm about 40 years ago), we are are also really at the edge. And I have a relatively decent income (1.5-2 times modal as we call it). And where does all that money go? Well, more than 25% goes to interest on our mortgage. We get some of that back but from tax money so it's a cigar from our own box. Whatever we earn more as a family is taken away by the banks by allowing us to loan more, which increases housing prices, which increases the interest they receive. Our economy is very much rigged to keep everybody working near full time to be able to live.
- lifty 8y ago
  Do you have an opinion about what caused this situation where people are in a constant chase to keep up with their expenses, especially in Netherlands? I have my opinions but I am really curious what is the perception of a middle class western person. Thanks!
  - abhinavkulkarni 8y ago
    Loosening of regulation and cheap influx of money, on the whim printing of money by the Fed. Case in point, the current situation with student loans. It's politically beneficial to make slogans about housing for all, education for all, etc. and then institute policy to distribute cheap money. Least time we did that, you know what happened (2008).
  - teekert 8y ago
    I think it is housing prices. Banks sign money into existence as your debt. And then you work to pay it off plus interest. We bought our house from a single old lady for about 195.000 euros (plus 40.000 for restructuring and then some for taxes), this woman bought this house in the sixties for 19.500 guilders (8.850 euros), she got about 186.000 euros just for living there for 50 years. Meanwhile we pay the bank 4.85% of 245.000 yearly for 30 years (ok, it's less now for sure) but that 4.85% would amount to 349.000 euro's for the banking system, just for signing my debt into existence. In this way they constantly squeeze society. If you do the math you see that you pay over 300 a month to decrease the debt while paying about 1000 in interest. If housing prices rise more than wages at some point both parents have to work full time and can afford less and less luxury items. Then we are at "maximum squeeze". Can you imaging that my parents once payed 12% mortgage interest! of course houses were cheaper then (this was early 80's) but still. People with 2 incomes by the way can save a full income (although I know some people that really can't afford to have one parent at home), they really don't feel anything, but banks are eating away are our wealth people, wake up. And when the banks fall because they took to much risk, they require our money again, to be saved!
dbatten 8y ago
This raises two questions in my mind: I admittedly come from a very privileged background (in terms of both an upper-middle-class family and genetics), but how have so many people found themselves in places where it's so hard to make ends meet? My parents paid for college (like I said, admittedly privileged) and the State of North Carolina actually gave me free tuition and paid me a stipend to get my Master's degree (free/cheap government education is a benefit which you don't have to be privileged to get, at least not as privileged). I chose the "wrong" programs from a job prospects / earnings perspective - Sociology and Public Administration. I still managed to fall into a career as a data scientist. I'm not paid a bay-area salary, but then the suburbs of Raleigh/Durham don't have a bay-area cost of living either. My wife and I have a bigger house than we need, drive two old (2005 & 2009) but functional cars, have two kids, take a reasonably nice week-long vacation each year, and give quite a bit away, all on one salary. We've both made sacrifices to be debt free other than the mortgage, which helps. Most of my close friends went to very reasonably-priced state schools (e.g., NC State University), got the "right" degrees, and are now gainfully employed and able to support a family. Do I just live in that much of a bubble? Are my and my friends' experiences really that out of the ordinary in America in 2018? Second, is it just because I'm young? This article suggests a lot of programmers/engineers end up being un-hireable by middle age, and struggle to find another career to make ends meet. Does that match the experience of a lot of folks here? From my perspective, most of the middle aged programmers/engineers I know have just moved on to become software architects, managers of development teams, CTOs, consultants, etc. - in other words, they're doing even more lucrative work facilitated by their years of experience.
- RubenSandwich 8y ago
  I'm sorry but you do live in a bubble. Here is a UN report on poverty and rising inequality in the USA: https://digitallibrary.un.org/record/1629536/files/A_HRC_38_33_Add-1-EN.pdf https://digitallibrary.un.org/record/1629536/files/A_HRC_38_.... Here are a few notes from the report: * In September 2017, more than one in every eight Americans were living in poverty (40 million, equal to 12.7% of the population). And almost half of those (18.5 million) were living in deep poverty, with reported family income below one-half of the poverty threshold. * In the OECD the US ranks 35th out of 37 in terms of poverty and inequality. * The youth poverty rate in the United States is the highest across the OECD with one quarter of youth living in poverty compared to less than 14% across the OECD. * US healthcare expenditures per capita are double the OECD average and much higher than in all other countries. But there are many fewer doctors and hospital beds per person than the OECD average. * The Stanford Center on Inequality and Poverty ranks the most well-off countries in terms of labor markets, poverty, safety net, wealth inequality, and economic mobility. The US comes in last of the top 10 most well-off countries, and 18th amongst the top 21. * According to the World Income Inequality Database, the US has the highest Gini rate (measuring inequality) of all Western Countries The truth is poverty and inequality is uncomfortable and pushed to the edges of society.
golergka 8y ago
> Quart describes her own experience of slipping into the “falling middle-class vortex” after the birth of her daughter seven years ago, a time when she and her husband were freelance writers facing new child care costs and hospital bills. TBH, couple of "freelance writers" deciding to have a child sounds like recipe for financial disaster right from the bat. I understand that "freelance writer" is a broad term, but most of the writers I know are very far from affording a child or two. I understand that having a child, unlike, say, buying a sports car, is a luxury a lot of people around the world decide to indulge in even if they don't really afford it. But if you spend money and resources on something you can't really afford, at least be honest with yourself about it.
- z0r 8y ago
  Raising children being relegated to luxury status is a symptom of an oppressive and/or failing economic system.
  - golergka 8y ago
    Not at all - it's a sign of an economic system that finally accounts for ecological externalities. If we want to save the planet, human population needs to stop growing. So, on average, a person should only be able afford one child. And when you remember that wealth inevitably follows a pareto distribution, it's obvious that most families won't be able to afford any children at all.
    - z0r 8y ago
      That's not what happens. Population growth is outsourced to the third world (immigration, manufacturing, etc.) The planet (biosphere) will be hollowed out beyond repair by our ever growing economy. "Wealth inevitably follows a pareto distribution" is just an excuse for terminating your thinking.
dqpb 8y ago
> They are people on the brink who did everything 'right' One of my favorite lessons of software engineering: it doesn't matter how right you think you are.
notacoward 8y ago
People often lump freelance/contingent work and the "gig economy" together, but they're actually two different things. Yes, both are often used to avoid the cost of taxes and benefits, or to gain flexibility and not have to lay off regular workers if the business doesn't thrive. However, freelance and contingent work has generally been about hiring people who chose to work under those terms, to accept the uncertainty and some of the costs in return for gaining their own kind of flexibility or a higher hourly wage. The gig economy to a large degree seems to rely on a pool of involuntarily unemployed (or under-employed) people who would very much prefer to have a more regular job with a more regular paycheck if only they could find one. If the economy, or economic policy, changed so that there were more decent jobs available, the freelancers and contractors would go on as they always have but the gig workers would all bail and the gig-economy companies would have to make some serious adjustments to stay in business (if that would even be possible in such a different labor environment).
rdlecler1 8y ago
High housing prices are a massive tax on both middle class and investment. It all flows to landlords and lenders. Cut housing prices by 1/2 - 2/3 and the middle class has money for other things. We need an Elon Musk for housing.
- cozzyd 8y ago
  Hate to break it to you, but none of the products Elon Musk is peddling are meant for the middle class.
  - abhinavkulkarni 8y ago
    Well, Tesla is transitioning from luxury cars to the mainstream ones. Secondly, how about reducing our reliance of fossil fuels and instead using electricity for driving the cars (I know, I know, electricity comes largely from fossil fuels, but net, it is beneficial to use it for driving cars than gas)? That's not going to benefit the common public?
    - Semirhage 8y ago
      When? Right now their “mainstream” $35k car is actually $55k+, with a backlog.
      - frockington 8y ago
        And the tax credit is going to go away soon so add a couple thousand to that number.
  - rm_-rf_slash 8y ago
    Starlink?
- dionidium 8y ago
  The problems facing housing are regulatory in nature. We don't need a savior from the investor class. We just need to make it legal to build more housing. There is nothing confusing about it. There's no difficult problem that needs outside-the-box solutions. It's currently illegal to build as much housing as we need. Make it not illegal.
projectramo 8y ago
I can tell the ages of people posting on here from their comments. I love Berlin because of the nightlife and culture. 20s. I love Berlin because of the free schooling. 30s and 40s. I love Berlin because of the free healthcare. 50s+
mrfredward 8y ago
A lot of things in America are really cheap, but there are a few areas where we are denied cost effective options. I like colleges as an example because you don't need any domain specific knowledge to see the excess. I went to a cheap state school. The buildings were made of red brick, the paths were paved with brick and replaced every 3 years, and the gardens were meticulously maintained...the place was meant to look like a palace, and this was one of the most cost effective options I could find. If I don't strike it rich, I'll probably never live or work in a place as fancy as where I went to school. Of course there are ugly colleges too, but the point is that the price of tuition includes a lot that has nothing to do with education, and a lot of this is stuff people wouldn't pay for if given the choice. Does it make sense to pay for an upper middle class lifestyle when you're a broke 19 year old? Don't worry, the government will give you a loan...
- troupe 8y ago
  > the price of tuition includes a lot that has nothing to do with education, and a lot of this is stuff people wouldn't pay for if given the choice. This is a very good point. There are colleges that are quite a bit less expensive, but as a whole the fact you can get a loan for pretty much any amount without needing to justify the return on investment guarantees that colleges will keep increasing their expenses to get students to spend their debt at their school.
  - downrightmike 8y ago
    On undergrad, there is a life time limit of $60k, so expect the average cost to go up to that. And then the limit will be increased.
speeder 8y ago
I am Brazillian Still, sadly that stuff also applies here... Me and my friends around my age, that were born in solid middle-class families (of the sort that could own only one car, a cheap house or apartment and so on), were taught that the path of life was: go to college, get a job or public sector job (here in Brazil those are popular), marry, have a boring life. Instead we went to college paid with crazy loans, found no jobs, jumped around from gig to gig trying to repay the loans, people don't want seriosu relationships, only flings, and now I am 30, living back in my parents house, still with no job. A 30 year old college friend of mine that is excellent designer and know some coding, is living on his parents home with his kid (no wife), to pay the kid bills he found a illegal-ish gig as construction worker, and after he lost that job, he can't find a new one. My grandparents used to tell me what was their "poor life", where they had to walk to school, work their asses off early, date in front of dad of the bride, eat eggs because other food was expensive... Now we have a "rich" life, with cars (that belong to parents, I never could afford my own, neither my friends), computer, internet... but can't afford our own house, we can't "work our ass off" because there is no work, eating enough protein in some months have been hard, as food prices inflated way beyond the wage growth and what is affordable now is basically cereals and starchy foods (like potatoes), and your food choice become: eat enough nutrients and baloon in size wildly as all food availble has too much calories comapred to other nutrients, or control your calories, have nutrient deficit... To me is no surprise people live in slums or invaded areas, one time I rented a apartment with cracked walls, non-working fire alarm, elevator that often had issues (like operating with doors open and stopping 20 centimeters off-level), no garage, and the rent was 4 times the mininum wage, I could only afford living there when my income due to some coding contracts landed me in the top 3% highest earners of the country... made me wonder, where everyone else was living. (or one time I shared a normal 3 bedroom house, with literally 35 persons, most of them already had bachelor degrees, several in STEM, and were there to train in a nearby police academy, hoping such dangerous work was better than having no work at all in their own field)
- somethingsimple 8y ago
  Wow, things have gotten really bad since I left the country. Mind if I ask in what state you live? I never had trouble finding a full time programming job in Rio Grande do Sul.
mathiasben 8y ago
It's the concentration of wealth causing this as the economy is being bled dry. the fix is to restore the progressive tax code, income in excess of $5M/yr taxed at 99%. not rocket science, but nearly impossible because politics, so get used to being poor America. currently half of jobs in usa pay less than $18/hr. only going to get worse unless the root cause is addressed.
- CNJ7654 8y ago
  This just in! Most major businesses moving outside of the US pending radical tax code reform!
  - matthewwiese 8y ago
    Your comment was dead but I thought I may as well vouch it. Although you wrote your point in a snarky tone, taking large corporations into account when discussing this topic seems at least halfway in good faith. FWIW I too am a jobless Millennial at the moment, so it's not like I am playing devil's advocate because of a nefarious hidden agenda. EDIT: Spelling.
- kindarooster 8y ago
  I wish I heard this view on taxes more often. Have a nice smooth tax curve up to like 95% at some income level (5 or 10 M). The rich are not taxed anywhere close to enough.
  - rich-and-poor 8y ago
    If someone figures out how to make 5M/year of income, I am absolutely certain they are better at capital allocation than the current administration. You are suggesting that they are not, and that we need to have the state decide where the money of the top earners go. I'm sorry, but we have tried that before. It does not end well.
    - spruciefic399 8y ago
      I think the problem with that argument is that the reasons an individual might be good allocating their own capital are distinct from the reasons they have capital, or what is justified, in the sense of ethical or societally defensible. A successful white-collar criminal can be said to be good at capital allocation, to make an extreme example. My argument is not that wealth means someone is criminal (although I do think criminality has as a goal wealth rather than poverty, which is the inverse but relevant). However I do think there are lots of hidden costs that people advertently or inadvertently manage to get out of paying for, and taxes are meant to recognize that fact. The bailouts of the great recession are good examples of this to me in some sense. The government saved certain businesses, or ameliorated their crash. Whether or not this was the right decision is one thing, but given that they did get bailouts (or outs), suggests that what we should expect is taxes and regulation to support these kinds of things. There are lots of other things like this that conveniently get glossed over, like hidden environmental costs, education and infrastructure, research, etc. I find it incredibly manipulative, for example, for arguments to be made against net neutrality on the grounds that telecom companies somehow bootstrapped their way up from nothing, when the internet itself was a government invention, and much of their infrastructure is made possible by public right-of-way laws or other privileges given by municipalities. I think the fundamental problem with US society today is an extreme form of survivorship or fundamental attribution bias, where we grossly overattribute success to individual characteristics and not other factors. Then we get locked into these strawman debates that pit extreme capitalism against communism, as if there's no moderated grey area, that our only choices are complete equality of wages etc. or winner-takes all gross inequality. What I increasingly see in the US are the haves and the have nots, and I no longer believe that the haves, by in the large, deserve what they have in a way that the have nots do not. Income inequality, to me, is bad not just because of the disparity itself, but because it tends to exaggerate market errors in valuation. We tend to have these conversations and HN and elsewhere where we look at these examples of downward mobility and point to everything someone did wrong, but then do not turn to management, administration, business, etc. and ask "did they really do everything right"? We also tend to act as if, if they really made an error, that is really worth the downward mobility they accrued.
CNJ7654 8y ago
Why our families can't afford America: Youth getting swindled into massive student loan debts for the sake of it because "you have to go to college to get a good job" Families thinking it's a good idea to rent large, spacious apartments in massive urban centers where space comes at a massive premium
User23 8y ago
Funny how the word "immigration" never appears in these articles. Any intellectually honest assessment of the waning American middle class needs to consider the overwhelming post 1965 demographic changes. Regardless of your personal feelings on the matter, adding tens of millions of very poor people to a population over the course of decades is, as a mathematical certainty, going to reduce the median wealth of the population. Then add to that dynamic effects such as increased demand for housing and other necessities, higher taxes to cover increased costs of health, education, welfare, and so on, and it's no wonder the fading middle class is getting squeezed.
- kylehotchkiss 8y ago
  https://www.recode.net/2018/1/12/16883260/trump-immigration-us-america-tech-companies-immigrants https://www.recode.net/2018/1/12/16883260/trump-immigration-... "Immigrants and their children have helped found 60 percent of the most highly valued tech companies in the U.S"
  - User23 8y ago
    I was very careful not to make any value judgments or even prescriptions. I'm simply looking at facts and reasonable inferences from them. Some people will prefer to conclude that immigration is bad and should be reduced. Some people will prefer to conclude that immigration is great and should be increased. In the vast majority of cases people's preferences appear to align with their own perceived self interest. The people down-voting this post and my original one are assuredly members of the latter class. Immigration isn't a binary issue. One can reasonably conclude that tens of millions of poor uneducated foreigners are bad for the US population median wealth distribution, but tens of thousands of educated entrepreneurial foreigners are good for it. One can also do so without succumbing to the puerile some's good more's better pseudo-reasoning that dominates the Overton approved discourse on the subject. Also, supporting my original post, that massive influx of affluent foreigners has observably greatly increased the cost of living in the bay area. A person can make 6 figures and still be considered in poverty. This is clearly germane to any discussion of the middle class withering away.
downrightmike 8y ago
A large part of the problem is the psychology of being middle class. No one wants to be poor, or to think that they are poor, they affiliate themselves with the middle class. The social definition of what is middle class has been broadened to include people who would otherwise fit in the poor definition. Thinking themselves to be middle class, they try to act it and over spend and never save. A more stringent definition used to be something along the line of being a professional that would allow you to be able to afford to retire early and have the funds to get into politics or some other service. Poor people will continue to be bled dry, while the middle class shrinks and everyone refuses to accept they are technically poor and they need to act with purpose to improve their situations.
- itchyouch 8y ago
  Isn't it just percentiles? I recall 30-80th percentiles being considered the middle class. 50th percentile household income is around 55-60k. 30th-80th is somewhere around 40-160k/year ish in income. The problem is that "incomes have stayed relatively flat" aka, people were still making the same 40-160k/yr 20-50 years ago, thus they have lost earning power.
eulers__number 8y ago
thats why we need anarcho-capitalism
jk_danson 8y ago
There is opportunity everywhere. The middle class is fading more from a lack of individual drive to succeed. My parent went from middle class to absolute broke. They lost their home and lived with their parent for several years while rebuilding what they lost. Now they own a better home and are doing very well. They are a one income family (my father works and has no college degrees) with 5 kids still living with them.
jiveturkey 8y ago
TFA is a rather thin "review" of the book, almost completely unsubstantive. > “It’s not your fault.” Based on the diligent people she meets, it’s hard to disagree. Sorry, but one can be diligent and still have made wrong choices. And the irony is thick. The author found herself in this boat through years of being a freelance writer, and now in heavy debt from culinary school. I haven't read the book but I very much doubt I would find it compelling. I do agree, some and maybe most of the blame doesn't lie on the middle class's shoulders (except for lack of civic engagement), but it doesn't seem like this book is going to get to the heart of it. I also laugh at this quote from TFA: > Even lawyers, a traditionally risk-averse bunch who tend to choose their profession for its stability, are getting caught in the vise between increasing law school tuitions and decreasing job prospects. Precarity, Quart suggests, can translate into solidarity. Even lawyers? It is well known that law schools are pumping out too many and too low qualified grads. The information about job prospects is available. Those who went into tier 3 law schools thinking that they would come out the other end successfully have made their own bed. Yes indeed much fault lies with the law schools themselves, but let's not absolve the students of blame here.
exabrial 8y ago
Should have been entitled, why people on the coasts can't afford America.

251 points by petethomas 8y ago

Stretched would be more accurate.

Death of the American dream was a decent doc about this subject. All of this has been engineered into place over a long period of time.

metalliqaz 8y ago
The ownership class declared a shadow war on the New Deal and has won the long game.
- danieltillett 8y ago
  The New Deal was just a head fake while they dealt with the real enemy - communism. I do have to give the owners credit (or more accurately their advisers) for how they played the long game - a work of genius that has totally won.
  - Applejinx 8y ago
    Pyhrric victory. In so winning, the capital class makes overthrow and revolution impossible to avoid. The threshold point goes ever higher, and by the time you're putting the screws to the borgeouisie and formerly comfortable middle class people it's too late: you're trying to exclude those who have enough power and leisure time to effectively mobilize against you. 'Totally won' means there's nowhere to go but down.
    - lotsofpulp 8y ago
      Technology can be used so that no matter the number of poor people that want to revolutionize, they will be defeated. You can pick out and get rid of the leaders before they even get a chance to get going, and even if they do, you have control of a very capable military and police force. Resource depletion and pollution might be their formidable enemies.
      - germinalphrase 8y ago
        There’s a speculative fiction story there - it involves a wall and drones, a post-scarcity walled garden society and a slowly poisoned and dying slum.
skrebbel 8y ago
> has been engineered into place You're conveying an image of handwringing illuminati in a room who are out to get us. Is that what you mean? If not, who has been engineering this and why?
- jinfiesto 8y ago
  That's a little overstated. The Powell memo all but declared a war on the working class.
  - throwaway7312 8y ago
    This memo? http://reclaimdemocracy.org/powell_memo_lewis/ http://reclaimdemocracy.org/powell_memo_lewis/ Hadn't heard of it. Just read it. Interesting stuff. It's very clearly a call-to-arms for business leaders against Marxists/communists. Not the working class. Most Communists, at least in the West, spring from the middle- and upper-middle class, not the working class. And Communist countries, historically, tend to make their working classes worse off, not better. Equating a defense against communism with an attack on the working class would seem a stretch.
    - jinfiesto 8y ago
      Yes. With regards to it being a call to arms for business leaders against Marxists/communists, that's accurate to a certain degree. If you look at what gets lumped in with marxists/communists though, it becomes pretty apparent that the memo was meant to be an assault on everything that could be "unfriendly" to business. In the Powell memo, you can see some of the precursors to what's happening today. For instance, I think the demonization of academia in right-wing circles as well as the death of organized labor (unions) probably start with this memo (I'm not the only person who thinks this. Chomsky as elaborated on this at length.) The Powell memo was also started the process of making lobbying both widespread and acceptable to society (even when it was legal, it used to be frowned upon.) I think most people would agree that lobbying is a cancer on our democracy.
- rectang 8y ago

jaggederest 8y ago

All the explanation you need in two graphs: https://fred.stlouisfed.org/graph/fredgraph.png?g=ki8y https://fred.stlouisfed.org/graph/fredgraph.png?g=ki8y https://fred.stlouisfed.org/graph/fredgraph.png?g=ki8A https://fred.stlouisfed.org/graph/fredgraph.png?g=ki8A Cost of education over real median household income, and house price index over real median household income. Education is more than twice as expensive as the start of the century, and houses are almost twice as expensive as the start of the century.

metalliqaz 8y ago
They are good graphs, but I think explanation is better given by graphs of where wage growth has gone. I don't have it handy, but I recall a very nice graph that showed nearly all wage growth since the mid 70's has gone to the top 10%
- hectormalot 8y ago
  Since the graph is by median (not the mean), this should really disturb the graph. I think they are spot on: a person on the center of the income distribution has seen housing and education cost double when compared to his/her income. And probably healthcare as well. I’ll admit, income inequality has increased as well, but that by itself could be fine if the relative living cost for the average person had not increased that much
- tafycent 8y ago
  One interesting and slightly mitigating factor to consider is that during the same period of time far more people have moved from middle to upper class or lower to middle class than have moved down in income class. Part of the reason inequality is increasing is that as a whole we're largely moving up in standard of living, but the bottom tail of the distribution isn't really moving. And I'd argue that you wouldn't really expect it to. It's a lot more difficult to drag the destitute out of poverty than to increase the standard of living for most, but not all, people
coliveira 8y ago
You're forgetting health care costs, which have skyrocketed since the 80s. Interestingly, all of these costs are not part of official inflation numbers, so real inflation for middle class is much higher than the reports say.

metalliqaz 8y ago

> some sharp points about how workers are expected to “deny their biology” and “how little American businesses and legislators care about care,” These are two wonderful, succinct statements that perfectly describe the American experience.

tracer4201 8y ago

My total comp this year is ballpark $240K. I'm still paying student loans. I'd like to buy a home, but in my area, there's nothing in a reasonable commmute from work under $750-$800K and anything less is getting bought in cash for some ridiculous amount over asking price. You might argue that $800K is justified on a $240K income. I have anxiety from the thought that I could lose my job, and the barrier to entry in my field at other companies is so high that I would burn through my savings/investments and not be able to pay mortgage, taxes, + insurance.

cylinder 8y ago
You can easily afford that mortgage. It's $4100/mo. Aren't you netting $12-$14k/mo after income tax? Not sure what the property taxes are where you are. Everyone faces the same anxiety when buying, but what's the alternative? Is your rent that much cheaper? If you lose your job, you still have to rent a place to live. You're also missing out on a big capital gains tax exemption. If you do lose your job, you can rent it out. $800k is nothing in a city with $240k jobs. You should see other big cities in the world!
- jacquesm 8y ago
  > If you do lose your job, you can rent it out. Will you pay him back the difference if he can't? If not then why such definitive statements about what someone else should be comfortable with. I could easily borrow a million or more from the bank to buy a house, but that wouldn't make it a wise decision. Instead I live in a house far smaller and more modest than what I could be living in and I feel better for it knowing that in a downturn (when most likely more people are experiencing a downturn) I will not have to change my life-style one bit.
- bradstewart 8y ago
  While I agree with you, the big difference (I think) is that you burn a significant portion of your savings on the down payment. So that cash is no longer available to cover your monthly costs if you lose your job.
pmorici 8y ago

rio517 8y ago

This. I was lucky enough to fall for a German woman who was studying in the states. We married and moved to Berlin when we realized having a family in the US would be a struggle. We could have moved to the suburbs, but we really hate car culture and wanted to live in a biking city. I worked in tech - didn't have to learn German or jump through hoops to get a job. Now, on a single high 5 figure salary, I'm 15 minutes biking to work and live in one of the nicest parts of the city. We have two kids in free day care. My wife works part time, and she is finishing a year off of 60% paid maternity leave. She really doesn't earn much after taxes, but we save all her income - more than 15k per year. Salaries are lower here and things are getting more expensive for sure. But for 400k+ EUR, we should be able to buy a place for a family of four and bet set for a long time.

sneak 8y ago
Having lived in Berlin for ten years, I can say with certainty that wages there are less than half equivalents in our industry in the US, and income taxes are much higher. Cost of living in some places, like Berlin, is lower (for now), but that only matters if you intend to be a low income earner over your career. I would rather have 50% higher expenses and 100-300% higher income, myself. There’s more to lifelong financial planning than “can I afford house payments?”.
- liotier 8y ago
  Nice - until you have kids and health problems... Then you appreciate how much Europe makes these a non-problem - at least financially.
  - sophistication 8y ago
    Is that really a problem for engineers earning >~60K a year?
    - jventura 8y ago
      If your health problems do not prevent you from working, it’s not a problem.. But keep in mind that even non-engineers and poor people have those benefits.

timwaagh 8y ago

i would love to participate in this discussion. unfortunately i cannot, because although i do not have to complain about money, unfortunately my financial situation is not so amazing it would be smart to throw away money on a NYT subscription.

chrisseaton 8y ago
There is a rule in this site against complaining about pay walls.
- timwaagh 8y ago
  my bad. i thought the rule was against pay walls itself. maybe something changed. edit: cannot find any rule on this in the guidelines. perhaps you could give me a reference.
  - chrisseaton 8y ago
    > ... please don't post complaints about paywalls. Those are off topic. https://news.ycombinator.com/newsfaq.html https://news.ycombinator.com/newsfaq.html
sdf43543t345 8y ago
* delete cookies or * block cookies = free NYT

pmorici 8y ago

Is it just me or do these articles about economic hardship always seem to use the most unsurprising examples for their prototypical struggling subject. The example they use here is freelance writer. Hasn't that job title always had poor prospects? I remember a similar article posted here about people struggling to find work after the 2008 crash and their example was a person who had been laid off but instead of trying to find a new job they purposely blew through their savings for a couple years and were then surprised when they went to look for work and something didn't immediately materialize.

ForHackernews 8y ago
One of the other examples in the same article is a middle-aged aerospace engineer, so maybe that's more to your liking.
- pmorici 8y ago
  Sure, that's more plausible to the central point they are trying to make.
- troupe 8y ago
  An aerospace engineer who decided to become a personal chef and went into deep dept at a culinary school. I'm guessing this individual is a bit different than the engineers I know.
  - bittercynic 8y ago
    If you're an in-demand engineer, you're likely surrounded by in-demand engineers, and that might seem like the norm to you, but that path might not be available to everyone. I think it's worth thinking about the conditions that could lead to a person seemingly torpedoing herself with an expensive, debt-ridden culinary certificate. Things really have gotten tougher for many Americans over the past few decades. Some people make it extra tough on themselves by refusing to handle downward mobility gracefully and taking the best options available to them. On the surface, borrowing money for culinary school seems like an objectively (very) bad choice, but people are complicated, and I'd be interested in understanding what brought her to this.

dalbasal 8y ago

There are all sorts of aspects to this. In terms of the bigger, longer term trends, I think the dynamic described by Thomas Picketty is the most important aspect. Long term trends towards increased wealth disparity. On the other hand, at the micro level people actually experience, I think the cultural dynamic is more important. It determines how people feel about the economy. The people she talks to believed their educations and backgrounds (most of them grew up in middle-class homes) would guarantee some financial stability Upward mobility is ideologically important to any major, modern political camp. Few deal with downward mobility in any way. Individuals will have a much tougher time politically tolerating being poorer than their parents (or their cohort) than just being poor. Losing is more emotional than winning and the grudge lasts longer than the opposite. Ideologically, I think most of us would say that social class should not be inherited. Emotionally, few of us can live with downward moves in the economic hierarchy. It creates an unmistakable feeling of having been robbed of one's birthright.

branchless 8y ago
Nope this guy has a good job. Not about mobility. This is about rentiers. People need to read "Progress and poverty" by Henry George. Land prices are the issue.
- dalbasal 8y ago
  Not having a job isn't the only way to move down a tier. I think what a lot of cohorts are feeling (the economy is broken) comes down to (1) middle class upbringing (2) did the things middle class kids are supposed to do, like college, "professional white collar job" (3) results are worse than expected. People's expectations can be set all sorts of ways, but the most obvious is comparatively to the group they believe they are or shoybe part of. Ie, parents, friends... This is all at the personal level. There are also macro trends and dynamics in the economy overall. Haven't read George, but Picketty (recent Nobel laureate) has a very good theory for this. I don't know how George uses "rentier" but "returns to capital" probably encompasses.
- pierotofy 8y ago
  Book can be downloaded from http://www.gutenberg.org/ebooks/55308 http://www.gutenberg.org/ebooks/55308

mruniverse 8y ago

Is it worth reading or is it just about how things are more expensive and we don't make enough?

throwaway7312 8y ago
It's that, + "middle class going broke after being conned by Trump University & the gig economy."
- mruniverse 8y ago
  I like the writing from Paul Krugman. He tries to explain systemic reasons for inequality.

EZ-E 8y ago

Where did the money go?

teekert 8y ago

Honestly as a Dutch man with a family but only one income (the norm about 40 years ago), we are are also really at the edge. And I have a relatively decent income (1.5-2 times modal as we call it). And where does all that money go? Well, more than 25% goes to interest on our mortgage. We get some of that back but from tax money so it's a cigar from our own box. Whatever we earn more as a family is taken away by the banks by allowing us to loan more, which increases housing prices, which increases the interest they receive. Our economy is very much rigged to keep everybody working near full time to be able to live.

lifty 8y ago
Do you have an opinion about what caused this situation where people are in a constant chase to keep up with their expenses, especially in Netherlands? I have my opinions but I am really curious what is the perception of a middle class western person. Thanks!
- abhinavkulkarni 8y ago
  Loosening of regulation and cheap influx of money, on the whim printing of money by the Fed. Case in point, the current situation with student loans. It's politically beneficial to make slogans about housing for all, education for all, etc. and then institute policy to distribute cheap money. Least time we did that, you know what happened (2008).
- teekert 8y ago
  I think it is housing prices. Banks sign money into existence as your debt. And then you work to pay it off plus interest. We bought our house from a single old lady for about 195.000 euros (plus 40.000 for restructuring and then some for taxes), this woman bought this house in the sixties for 19.500 guilders (8.850 euros), she got about 186.000 euros just for living there for 50 years. Meanwhile we pay the bank 4.85% of 245.000 yearly for 30 years (ok, it's less now for sure) but that 4.85% would amount to 349.000 euro's for the banking system, just for signing my debt into existence. In this way they constantly squeeze society. If you do the math you see that you pay over 300 a month to decrease the debt while paying about 1000 in interest. If housing prices rise more than wages at some point both parents have to work full time and can afford less and less luxury items. Then we are at "maximum squeeze". Can you imaging that my parents once payed 12% mortgage interest! of course houses were cheaper then (this was early 80's) but still. People with 2 incomes by the way can save a full income (although I know some people that really can't afford to have one parent at home), they really don't feel anything, but banks are eating away are our wealth people, wake up. And when the banks fall because they took to much risk, they require our money again, to be saved!

dbatten 8y ago

This raises two questions in my mind: I admittedly come from a very privileged background (in terms of both an upper-middle-class family and genetics), but how have so many people found themselves in places where it's so hard to make ends meet? My parents paid for college (like I said, admittedly privileged) and the State of North Carolina actually gave me free tuition and paid me a stipend to get my Master's degree (free/cheap government education is a benefit which you don't have to be privileged to get, at least not as privileged). I chose the "wrong" programs from a job prospects / earnings perspective - Sociology and Public Administration. I still managed to fall into a career as a data scientist. I'm not paid a bay-area salary, but then the suburbs of Raleigh/Durham don't have a bay-area cost of living either. My wife and I have a bigger house than we need, drive two old (2005 & 2009) but functional cars, have two kids, take a reasonably nice week-long vacation each year, and give quite a bit away, all on one salary. We've both made sacrifices to be debt free other than the mortgage, which helps. Most of my close friends went to very reasonably-priced state schools (e.g., NC State University), got the "right" degrees, and are now gainfully employed and able to support a family. Do I just live in that much of a bubble? Are my and my friends' experiences really that out of the ordinary in America in 2018? Second, is it just because I'm young? This article suggests a lot of programmers/engineers end up being un-hireable by middle age, and struggle to find another career to make ends meet. Does that match the experience of a lot of folks here? From my perspective, most of the middle aged programmers/engineers I know have just moved on to become software architects, managers of development teams, CTOs, consultants, etc. - in other words, they're doing even more lucrative work facilitated by their years of experience.

RubenSandwich 8y ago
I'm sorry but you do live in a bubble. Here is a UN report on poverty and rising inequality in the USA: https://digitallibrary.un.org/record/1629536/files/A_HRC_38_33_Add-1-EN.pdf https://digitallibrary.un.org/record/1629536/files/A_HRC_38_.... Here are a few notes from the report: * In September 2017, more than one in every eight Americans were living in poverty (40 million, equal to 12.7% of the population). And almost half of those (18.5 million) were living in deep poverty, with reported family income below one-half of the poverty threshold. * In the OECD the US ranks 35th out of 37 in terms of poverty and inequality. * The youth poverty rate in the United States is the highest across the OECD with one quarter of youth living in poverty compared to less than 14% across the OECD. * US healthcare expenditures per capita are double the OECD average and much higher than in all other countries. But there are many fewer doctors and hospital beds per person than the OECD average. * The Stanford Center on Inequality and Poverty ranks the most well-off countries in terms of labor markets, poverty, safety net, wealth inequality, and economic mobility. The US comes in last of the top 10 most well-off countries, and 18th amongst the top 21. * According to the World Income Inequality Database, the US has the highest Gini rate (measuring inequality) of all Western Countries The truth is poverty and inequality is uncomfortable and pushed to the edges of society.

golergka 8y ago

> Quart describes her own experience of slipping into the “falling middle-class vortex” after the birth of her daughter seven years ago, a time when she and her husband were freelance writers facing new child care costs and hospital bills. TBH, couple of "freelance writers" deciding to have a child sounds like recipe for financial disaster right from the bat. I understand that "freelance writer" is a broad term, but most of the writers I know are very far from affording a child or two. I understand that having a child, unlike, say, buying a sports car, is a luxury a lot of people around the world decide to indulge in even if they don't really afford it. But if you spend money and resources on something you can't really afford, at least be honest with yourself about it.

z0r 8y ago
Raising children being relegated to luxury status is a symptom of an oppressive and/or failing economic system.
- golergka 8y ago
  Not at all - it's a sign of an economic system that finally accounts for ecological externalities. If we want to save the planet, human population needs to stop growing. So, on average, a person should only be able afford one child. And when you remember that wealth inevitably follows a pareto distribution, it's obvious that most families won't be able to afford any children at all.
  - z0r 8y ago
    That's not what happens. Population growth is outsourced to the third world (immigration, manufacturing, etc.) The planet (biosphere) will be hollowed out beyond repair by our ever growing economy. "Wealth inevitably follows a pareto distribution" is just an excuse for terminating your thinking.

dqpb 8y ago

> They are people on the brink who did everything 'right' One of my favorite lessons of software engineering: it doesn't matter how right you think you are.

notacoward 8y ago

People often lump freelance/contingent work and the "gig economy" together, but they're actually two different things. Yes, both are often used to avoid the cost of taxes and benefits, or to gain flexibility and not have to lay off regular workers if the business doesn't thrive. However, freelance and contingent work has generally been about hiring people who chose to work under those terms, to accept the uncertainty and some of the costs in return for gaining their own kind of flexibility or a higher hourly wage. The gig economy to a large degree seems to rely on a pool of involuntarily unemployed (or under-employed) people who would very much prefer to have a more regular job with a more regular paycheck if only they could find one. If the economy, or economic policy, changed so that there were more decent jobs available, the freelancers and contractors would go on as they always have but the gig workers would all bail and the gig-economy companies would have to make some serious adjustments to stay in business (if that would even be possible in such a different labor environment).

rdlecler1 8y ago

High housing prices are a massive tax on both middle class and investment. It all flows to landlords and lenders. Cut housing prices by 1/2 - 2/3 and the middle class has money for other things. We need an Elon Musk for housing.

cozzyd 8y ago
Hate to break it to you, but none of the products Elon Musk is peddling are meant for the middle class.
- abhinavkulkarni 8y ago
  Well, Tesla is transitioning from luxury cars to the mainstream ones. Secondly, how about reducing our reliance of fossil fuels and instead using electricity for driving the cars (I know, I know, electricity comes largely from fossil fuels, but net, it is beneficial to use it for driving cars than gas)? That's not going to benefit the common public?
  - Semirhage 8y ago
    When? Right now their “mainstream” $35k car is actually $55k+, with a backlog.
    - frockington 8y ago
      And the tax credit is going to go away soon so add a couple thousand to that number.
- rm_-rf_slash 8y ago
  Starlink?
dionidium 8y ago
The problems facing housing are regulatory in nature. We don't need a savior from the investor class. We just need to make it legal to build more housing. There is nothing confusing about it. There's no difficult problem that needs outside-the-box solutions. It's currently illegal to build as much housing as we need. Make it not illegal.

projectramo 8y ago

I can tell the ages of people posting on here from their comments. I love Berlin because of the nightlife and culture. 20s. I love Berlin because of the free schooling. 30s and 40s. I love Berlin because of the free healthcare. 50s+

mrfredward 8y ago

A lot of things in America are really cheap, but there are a few areas where we are denied cost effective options. I like colleges as an example because you don't need any domain specific knowledge to see the excess. I went to a cheap state school. The buildings were made of red brick, the paths were paved with brick and replaced every 3 years, and the gardens were meticulously maintained...the place was meant to look like a palace, and this was one of the most cost effective options I could find. If I don't strike it rich, I'll probably never live or work in a place as fancy as where I went to school. Of course there are ugly colleges too, but the point is that the price of tuition includes a lot that has nothing to do with education, and a lot of this is stuff people wouldn't pay for if given the choice. Does it make sense to pay for an upper middle class lifestyle when you're a broke 19 year old? Don't worry, the government will give you a loan...

troupe 8y ago
> the price of tuition includes a lot that has nothing to do with education, and a lot of this is stuff people wouldn't pay for if given the choice. This is a very good point. There are colleges that are quite a bit less expensive, but as a whole the fact you can get a loan for pretty much any amount without needing to justify the return on investment guarantees that colleges will keep increasing their expenses to get students to spend their debt at their school.
- downrightmike 8y ago
  On undergrad, there is a life time limit of $60k, so expect the average cost to go up to that. And then the limit will be increased.

speeder 8y ago

I am Brazillian Still, sadly that stuff also applies here... Me and my friends around my age, that were born in solid middle-class families (of the sort that could own only one car, a cheap house or apartment and so on), were taught that the path of life was: go to college, get a job or public sector job (here in Brazil those are popular), marry, have a boring life. Instead we went to college paid with crazy loans, found no jobs, jumped around from gig to gig trying to repay the loans, people don't want seriosu relationships, only flings, and now I am 30, living back in my parents house, still with no job. A 30 year old college friend of mine that is excellent designer and know some coding, is living on his parents home with his kid (no wife), to pay the kid bills he found a illegal-ish gig as construction worker, and after he lost that job, he can't find a new one. My grandparents used to tell me what was their "poor life", where they had to walk to school, work their asses off early, date in front of dad of the bride, eat eggs because other food was expensive... Now we have a "rich" life, with cars (that belong to parents, I never could afford my own, neither my friends), computer, internet... but can't afford our own house, we can't "work our ass off" because there is no work, eating enough protein in some months have been hard, as food prices inflated way beyond the wage growth and what is affordable now is basically cereals and starchy foods (like potatoes), and your food choice become: eat enough nutrients and baloon in size wildly as all food availble has too much calories comapred to other nutrients, or control your calories, have nutrient deficit... To me is no surprise people live in slums or invaded areas, one time I rented a apartment with cracked walls, non-working fire alarm, elevator that often had issues (like operating with doors open and stopping 20 centimeters off-level), no garage, and the rent was 4 times the mininum wage, I could only afford living there when my income due to some coding contracts landed me in the top 3% highest earners of the country... made me wonder, where everyone else was living. (or one time I shared a normal 3 bedroom house, with literally 35 persons, most of them already had bachelor degrees, several in STEM, and were there to train in a nearby police academy, hoping such dangerous work was better than having no work at all in their own field)

somethingsimple 8y ago
Wow, things have gotten really bad since I left the country. Mind if I ask in what state you live? I never had trouble finding a full time programming job in Rio Grande do Sul.

mathiasben 8y ago

It's the concentration of wealth causing this as the economy is being bled dry. the fix is to restore the progressive tax code, income in excess of $5M/yr taxed at 99%. not rocket science, but nearly impossible because politics, so get used to being poor America. currently half of jobs in usa pay less than $18/hr. only going to get worse unless the root cause is addressed.

CNJ7654 8y ago
This just in! Most major businesses moving outside of the US pending radical tax code reform!
- matthewwiese 8y ago
  Your comment was dead but I thought I may as well vouch it. Although you wrote your point in a snarky tone, taking large corporations into account when discussing this topic seems at least halfway in good faith. FWIW I too am a jobless Millennial at the moment, so it's not like I am playing devil's advocate because of a nefarious hidden agenda. EDIT: Spelling.
kindarooster 8y ago
I wish I heard this view on taxes more often. Have a nice smooth tax curve up to like 95% at some income level (5 or 10 M). The rich are not taxed anywhere close to enough.
- rich-and-poor 8y ago
  If someone figures out how to make 5M/year of income, I am absolutely certain they are better at capital allocation than the current administration. You are suggesting that they are not, and that we need to have the state decide where the money of the top earners go. I'm sorry, but we have tried that before. It does not end well.
  - spruciefic399 8y ago
    I think the problem with that argument is that the reasons an individual might be good allocating their own capital are distinct from the reasons they have capital, or what is justified, in the sense of ethical or societally defensible. A successful white-collar criminal can be said to be good at capital allocation, to make an extreme example. My argument is not that wealth means someone is criminal (although I do think criminality has as a goal wealth rather than poverty, which is the inverse but relevant). However I do think there are lots of hidden costs that people advertently or inadvertently manage to get out of paying for, and taxes are meant to recognize that fact. The bailouts of the great recession are good examples of this to me in some sense. The government saved certain businesses, or ameliorated their crash. Whether or not this was the right decision is one thing, but given that they did get bailouts (or outs), suggests that what we should expect is taxes and regulation to support these kinds of things. There are lots of other things like this that conveniently get glossed over, like hidden environmental costs, education and infrastructure, research, etc. I find it incredibly manipulative, for example, for arguments to be made against net neutrality on the grounds that telecom companies somehow bootstrapped their way up from nothing, when the internet itself was a government invention, and much of their infrastructure is made possible by public right-of-way laws or other privileges given by municipalities. I think the fundamental problem with US society today is an extreme form of survivorship or fundamental attribution bias, where we grossly overattribute success to individual characteristics and not other factors. Then we get locked into these strawman debates that pit extreme capitalism against communism, as if there's no moderated grey area, that our only choices are complete equality of wages etc. or winner-takes all gross inequality. What I increasingly see in the US are the haves and the have nots, and I no longer believe that the haves, by in the large, deserve what they have in a way that the have nots do not. Income inequality, to me, is bad not just because of the disparity itself, but because it tends to exaggerate market errors in valuation. We tend to have these conversations and HN and elsewhere where we look at these examples of downward mobility and point to everything someone did wrong, but then do not turn to management, administration, business, etc. and ask "did they really do everything right"? We also tend to act as if, if they really made an error, that is really worth the downward mobility they accrued.

CNJ7654 8y ago

Why our families can't afford America: Youth getting swindled into massive student loan debts for the sake of it because "you have to go to college to get a good job" Families thinking it's a good idea to rent large, spacious apartments in massive urban centers where space comes at a massive premium

User23 8y ago

Funny how the word "immigration" never appears in these articles. Any intellectually honest assessment of the waning American middle class needs to consider the overwhelming post 1965 demographic changes. Regardless of your personal feelings on the matter, adding tens of millions of very poor people to a population over the course of decades is, as a mathematical certainty, going to reduce the median wealth of the population. Then add to that dynamic effects such as increased demand for housing and other necessities, higher taxes to cover increased costs of health, education, welfare, and so on, and it's no wonder the fading middle class is getting squeezed.

kylehotchkiss 8y ago
https://www.recode.net/2018/1/12/16883260/trump-immigration-us-america-tech-companies-immigrants https://www.recode.net/2018/1/12/16883260/trump-immigration-... "Immigrants and their children have helped found 60 percent of the most highly valued tech companies in the U.S"
- User23 8y ago
  I was very careful not to make any value judgments or even prescriptions. I'm simply looking at facts and reasonable inferences from them. Some people will prefer to conclude that immigration is bad and should be reduced. Some people will prefer to conclude that immigration is great and should be increased. In the vast majority of cases people's preferences appear to align with their own perceived self interest. The people down-voting this post and my original one are assuredly members of the latter class. Immigration isn't a binary issue. One can reasonably conclude that tens of millions of poor uneducated foreigners are bad for the US population median wealth distribution, but tens of thousands of educated entrepreneurial foreigners are good for it. One can also do so without succumbing to the puerile some's good more's better pseudo-reasoning that dominates the Overton approved discourse on the subject. Also, supporting my original post, that massive influx of affluent foreigners has observably greatly increased the cost of living in the bay area. A person can make 6 figures and still be considered in poverty. This is clearly germane to any discussion of the middle class withering away.

downrightmike 8y ago

A large part of the problem is the psychology of being middle class. No one wants to be poor, or to think that they are poor, they affiliate themselves with the middle class. The social definition of what is middle class has been broadened to include people who would otherwise fit in the poor definition. Thinking themselves to be middle class, they try to act it and over spend and never save. A more stringent definition used to be something along the line of being a professional that would allow you to be able to afford to retire early and have the funds to get into politics or some other service. Poor people will continue to be bled dry, while the middle class shrinks and everyone refuses to accept they are technically poor and they need to act with purpose to improve their situations.

itchyouch 8y ago
Isn't it just percentiles? I recall 30-80th percentiles being considered the middle class. 50th percentile household income is around 55-60k. 30th-80th is somewhere around 40-160k/year ish in income. The problem is that "incomes have stayed relatively flat" aka, people were still making the same 40-160k/yr 20-50 years ago, thus they have lost earning power.

eulers__number 8y ago

thats why we need anarcho-capitalism

jk_danson 8y ago

There is opportunity everywhere. The middle class is fading more from a lack of individual drive to succeed. My parent went from middle class to absolute broke. They lost their home and lived with their parent for several years while rebuilding what they lost. Now they own a better home and are doing very well. They are a one income family (my father works and has no college degrees) with 5 kids still living with them.

jiveturkey 8y ago

TFA is a rather thin "review" of the book, almost completely unsubstantive. > “It’s not your fault.” Based on the diligent people she meets, it’s hard to disagree. Sorry, but one can be diligent and still have made wrong choices. And the irony is thick. The author found herself in this boat through years of being a freelance writer, and now in heavy debt from culinary school. I haven't read the book but I very much doubt I would find it compelling. I do agree, some and maybe most of the blame doesn't lie on the middle class's shoulders (except for lack of civic engagement), but it doesn't seem like this book is going to get to the heart of it. I also laugh at this quote from TFA: > Even lawyers, a traditionally risk-averse bunch who tend to choose their profession for its stability, are getting caught in the vise between increasing law school tuitions and decreasing job prospects. Precarity, Quart suggests, can translate into solidarity. Even lawyers? It is well known that law schools are pumping out too many and too low qualified grads. The information about job prospects is available. Those who went into tier 3 law schools thinking that they would come out the other end successfully have made their own bed. Yes indeed much fault lies with the law schools themselves, but let's not absolve the students of blame here.

exabrial 8y ago

Should have been entitled, why people on the coasts can't afford America.