6 ms·

The pie may have grown, but aside from labor in the Global South, the people who have captured the gains from that growth have been the capital class in the dev

The pie may have grown, but aside from labor in the Global South, the people who have captured the gains from that growth have been the capital class in the developed nations (i.e not blue collar workers or the professional class). And no, getting some of your compensation in stock options doesn't make you apart of the capital class, unless you can stop working.

dcolkitt 7y ago
> the people who have captured the gains from that growth have been the capital class in the developed nations (i.e not blue collar workers or the professional class) Wrong. Middle-class Americans have captured gains through cheaper, higher-quality products than would have otherwise existed without trade and development. Are you using a phone made in China, or wearing clothes made in Bangladesh, or eat fresh fruit in the winter? Then by definition, you've captured gains from trade.
- _iyig 7y ago
  Maybe so, but nobody's happy about cheap lawn furniture, for example, when they can't afford homes, healthcare, or education.
  - lotsofpulp 7y ago
    I think that's a consequence of pulling wealth from the future into the present to counteract the loss of wealth due to decreases in the price of labor due to increase in supply of labor from other countries and decrease in demand of labor due to automation. Question is how far into the future are we going to keep pulling.
  - dantheman 7y ago
    Interesting that those three industries are the most heavily regulated and manipulated by the government.
    - jschwartzi 7y ago
      Can you please make your point directly instead of snarking about regulation instead? It contributes little to the conversation if your don’t put forth any arguments or discussion.
      - AnimalMuppet 7y ago
        I am not a fan of making people guess what the point is, but I thought that dantheman's point was actually pretty clear. It becomes reasonable to suppose that government intervention and regulation play at least a role in the unaffordability crises in education, housing, and healthcare.
        dantheman 7y ago
        Thanks, that is correct. I couldn't edit my comment.
    - deleted 7y ago
      [deleted]
  - dcolkitt 7y ago
    Healthcare expenditures only makes up 6.3% of the average income of an American household. Education only makes up 1.8%. Vehicles and apparel alone, without even breaking out any other tradable sector, make up the same percent of household expenditures as healthcare and education. Housing makes up 25%. But the cost of housing, as measured by the median inflation-adjusted cost per square foot of a new house has actually fallen by 8% since 1992. [1] https://www.bls.gov/news.release/cesan.nr0.htm https://www.bls.gov/news.release/cesan.nr0.htm [2] https://www.census.gov/construction/chars/ https://www.census.gov/construction/chars/
    - danans 7y ago
      > But the cost of housing, as measured by the median inflation-adjusted cost per square foot of a new house has actually fallen by 8% since 1992. That's a relatively meaningless statistic given that new houses don't account for a significant subset of the housing supply. A better measure of true housing costs is BLS's annual Consumer Expenditure Survey [1], which shows that just from 2013-2018, average annual housing expenditure has risen from $17148 to $20091, an increase of 17%. 1. https://www.bls.gov/cex/2018/standard/multiyr.pdf https://www.bls.gov/cex/2018/standard/multiyr.pdf
      - dcolkitt 7y ago
        Using that same source shows that after tax incomes increased from $56k to $67k over the exact same period. So housing expenditures actually grew at a slightly slower rate than income (17% vs. 19%). That proves the opposite: housing is actually become more affordable. Moreover, according to the source shelter only made up about half the increase in expenditures in the category. Expenditures on shelter grew even slower than housing as a whole, 16%. From the source, Americans spent 32% more on furniture and appliances (including a whooping 50% increase on major appliances), 28% more on housekeeping services, 30% more on their cell phone bill (which is weirdly part of of the housing category), 23% more on household products, and 20% more on their water bill. In other words Americans are splurging on smart fridges, maid service, mobile data plans, organic cleaners and long showers. That doesn't really sound consistent with the story of cash-strapped workers struggling in an overpriced housing market. That sounds a lot more consistent with the macroeconomic data, which is tells us that since 2013, the economy has been booming and unemployment is at post-war lows.
- raxxorrax 7y ago
  This isn't adequate compensation at all considering productivity growth.
- theflyinghorse 7y ago
  > Wrong. Sure, we can say that there has been some benefit to the middle class in the West through reduced price on some of the goods but certainly not on big bill items such as housing and education. It's great that I can buy a cheap jacket and keep some of my income, it sucks that my housing expanses went from 1/5 to 1/2 of my income (as an example). Overall an American worker who lost his well paying manufacturing job and replaced it with a job at walmart lost massively. Elephant Chart I think tells the whole story[1]. 1. https://avc.com/2016/08/elephant-chart/ https://avc.com/2016/08/elephant-chart/
  - dcolkitt 7y ago
    > but certainly not on big bill items such as housing and education On average, housing expenditures only makes up about 25% of American household income. And education expenditures are nearly a rounding error at 1.8%. Adjusted for inflation the median cost per square foot of a new home in the US actually fell by 8% from 1992 to 2018. It's true that Americans are spending more on housing than in the past, but that's mostly because they're buying significantly bigger houses. The median new home saw its square footage increase by more than 50% since 1985. Despite a decline in the average household size. And that doesn't even cover the significant increase in quality in things like central AC, attached garages, fire safety, higher ceilings, high ampere electrical circuits, better insulation, etc. The HN community is biased on this topic because they tend to live in HCoL metros like the Bay Area and to only recently be out of school. But the fact of the matter is that the vast majority of middle America in flyover states has not seen any significant loss of affordability in housing. That should tell you that the problem isn't globalization, it's the San Francisco zoning board. > Overall an American worker who lost his well paying manufacturing job and replaced it with a job at walmart lost massively. Since 1980 the decline in manufacturing employment have been more than offset by growth in high-paying jobs in healthcare, education, professional services, real estate, and financial services. American manufacturing output is at an all-time. There's huge job shortages in the industry, and American factories are desperate for workers. That should tell you that manufacturing jobs were never "replaced", rather Americans workers decided to move to other industries. Manufacturing jobs are good-paying, but dangerous, physically demanding and unpleasant. Most workers who left decided to either go to skilled construction trades or natural resource extraction, where pay is significantly better. Or they decided to become skilled professionals like nurses, teachers, or realtors, where pay is still good but working conditions are significantly better. [0] https://www.bls.gov/news.release/cesan.nr0.htm https://www.bls.gov/news.release/cesan.nr0.htm [1] https://www.census.gov/construction/chars/ https://www.census.gov/construction/chars/ [2] https://www.census.gov/const/C25Ann/sftotalmedavgsqft.pdf https://www.census.gov/const/C25Ann/sftotalmedavgsqft.pdf [3] https://www.cnbc.com/2018/08/03/job-gains-for-the-manufacturing-industry-are-the-most-since-1995.html https://www.cnbc.com/2018/08/03/job-gains-for-the-manufactur... [4] https://www.reliableplant.com/Read/30044/manufacturing-worker-shortage https://www.reliableplant.com/Read/30044/manufacturing-worke... [5] https://www.bls.gov/opub/mlr/2016/article/current-employment-statistics-survey-100-years-of-employment-hours-and-earnings.htm https://www.bls.gov/opub/mlr/2016/article/current-employment...
- ezzzzz 7y ago
  >Middle-class Americans have captured gains through cheaper, higher-quality products than would have otherwise existed without trade and development. Cheaper products, sure, but higher quality? Retailers like Walmart and Amazon are essentially operating cartels, they dictate the prices they are willing to pay for manufactured goods. For manufacturers to meet these demands, cuts will have to come from somewhere--cheaper materials, less R&D etc. Consumers may benefit in a cheaper price for their widget, but that widget is not as likely to have the service life it would have in the past. Shorter service life results in buying 'cheaper' goods at a higher frequency (which is likely to result as a net loss for the consumer). This is rhetorical, yes, but not hard to defend. Clothing, appliances, electronics (in price-point verticals) all reflect this 'trend'. This is not even going in to 'Planned-Obsolescence', which is another symptom of the same problem.
  - dcolkitt 7y ago
    Autos, which were the first major industry to globalize, have shown undeniably significant and sustained improvements in quality, reliability and safety over time. I don't really hard data for any other major sector, and would be interested in anyone that does. [1] https://www.usatoday.com/story/money/cars/2019/06/28/average-vehicle-age-ihs-markit/1593764001/ https://www.usatoday.com/story/money/cars/2019/06/28/average...
    - ezzzzz 7y ago
      This is true, but there are 2 things to consider here. First, purchasing a new or gently used car is likely to be a person's second biggest monthly expense after housing. It is therefore in the best interest of the manufacturer to create a product that is reliable (at least reliable enough to last as long as the 6-7 year loan which are common today). Secondly, you have a couple of 'unicorn' manufacturers (to use a SV parlance) in Toyota and Honda that have historically been outliers in reliability within their market, and have subsequently dominated the market. This is a huge difference from the sweat-shop in Bangladesh making t-shirts for Wal-Mart or H&M, or the electronics manufacturer in Shenzhen making toasters. It's all about supply and demand, the demand for a reliable automobile creates a market for that product. Meanwhile, as lower and middle-class people have less purchasing power due to high housing prices, debt, medical expenses etc, the demand for cheap toasters is greater than the demand for a more expensive (but robust) alternative.
esoterica 7y ago
You can retire on your investments in your 30s or 40s on a higher end professional salary if you’re not an idiot with money. My old boss retired at 31. Not a CEO or a venture capitalist, just another schmuck who came in to the office to write code every day and got paid a lot of money to do it.
- gpanders 7y ago
  Indeed, particularly if one eschews chasing after some ephemeral and meaningless concept of "status". The article repeatedly frames the professional class' decision making and motivation as pursuing status or in joining the ranks of the upper-class elite... Perhaps I live in a bubble, but this is not a trend that I observe at all among my peers, most of whom are (young) professionals.

dcolkitt 7y ago

> the people who have captured the gains from that growth have been the capital class in the developed nations (i.e not blue collar workers or the professional class) Wrong. Middle-class Americans have captured gains through cheaper, higher-quality products than would have otherwise existed without trade and development. Are you using a phone made in China, or wearing clothes made in Bangladesh, or eat fresh fruit in the winter? Then by definition, you've captured gains from trade.

_iyig 7y ago
Maybe so, but nobody's happy about cheap lawn furniture, for example, when they can't afford homes, healthcare, or education.
- lotsofpulp 7y ago
  I think that's a consequence of pulling wealth from the future into the present to counteract the loss of wealth due to decreases in the price of labor due to increase in supply of labor from other countries and decrease in demand of labor due to automation. Question is how far into the future are we going to keep pulling.
- dantheman 7y ago
  Interesting that those three industries are the most heavily regulated and manipulated by the government.
  - jschwartzi 7y ago
    Can you please make your point directly instead of snarking about regulation instead? It contributes little to the conversation if your don’t put forth any arguments or discussion.
    - AnimalMuppet 7y ago
      I am not a fan of making people guess what the point is, but I thought that dantheman's point was actually pretty clear. It becomes reasonable to suppose that government intervention and regulation play at least a role in the unaffordability crises in education, housing, and healthcare.
      - dantheman 7y ago
        Thanks, that is correct. I couldn't edit my comment.
  - deleted 7y ago
    [deleted]
- dcolkitt 7y ago
  Healthcare expenditures only makes up 6.3% of the average income of an American household. Education only makes up 1.8%. Vehicles and apparel alone, without even breaking out any other tradable sector, make up the same percent of household expenditures as healthcare and education. Housing makes up 25%. But the cost of housing, as measured by the median inflation-adjusted cost per square foot of a new house has actually fallen by 8% since 1992. [1] https://www.bls.gov/news.release/cesan.nr0.htm https://www.bls.gov/news.release/cesan.nr0.htm [2] https://www.census.gov/construction/chars/ https://www.census.gov/construction/chars/
  - danans 7y ago
    > But the cost of housing, as measured by the median inflation-adjusted cost per square foot of a new house has actually fallen by 8% since 1992. That's a relatively meaningless statistic given that new houses don't account for a significant subset of the housing supply. A better measure of true housing costs is BLS's annual Consumer Expenditure Survey [1], which shows that just from 2013-2018, average annual housing expenditure has risen from $17148 to $20091, an increase of 17%. 1. https://www.bls.gov/cex/2018/standard/multiyr.pdf https://www.bls.gov/cex/2018/standard/multiyr.pdf
    - dcolkitt 7y ago
      Using that same source shows that after tax incomes increased from $56k to $67k over the exact same period. So housing expenditures actually grew at a slightly slower rate than income (17% vs. 19%). That proves the opposite: housing is actually become more affordable. Moreover, according to the source shelter only made up about half the increase in expenditures in the category. Expenditures on shelter grew even slower than housing as a whole, 16%. From the source, Americans spent 32% more on furniture and appliances (including a whooping 50% increase on major appliances), 28% more on housekeeping services, 30% more on their cell phone bill (which is weirdly part of of the housing category), 23% more on household products, and 20% more on their water bill. In other words Americans are splurging on smart fridges, maid service, mobile data plans, organic cleaners and long showers. That doesn't really sound consistent with the story of cash-strapped workers struggling in an overpriced housing market. That sounds a lot more consistent with the macroeconomic data, which is tells us that since 2013, the economy has been booming and unemployment is at post-war lows.
raxxorrax 7y ago
This isn't adequate compensation at all considering productivity growth.
theflyinghorse 7y ago
> Wrong. Sure, we can say that there has been some benefit to the middle class in the West through reduced price on some of the goods but certainly not on big bill items such as housing and education. It's great that I can buy a cheap jacket and keep some of my income, it sucks that my housing expanses went from 1/5 to 1/2 of my income (as an example). Overall an American worker who lost his well paying manufacturing job and replaced it with a job at walmart lost massively. Elephant Chart I think tells the whole story[1]. 1. https://avc.com/2016/08/elephant-chart/ https://avc.com/2016/08/elephant-chart/
- dcolkitt 7y ago
  > but certainly not on big bill items such as housing and education On average, housing expenditures only makes up about 25% of American household income. And education expenditures are nearly a rounding error at 1.8%. Adjusted for inflation the median cost per square foot of a new home in the US actually fell by 8% from 1992 to 2018. It's true that Americans are spending more on housing than in the past, but that's mostly because they're buying significantly bigger houses. The median new home saw its square footage increase by more than 50% since 1985. Despite a decline in the average household size. And that doesn't even cover the significant increase in quality in things like central AC, attached garages, fire safety, higher ceilings, high ampere electrical circuits, better insulation, etc. The HN community is biased on this topic because they tend to live in HCoL metros like the Bay Area and to only recently be out of school. But the fact of the matter is that the vast majority of middle America in flyover states has not seen any significant loss of affordability in housing. That should tell you that the problem isn't globalization, it's the San Francisco zoning board. > Overall an American worker who lost his well paying manufacturing job and replaced it with a job at walmart lost massively. Since 1980 the decline in manufacturing employment have been more than offset by growth in high-paying jobs in healthcare, education, professional services, real estate, and financial services. American manufacturing output is at an all-time. There's huge job shortages in the industry, and American factories are desperate for workers. That should tell you that manufacturing jobs were never "replaced", rather Americans workers decided to move to other industries. Manufacturing jobs are good-paying, but dangerous, physically demanding and unpleasant. Most workers who left decided to either go to skilled construction trades or natural resource extraction, where pay is significantly better. Or they decided to become skilled professionals like nurses, teachers, or realtors, where pay is still good but working conditions are significantly better. [0] https://www.bls.gov/news.release/cesan.nr0.htm https://www.bls.gov/news.release/cesan.nr0.htm [1] https://www.census.gov/construction/chars/ https://www.census.gov/construction/chars/ [2] https://www.census.gov/const/C25Ann/sftotalmedavgsqft.pdf https://www.census.gov/const/C25Ann/sftotalmedavgsqft.pdf [3] https://www.cnbc.com/2018/08/03/job-gains-for-the-manufacturing-industry-are-the-most-since-1995.html https://www.cnbc.com/2018/08/03/job-gains-for-the-manufactur... [4] https://www.reliableplant.com/Read/30044/manufacturing-worker-shortage https://www.reliableplant.com/Read/30044/manufacturing-worke... [5] https://www.bls.gov/opub/mlr/2016/article/current-employment-statistics-survey-100-years-of-employment-hours-and-earnings.htm https://www.bls.gov/opub/mlr/2016/article/current-employment...
ezzzzz 7y ago
>Middle-class Americans have captured gains through cheaper, higher-quality products than would have otherwise existed without trade and development. Cheaper products, sure, but higher quality? Retailers like Walmart and Amazon are essentially operating cartels, they dictate the prices they are willing to pay for manufactured goods. For manufacturers to meet these demands, cuts will have to come from somewhere--cheaper materials, less R&D etc. Consumers may benefit in a cheaper price for their widget, but that widget is not as likely to have the service life it would have in the past. Shorter service life results in buying 'cheaper' goods at a higher frequency (which is likely to result as a net loss for the consumer). This is rhetorical, yes, but not hard to defend. Clothing, appliances, electronics (in price-point verticals) all reflect this 'trend'. This is not even going in to 'Planned-Obsolescence', which is another symptom of the same problem.
- dcolkitt 7y ago
  Autos, which were the first major industry to globalize, have shown undeniably significant and sustained improvements in quality, reliability and safety over time. I don't really hard data for any other major sector, and would be interested in anyone that does. [1] https://www.usatoday.com/story/money/cars/2019/06/28/average-vehicle-age-ihs-markit/1593764001/ https://www.usatoday.com/story/money/cars/2019/06/28/average...
  - ezzzzz 7y ago
    This is true, but there are 2 things to consider here. First, purchasing a new or gently used car is likely to be a person's second biggest monthly expense after housing. It is therefore in the best interest of the manufacturer to create a product that is reliable (at least reliable enough to last as long as the 6-7 year loan which are common today). Secondly, you have a couple of 'unicorn' manufacturers (to use a SV parlance) in Toyota and Honda that have historically been outliers in reliability within their market, and have subsequently dominated the market. This is a huge difference from the sweat-shop in Bangladesh making t-shirts for Wal-Mart or H&M, or the electronics manufacturer in Shenzhen making toasters. It's all about supply and demand, the demand for a reliable automobile creates a market for that product. Meanwhile, as lower and middle-class people have less purchasing power due to high housing prices, debt, medical expenses etc, the demand for cheap toasters is greater than the demand for a more expensive (but robust) alternative.

esoterica 7y ago

You can retire on your investments in your 30s or 40s on a higher end professional salary if you’re not an idiot with money. My old boss retired at 31. Not a CEO or a venture capitalist, just another schmuck who came in to the office to write code every day and got paid a lot of money to do it.

gpanders 7y ago
Indeed, particularly if one eschews chasing after some ephemeral and meaningless concept of "status". The article repeatedly frames the professional class' decision making and motivation as pursuing status or in joining the ranks of the upper-class elite... Perhaps I live in a bubble, but this is not a trend that I observe at all among my peers, most of whom are (young) professionals.