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> Otherwise you could say that just about any American middle class family is wealthy — just look at the entire world’s population Any middle class American is

> Otherwise you could say that just about any American middle class family is wealthy — just look at the entire world’s population Any middle class American is wealthy by the world's standard. The quality of life provided by middle class America is the life of the 1%. To not see this is to not understand how most of the world lives, and the challenges people face from being less lucky.

gdubs 7y ago
This is exactly my point though. If you look at averages, a jumbo home owner in the US is considered wealthy — but only if you ignore their local market. Like in the Bay Area where you could earn $100k a year and still be considered “low income”. These people may be huge earners compared to the average American. It doesn’t mean they’re living the lavish lifestyles of the rich and famous. A lot of them are living paycheck-to-paycheck. Markets are relative. Similarly, the average American making over $40k a year will not consider themselves the 1%, but to the average citizen of the world they are.
- codingdave 7y ago
  If people are choosing to live in the Bay Area and spend all their money on COL expenses, that does not mean they are not wealthy. It just means they are choosing to spend all their wealth to stay there. Believe me, those of us who live a state or two east of there see plenty of people who have left after a few years of paying on those jumbo loans, and the equity from those homes sets them up quite nicely in another place. People who own homes in the Bay Area do not have massive disposable income. But they do have wealth.
  - asdkhadsj 7y ago
    I feel like everyone is talking past each other. Or perhaps the definition of wealth is failing this discussion. Telling a family struggling to make ends meet that they are wealthy seems of little value. Depending on the scenario, they could be one job loss away from having nothing just like one of your families a state or two east. Now that same family, income and house with a paid off mortgage is in an entirely different situation. The difference is the wealth they accrued in paying down their mortgage. They claimed value in doing so. But merely having a massive mortgage in the Bay Area does not _inherently_ equate to wealth.
  - nostrademons 7y ago
    As long as they have a supply of buyers for those houses. Article is suggesting that new buyers won't be able to get jumbo mortgages. If people can't borrow $2M for a house anymore the sale price of houses is going to take a big hit.
- asdkhadsj 7y ago
  To agree with you, It's even more complex than even you outline, too. Wealth is, imo, a relative profit and cost of living expense calculation, regardless of how much you make. Ultimately it doesn't matter where you live or how much you make, you can be living paycheck to paycheck in almost any scenario. There are definitely subtleties, like how feasible it would be for you to reduce expenses while keeping your income the same. Life.. gets complicated.
api 7y ago
That is true, but there's a flip side problem with this way of thinking: it can lead to a race to the bottom mentality in which improvements are argued against by comparison to those worse off. "Workers in America don't need better pay or benefits, they're already wealthy by world standards!" "Workers in China don't need basic safety protections and sane work hours, they're already better off than workers in sub-Saharan Africa!"
borkt 7y ago
I’ve spent time a lot of people that live much better than me in what are considered third world countries, including overall quality of life, who make far less than I do. There are countries where money goes much further and family holds much greater value when compared to work than US culture (and laws) generally produces. They see friends and family for meals many times a week, their health care is affordable, and their jobs are more secure. It would be thought of as a cultural taboo to value work over family, whereas the majority of US employers see placing family over work as a fireable offense. Yes we have more paper wealth, but if we have to work longer hours and are spending it all on utilities, healthcare, and vastly overpriced housing, does it really matter? Edit: This applies to countries with relatively reasonable populations with respect to their resources. This does not apply to places like China and India where there is a huge population to support.
- borkt 7y ago
  This recent post covers what I am describing here far more in depth and relate to Europe. My experiences have been in South America https://news.ycombinator.com/item?id=22777745 https://news.ycombinator.com/item?id=22777745
- anoraca 7y ago
  You're spending time with the wealthy people of those countries. Half of the world does not have a flush toilet at home.
- CalRobert 7y ago
  Seriously. I sometimes cringe when I think what I could be making if I moved back to California (I'm even _from_ norcal...) but I just can't handle US workaholism (most of it performative) and the idea that even if I manage to pull off 5+ weeks of PTO a year, my spouse certainly won't, and I like living somewhere everyone gets a month off a year and even people under the median wage can afford a decent holiday.
- BoiledCabbage 7y ago
  > They see friends and family for meals many times a week, their health care is affordable, and their jobs are more secure. This is all true - and all of those are possible while still being wealthy. The peculiarities of US culture are different from being wealthy. As another example you don't need to have an obsession with guns to be a wealthy country, but the US does.
perl4ever 7y ago
"The quality of life provided by middle class America is the life of the 1%" It's been said many times before about similar statements, but this is not true or mathematically possible. I believe it's off by about an order of magnitude. Middle class in the US is something like $45,200 to $135,600 in household income, which is roughly half the population. Half the population is about 2% of the world population. And every American is not wealthier than everyone outside the US. If you google something like "global income percentile" you will find a considerable amount of BS claims - the first one I found was on Investopedia. For fun or ideology or whatever, the meme that middle class Americans are in the top 1% is something that people will just go on the internet and lie about. I didn't spend enough time looking to find really satisfactory sources, but in trying to find something relatively unbiased I ended up with something that suggested the US middle class might very roughly be around the top 10% globally. Source: https://www.pewresearch.org/global/2015/07/08/a-global-middle-class-is-more-promise-than-reality/ https://www.pewresearch.org/global/2015/07/08/a-global-middl... (Note that in the terms of the linked article, it seems like the global middle class is a tier below the US middle class, so if about 85% of the world is "poor" or "middle class", then the remainder or 10-15% equates to the US "middle")

gdubs 7y ago

This is exactly my point though. If you look at averages, a jumbo home owner in the US is considered wealthy — but only if you ignore their local market. Like in the Bay Area where you could earn $100k a year and still be considered “low income”. These people may be huge earners compared to the average American. It doesn’t mean they’re living the lavish lifestyles of the rich and famous. A lot of them are living paycheck-to-paycheck. Markets are relative. Similarly, the average American making over $40k a year will not consider themselves the 1%, but to the average citizen of the world they are.

codingdave 7y ago
If people are choosing to live in the Bay Area and spend all their money on COL expenses, that does not mean they are not wealthy. It just means they are choosing to spend all their wealth to stay there. Believe me, those of us who live a state or two east of there see plenty of people who have left after a few years of paying on those jumbo loans, and the equity from those homes sets them up quite nicely in another place. People who own homes in the Bay Area do not have massive disposable income. But they do have wealth.
- asdkhadsj 7y ago
  I feel like everyone is talking past each other. Or perhaps the definition of wealth is failing this discussion. Telling a family struggling to make ends meet that they are wealthy seems of little value. Depending on the scenario, they could be one job loss away from having nothing just like one of your families a state or two east. Now that same family, income and house with a paid off mortgage is in an entirely different situation. The difference is the wealth they accrued in paying down their mortgage. They claimed value in doing so. But merely having a massive mortgage in the Bay Area does not _inherently_ equate to wealth.
- nostrademons 7y ago
  As long as they have a supply of buyers for those houses. Article is suggesting that new buyers won't be able to get jumbo mortgages. If people can't borrow $2M for a house anymore the sale price of houses is going to take a big hit.
asdkhadsj 7y ago
To agree with you, It's even more complex than even you outline, too. Wealth is, imo, a relative profit and cost of living expense calculation, regardless of how much you make. Ultimately it doesn't matter where you live or how much you make, you can be living paycheck to paycheck in almost any scenario. There are definitely subtleties, like how feasible it would be for you to reduce expenses while keeping your income the same. Life.. gets complicated.

api 7y ago

That is true, but there's a flip side problem with this way of thinking: it can lead to a race to the bottom mentality in which improvements are argued against by comparison to those worse off. "Workers in America don't need better pay or benefits, they're already wealthy by world standards!" "Workers in China don't need basic safety protections and sane work hours, they're already better off than workers in sub-Saharan Africa!"

borkt 7y ago

I’ve spent time a lot of people that live much better than me in what are considered third world countries, including overall quality of life, who make far less than I do. There are countries where money goes much further and family holds much greater value when compared to work than US culture (and laws) generally produces. They see friends and family for meals many times a week, their health care is affordable, and their jobs are more secure. It would be thought of as a cultural taboo to value work over family, whereas the majority of US employers see placing family over work as a fireable offense. Yes we have more paper wealth, but if we have to work longer hours and are spending it all on utilities, healthcare, and vastly overpriced housing, does it really matter? Edit: This applies to countries with relatively reasonable populations with respect to their resources. This does not apply to places like China and India where there is a huge population to support.

borkt 7y ago
This recent post covers what I am describing here far more in depth and relate to Europe. My experiences have been in South America https://news.ycombinator.com/item?id=22777745 https://news.ycombinator.com/item?id=22777745
anoraca 7y ago
You're spending time with the wealthy people of those countries. Half of the world does not have a flush toilet at home.
CalRobert 7y ago
Seriously. I sometimes cringe when I think what I could be making if I moved back to California (I'm even _from_ norcal...) but I just can't handle US workaholism (most of it performative) and the idea that even if I manage to pull off 5+ weeks of PTO a year, my spouse certainly won't, and I like living somewhere everyone gets a month off a year and even people under the median wage can afford a decent holiday.
BoiledCabbage 7y ago
> They see friends and family for meals many times a week, their health care is affordable, and their jobs are more secure. This is all true - and all of those are possible while still being wealthy. The peculiarities of US culture are different from being wealthy. As another example you don't need to have an obsession with guns to be a wealthy country, but the US does.

perl4ever 7y ago

"The quality of life provided by middle class America is the life of the 1%" It's been said many times before about similar statements, but this is not true or mathematically possible. I believe it's off by about an order of magnitude. Middle class in the US is something like $45,200 to $135,600 in household income, which is roughly half the population. Half the population is about 2% of the world population. And every American is not wealthier than everyone outside the US. If you google something like "global income percentile" you will find a considerable amount of BS claims - the first one I found was on Investopedia. For fun or ideology or whatever, the meme that middle class Americans are in the top 1% is something that people will just go on the internet and lie about. I didn't spend enough time looking to find really satisfactory sources, but in trying to find something relatively unbiased I ended up with something that suggested the US middle class might very roughly be around the top 10% globally. Source: https://www.pewresearch.org/global/2015/07/08/a-global-middle-class-is-more-promise-than-reality/ https://www.pewresearch.org/global/2015/07/08/a-global-middl... (Note that in the terms of the linked article, it seems like the global middle class is a tier below the US middle class, so if about 85% of the world is "poor" or "middle class", then the remainder or 10-15% equates to the US "middle")