29 ms·

Where our economy is, for the young

276 points by dsr_ 6y ago

sandworm101 6y ago
This isn't a matter simply for the young. The young are definitely hit harder, but the real issue is that "work" is not valued as it once was. The 'economy' is doing great. Stocks go ever higher despite pandemics and money trends. Taxes are low. Luxury spending is at an all time high. Investors, be them wealthy independants or pensioned former workers, are generally happy. Young people own nothing and so the bulk of their income must come through wages rather than investments. It is those workers, those who don't own their sources of income, that are struggling to make rent.
- iagovar 6y ago
  Average account balance before the pandemic was 3K for <30yo in Spain. I heard it was even less in the US. That has a lot of implications, and none of them good IMO.
  - swiley 6y ago
    In most countries holding cache is a net loss due to low interest rates so that's not necessarily a good argument.
    - tafox 6y ago
      Yes it is. That 3K is the average young person's only asset and it is just getting eaten by inflation anyway. These people struggle to pay rent each month let alone think about "investments".
      - yelloweyes 6y ago
        ????????????????? Sure you will lose a little bit, like 2 or 3% a year. But if you have nothing saved then what will you do in case of an emergency? such as losing a job?
        cpursley 6y ago
        29.99% interest credit cards.
    - reallydontask 6y ago
      There is the idea of having an emergency fund, which given its nature, should be stored in an instant access savings accounts. This is money for when you lose your job for instance Your appetite for risks and circumstances determine how big it should be (a good rule of thumb is six months worth of salary) but there are countless stories of people trying to be clever with their emergency funds and storing them in ETFs or riskier investments only to find that when the need comes, their fund is not enough and get in financial distress.
      - jcalvinowens 6y ago
        If you're a US citizen, "I Series Savings Bonds" are fantastic emergency fund vehicles. You can cash them out instantly after holding them only one year, mine are paying just under 2% right now.
        vel0city 6y ago
        Series I Savings Bonds are currently 1.06%. https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm https://www.treasurydirect.gov/indiv/research/indepth/ibonds...
        dzonga 6y ago
        credit union savings accounts. mine pays 2.5%. you won't have penalty.
  - conceptme 6y ago
    But is that everybody under 30? Makes much more sense to measure 25 - 30. As most will start to have a real job by that age.
    - Shared404 6y ago
      I would track 18-30, as that catches those who are likely to be living independently.
      - throwaway0a5e 6y ago
        And it lumps them in with those who are likely still in school and have no real job yet thereby making it basically impossible to draw (useful) conclusions about independent young people.
        Shared404 6y ago
        > And it lumps them in with those who are likely still in school I won't argue that one, but where do you draw the line with > have no real job yet I would argue that as long as you are working, you have a real job. Probably the best would be to track both 25-30 and 18-30 and see how it changes.
        throwaway0a5e 6y ago
        >I would argue that as long as you are working, you have a real job. If you're working nights in a warehouse while you finish your degree that will get you into an industry with nearly six figure starting salaries then I would argue that you're not "working yet" you're just a student with income.
        Shared404 6y ago
        What does salary have to do if somethings a "real job"? Or what about blue collar workers who aren't going to school, and are at that same warehouse? Are they not working at a real job?
  - entropea 6y ago
    60% couldn't afford a $1000 emergency in USA, in 2019. $3k? Probably a lot higher number. https://www.cnbc.com/2019/01/23/most-americans-dont-have-the-savings-to-cover-a-1000-emergency.html https://www.cnbc.com/2019/01/23/most-americans-dont-have-the...
- cryptica 6y ago
  It's not just that 'work' is not valued. The problem is that 'value creation' is not valued (particularly in the tech sector). There are plenty of highly paid bullshit jobs. Tech corporations are essentially empty shells; their market caps are not based on the value that they create for society but on the rate of money printing by the reserve banks of the world. Because tech corporations are not subjected to free market forces like everybody else, they eventually lose their ability to create new value (and the kinds of people who join these companies and stay there do not have a value creator mindset). Indeed, if you compare the price of S&P500 companies relative to most stable-value commodities such as gold, it would seem that the S&P500 hasn't grown at all in the last 5 years. However, S&P500 correlates strongly with the growth in M1 and M2 money supply. This indicates that the growth in nominal price of stocks in the past 5 years is entirely artificial. Young tech workers cannot compete with corporations because the playing field is not even. If your competitor is getting free money from someone, how can you possibly compete with them in any market? This is why all young people in tech these days are eventually absorbed into corporations. Whether through employment or phony acqui-hire. It's also why big corporations like Google used to buy up startups and then kill the project immediately afterwards. It's mostly phony money transfer with hidden motives and it's not related to value creation.
  - cryptica 6y ago
    BTW, the main reason why this is getting downvoted is because the wealthiest investors already know all this and many of them read HN... They think they can keep manipulating the economy forever to keep their stock prices up through money printing and they want to suppress this information because they don't want shareholders to realize it and dump the stock before they do. There is tremendous peer pressure right now to suppress this kind of content for insiders and employees to not sell their shares... But the bad news for these people is that the last people to sell their stocks are going to lose and it's a very fragile situation. It wouldn't take many employees to dump to cause a stock market crash now. Usually employees and small shareholders are the losers. If you look at who is buying Bitcoin now, it's MicroStrategy, Greylock partners and A16z (smart money)... Many are also moving into gold and silver. Do you seriously think that the rank and file corporate bureaucrat/employee who's been sitting through useless meetings every day for 10 years is worth the $2 to $10 million in corporate stocks that they own? Did they deliver that kind of value to society? No. If I owned corporate stocks worth even $100K and the bosses kept discouraging selling of stocks by employees, I would sell everything right now and change companies. You will never see such good valuation again. As always, the first to jump on the new trend always win and it's always going to be the smallest group possible. The majority always loses.
- Ericson2314 6y ago
  > The real issue is that "work" is not valued as it once was. And the work indeed is more bullshit than it used to be! I'm afraid we cannot turn back the clock on this one, so we have to find another way. eyes UBI
  - burlesona 6y ago
    I don’t disagree with you about UBI, but I have to say it makes me feel sad. In my experience most people really want meaningful work, and the fact that it puts food on the table makes a lot of otherwise meh work more satisfying and meaningful. At the end of the day it’s more important that people can meet their needs, and if UBI does that, a lot of people will be able to improvise some interesting things to apply themselves to, which I think will be great for them. But a lot of people will also sit on the couch and watch TV all day, feeling there’s no point to life. We’ll have all kinds of new and unforseeable second order effects. I also worry that the fundamental problem is not so much income but cost of living. The way things work today, any amount of UBI that you pay but just drive up the rent. If we don’t significantly increase housing supplies to meet demand, I don’t see how we can break that loop.
    - Ericson2314 6y ago
      > I don’t disagree with you about UBI, but I have to say it makes me feel sad. In my experience most people really want meaningful work, and the fact that it puts food on the table makes a lot of otherwise meh work more satisfying and meaningful. I think the remaining work will be such more meaningful that it will be net dealienation. I think less stress and more free time begets curiosity, so I think it's fair to say people could get a lot out of work than they do from their current drudgery. In the long term, think large amounts of leisure time but ones does "tours of duty" in each of the core industries that power modern society as part of liberal education of how society functions. > I also worry that the fundamental problem is not so much income but cost of living. The way things work today, any amount of UBI that you pay but just drive up the rent. If we don’t significantly increase housing supplies to meet demand, I don’t see how we can break that loop. See https://phenomenalworld.org/analysis/universal-basic-income-the-city https://phenomenalworld.org/analysis/universal-basic-income-... for the results of some modeling. Rent in absolute terms and as a portion of income went down!
- netcan 6y ago
  An aspect of this, in much of the west, is political demography. The voting population is getting older all the time. Politics increasingly serves their interests. Often these are directly orthogonal. Labour vs capital. Real estate values vs housing costs. Opportunity vs stability. Even this pandemic, sadly, creates opposing interests. Younger people need workplaces to operate. Older people are more susceptible to the virus. Since the stock markets are fine, retired people don't generally have financial interests at stake.
- C1sc0cat 6y ago
  MY ISA and Pension Funds are still down from where they where pre covid. 25 % of people in the uk have < 1k in savings
- fxtentacle 6y ago
  Good work is still highly valued, it's just that the value is not paid to the worker, but to the company owning the work. If you increase a company's profit by $500k annually through setting up a new automation system, you'll still only get your $40k internship salary. And the company will pocket the remaining $460k, to be paid out to the owners as profits. So yes, I fully agree with you. This hits the young people the hardest because they are the ones to own the least, on average. But more in general, everyone who is not part of the elite owning those companies and their preferred stocks is suffering. It's almost a cliche "owners vs. workers" class war at this point. But for some reason, everyone in the US expects to enter the owning elite within years - no matter how ridiculously improbable that is - so nobody is willing to stand up for the workers.
  - lordnacho 6y ago
    This is not far from the true numbers. I've known several management consultants - the young, educated hustlers who are on their first job - who discovered from their clients what the bill actually was. Ratios of 6+ are common.
    - JAlexoid 6y ago
      I worked with enough consultants to now that the good ones subsidize the salary of the bad ones.
  - AlexTWithBeard 6y ago
    > the company will pocket the remaining $460k First, in most companies it's very hard to say who exactly managed to increase the profit. Is it you who came up with the idea? Is it your boss who picked this specific idea out of fifty other ideas you came up with last week? Is it the QA team who managed to catch the bug which would've erased all the profits? Is it HR who hired you among other candidates? Second, no, the remaining is not $460k. In a Big Greedy Corporation I work an average annual cost of employee in "primary" location is around $200k (pre-covid). It includes office space, technology, infrastructure, salary, taxes, fees, insurances and so on. Third, that's the premium the company gets for the risk. Intern will get his salary no matter what. The company makes a bet though. You want to own part of that risk? Build your own company.
- pehtis 6y ago
  > It is those workers, those who don't own their sources of income, that are struggling to make rent. That is exactly how social classes are distinguished in Marxism: "[T]he class of modern wage labourers who, having no means of production of their own, are reduced to selling their labour power in order to live" https://en.wikipedia.org/wiki/Marxism#Social_classes https://en.wikipedia.org/wiki/Marxism#Social_classes
- animal_spirits 6y ago
  > "Young people own nothing" I wouldn't say that. I am 24 and I have some pretty incredible tools in my pocket right now that someone in 1991 couldn't have even dreamed of. The problem is, instead of owning a good car or having an apartment to live in, I have the pinnacle-of-technology swiss-army knife of information processors (smart phone, macbook pro, desktop computer) within reach. That is where I think the value of things have changed over time. It went from the opportunity to _have_ to the opportunity to _learn_
  - tehjoker 6y ago
    In more marxist terms, we have traded variation of consumer goods for precarity in our ability to live our lives. You can play video games, but your boss can fire you at a whim and your landlord can kick you on the street. You can't become class mobile without taking on huge debts and possibly not making it.
  - pram 6y ago
    You could still learn stuff in 1991 jfyi
    - animal_spirits 6y ago
      Oh yes of course but its way way way easier today with magnitudes more subjects covered in depth
      - tspike 6y ago
        The rewards for finding the information needed to learn were geometrically higher relative to the difficulty. It's easier to learn today; the (monetary) value of that learning is lower.
    - cwbrandsma 6y ago
      Finding the information was harder. There were libraries, my town library was in the basement of the city hall building, and my local mechanic has a larger building. If the library didn’t have it, you could hit a small book store, whose specialty was romance novels for local farm wives. Basically, anything you would actually want would be special order, hoping the book dealer knew what you were talking about in the first place.
- dustingetz 6y ago
  US stocks are up because the federal government is buying stocks (illegally) for the first time in history
  - mc10 6y ago
    Curious, in what way is the Fed’s bond purchasing program illegal?
- anovikov 6y ago
  Absolutely vast majority of income of everyone apart from billionaires/top 0.01%, comes from work rather than investments... Yes even for top 1% apart from top 0.1%, share of income from investments is negligible. Total value of U.S. stock market is $35T and given the traditional 4% "safe" withdrawal formula, it is about 7% of GDP or 10% of overall income, as profits. About half of it going to the top 0.01%. Problem maybe is that there are no highly paid jobs available for unqualified young people anymore.
- mythrwy 6y ago
  Agreed. And this is a good part of the "real" grievance of both young people and working class minorities, especially in big cities in my opinion. It's not working class wages haven't risen, they have. But, the costs of housing, healthcare, education and many other necessities have risen at a much faster pace, particularly in cities. These rises in cost are of course profits to someone so the economy is "booming. But it's become so distorted that it's becoming increasingly hard to keep up for the lower wage earners with no end in site. Of course the owners of assets don't see the problem. Their properties and stocks are appreciating nicely. And the fed has been encouraging this. Now, one argument might be that if this wasn't occurring that low wage earners would be even worse off with no jobs and and there may be some validity to that point of view but the inequality of this isn't just an abstract ethical problem at this point but rather a system threatening problem. I don't know that there is an easy fix either. It often seems trying to fix one problem with rent controls, wage floors, progressive taxation etc. results in other problems. But the increase in costs of housing, medical care etc. while wages grow at a much slower rate isn't sustainable imo.
- neilparikh 6y ago
  The solution is to tax the unproductive part of society, which only extracts wealth from everyone else: landowners. This allows us to shift the burden away from labour.
plazmatic 6y ago
this title is, fucking dumb
bhupy 6y ago
A lot of anecdotes and conjecture here, so it’s worth analyzing the median trends across generations: https://www.bloomberg.com/opinion/articles/2020-09-23/median-household-income-grew-more-in-the-10s-than-the-90s?sref=R8NfLgwS https://www.bloomberg.com/opinion/articles/2020-09-23/median... https://twitter.com/ernietedeschi/status/1308748407633309696 https://twitter.com/ernietedeschi/status/1308748407633309696 https://twitter.com/ernietedeschi/status/1308813020425007105 https://twitter.com/ernietedeschi/status/1308813020425007105 (yes, these are all adjusted for inflation) Real median per capita income is the highest its ever been regardless of which inflation index you use -> https://twitter.com/Noahpinion/status/1307793622369103872 https://twitter.com/Noahpinion/status/1307793622369103872 Not only that, we’re on average working fewer hours — so not only has income growth been higher in recent years, it’s been of higher quality -> https://twitter.com/Noahpinion/status/1308790402082766849 https://twitter.com/Noahpinion/status/1308790402082766849 Anecdotes are important because they allow people to voice their concerns, but it’s important that we don’t miss the forest for the trees.
- swiley 6y ago
  The median is only useful in certain kinds of distributions and many people argue that income distribution isn't one of those.
  - bhupy 6y ago
    Do you have a citation for that? The median is generally the most reliable metric to use specifically for income, since it isn’t impacted by outliers.
    - swiley 6y ago
      The median is often used for income, that doesn't make it "reliable."
      - bhupy 6y ago
        It’s “reliable” insofar as it tells us how the “average” person is doing, and by definition the lower bound for the top half of the population.
quietbritishjim 6y ago
I would love to know the proportion of people at, say, 25 that can afford to buy a house (in the area they grew up and of some reasonable size e.g. 3 bedroom) over time. Sure, income has gone up, but so have house prices and so that proportion has surely collapsed. That has a much bigger effect on young peoples' lives than the number of luxury items they can buy and stuff into the property that they don't have. Edit: I found this interesting graph for the UK (where I live) [1]. It shows the ratio of average house price to average annual income. Not perfect measure as distribution of income over age brackets is probably more imbalanced now due to starting work later (18 - 25 rather than 16 - 21) but still interesting. Brief textual summary: * 1920 - 1945: 5 ish * 1945 - 1955: 6 - 7 (brief spike) * 1960 - 2000: 4 - 5 (with occasional spike to 6) * 2000 - 2020: 8 - 9 (with dip in the middle but still above 7) [1] https://www.schroders.com/en/insights/economics/what-174-years-of-data-tell-us-about-house-price-affordability-in-the-uk/ https://www.schroders.com/en/insights/economics/what-174-yea... Edit 2: Here in the UK the problem is particularly acute in the suburbs of the big cities, especially London, because the ability to build new housing is artificially restricted by the green belt legislation [2]. [2] https://en.wikipedia.org/wiki/Green_belt_(United_Kingdom) https://en.wikipedia.org/wiki/Green_belt_(United_Kingdom)
- jka 6y ago
  Would 'median disposable income' be a good proxy for that? (in other words, a metric to determine whether this increased median income ends up in the pockets of and usable by the recipients, or whether it is being used to support day-to-day life)
  - quietbritishjim 6y ago
    If by "that" you mean the ability to buy a decent house for yourself then the answer is that it would be an extremely poor proxy ... almost uncorrelated. It's possible to live without buying a house or even renting by yourself (you can live with parents or rent a shared house with other young people). People in that situation would still have (and be recorded as having) a disposable income even though accomodation is an essential expense because owning your own personal house is not technically an essential expense. Therefore, if wages are decent but housing is extremely expensive (which I believe is the case here in the UK, especially city suburbs) then median disposable income would continue to increase while the ability of young people to buy their own homes would continue to decrease.
matz1 6y ago
Yes, economy always evolve and changing. The new gigs in today era is: make youtube video, game streamer, instagram model, etc. Mind boggling how young people these days can make considerable amount of money out of these.
- durnygbur 6y ago
  Ad industry is equally generous to all its servants. Including, or maybe in particular, to software professionals.
- jlokier 6y ago
  Those kinds of "influencer" gigs are a lottery. Most people do poorly in them, a very small number are very successful. It's like being a band, a few are stars, the rest can't afford to do it as their main job. The amount of money that the most successful can make is not a good indicator of likely income. They're not what is generally meant by "gig economy" by the way. What is generally meant are precarious jobs with variable shifts, often low paid. Things like Uber driving, minimum-wage jobs delivering food when there's demand, and zero-hour contracts working in shops.
  - matz1 6y ago
    Sure, I'm not even talking about the stars, but even the fact young people can make any money out of these is incredible. I wouldn't imagine it in 1991. What I'm saying is for young people the opportunities for gig are relatively the same compared to 1991, except its in the different form. Not to mention the opportunities to aquire skill or to learn almost anything for free from the internet.
    - TacticalTable 6y ago
      > What I'm saying is for young people the opportunities for gig are relatively the same compared to 1991, except its in the different form. You've explicitly named lotteries and acted as if they're the same as actual gig employment. I have several instagram influencer friends, and a few who make youtube videos on the side. It's their dream to go pro. You want to know their collective income, from a pool of about 10 people, who have been working at this for over a year? It's under $100. That's not a gig, that's a lottery that costs time and energy. If you want to talk gigs, talk about Wag or Uber. Which, are also definitely not the same gigs that the article was talking about.
WrtCdEvrydy 6y ago
> hiring becoming rife with credentialism I disagree with this, the profession is becoming more like a real profession instead of a whole bunch of people just slinging code left and right. The reason programmers make good money is because we're at the beginning of a great profession like lawyers and finance guys did when their professions began. We will come to a time that the programming career requires certification kinda like nursing, lawyers or finance guys. The question is how strict the certification process will be... will it be like CPAs where you can work in finance and eventually certify or like lawyers where you can't write code professionally without the license.
- jaspax 6y ago
  > the profession is becoming more like a real profession So rife with credentialism, just like she said. The day you need a license to write code is the day I start a coding-as-civil-disobedience program.
  - WrtCdEvrydy 6y ago
    > The day you need a license to write code is the day I start a coding-as-civil-disobedience program. It's the same as being a lawyer, a doctor, a nurse or a CPA. Those are careers that can cause a lot of harm to other people, yet programmers think they're above it all. Wait until someone takes control of a smart power grid, or a self driving car/truck/airplane because of outsourcing or someone writes some shit software that causes an airplane to fall out of the sky.
    - richiebful1 6y ago
      The Boeing 737 MAX is already an example of cost-cutting in software leading to measurable deaths. But Boeing took the flak, not the software engineering profession as a whole.
    - scollet 6y ago
      Right, it's a matter of risk level. There are plenty - if not the majority - of disciplines in software and firmware that don't have these levels of risk. I can still write a dog sharing social media app, but I wouldn't be able to interface with a satellite. Something along those lines.
logicOnly 6y ago
Author casually dismissed inflation, when the reality is that inflation is the single greatest cause for this disparity.
- nafey 6y ago
  How so? His examples have been adjusted to inflation and the calculation is also present in the article itself.
  - etskinner 6y ago
    > His Her, actually: https://siderea.dreamwidth.org/profile https://siderea.dreamwidth.org/profile
oars 6y ago
Fantastic read. This is the type of rare content I come to HN for (opposed to Reddit). Thank you!
- dsr_ 6y ago
  Siderea emits something of this caliber about every two months, and she isn't boring in between.
AlexTWithBeard 6y ago
> "work" is not valued as it once was It is, but not in this country. We sold it to China for a bowl of lentil stew. Now we all have to live with that.
- neves 6y ago
  We didn't sell. The capital owners decided to send there to increase their profits.
  - AlexTWithBeard 6y ago
    Capital owners would much prefer running stuff locally: it's more expensive so the profit margin is higher. No headache with logistics. Predictable laws. Friendly courts. It's customers who are not willing to pay the premium for locally made stuff. As soon as one factory moves to China others have no choice, but to follow, otherwise they will lose the price war.
    - consp 6y ago
      > It's customers who are not willing to pay the premium for locally made stuff. Or can't.
      - NoZZz 6y ago
        Because they outsourced their jobs!
      - JAlexoid 6y ago
        Oh please.... Most don't want to. (Presuming you're in US and generalizing) Being on NH you probably earn 2x the median US income. Do you own an American made luxury vehicle, that you probably can afford to lease or buy on credit? Probably not. And I bet it's because you don't want to.
        AlexandrB 6y ago
        This is a really badly considered example because Tesla exists and I'm willing to bet that a large portion of HN wants to own a Tesla vehicle. A better example might be US-made clothing, which often comes with a premium price.
mtberatwork 6y ago
> The 'economy' is doing great. Stocks go ever higher despite pandemics and money trends. The stock market is doing great but all economic indicators are down. The stock market has no bearing on the economy right now.
- PeterStuer 6y ago
  It's been a Ponzi casino propped up by a relentless torrent of cash oozing into it straight from the printing presses for a very, very long time
  - thedudeabides5 6y ago
    That maybe a little aggressive. The comment above hit the nail on the head, it's actually pretty simple. Old people = asset holders (aka holders of financial obligations, bonds and stocks) Young people = usually in debt (student, auto, credit card, mortgage) and hoping to earn their way out with income. Aka the young are the very debtors that the old creditors are lending to via their retirement funds of bonds and stocks. An the Fed, well really their only tool is to print to do what? Buy financial assets. So in times of stress they buy those assets/liabilities, pushing up their prices first through decreasing long term rates (hence buying government bonds) and then with QE infinity, eventually buying the actual same asset/liabilities that make up the rich people's portfolios. Hence we response to a drastic income shock by...bailing out rich people. Ideally the Fed would just monetize government spending directly to those poor people, but as you can see with Pelosi-McConnell 2020, that stuff needs to go through Congress, which is a partisan mess.
    - tremon 6y ago
      I think the ponzi scheme refers to the amount of money flowing around in financial schemes that isn't actually "money". By creating numerous financial products and valuations that aren't actually based on assets, the banking system has been able to "print" more money than the central bank would ever allow. And that "money" is what's propping up the stock market. That's why the stock market is no longer representative of the economy: "money" has become an economy in itself.
zozin 6y ago
A combination of factors have completely ravaged Millennials' finances: * Technology is capturing more and more of low-wage/low-skill entry level work. * The combination of technology, free-market capitalism and globalization means that American youth have to compete with non-Americans for jobs that were solely done by Americans during most of the 20th century. * Incompetent government policies have created a system where college tuition has outstripped core inflation by 500-600%; all of this in a system where a college education has gone from nice-to-have to an absolute necessity. * Globalization and urbanization have led to congregation of more and more people in urban cores, causing housing and other fixed living costs to increase. * Untimely financial crises have both retarded Millennial career progress as well as their ability to save/invest in the stock market. None of these processes or events are inherently bad, but their combination have created so many negative externalities for a generation of Americans that these people will never be able to recover.
- ben7799 6y ago
  There is one other weird aspect if you compare millenials with GenX. Millenials spend a lot more money on a lot of stuff that didn't even exist in the period in the 1990s the blog author was talking about. In the early 1990s if you were young & working you: * Possibly didn't have a TV * Were extremely likely to not own a computer - They were REALLY expensive, most people who had them had them because they were in tech and the employer gave you one to take home * You didn't have a $900 smartphone and pay $100 or more a month to use it * Definitely didn't pay recurring software subscription fees, very likely didn't buy any software * Probably went out to eat far less than today * Were less likely to work/live in the Urban core.. you might have needed a car but everything else was cheaper * You weren't going to Starbucks or other Cafes and buying $3-4 Coffee drinks, cause most places didn't even have cafes like that * There was less pressure to keep up with the joneses since Social Media didn't even exist There was a lot of stuff in Millennial culture in the 2010s that was downright expensive.
  - treespace89 6y ago
    As a GenX in the 90's my money went to: - Going to the movies - Going out for fast food - Renting movies - Renting video games
ryanmarsh 6y ago
If I were starting out now, in exactly the same situation as I had been in 1991, a smart, hard-working, self-motivated, well-organized, fast-talking, interviewer-impressing young person with no college degree, nor any credentials beyond a high school diploma, but the ability to learn to do hard things fast, and independently, if just given a chance, and the chutzpah to talk oneself into jobs one doesn't actually know how to do in the confidence one will figure it out when one gets there: what options would I have to turn that promising constellation into cash in my pocket? This statement is exactly my lived experience except that I started in 1994 or 95. My question for others here. What is the answer to his question? Is it possible to do now what we did back then? Why?
- JeremyBarbosa 6y ago
  As a recent college grad who has held many junior developer interviews while working at a startup, I would say that the answer is most definitely no. The current interview process is so bogged down with a high number of applicants and focuses so much on objective accomplishments, that any shortcut to trim applicants is taken. It seemed that only by removing applicants with a lower GPA or perhaps a mismatching degree could the interview pool actually reach a manageable number. This is a real shame because so many good people are most definitely ignored, but it is so much harder to prove character traits versus simply checking for a degree.
  - nradov 6y ago
    The online application process has made it so easy to apply for jobs that employers get flooded with applications. So they really have no choice but to use arbitrary criteria to filter candidates down to a manageable set. (The same thing has also happened to college applications.)
  - barry-cotter 6y ago
    The fact that Lambda School has a business model suggests you’re missing something. People manage to get jobs paying $50,000 a year and much more based off of nine months of full time instruction. > Time to placement: How long does it take students to be placed into jobs after graduation? > Of the 201 students who graduated in H1 2019 and were placed in jobs, 116 (58%) accepted jobs within 90 days of graduation, 68 (34%) accepted jobs between 90 and 180 days after graduation, and 17 (8%) accepted jobs 180 days or more after graduation. > Salary expectations: What is the median annualized salary of placed graduates? > The median annualized salary for H1 2019 placed graduates was $70,000. https://lambdaschool.com/reports/2019-outcomes-report#how https://lambdaschool.com/reports/2019-outcomes-report#how
pjdemers 6y ago
She is very right that the tech job market changed in 2001. I have a former coworker who lost his job in 2017. He had not been in the job market since 1995. He was shocked how things had changed. His direct quote: "It used to be easy to find a tech job. Now it is hard. I couldn't understand why in the last few years I was able to hire people who I thought were over-qualified. But I now see that I'm under-qualified".
- honkycat 6y ago
  This is my nightmare: going out of date. Never lose the fear!
  - racl101 6y ago
    Never be complacent. Always be learning. We are expendable. Let's not give employers a reason to think this. I used to think that I just need to learn a couple of technologies, some back end scripting language, some shell scripting, some SQL and JavaScript and I'll be set. That was 10 years ago. How wrong I was.
- slfnflctd 6y ago
  It was eerie how much of this post reminded me of my experiences in the 90s, and I lived over a thousand miles away from the author. I was relaxed & confident because I could always find an easy job that paid the bills. I had no frame of reference whatsoever to even understand that things were changing at all, let alone how or why. I thought I would have time to wait until the 'perfect fit' came along. I was wrong.
- racl101 6y ago
  The scariest part is that those of us who are abled bodied who think that if times got rough they could always go back and flip burgers or be a cashier are starting to get a rude awakening that even those jobs have lots of competition and, worse, some of those jobs are getting automated.
ben7799 6y ago
I'm similar age.. the talk of hourly wages rings true to me. In the early 90s I was still in HS. I made $8/hr as a lifeguard in HS and $12/hr as a Red Cross Water Safety Instructor. I'd clock out of one and clock in at the higher rate depending on what I was doing. That's about $14-21/hr based on inflation. These were actually jobs that were much harder to qualify for compared to most jobs high school kids get. They required my parents having the foresight to sign me up for many years of swim instruction and then lifeguarding & teaching classes. WSI classes were actually quite difficult back then, and I think they still are. I actually know a lot of people working lifeguard and swim instructor jobs make less than $8/hr today. Just an example but I think these jobs are similar to many others. Most places my son has taken swim lessons the instructors are not Red Cross certified, and it really shows, the programs are nowhere near as well designed and the instructors don't even swim well enough to make it through the WSI course. Meanwhile the business owner charges WAY more for the swim lessons. The employees make 50% what they did 25-30 years ago but the business owners are likely making WAY more money. Heck swim lessons weren't even really a for profit market back in the 1990s. As soon as I had one year of college I always had summer software internships. The first one started at $16/hr and the hourly wages went up every year. As far as the recollections of the .com crash in 2001/2002. It's impossible to know how good the blog author was. In the first .com boom there were a lot of companies that did 0 productive work, burned through lots of VC money, and never even shipped a product. They hired lots of people without college degrees, sometimes they hired people who dropped out of HS. "We don't do any work, we just play Quake all day in the office" was definitely a thing in the late 90s. There were a lot of people who worked places like that who had "Sr. Software Engineer" on their Resume and had very little ability to do the job. The .com crash was a correction for a lot of that. There were other people who had the same lack of credentials but did fine because they were legit, had the talent, worked hard, learned on the job, and worked at companies that were actually doing real work. I think today's startup market is different. Code quality standards are a lot higher. There are weird parts of the software economy around social media, advertising, etc.. but there seem to be less companies that are just there to outright defraud VCs. Investors are a lot smarter now. I worked as a Perma-Temp for 2 years after the .com crash. It was actually very lucrative at that time. 2002-2005 were pretty scary. There was tons of talk of Outsourcing just replacing everything in the US. It didn't work.
oramit 6y ago
Lots of good comments on this but two factors I haven't seen considered: - Rise of programming bootcamps - More intrusive workplaces In the 90's and early 00's programming was not cool. There was a lot of money to be made, sure, but the average developer was far more likely to be in it for the software, not the money. Companies were more willing to bring people on then because there were far fewer bullshitters. Post '08 programming became cool - remember brogrammers? - and a whole cottage industry of bootcamps popped up. Companies had to pull back and put up a lot more barriers to hiring because so many people started applying with dubious resumes. It also seems like there has been a slow but steady increase in how intrusive your workplace is to your life. Hiring and firing people has slowly become more and more fraught for employers so they want to do less of it. Insurance has gotten incredibly expensive and is linked to your employment so both sides are wary to take chances and want a sure thing. I don't think this is a phenomenon just in tech either. It's a US wide problem with all the incentives making it difficult to take chances.
rayiner 6y ago
These cross-sectional comparisons are really difficult. For example, the author mentions rent in Boston. The homicide rate in Boston in 1990 was three times higher than today, comparable to where Newark is today. There were good jobs downtown, but the tech boom hadn't yet begun. In 1990, the city was coming off of three straight decades of population decline. Since 1990, the population has grown 20%, but the city has built almost no new housing: https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iY_crGvqlCv8/v0/800x-1.png https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iY_crGvqlCv.... The author also talks about working in "word processing." That was a much rarer and more valuable skill in 1990 than today. I'm a child of the 1980s and early 1990s, and despite coming from an upper middle class family, I didn't learn how to touch type until 8th grade. My daughter has a Macbook pro and is on pace to be a touch type by the end of second grade. I'm not saying there is "nothing to see here." But we can't have a serious conversation about this unless we have a serious conversation about this. Part of having a serious conversation is agreeing on the facts: https://www.pewresearch.org/fact-tank/2018/12/11/young-adult-households-are-earning-more-than-most-older-americans-did-at-the-same-age https://www.pewresearch.org/fact-tank/2018/12/11/young-adult.... The fact is that millennial households make more money today than previous generations did at the same age. Households headed by people ages 22-37, adjusted for changes in household size, make 60% more money adjusted for inflation than in 1967. Another thing is acknowledging that, if you compared housing in cities to other positional goods, Medford or Astoria or Mountain View are a different product today than they were in 1990. It's like how the Camry and Accord keep moving up market and new models are slotted underneath. The equivalent of Medford back then is some suburb in Kansas City. Third, we have to acknowledge that credentials such as college degrees are not as valuable today as in the past: https://www.the74million.org/wp-content/uploads/2019/03/Pell-line-graph.jpg https://www.the74million.org/wp-content/uploads/2019/03/Pell.... In 1970, 40% young people coming from the top quarter of households (by income) had a college degree by age 24. Today, that's 58%. In the next quartile down, that figure nearly tripled, from 15% to 41%. And in the next quartile down (people from families making below the median income) that number doubled from 11% to 20%. Being a college degree holder just doesn't mean as much today as it did 50 years ago. Fourth, we have to acknowledge changing demographics. We have to acknowledge that economic immigrants tend to come into the country with little in the way of financial resources. And even a country that's doing a great job of providing inter-generational mobility for those immigrants will show more poverty in aggregate statistics than one that doesn't have any economic immigrants. That's true in the U.S. as well. Data shows that all major immigrant-heavy ethnic groups, including Hispanics, have incomes that are converging with those of the white majority over time: https://academic.oup.com/qje/article/135/2/711/5687353#201514575 https://academic.oup.com/qje/article/135/2/711/5687353#20151.... But the percentage of the population that's a first generation immigrant--and thus disproportionately likely to have come here with limited means and education--has tripled since 1970. It's easy to take a couple of data points from two time periods and draw conclusions. But such analyzes assume everything else is staying the same, and the conclusions aren't worth very much unless you account for changes. Doing that accounting properly is very hard.
chasebank 6y ago
Do you think asset inflation due to artificially low interest rates has anything to do with this trend?
nickysielicki 6y ago
The nineties were a very flush time period. This article is trying to paint it as if those weren’t extraordinary times.
- passivepinetree 6y ago
  The author sort of alludes to it at the end of the article when they mention that Gen-Xers' expectations are even more tempered than Boomers' expectations about what it takes to survive today. Is there another group/time period you're interested in specifically comparing to?
intended 6y ago
For anyone who does end up reading this, I highly reccomend reading r/badeconomics for most economic questions you come up with. I find that understanding an economic issue ends up requiring me to read one papers just to penetrate one paragraph of someone's explanation of a phenomenon. Badecon instead is a place where you see bad ideas taken and dissected to show what was wrong, and in the process many sacred cows and talking points get dissected. Makes the process a whole lot easier to understand from a topical issue perspective (rather than doing a part time econ degree)
- opportune 6y ago
  Just make sure you don’t go to actual /r/economics which is really a politics about the state of the economy subreddit where most seemingly have never even taken an economics class
TearsInTheRain 6y ago
Something i see glossed over in a lot of conversations about inflation is that inflation doesnt affect all prices equally. Sure housing has gone up significantly but things like electronics and clothing have gotten cheaper and a lot of products like household goods are flat. You cant make apples to apples comparisons by just looking at one slice of the economy
john_moscow 6y ago
Like every product price, the wages are very much proportional to the demand/supply balance. And the increased centralization and standardization is directly and considerably reducing the demand. If you have 10 companies with roughly equivalent market share, you need 10 CEOs, 10 independent chains of command, 10 accountants, 10 lawyers, 10 IT guys and so on. Each of those people possesses some domain knowledge, is harder to replace, and can negotiate a relatively high salary. Now if you let them merge into 1 megacorp, you get 1 CEO with 2-3 VPs, a couple of accountants/lawyers/IT guys/middle managers, and the rest become corporate drones following predefined instructions. They are much easier to replace, so they get lower wages. Globally, you have increased the efficiency in terms of lowering absolute prices, but decreased everybody's living standard, because the median wage drop was even more dramatic. If you want to gauge the scale of the problem, just think how much of your own monthly spending goes to owner-operated businesses vs. 1000+-employee corporations vs. rent-like transactions (e.g. mortgage interest). There are also a bunch of very specific policies making this worse: * Low interest rate make capital cheap, enabling leveraged acquisitions. * Bailouts for inefficient corporations prevent smaller businesses from taking their place. * Non-existing enforcement of anti-trust laws is another huge thing. Good luck selling physical items online without going on Amazon. Good like surviving after Amazon deems your niche worthy of their time and knocks off your product with "Amazon Basics". Ditto for mobile apps, ditto for any niche captured by a Google product, that is often terrible, but free to the end user due to ads. A separate thing is the government-backed college loans, that drive the tuition prices to the point where it doesn't pay off, but is still required by most employers. These are big long-term problems that will shape the economic future for most of the currently economically active population, but to my surprise there is very little public discussion about them.
zeveb 6y ago
https://twitter.com/ernietedeschi/status/1308748407633309696 https://twitter.com/ernietedeschi/status/1308748407633309696 These graphs appear to show that real, inflation-adjusted median-income is higher for Gen Z that it was for Millenials, higher for Millenials than it was for the 'Oregon Trail' cohort, higher for the 'Oregon Trail' kids than it was for Gen X, higher for Gen X than the Baby Boomers and higher for the Baby Boomers than for the Silent Generation. Are his figures false, or is it possible that there is another factor at work? Maybe we look back at our youth with rose-coloured glasses, and maybe we look up to those older than us and fail to see how hard they worked to get where they are. I remember that my first apartment was a dive; I just now looked it up and see that it has been completely renovated, is appointed like a luxury flat and is only 36% higher in real dollars. That is not terrible. A quick check on Zillow shows units available in my original price range not that far away, in a town which is far more desirable than it was decades ago. Edit: ah, I see https://news.ycombinator.com/item?id=24662058 https://news.ycombinator.com/item?id=24662058 has the same graphs. I think my commentary and own figures are interesting, so I will leave them.
hikerclimber 6y ago
hopefully young people like me don't have jobs so it leads to anarchy.
opportune 6y ago
This is focused on jobs but I’d like to see more conversation on debt, NIMBYism and interest rates. There are a lot of jobs, maybe not easy well paying ones, but lots of jobs that would have you earning $30k or $40k a year without particularly specialized skills. The problem is that those are not nearly enough to cover costs, specifically in housing. And the reason housing is so insane is that the homeowners cartel has manufactured a supply shortage AND with more or less permanently low interest rates (because due to the massive amount of government debt we have to keep them low) the real estate market prices out people who don’t want to take on insane amounts of debt.
jackcosgrove 6y ago
All of the aspects of generational inequality stem from a single root cause: the rising dependency ratio after the peak of the demographic dividend. US labor force participation peaked in the 90s as female entrance into the workforce peaked. After that happened, the countervailing force of lower birthrates began to take over and the dependency ratio started to rise. We're all fighting for a piece of a pie that is, relative to the population, shrinking. And it's shrinking because of demographic trends that began decades ago and would take decades to reverse. Every developed country is going through the same thing, and some are in much worse positions than the US. Older people were lucky enough to be born into a world with demographics favorable to growth; younger people are unlucky to have been born into a shrinking world.
- cashewchoo 6y ago
  Are you talking mainly to things like consumer goods being bought more and more specifically because there are more people? Or systems that are basically N people paying for M people like Social Security (where N = number of workers and M = number of retirees) where N and M need to roughly stay the same ratio? Or something else? (More generally - I find your comment intriguing, please do go on!)
  - deleted 6y ago
    [deleted]
  - jackcosgrove 6y ago
    The latter, there are fewer workers per population than in the past. This means supply falls relative to demand since the growing population is seniors with savings. That leads to higher prices. When demographics are in your favor, a youth bulge places fewer demands on society. Now we can tweak things to make them better. However the demographic megatrend is mostly set in place and there's not much we can do to reverse it.
DeonPenny 6y ago
This seems to me that this is a result of the training young people get being more and more divergent from the actual work the economy needs because of governmental gerrymandering. People made it impossible to apprentice at lower wages for higher wages later so now we have huge batches of young 18-25 year old who can't compete fairly for a job. Then we also have young people getting degrees in their passion rather than in anything people actually need.
- sascha_sl 6y ago
  What makes you say that? I have seen absolutely no reason to believe any of that. Especially considering this article is explicitly referencing mostly unskilled labor.
  - DeonPenny 6y ago
    Because how do these kid even get skills if the required amount to pay them prices them out of the market. You'd probably hire a drop out if you could pay much less in wages, but I see a lot of people avoiding that apprenticeship path. They didn't have this issue in the early 90 cause inflation had so quickly outpaced minimum wage there really wasn't one. So in 1979-1985 when he was paid somewhere near 7-11 a hour I'd guess and paying $270 a month. I'm guessing it was worth it to his teach him. Now in some cities it not worth it for example in SF to hire a kid to do basic SDR or work around the office.
bamboozled 6y ago
Where is the entire world for the young. The world is ran by older people who do nothing really useful for the young generations cause. I feel like the young don't even have a voice or much hope at all in 2020.
hikerclimber1 6y ago
hopefully no one has jobs and the U.S. economy goes downhill and fires burn the entire western half of the U.S.
waynecochran 6y ago
I can't tell if this was said tongue-in-check or not: And working full time is clearly ridiculous and probably a violation of human rights.

276 points by dsr_ 6y ago

This isn't a matter simply for the young. The young are definitely hit harder, but the real issue is that "work" is not valued as it once was. The 'economy' is doing great. Stocks go ever higher despite pandemics and money trends. Taxes are low. Luxury spending is at an all time high. Investors, be them wealthy independants or pensioned former workers, are generally happy. Young people own nothing and so the bulk of their income must come through wages rather than investments. It is those workers, those who don't own their sources of income, that are struggling to make rent.

iagovar 6y ago
Average account balance before the pandemic was 3K for <30yo in Spain. I heard it was even less in the US. That has a lot of implications, and none of them good IMO.
- swiley 6y ago
  In most countries holding cache is a net loss due to low interest rates so that's not necessarily a good argument.
  - tafox 6y ago
    Yes it is. That 3K is the average young person's only asset and it is just getting eaten by inflation anyway. These people struggle to pay rent each month let alone think about "investments".
    - yelloweyes 6y ago
      ????????????????? Sure you will lose a little bit, like 2 or 3% a year. But if you have nothing saved then what will you do in case of an emergency? such as losing a job?
      - cpursley 6y ago
        29.99% interest credit cards.
  - reallydontask 6y ago
    There is the idea of having an emergency fund, which given its nature, should be stored in an instant access savings accounts. This is money for when you lose your job for instance Your appetite for risks and circumstances determine how big it should be (a good rule of thumb is six months worth of salary) but there are countless stories of people trying to be clever with their emergency funds and storing them in ETFs or riskier investments only to find that when the need comes, their fund is not enough and get in financial distress.
    - jcalvinowens 6y ago
      If you're a US citizen, "I Series Savings Bonds" are fantastic emergency fund vehicles. You can cash them out instantly after holding them only one year, mine are paying just under 2% right now.
      - vel0city 6y ago
        Series I Savings Bonds are currently 1.06%. https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm https://www.treasurydirect.gov/indiv/research/indepth/ibonds...
      - dzonga 6y ago
        credit union savings accounts. mine pays 2.5%. you won't have penalty.
- conceptme 6y ago
  But is that everybody under 30? Makes much more sense to measure 25 - 30. As most will start to have a real job by that age.
  - Shared404 6y ago
    I would track 18-30, as that catches those who are likely to be living independently.
    - throwaway0a5e 6y ago
      And it lumps them in with those who are likely still in school and have no real job yet thereby making it basically impossible to draw (useful) conclusions about independent young people.
      - Shared404 6y ago
        > And it lumps them in with those who are likely still in school I won't argue that one, but where do you draw the line with > have no real job yet I would argue that as long as you are working, you have a real job. Probably the best would be to track both 25-30 and 18-30 and see how it changes.
        throwaway0a5e 6y ago
        >I would argue that as long as you are working, you have a real job. If you're working nights in a warehouse while you finish your degree that will get you into an industry with nearly six figure starting salaries then I would argue that you're not "working yet" you're just a student with income.
        Shared404 6y ago
        What does salary have to do if somethings a "real job"? Or what about blue collar workers who aren't going to school, and are at that same warehouse? Are they not working at a real job?
- entropea 6y ago
  60% couldn't afford a $1000 emergency in USA, in 2019. $3k? Probably a lot higher number. https://www.cnbc.com/2019/01/23/most-americans-dont-have-the-savings-to-cover-a-1000-emergency.html https://www.cnbc.com/2019/01/23/most-americans-dont-have-the...
cryptica 6y ago
It's not just that 'work' is not valued. The problem is that 'value creation' is not valued (particularly in the tech sector). There are plenty of highly paid bullshit jobs. Tech corporations are essentially empty shells; their market caps are not based on the value that they create for society but on the rate of money printing by the reserve banks of the world. Because tech corporations are not subjected to free market forces like everybody else, they eventually lose their ability to create new value (and the kinds of people who join these companies and stay there do not have a value creator mindset). Indeed, if you compare the price of S&P500 companies relative to most stable-value commodities such as gold, it would seem that the S&P500 hasn't grown at all in the last 5 years. However, S&P500 correlates strongly with the growth in M1 and M2 money supply. This indicates that the growth in nominal price of stocks in the past 5 years is entirely artificial. Young tech workers cannot compete with corporations because the playing field is not even. If your competitor is getting free money from someone, how can you possibly compete with them in any market? This is why all young people in tech these days are eventually absorbed into corporations. Whether through employment or phony acqui-hire. It's also why big corporations like Google used to buy up startups and then kill the project immediately afterwards. It's mostly phony money transfer with hidden motives and it's not related to value creation.
- cryptica 6y ago
  BTW, the main reason why this is getting downvoted is because the wealthiest investors already know all this and many of them read HN... They think they can keep manipulating the economy forever to keep their stock prices up through money printing and they want to suppress this information because they don't want shareholders to realize it and dump the stock before they do. There is tremendous peer pressure right now to suppress this kind of content for insiders and employees to not sell their shares... But the bad news for these people is that the last people to sell their stocks are going to lose and it's a very fragile situation. It wouldn't take many employees to dump to cause a stock market crash now. Usually employees and small shareholders are the losers. If you look at who is buying Bitcoin now, it's MicroStrategy, Greylock partners and A16z (smart money)... Many are also moving into gold and silver. Do you seriously think that the rank and file corporate bureaucrat/employee who's been sitting through useless meetings every day for 10 years is worth the $2 to $10 million in corporate stocks that they own? Did they deliver that kind of value to society? No. If I owned corporate stocks worth even $100K and the bosses kept discouraging selling of stocks by employees, I would sell everything right now and change companies. You will never see such good valuation again. As always, the first to jump on the new trend always win and it's always going to be the smallest group possible. The majority always loses.
Ericson2314 6y ago
> The real issue is that "work" is not valued as it once was. And the work indeed is more bullshit than it used to be! I'm afraid we cannot turn back the clock on this one, so we have to find another way. eyes UBI
- burlesona 6y ago
  I don’t disagree with you about UBI, but I have to say it makes me feel sad. In my experience most people really want meaningful work, and the fact that it puts food on the table makes a lot of otherwise meh work more satisfying and meaningful. At the end of the day it’s more important that people can meet their needs, and if UBI does that, a lot of people will be able to improvise some interesting things to apply themselves to, which I think will be great for them. But a lot of people will also sit on the couch and watch TV all day, feeling there’s no point to life. We’ll have all kinds of new and unforseeable second order effects. I also worry that the fundamental problem is not so much income but cost of living. The way things work today, any amount of UBI that you pay but just drive up the rent. If we don’t significantly increase housing supplies to meet demand, I don’t see how we can break that loop.
  - Ericson2314 6y ago
    > I don’t disagree with you about UBI, but I have to say it makes me feel sad. In my experience most people really want meaningful work, and the fact that it puts food on the table makes a lot of otherwise meh work more satisfying and meaningful. I think the remaining work will be such more meaningful that it will be net dealienation. I think less stress and more free time begets curiosity, so I think it's fair to say people could get a lot out of work than they do from their current drudgery. In the long term, think large amounts of leisure time but ones does "tours of duty" in each of the core industries that power modern society as part of liberal education of how society functions. > I also worry that the fundamental problem is not so much income but cost of living. The way things work today, any amount of UBI that you pay but just drive up the rent. If we don’t significantly increase housing supplies to meet demand, I don’t see how we can break that loop. See https://phenomenalworld.org/analysis/universal-basic-income-the-city https://phenomenalworld.org/analysis/universal-basic-income-... for the results of some modeling. Rent in absolute terms and as a portion of income went down!
netcan 6y ago
An aspect of this, in much of the west, is political demography. The voting population is getting older all the time. Politics increasingly serves their interests. Often these are directly orthogonal. Labour vs capital. Real estate values vs housing costs. Opportunity vs stability. Even this pandemic, sadly, creates opposing interests. Younger people need workplaces to operate. Older people are more susceptible to the virus. Since the stock markets are fine, retired people don't generally have financial interests at stake.
C1sc0cat 6y ago
MY ISA and Pension Funds are still down from where they where pre covid. 25 % of people in the uk have < 1k in savings
fxtentacle 6y ago
Good work is still highly valued, it's just that the value is not paid to the worker, but to the company owning the work. If you increase a company's profit by $500k annually through setting up a new automation system, you'll still only get your $40k internship salary. And the company will pocket the remaining $460k, to be paid out to the owners as profits. So yes, I fully agree with you. This hits the young people the hardest because they are the ones to own the least, on average. But more in general, everyone who is not part of the elite owning those companies and their preferred stocks is suffering. It's almost a cliche "owners vs. workers" class war at this point. But for some reason, everyone in the US expects to enter the owning elite within years - no matter how ridiculously improbable that is - so nobody is willing to stand up for the workers.
- lordnacho 6y ago
  This is not far from the true numbers. I've known several management consultants - the young, educated hustlers who are on their first job - who discovered from their clients what the bill actually was. Ratios of 6+ are common.
  - JAlexoid 6y ago
    I worked with enough consultants to now that the good ones subsidize the salary of the bad ones.
- AlexTWithBeard 6y ago
  > the company will pocket the remaining $460k First, in most companies it's very hard to say who exactly managed to increase the profit. Is it you who came up with the idea? Is it your boss who picked this specific idea out of fifty other ideas you came up with last week? Is it the QA team who managed to catch the bug which would've erased all the profits? Is it HR who hired you among other candidates? Second, no, the remaining is not $460k. In a Big Greedy Corporation I work an average annual cost of employee in "primary" location is around $200k (pre-covid). It includes office space, technology, infrastructure, salary, taxes, fees, insurances and so on. Third, that's the premium the company gets for the risk. Intern will get his salary no matter what. The company makes a bet though. You want to own part of that risk? Build your own company.
pehtis 6y ago
> It is those workers, those who don't own their sources of income, that are struggling to make rent. That is exactly how social classes are distinguished in Marxism: "[T]he class of modern wage labourers who, having no means of production of their own, are reduced to selling their labour power in order to live" https://en.wikipedia.org/wiki/Marxism#Social_classes https://en.wikipedia.org/wiki/Marxism#Social_classes
animal_spirits 6y ago
> "Young people own nothing" I wouldn't say that. I am 24 and I have some pretty incredible tools in my pocket right now that someone in 1991 couldn't have even dreamed of. The problem is, instead of owning a good car or having an apartment to live in, I have the pinnacle-of-technology swiss-army knife of information processors (smart phone, macbook pro, desktop computer) within reach. That is where I think the value of things have changed over time. It went from the opportunity to _have_ to the opportunity to _learn_
- tehjoker 6y ago
  In more marxist terms, we have traded variation of consumer goods for precarity in our ability to live our lives. You can play video games, but your boss can fire you at a whim and your landlord can kick you on the street. You can't become class mobile without taking on huge debts and possibly not making it.
- pram 6y ago
  You could still learn stuff in 1991 jfyi
  - animal_spirits 6y ago
    Oh yes of course but its way way way easier today with magnitudes more subjects covered in depth
    - tspike 6y ago
      The rewards for finding the information needed to learn were geometrically higher relative to the difficulty. It's easier to learn today; the (monetary) value of that learning is lower.
  - cwbrandsma 6y ago
    Finding the information was harder. There were libraries, my town library was in the basement of the city hall building, and my local mechanic has a larger building. If the library didn’t have it, you could hit a small book store, whose specialty was romance novels for local farm wives. Basically, anything you would actually want would be special order, hoping the book dealer knew what you were talking about in the first place.
dustingetz 6y ago
US stocks are up because the federal government is buying stocks (illegally) for the first time in history
- mc10 6y ago
  Curious, in what way is the Fed’s bond purchasing program illegal?
anovikov 6y ago
Absolutely vast majority of income of everyone apart from billionaires/top 0.01%, comes from work rather than investments... Yes even for top 1% apart from top 0.1%, share of income from investments is negligible. Total value of U.S. stock market is $35T and given the traditional 4% "safe" withdrawal formula, it is about 7% of GDP or 10% of overall income, as profits. About half of it going to the top 0.01%. Problem maybe is that there are no highly paid jobs available for unqualified young people anymore.
mythrwy 6y ago
Agreed. And this is a good part of the "real" grievance of both young people and working class minorities, especially in big cities in my opinion. It's not working class wages haven't risen, they have. But, the costs of housing, healthcare, education and many other necessities have risen at a much faster pace, particularly in cities. These rises in cost are of course profits to someone so the economy is "booming. But it's become so distorted that it's becoming increasingly hard to keep up for the lower wage earners with no end in site. Of course the owners of assets don't see the problem. Their properties and stocks are appreciating nicely. And the fed has been encouraging this. Now, one argument might be that if this wasn't occurring that low wage earners would be even worse off with no jobs and and there may be some validity to that point of view but the inequality of this isn't just an abstract ethical problem at this point but rather a system threatening problem. I don't know that there is an easy fix either. It often seems trying to fix one problem with rent controls, wage floors, progressive taxation etc. results in other problems. But the increase in costs of housing, medical care etc. while wages grow at a much slower rate isn't sustainable imo.
neilparikh 6y ago
The solution is to tax the unproductive part of society, which only extracts wealth from everyone else: landowners. This allows us to shift the burden away from labour.

plazmatic 6y ago

this title is, fucking dumb

bhupy 6y ago

A lot of anecdotes and conjecture here, so it’s worth analyzing the median trends across generations: https://www.bloomberg.com/opinion/articles/2020-09-23/median-household-income-grew-more-in-the-10s-than-the-90s?sref=R8NfLgwS https://www.bloomberg.com/opinion/articles/2020-09-23/median... https://twitter.com/ernietedeschi/status/1308748407633309696 https://twitter.com/ernietedeschi/status/1308748407633309696 https://twitter.com/ernietedeschi/status/1308813020425007105 https://twitter.com/ernietedeschi/status/1308813020425007105 (yes, these are all adjusted for inflation) Real median per capita income is the highest its ever been regardless of which inflation index you use -> https://twitter.com/Noahpinion/status/1307793622369103872 https://twitter.com/Noahpinion/status/1307793622369103872 Not only that, we’re on average working fewer hours — so not only has income growth been higher in recent years, it’s been of higher quality -> https://twitter.com/Noahpinion/status/1308790402082766849 https://twitter.com/Noahpinion/status/1308790402082766849 Anecdotes are important because they allow people to voice their concerns, but it’s important that we don’t miss the forest for the trees.

swiley 6y ago
The median is only useful in certain kinds of distributions and many people argue that income distribution isn't one of those.
- bhupy 6y ago
  Do you have a citation for that? The median is generally the most reliable metric to use specifically for income, since it isn’t impacted by outliers.
  - swiley 6y ago
    The median is often used for income, that doesn't make it "reliable."
    - bhupy 6y ago
      It’s “reliable” insofar as it tells us how the “average” person is doing, and by definition the lower bound for the top half of the population.

quietbritishjim 6y ago

I would love to know the proportion of people at, say, 25 that can afford to buy a house (in the area they grew up and of some reasonable size e.g. 3 bedroom) over time. Sure, income has gone up, but so have house prices and so that proportion has surely collapsed. That has a much bigger effect on young peoples' lives than the number of luxury items they can buy and stuff into the property that they don't have. Edit: I found this interesting graph for the UK (where I live) [1]. It shows the ratio of average house price to average annual income. Not perfect measure as distribution of income over age brackets is probably more imbalanced now due to starting work later (18 - 25 rather than 16 - 21) but still interesting. Brief textual summary: * 1920 - 1945: 5 ish * 1945 - 1955: 6 - 7 (brief spike) * 1960 - 2000: 4 - 5 (with occasional spike to 6) * 2000 - 2020: 8 - 9 (with dip in the middle but still above 7) [1] https://www.schroders.com/en/insights/economics/what-174-years-of-data-tell-us-about-house-price-affordability-in-the-uk/ https://www.schroders.com/en/insights/economics/what-174-yea... Edit 2: Here in the UK the problem is particularly acute in the suburbs of the big cities, especially London, because the ability to build new housing is artificially restricted by the green belt legislation [2]. [2] https://en.wikipedia.org/wiki/Green_belt_(United_Kingdom) https://en.wikipedia.org/wiki/Green_belt_(United_Kingdom)

jka 6y ago
Would 'median disposable income' be a good proxy for that? (in other words, a metric to determine whether this increased median income ends up in the pockets of and usable by the recipients, or whether it is being used to support day-to-day life)
- quietbritishjim 6y ago
  If by "that" you mean the ability to buy a decent house for yourself then the answer is that it would be an extremely poor proxy ... almost uncorrelated. It's possible to live without buying a house or even renting by yourself (you can live with parents or rent a shared house with other young people). People in that situation would still have (and be recorded as having) a disposable income even though accomodation is an essential expense because owning your own personal house is not technically an essential expense. Therefore, if wages are decent but housing is extremely expensive (which I believe is the case here in the UK, especially city suburbs) then median disposable income would continue to increase while the ability of young people to buy their own homes would continue to decrease.

matz1 6y ago

Yes, economy always evolve and changing. The new gigs in today era is: make youtube video, game streamer, instagram model, etc. Mind boggling how young people these days can make considerable amount of money out of these.

durnygbur 6y ago
Ad industry is equally generous to all its servants. Including, or maybe in particular, to software professionals.
jlokier 6y ago
Those kinds of "influencer" gigs are a lottery. Most people do poorly in them, a very small number are very successful. It's like being a band, a few are stars, the rest can't afford to do it as their main job. The amount of money that the most successful can make is not a good indicator of likely income. They're not what is generally meant by "gig economy" by the way. What is generally meant are precarious jobs with variable shifts, often low paid. Things like Uber driving, minimum-wage jobs delivering food when there's demand, and zero-hour contracts working in shops.
- matz1 6y ago
  Sure, I'm not even talking about the stars, but even the fact young people can make any money out of these is incredible. I wouldn't imagine it in 1991. What I'm saying is for young people the opportunities for gig are relatively the same compared to 1991, except its in the different form. Not to mention the opportunities to aquire skill or to learn almost anything for free from the internet.
  - TacticalTable 6y ago
    > What I'm saying is for young people the opportunities for gig are relatively the same compared to 1991, except its in the different form. You've explicitly named lotteries and acted as if they're the same as actual gig employment. I have several instagram influencer friends, and a few who make youtube videos on the side. It's their dream to go pro. You want to know their collective income, from a pool of about 10 people, who have been working at this for over a year? It's under $100. That's not a gig, that's a lottery that costs time and energy. If you want to talk gigs, talk about Wag or Uber. Which, are also definitely not the same gigs that the article was talking about.

WrtCdEvrydy 6y ago

> hiring becoming rife with credentialism I disagree with this, the profession is becoming more like a real profession instead of a whole bunch of people just slinging code left and right. The reason programmers make good money is because we're at the beginning of a great profession like lawyers and finance guys did when their professions began. We will come to a time that the programming career requires certification kinda like nursing, lawyers or finance guys. The question is how strict the certification process will be... will it be like CPAs where you can work in finance and eventually certify or like lawyers where you can't write code professionally without the license.

jaspax 6y ago
> the profession is becoming more like a real profession So rife with credentialism, just like she said. The day you need a license to write code is the day I start a coding-as-civil-disobedience program.
- WrtCdEvrydy 6y ago
  > The day you need a license to write code is the day I start a coding-as-civil-disobedience program. It's the same as being a lawyer, a doctor, a nurse or a CPA. Those are careers that can cause a lot of harm to other people, yet programmers think they're above it all. Wait until someone takes control of a smart power grid, or a self driving car/truck/airplane because of outsourcing or someone writes some shit software that causes an airplane to fall out of the sky.
  - richiebful1 6y ago
    The Boeing 737 MAX is already an example of cost-cutting in software leading to measurable deaths. But Boeing took the flak, not the software engineering profession as a whole.
  - scollet 6y ago
    Right, it's a matter of risk level. There are plenty - if not the majority - of disciplines in software and firmware that don't have these levels of risk. I can still write a dog sharing social media app, but I wouldn't be able to interface with a satellite. Something along those lines.

logicOnly 6y ago

Author casually dismissed inflation, when the reality is that inflation is the single greatest cause for this disparity.

nafey 6y ago
How so? His examples have been adjusted to inflation and the calculation is also present in the article itself.
- etskinner 6y ago
  > His Her, actually: https://siderea.dreamwidth.org/profile https://siderea.dreamwidth.org/profile

oars 6y ago

Fantastic read. This is the type of rare content I come to HN for (opposed to Reddit). Thank you!

dsr_ 6y ago
Siderea emits something of this caliber about every two months, and she isn't boring in between.

AlexTWithBeard 6y ago

> "work" is not valued as it once was It is, but not in this country. We sold it to China for a bowl of lentil stew. Now we all have to live with that.

neves 6y ago
We didn't sell. The capital owners decided to send there to increase their profits.
- AlexTWithBeard 6y ago
  Capital owners would much prefer running stuff locally: it's more expensive so the profit margin is higher. No headache with logistics. Predictable laws. Friendly courts. It's customers who are not willing to pay the premium for locally made stuff. As soon as one factory moves to China others have no choice, but to follow, otherwise they will lose the price war.
  - consp 6y ago
    > It's customers who are not willing to pay the premium for locally made stuff. Or can't.
    - NoZZz 6y ago
      Because they outsourced their jobs!
    - JAlexoid 6y ago
      Oh please.... Most don't want to. (Presuming you're in US and generalizing) Being on NH you probably earn 2x the median US income. Do you own an American made luxury vehicle, that you probably can afford to lease or buy on credit? Probably not. And I bet it's because you don't want to.
      - AlexandrB 6y ago
        This is a really badly considered example because Tesla exists and I'm willing to bet that a large portion of HN wants to own a Tesla vehicle. A better example might be US-made clothing, which often comes with a premium price.

mtberatwork 6y ago

> The 'economy' is doing great. Stocks go ever higher despite pandemics and money trends. The stock market is doing great but all economic indicators are down. The stock market has no bearing on the economy right now.

PeterStuer 6y ago
It's been a Ponzi casino propped up by a relentless torrent of cash oozing into it straight from the printing presses for a very, very long time
- thedudeabides5 6y ago
  That maybe a little aggressive. The comment above hit the nail on the head, it's actually pretty simple. Old people = asset holders (aka holders of financial obligations, bonds and stocks) Young people = usually in debt (student, auto, credit card, mortgage) and hoping to earn their way out with income. Aka the young are the very debtors that the old creditors are lending to via their retirement funds of bonds and stocks. An the Fed, well really their only tool is to print to do what? Buy financial assets. So in times of stress they buy those assets/liabilities, pushing up their prices first through decreasing long term rates (hence buying government bonds) and then with QE infinity, eventually buying the actual same asset/liabilities that make up the rich people's portfolios. Hence we response to a drastic income shock by...bailing out rich people. Ideally the Fed would just monetize government spending directly to those poor people, but as you can see with Pelosi-McConnell 2020, that stuff needs to go through Congress, which is a partisan mess.
  - tremon 6y ago
    I think the ponzi scheme refers to the amount of money flowing around in financial schemes that isn't actually "money". By creating numerous financial products and valuations that aren't actually based on assets, the banking system has been able to "print" more money than the central bank would ever allow. And that "money" is what's propping up the stock market. That's why the stock market is no longer representative of the economy: "money" has become an economy in itself.

zozin 6y ago

A combination of factors have completely ravaged Millennials' finances: * Technology is capturing more and more of low-wage/low-skill entry level work. * The combination of technology, free-market capitalism and globalization means that American youth have to compete with non-Americans for jobs that were solely done by Americans during most of the 20th century. * Incompetent government policies have created a system where college tuition has outstripped core inflation by 500-600%; all of this in a system where a college education has gone from nice-to-have to an absolute necessity. * Globalization and urbanization have led to congregation of more and more people in urban cores, causing housing and other fixed living costs to increase. * Untimely financial crises have both retarded Millennial career progress as well as their ability to save/invest in the stock market. None of these processes or events are inherently bad, but their combination have created so many negative externalities for a generation of Americans that these people will never be able to recover.

ben7799 6y ago
There is one other weird aspect if you compare millenials with GenX. Millenials spend a lot more money on a lot of stuff that didn't even exist in the period in the 1990s the blog author was talking about. In the early 1990s if you were young & working you: * Possibly didn't have a TV * Were extremely likely to not own a computer - They were REALLY expensive, most people who had them had them because they were in tech and the employer gave you one to take home * You didn't have a $900 smartphone and pay $100 or more a month to use it * Definitely didn't pay recurring software subscription fees, very likely didn't buy any software * Probably went out to eat far less than today * Were less likely to work/live in the Urban core.. you might have needed a car but everything else was cheaper * You weren't going to Starbucks or other Cafes and buying $3-4 Coffee drinks, cause most places didn't even have cafes like that * There was less pressure to keep up with the joneses since Social Media didn't even exist There was a lot of stuff in Millennial culture in the 2010s that was downright expensive.
- treespace89 6y ago
  As a GenX in the 90's my money went to: - Going to the movies - Going out for fast food - Renting movies - Renting video games

ryanmarsh 6y ago

If I were starting out now, in exactly the same situation as I had been in 1991, a smart, hard-working, self-motivated, well-organized, fast-talking, interviewer-impressing young person with no college degree, nor any credentials beyond a high school diploma, but the ability to learn to do hard things fast, and independently, if just given a chance, and the chutzpah to talk oneself into jobs one doesn't actually know how to do in the confidence one will figure it out when one gets there: what options would I have to turn that promising constellation into cash in my pocket? This statement is exactly my lived experience except that I started in 1994 or 95. My question for others here. What is the answer to his question? Is it possible to do now what we did back then? Why?

JeremyBarbosa 6y ago
As a recent college grad who has held many junior developer interviews while working at a startup, I would say that the answer is most definitely no. The current interview process is so bogged down with a high number of applicants and focuses so much on objective accomplishments, that any shortcut to trim applicants is taken. It seemed that only by removing applicants with a lower GPA or perhaps a mismatching degree could the interview pool actually reach a manageable number. This is a real shame because so many good people are most definitely ignored, but it is so much harder to prove character traits versus simply checking for a degree.
- nradov 6y ago
  The online application process has made it so easy to apply for jobs that employers get flooded with applications. So they really have no choice but to use arbitrary criteria to filter candidates down to a manageable set. (The same thing has also happened to college applications.)
- barry-cotter 6y ago
  The fact that Lambda School has a business model suggests you’re missing something. People manage to get jobs paying $50,000 a year and much more based off of nine months of full time instruction. > Time to placement: How long does it take students to be placed into jobs after graduation? > Of the 201 students who graduated in H1 2019 and were placed in jobs, 116 (58%) accepted jobs within 90 days of graduation, 68 (34%) accepted jobs between 90 and 180 days after graduation, and 17 (8%) accepted jobs 180 days or more after graduation. > Salary expectations: What is the median annualized salary of placed graduates? > The median annualized salary for H1 2019 placed graduates was $70,000. https://lambdaschool.com/reports/2019-outcomes-report#how https://lambdaschool.com/reports/2019-outcomes-report#how

pjdemers 6y ago

She is very right that the tech job market changed in 2001. I have a former coworker who lost his job in 2017. He had not been in the job market since 1995. He was shocked how things had changed. His direct quote: "It used to be easy to find a tech job. Now it is hard. I couldn't understand why in the last few years I was able to hire people who I thought were over-qualified. But I now see that I'm under-qualified".

honkycat 6y ago
This is my nightmare: going out of date. Never lose the fear!
- racl101 6y ago
  Never be complacent. Always be learning. We are expendable. Let's not give employers a reason to think this. I used to think that I just need to learn a couple of technologies, some back end scripting language, some shell scripting, some SQL and JavaScript and I'll be set. That was 10 years ago. How wrong I was.
slfnflctd 6y ago
It was eerie how much of this post reminded me of my experiences in the 90s, and I lived over a thousand miles away from the author. I was relaxed & confident because I could always find an easy job that paid the bills. I had no frame of reference whatsoever to even understand that things were changing at all, let alone how or why. I thought I would have time to wait until the 'perfect fit' came along. I was wrong.
racl101 6y ago
The scariest part is that those of us who are abled bodied who think that if times got rough they could always go back and flip burgers or be a cashier are starting to get a rude awakening that even those jobs have lots of competition and, worse, some of those jobs are getting automated.

ben7799 6y ago

I'm similar age.. the talk of hourly wages rings true to me. In the early 90s I was still in HS. I made $8/hr as a lifeguard in HS and $12/hr as a Red Cross Water Safety Instructor. I'd clock out of one and clock in at the higher rate depending on what I was doing. That's about $14-21/hr based on inflation. These were actually jobs that were much harder to qualify for compared to most jobs high school kids get. They required my parents having the foresight to sign me up for many years of swim instruction and then lifeguarding & teaching classes. WSI classes were actually quite difficult back then, and I think they still are. I actually know a lot of people working lifeguard and swim instructor jobs make less than $8/hr today. Just an example but I think these jobs are similar to many others. Most places my son has taken swim lessons the instructors are not Red Cross certified, and it really shows, the programs are nowhere near as well designed and the instructors don't even swim well enough to make it through the WSI course. Meanwhile the business owner charges WAY more for the swim lessons. The employees make 50% what they did 25-30 years ago but the business owners are likely making WAY more money. Heck swim lessons weren't even really a for profit market back in the 1990s. As soon as I had one year of college I always had summer software internships. The first one started at $16/hr and the hourly wages went up every year. As far as the recollections of the .com crash in 2001/2002. It's impossible to know how good the blog author was. In the first .com boom there were a lot of companies that did 0 productive work, burned through lots of VC money, and never even shipped a product. They hired lots of people without college degrees, sometimes they hired people who dropped out of HS. "We don't do any work, we just play Quake all day in the office" was definitely a thing in the late 90s. There were a lot of people who worked places like that who had "Sr. Software Engineer" on their Resume and had very little ability to do the job. The .com crash was a correction for a lot of that. There were other people who had the same lack of credentials but did fine because they were legit, had the talent, worked hard, learned on the job, and worked at companies that were actually doing real work. I think today's startup market is different. Code quality standards are a lot higher. There are weird parts of the software economy around social media, advertising, etc.. but there seem to be less companies that are just there to outright defraud VCs. Investors are a lot smarter now. I worked as a Perma-Temp for 2 years after the .com crash. It was actually very lucrative at that time. 2002-2005 were pretty scary. There was tons of talk of Outsourcing just replacing everything in the US. It didn't work.

oramit 6y ago

Lots of good comments on this but two factors I haven't seen considered: - Rise of programming bootcamps - More intrusive workplaces In the 90's and early 00's programming was not cool. There was a lot of money to be made, sure, but the average developer was far more likely to be in it for the software, not the money. Companies were more willing to bring people on then because there were far fewer bullshitters. Post '08 programming became cool - remember brogrammers? - and a whole cottage industry of bootcamps popped up. Companies had to pull back and put up a lot more barriers to hiring because so many people started applying with dubious resumes. It also seems like there has been a slow but steady increase in how intrusive your workplace is to your life. Hiring and firing people has slowly become more and more fraught for employers so they want to do less of it. Insurance has gotten incredibly expensive and is linked to your employment so both sides are wary to take chances and want a sure thing. I don't think this is a phenomenon just in tech either. It's a US wide problem with all the incentives making it difficult to take chances.

rayiner 6y ago

These cross-sectional comparisons are really difficult. For example, the author mentions rent in Boston. The homicide rate in Boston in 1990 was three times higher than today, comparable to where Newark is today. There were good jobs downtown, but the tech boom hadn't yet begun. In 1990, the city was coming off of three straight decades of population decline. Since 1990, the population has grown 20%, but the city has built almost no new housing: https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iY_crGvqlCv8/v0/800x-1.png https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iY_crGvqlCv.... The author also talks about working in "word processing." That was a much rarer and more valuable skill in 1990 than today. I'm a child of the 1980s and early 1990s, and despite coming from an upper middle class family, I didn't learn how to touch type until 8th grade. My daughter has a Macbook pro and is on pace to be a touch type by the end of second grade. I'm not saying there is "nothing to see here." But we can't have a serious conversation about this unless we have a serious conversation about this. Part of having a serious conversation is agreeing on the facts: https://www.pewresearch.org/fact-tank/2018/12/11/young-adult-households-are-earning-more-than-most-older-americans-did-at-the-same-age https://www.pewresearch.org/fact-tank/2018/12/11/young-adult.... The fact is that millennial households make more money today than previous generations did at the same age. Households headed by people ages 22-37, adjusted for changes in household size, make 60% more money adjusted for inflation than in 1967. Another thing is acknowledging that, if you compared housing in cities to other positional goods, Medford or Astoria or Mountain View are a different product today than they were in 1990. It's like how the Camry and Accord keep moving up market and new models are slotted underneath. The equivalent of Medford back then is some suburb in Kansas City. Third, we have to acknowledge that credentials such as college degrees are not as valuable today as in the past: https://www.the74million.org/wp-content/uploads/2019/03/Pell-line-graph.jpg https://www.the74million.org/wp-content/uploads/2019/03/Pell.... In 1970, 40% young people coming from the top quarter of households (by income) had a college degree by age 24. Today, that's 58%. In the next quartile down, that figure nearly tripled, from 15% to 41%. And in the next quartile down (people from families making below the median income) that number doubled from 11% to 20%. Being a college degree holder just doesn't mean as much today as it did 50 years ago. Fourth, we have to acknowledge changing demographics. We have to acknowledge that economic immigrants tend to come into the country with little in the way of financial resources. And even a country that's doing a great job of providing inter-generational mobility for those immigrants will show more poverty in aggregate statistics than one that doesn't have any economic immigrants. That's true in the U.S. as well. Data shows that all major immigrant-heavy ethnic groups, including Hispanics, have incomes that are converging with those of the white majority over time: https://academic.oup.com/qje/article/135/2/711/5687353#201514575 https://academic.oup.com/qje/article/135/2/711/5687353#20151.... But the percentage of the population that's a first generation immigrant--and thus disproportionately likely to have come here with limited means and education--has tripled since 1970. It's easy to take a couple of data points from two time periods and draw conclusions. But such analyzes assume everything else is staying the same, and the conclusions aren't worth very much unless you account for changes. Doing that accounting properly is very hard.

chasebank 6y ago

Do you think asset inflation due to artificially low interest rates has anything to do with this trend?

nickysielicki 6y ago

The nineties were a very flush time period. This article is trying to paint it as if those weren’t extraordinary times.

passivepinetree 6y ago
The author sort of alludes to it at the end of the article when they mention that Gen-Xers' expectations are even more tempered than Boomers' expectations about what it takes to survive today. Is there another group/time period you're interested in specifically comparing to?

intended 6y ago

For anyone who does end up reading this, I highly reccomend reading r/badeconomics for most economic questions you come up with. I find that understanding an economic issue ends up requiring me to read one papers just to penetrate one paragraph of someone's explanation of a phenomenon. Badecon instead is a place where you see bad ideas taken and dissected to show what was wrong, and in the process many sacred cows and talking points get dissected. Makes the process a whole lot easier to understand from a topical issue perspective (rather than doing a part time econ degree)

opportune 6y ago
Just make sure you don’t go to actual /r/economics which is really a politics about the state of the economy subreddit where most seemingly have never even taken an economics class

TearsInTheRain 6y ago

Something i see glossed over in a lot of conversations about inflation is that inflation doesnt affect all prices equally. Sure housing has gone up significantly but things like electronics and clothing have gotten cheaper and a lot of products like household goods are flat. You cant make apples to apples comparisons by just looking at one slice of the economy

john_moscow 6y ago

Like every product price, the wages are very much proportional to the demand/supply balance. And the increased centralization and standardization is directly and considerably reducing the demand. If you have 10 companies with roughly equivalent market share, you need 10 CEOs, 10 independent chains of command, 10 accountants, 10 lawyers, 10 IT guys and so on. Each of those people possesses some domain knowledge, is harder to replace, and can negotiate a relatively high salary. Now if you let them merge into 1 megacorp, you get 1 CEO with 2-3 VPs, a couple of accountants/lawyers/IT guys/middle managers, and the rest become corporate drones following predefined instructions. They are much easier to replace, so they get lower wages. Globally, you have increased the efficiency in terms of lowering absolute prices, but decreased everybody's living standard, because the median wage drop was even more dramatic. If you want to gauge the scale of the problem, just think how much of your own monthly spending goes to owner-operated businesses vs. 1000+-employee corporations vs. rent-like transactions (e.g. mortgage interest). There are also a bunch of very specific policies making this worse: * Low interest rate make capital cheap, enabling leveraged acquisitions. * Bailouts for inefficient corporations prevent smaller businesses from taking their place. * Non-existing enforcement of anti-trust laws is another huge thing. Good luck selling physical items online without going on Amazon. Good like surviving after Amazon deems your niche worthy of their time and knocks off your product with "Amazon Basics". Ditto for mobile apps, ditto for any niche captured by a Google product, that is often terrible, but free to the end user due to ads. A separate thing is the government-backed college loans, that drive the tuition prices to the point where it doesn't pay off, but is still required by most employers. These are big long-term problems that will shape the economic future for most of the currently economically active population, but to my surprise there is very little public discussion about them.

zeveb 6y ago

https://twitter.com/ernietedeschi/status/1308748407633309696 https://twitter.com/ernietedeschi/status/1308748407633309696 These graphs appear to show that real, inflation-adjusted median-income is higher for Gen Z that it was for Millenials, higher for Millenials than it was for the 'Oregon Trail' cohort, higher for the 'Oregon Trail' kids than it was for Gen X, higher for Gen X than the Baby Boomers and higher for the Baby Boomers than for the Silent Generation. Are his figures false, or is it possible that there is another factor at work? Maybe we look back at our youth with rose-coloured glasses, and maybe we look up to those older than us and fail to see how hard they worked to get where they are. I remember that my first apartment was a dive; I just now looked it up and see that it has been completely renovated, is appointed like a luxury flat and is only 36% higher in real dollars. That is not terrible. A quick check on Zillow shows units available in my original price range not that far away, in a town which is far more desirable than it was decades ago. Edit: ah, I see https://news.ycombinator.com/item?id=24662058 https://news.ycombinator.com/item?id=24662058 has the same graphs. I think my commentary and own figures are interesting, so I will leave them.

hikerclimber 6y ago

hopefully young people like me don't have jobs so it leads to anarchy.

opportune 6y ago

This is focused on jobs but I’d like to see more conversation on debt, NIMBYism and interest rates. There are a lot of jobs, maybe not easy well paying ones, but lots of jobs that would have you earning $30k or $40k a year without particularly specialized skills. The problem is that those are not nearly enough to cover costs, specifically in housing. And the reason housing is so insane is that the homeowners cartel has manufactured a supply shortage AND with more or less permanently low interest rates (because due to the massive amount of government debt we have to keep them low) the real estate market prices out people who don’t want to take on insane amounts of debt.

jackcosgrove 6y ago

All of the aspects of generational inequality stem from a single root cause: the rising dependency ratio after the peak of the demographic dividend. US labor force participation peaked in the 90s as female entrance into the workforce peaked. After that happened, the countervailing force of lower birthrates began to take over and the dependency ratio started to rise. We're all fighting for a piece of a pie that is, relative to the population, shrinking. And it's shrinking because of demographic trends that began decades ago and would take decades to reverse. Every developed country is going through the same thing, and some are in much worse positions than the US. Older people were lucky enough to be born into a world with demographics favorable to growth; younger people are unlucky to have been born into a shrinking world.

cashewchoo 6y ago
Are you talking mainly to things like consumer goods being bought more and more specifically because there are more people? Or systems that are basically N people paying for M people like Social Security (where N = number of workers and M = number of retirees) where N and M need to roughly stay the same ratio? Or something else? (More generally - I find your comment intriguing, please do go on!)
- deleted 6y ago
  [deleted]
- jackcosgrove 6y ago
  The latter, there are fewer workers per population than in the past. This means supply falls relative to demand since the growing population is seniors with savings. That leads to higher prices. When demographics are in your favor, a youth bulge places fewer demands on society. Now we can tweak things to make them better. However the demographic megatrend is mostly set in place and there's not much we can do to reverse it.

DeonPenny 6y ago

This seems to me that this is a result of the training young people get being more and more divergent from the actual work the economy needs because of governmental gerrymandering. People made it impossible to apprentice at lower wages for higher wages later so now we have huge batches of young 18-25 year old who can't compete fairly for a job. Then we also have young people getting degrees in their passion rather than in anything people actually need.

sascha_sl 6y ago
What makes you say that? I have seen absolutely no reason to believe any of that. Especially considering this article is explicitly referencing mostly unskilled labor.
- DeonPenny 6y ago
  Because how do these kid even get skills if the required amount to pay them prices them out of the market. You'd probably hire a drop out if you could pay much less in wages, but I see a lot of people avoiding that apprenticeship path. They didn't have this issue in the early 90 cause inflation had so quickly outpaced minimum wage there really wasn't one. So in 1979-1985 when he was paid somewhere near 7-11 a hour I'd guess and paying $270 a month. I'm guessing it was worth it to his teach him. Now in some cities it not worth it for example in SF to hire a kid to do basic SDR or work around the office.

bamboozled 6y ago

Where is the entire world for the young. The world is ran by older people who do nothing really useful for the young generations cause. I feel like the young don't even have a voice or much hope at all in 2020.

hikerclimber1 6y ago

hopefully no one has jobs and the U.S. economy goes downhill and fires burn the entire western half of the U.S.

waynecochran 6y ago

I can't tell if this was said tongue-in-check or not: And working full time is clearly ridiculous and probably a violation of human rights.