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Even discretionary and non discretionary is a contentious item and in a CPI has to be defined. For example: is TV service discretionary? Is Internet service di

Even discretionary and non discretionary is a contentious item and in a CPI has to be defined. For example: is TV service discretionary? Is Internet service discretionary? Is broadband Internet access discretionary? I just checked. Bell TV + Internet is advertised as $120CAD right now. Cell service combined with that add $70CAD. Per month. With taxes on top that's round about $2,620 per year if we are talking Single person household. Now it depends on where you are and whether you live alone or not and such. In Toronto as a single person at the median income this alone can be 4.5% of your net income. I'd say that moves the needle. I pay less than half of this with a different ISP and cell provider + Netflix. Of course the precise calculations change as we move between cities and provinces as well as single person vs. families etc. as base costs get shared.

lumost 6y ago
The hypothetical single income earner that we are debating would pay an average rent of $2250/mo for a 1-bedroom in Toronto. Roughly 10x the cost of TV, internet, and phone. This cost has risen from ~$1750/mo in 2017 at roughly ~10% per year. For perspective, our hypothetical individual would be experiencing house price inflation equal to a new TV, phone, and internet bill every year. (1-bedrooms displayed the lowest price increase of any housing category in Toronto according to https://www.zumper.com/rent-research/toronto-on https://www.zumper.com/rent-research/toronto-on )
- tharkun__ 6y ago
  Absolutely agreed that there are worse categories than your phone/internet/tv bills. And yet even this relatively small and apparently I Yunsignificant non-discretionary (or was some of it discretionary? Or all of it?) item still makes up 4.5% of your net income. That I still call significant. Once I have a house the inflation on that also doesn't affect me that much any more (sure, evaluations increase my tax bill - which btw is a NA thing that is irrelevant in Germany for example as long as you have a mortgage) but other items do.
  - lumost 6y ago
    The underlying problem here is that one of our numbers must be wrong. The options I could see are 1. The marginal cost of housing has little to do with what individuals pay in the short-term. 2. The median income earner requires or will require substantial subsidies or raises to keep pace with the increased costs of their home. Roughly 3-4% per year assuming that housing is the only item inflating. 3. Either the median income, median rental, or tv+internet prices we've quoted are wildly off the mark. I'd bet that #2 is the correct interpretation of the statistics. While option 1 is possible, it hides low-quality substitutions and assumes that one can always make a substitution such as living with parents for longer.
    - tharkun__ 6y ago
      All very fair points. I think one thing that makes a huge difference is whether you rent or own. There's obviously so many nuances to this all. I realize that we (or at least I am) also mixing up various things, even though I chose to quote a particular city's median income for the example. If you are renting and your rent goes up 10% that obviously has a large effect. If you have a house and rent goes up 10% you don't care at all. If rent goes up like that, it's probable that house/condo sale prices go up too and you have to pay more in taxes. I bet the increase in taxes makes a smaller hole in your pocket, though I might be completely wrong. But this also depends on whether we stick with the example or move on to other countries, where there's no such thing as separate municipal/school taxes or where rent control is in place.

lumost 6y ago

The hypothetical single income earner that we are debating would pay an average rent of $2250/mo for a 1-bedroom in Toronto. Roughly 10x the cost of TV, internet, and phone. This cost has risen from ~$1750/mo in 2017 at roughly ~10% per year. For perspective, our hypothetical individual would be experiencing house price inflation equal to a new TV, phone, and internet bill every year. (1-bedrooms displayed the lowest price increase of any housing category in Toronto according to https://www.zumper.com/rent-research/toronto-on https://www.zumper.com/rent-research/toronto-on )

tharkun__ 6y ago
Absolutely agreed that there are worse categories than your phone/internet/tv bills. And yet even this relatively small and apparently I Yunsignificant non-discretionary (or was some of it discretionary? Or all of it?) item still makes up 4.5% of your net income. That I still call significant. Once I have a house the inflation on that also doesn't affect me that much any more (sure, evaluations increase my tax bill - which btw is a NA thing that is irrelevant in Germany for example as long as you have a mortgage) but other items do.
- lumost 6y ago
  The underlying problem here is that one of our numbers must be wrong. The options I could see are 1. The marginal cost of housing has little to do with what individuals pay in the short-term. 2. The median income earner requires or will require substantial subsidies or raises to keep pace with the increased costs of their home. Roughly 3-4% per year assuming that housing is the only item inflating. 3. Either the median income, median rental, or tv+internet prices we've quoted are wildly off the mark. I'd bet that #2 is the correct interpretation of the statistics. While option 1 is possible, it hides low-quality substitutions and assumes that one can always make a substitution such as living with parents for longer.
  - tharkun__ 6y ago
    All very fair points. I think one thing that makes a huge difference is whether you rent or own. There's obviously so many nuances to this all. I realize that we (or at least I am) also mixing up various things, even though I chose to quote a particular city's median income for the example. If you are renting and your rent goes up 10% that obviously has a large effect. If you have a house and rent goes up 10% you don't care at all. If rent goes up like that, it's probable that house/condo sale prices go up too and you have to pay more in taxes. I bet the increase in taxes makes a smaller hole in your pocket, though I might be completely wrong. But this also depends on whether we stick with the example or move on to other countries, where there's no such thing as separate municipal/school taxes or where rent control is in place.