9 ms·

I don't really know the stats, but I'm curious if this is true. Yes, GDP has been going up for a long time in many countries, and so the "average wealth" of eac

I don't really know the stats, but I'm curious if this is true. Yes, GDP has been going up for a long time in many countries, and so the "average wealth" of each generation is going up. However, is the same true for purchasing power? Sometimes you hear about these mythical stories of janitors who could afford to actually buy a house, despite having two children and their partners being stay-at-home moms. And yet today, I hear so many stories about 30 year olds with masters degrees who are still living with their parents because they can't afford to rent a studio. Like I said, and I can't find good stats on this online. If you have any stats on which you based your comment, I'd love to see them!

faitswulff 5y ago
The Wall Street Journal has a great infographic here comparing how many hours of worth it would take to pay median rent today versus in 1968: https://www.wsj.com/articles/how-much-does-the-federal-minimum-wage-buy-you-now-vs-then-11614866413 https://www.wsj.com/articles/how-much-does-the-federal-minim... Spoiler: it’s not pretty.
- cheschire 5y ago
  https://archive.is/vMKTY https://archive.is/vMKTY
- paul_f 5y ago
  A better comparison would be the price per square foot. The median rent today buys a MUCH larger (and nicer) house than it did in 1968. The average house in the US has increased by 1,000 square feet in the last 50 years. https://www.aei.org/carpe-diem/new-us-homes-today-are-1000-square-feet-larger-than-in-1973-and-living-space-per-person-has-nearly-doubled/ https://www.aei.org/carpe-diem/new-us-homes-today-are-1000-s...
  - Jenk 5y ago
    It's a comparison, but I wouldn't say a better one. You can't just rent a fraction of a property without sharing it with someone else, so the comparison is "What does it cost to get a place of your own in 1968 vs today?" and the answer is you either rent today's bigger but more expensive property, or don't - even if you could afford a 1968 property today.
    - bluGill 5y ago
      As Adam Smith observed, when people get more income it almost always goes to better places to live. Better can be more space, better location, or more luxury in the space. You can still find apartments built in the 1950s that are functional (places where the maintenance was done so they are essentially just as good as 70 years ago) and the rent is cheap. Most people want better.
  - Frost1x 5y ago
    The more interesting information on that page to me is that the living space per capita has increased. I was suspect that while square footage may be increasing, that could easily be offset by the number of people living in those houses but that doesn't seem to be the case. The key information missing here though is a more generalized cost of living space per person, beyond housing. This data can still be biased, in general, because it may be the case that fewer people own homes, say more successful wealthy people, while the majority are renting these properties. I have a bucket of anecdotal examples of friends who still don't own homes in their 30s and are still renting. This data would exclude all of those people painting a picture that people are doing well while some unknown population is renting, paying more per square foot than owning, and rates could be increasing per person per square foot over time. That population could be smaller or larger than those who own homes. I'd be interested to see those distributions of renting/owning and a similar cost comparison for renter square foot costs per capita.
  - everdrive 5y ago
    If a young millennial cannot afford a small apartment, it's a poor consolation that house sizes have grown.
  - cloche 5y ago
    Most renters are not renting "New US homes" and rent does not buy a house. It's a pretty poor comparison.
- kh1 5y ago
  I just looked at graphics, but that's comparing minimum wage against various goods, isn't it? So it would be interesting to see the comparison between median wage and rent, etc. From the data, however, it looks like income inequality expanded quite a bit.
  - faitswulff 5y ago
    The second infographic compares rent.
    - gruez 5y ago
      But that's still comparing minimum wage rather than median wage, like the parent poster was talking about.
- missedthecue 5y ago
  worthless graph because it compares minimum wage to the price of goods, not median wage. The minimum wage today is $7.25 but essentially no one makes that. Target, Chipotle, Amazon, and other start out at $15, others aren't far behind.
  - pnutjam 5y ago
    You're wrong. Sorry, you don't get to handwave away the many places that are paying $9 an hour and were paying $7.25 last year. Some are still trying to around here.
    - missedthecue 5y ago
      You can look at the BLS stats. Less than 0.2% of the workforce is making minimum wage.
      - imtringued 5y ago
        Half the reason why minimum wages don't work: If they are too low they do nothing. The other half is that if they are too high they don't create jobs that pay minimum wage. You can't legislate private jobs into existence.
        flamble 5y ago
        The point of the minimum wage is not to create jobs, it is to ensure that jobs that exist already pay a certain minimum. The more coherent argument against the minimum wage is that it destroys jobs which cannot be profitable for the employer at the higher wage. The problem with this argument is that the preponderance of research indicates a small magnitude for the elasticity of minimum-wage employment with respect to the minimum wage, generally around -0.05. If a 50% increase in minimum wage results in a 2.5% increase in unemployment in the cohort of people earning near the minimum, and if your aim is to increase the average wage for that cohort, then minimum wage increases do work. The idea that they don't is based on non-quantitative reasoning about the rightness of interfering with markets, or the virtue of work, or a value judgment about a small amount of unemployment outweighing an overall increase in compensation, etc. I've elided a bunch of detail here, in particular the distinction between minimum-wage elasticity and own-wage elasticity, but this is a good starter: https://www.gov.uk/government/publications/impacts-of-minimum-wages-review-of-the-international-evidence https://www.gov.uk/government/publications/impacts-of-minimu...
frockington1 5y ago
30 year olds with masters degrees who are still living with their parents? There must be additional information because this is just crazy. In 'flyover' country you don't see this. I'm assuming this is California or NY?
- Majestic121 5y ago
  I think another component might be the major. It's a mistake to think all masters degrees are equally 'bankable'
  - myfavoritedog 5y ago
    The fact that the master degrees claim was made without specifying what degrees those masters were in is telling.
- yoz-y 5y ago
  There might also be a skew due to COVID. Many single people moved back in with their parents because why not, no rent to pay and you can WFH anyways. And it’s not like the social life would go anywhere.
- paulluuk 5y ago
  In this case I was referencing my own country, the Netherlands. We're heavily urbanized and no location in the country is ever more than 4 hours driving away.
wishigotitfree 5y ago
> Yes, GDP has been going up for a long time in many countries, and so the "average wealth" of each generation is going up. GDP does not correlate to "average wealth" and is itself a dubious measure for economic progress depending on what figures you pick to calculate it. Also, no matter what metric you use, the "average wealth" of the younger generations, particularly millennials, is not in fact higher than their predecessors. The level of their productivity is a historical high point, but this is infamously contrasted by stagnating wages, assets, and by some metrics even overall quality of life.
- Aunche 5y ago
  >Also, no matter what metric you use, the "average wealth" of the younger generations, particularly millennials, is not in fact higher than their predecessors. That's only if you look at developed nations. The average wealth in Asia has exploded. The market for labor is far more globalized now, so you have to compete with people used to lower standards of living. >The level of their productivity is a historical high point Who's deserves credit for the productivity? Warehouse workers didn't suddenly get twice as good as good as moving inventory by themselves, they did so because Amazon investors invested in automation
TuringNYC 5y ago
>> And yet today, I hear so many stories about 30 year olds with masters degrees who are still living with their parents because they can't afford to rent a studio. Part of the problem here is a different problem -- the concentration of jobs in super high cost metro areas, and often also, the NIMBYism that prevents such high cost metro areas from building more housing to address demand. There are so many affordable studios to rent. And so many jobs, and sadly they aren't co-located...
ceilingcorner 5y ago
A lot of things that are social “musts” today were “wants” 30 years ago. Smart phones, unlimited data, eating out 3-4 times a week, Uber Eats delivery. None of this is necessary in order to survive, but not indulging is seen as odd or socially awkward.
- throwkeep 5y ago
  Also living space per person has nearly doubled since the 70s. https://www.aei.org/carpe-diem/new-us-homes-today-are-1000-square-feet-larger-than-in-1973-and-living-space-per-person-has-nearly-doubled/ https://www.aei.org/carpe-diem/new-us-homes-today-are-1000-s...
  - Frost1x 5y ago
    This was linked elsewhere and it only talks about home ownership and says nothing about renting which is the only viable option for many Americans. It doesn't say how many are renting vs owning and how renting has fared in growth/decline per capita.
    - throwkeep 5y ago
      Agree, it also doesn't help that we haven't been building enough new housing to keep up with growth.
- hallway_monitor 5y ago
  Or even worse, poor. These are honestly very decadent habits and the majority of people can't afford them.
- HarryHirsch 5y ago
  I'd disagree about "not necessary". Cellphones are a necessity now because payphones have gone the way of the dinosaur, there go 100 dollars for a family plan, internet is a necessity, there go 50 dollars more, and especially the expenses for the second car because no one can make do on one income, especially at the lower end of the income scale. And childcare expenses, of course. Especially childcare.
randomdata 5y ago
> And yet today, I hear so many stories about 30 year olds with masters degrees who are still living with their parents Stands to reason. Dedicating five or more years away from the workforce at least partially, if not in full, is an enormous setback financially. As money compounds, your earnings when you are young are dramatically more important to your financial stability than those when you are older. It would be surprising to learn that such a person is on equal footing with a janitor of the same age who started working at the age of 14.

faitswulff 5y ago

The Wall Street Journal has a great infographic here comparing how many hours of worth it would take to pay median rent today versus in 1968: https://www.wsj.com/articles/how-much-does-the-federal-minimum-wage-buy-you-now-vs-then-11614866413 https://www.wsj.com/articles/how-much-does-the-federal-minim... Spoiler: it’s not pretty.

cheschire 5y ago
https://archive.is/vMKTY https://archive.is/vMKTY
paul_f 5y ago
A better comparison would be the price per square foot. The median rent today buys a MUCH larger (and nicer) house than it did in 1968. The average house in the US has increased by 1,000 square feet in the last 50 years. https://www.aei.org/carpe-diem/new-us-homes-today-are-1000-square-feet-larger-than-in-1973-and-living-space-per-person-has-nearly-doubled/ https://www.aei.org/carpe-diem/new-us-homes-today-are-1000-s...
- Jenk 5y ago
  It's a comparison, but I wouldn't say a better one. You can't just rent a fraction of a property without sharing it with someone else, so the comparison is "What does it cost to get a place of your own in 1968 vs today?" and the answer is you either rent today's bigger but more expensive property, or don't - even if you could afford a 1968 property today.
  - bluGill 5y ago
    As Adam Smith observed, when people get more income it almost always goes to better places to live. Better can be more space, better location, or more luxury in the space. You can still find apartments built in the 1950s that are functional (places where the maintenance was done so they are essentially just as good as 70 years ago) and the rent is cheap. Most people want better.
- Frost1x 5y ago
  The more interesting information on that page to me is that the living space per capita has increased. I was suspect that while square footage may be increasing, that could easily be offset by the number of people living in those houses but that doesn't seem to be the case. The key information missing here though is a more generalized cost of living space per person, beyond housing. This data can still be biased, in general, because it may be the case that fewer people own homes, say more successful wealthy people, while the majority are renting these properties. I have a bucket of anecdotal examples of friends who still don't own homes in their 30s and are still renting. This data would exclude all of those people painting a picture that people are doing well while some unknown population is renting, paying more per square foot than owning, and rates could be increasing per person per square foot over time. That population could be smaller or larger than those who own homes. I'd be interested to see those distributions of renting/owning and a similar cost comparison for renter square foot costs per capita.
- everdrive 5y ago
  If a young millennial cannot afford a small apartment, it's a poor consolation that house sizes have grown.
- cloche 5y ago
  Most renters are not renting "New US homes" and rent does not buy a house. It's a pretty poor comparison.
kh1 5y ago
I just looked at graphics, but that's comparing minimum wage against various goods, isn't it? So it would be interesting to see the comparison between median wage and rent, etc. From the data, however, it looks like income inequality expanded quite a bit.
- faitswulff 5y ago
  The second infographic compares rent.
  - gruez 5y ago
    But that's still comparing minimum wage rather than median wage, like the parent poster was talking about.
missedthecue 5y ago
worthless graph because it compares minimum wage to the price of goods, not median wage. The minimum wage today is $7.25 but essentially no one makes that. Target, Chipotle, Amazon, and other start out at $15, others aren't far behind.
- pnutjam 5y ago
  You're wrong. Sorry, you don't get to handwave away the many places that are paying $9 an hour and were paying $7.25 last year. Some are still trying to around here.
  - missedthecue 5y ago
    You can look at the BLS stats. Less than 0.2% of the workforce is making minimum wage.
    - imtringued 5y ago
      Half the reason why minimum wages don't work: If they are too low they do nothing. The other half is that if they are too high they don't create jobs that pay minimum wage. You can't legislate private jobs into existence.
      - flamble 5y ago
        The point of the minimum wage is not to create jobs, it is to ensure that jobs that exist already pay a certain minimum. The more coherent argument against the minimum wage is that it destroys jobs which cannot be profitable for the employer at the higher wage. The problem with this argument is that the preponderance of research indicates a small magnitude for the elasticity of minimum-wage employment with respect to the minimum wage, generally around -0.05. If a 50% increase in minimum wage results in a 2.5% increase in unemployment in the cohort of people earning near the minimum, and if your aim is to increase the average wage for that cohort, then minimum wage increases do work. The idea that they don't is based on non-quantitative reasoning about the rightness of interfering with markets, or the virtue of work, or a value judgment about a small amount of unemployment outweighing an overall increase in compensation, etc. I've elided a bunch of detail here, in particular the distinction between minimum-wage elasticity and own-wage elasticity, but this is a good starter: https://www.gov.uk/government/publications/impacts-of-minimum-wages-review-of-the-international-evidence https://www.gov.uk/government/publications/impacts-of-minimu...

frockington1 5y ago

30 year olds with masters degrees who are still living with their parents? There must be additional information because this is just crazy. In 'flyover' country you don't see this. I'm assuming this is California or NY?

Majestic121 5y ago
I think another component might be the major. It's a mistake to think all masters degrees are equally 'bankable'
- myfavoritedog 5y ago
  The fact that the master degrees claim was made without specifying what degrees those masters were in is telling.
yoz-y 5y ago
There might also be a skew due to COVID. Many single people moved back in with their parents because why not, no rent to pay and you can WFH anyways. And it’s not like the social life would go anywhere.
paulluuk 5y ago
In this case I was referencing my own country, the Netherlands. We're heavily urbanized and no location in the country is ever more than 4 hours driving away.

wishigotitfree 5y ago

> Yes, GDP has been going up for a long time in many countries, and so the "average wealth" of each generation is going up. GDP does not correlate to "average wealth" and is itself a dubious measure for economic progress depending on what figures you pick to calculate it. Also, no matter what metric you use, the "average wealth" of the younger generations, particularly millennials, is not in fact higher than their predecessors. The level of their productivity is a historical high point, but this is infamously contrasted by stagnating wages, assets, and by some metrics even overall quality of life.

Aunche 5y ago
>Also, no matter what metric you use, the "average wealth" of the younger generations, particularly millennials, is not in fact higher than their predecessors. That's only if you look at developed nations. The average wealth in Asia has exploded. The market for labor is far more globalized now, so you have to compete with people used to lower standards of living. >The level of their productivity is a historical high point Who's deserves credit for the productivity? Warehouse workers didn't suddenly get twice as good as good as moving inventory by themselves, they did so because Amazon investors invested in automation

TuringNYC 5y ago

>> And yet today, I hear so many stories about 30 year olds with masters degrees who are still living with their parents because they can't afford to rent a studio. Part of the problem here is a different problem -- the concentration of jobs in super high cost metro areas, and often also, the NIMBYism that prevents such high cost metro areas from building more housing to address demand. There are so many affordable studios to rent. And so many jobs, and sadly they aren't co-located...

ceilingcorner 5y ago

A lot of things that are social “musts” today were “wants” 30 years ago. Smart phones, unlimited data, eating out 3-4 times a week, Uber Eats delivery. None of this is necessary in order to survive, but not indulging is seen as odd or socially awkward.

throwkeep 5y ago
Also living space per person has nearly doubled since the 70s. https://www.aei.org/carpe-diem/new-us-homes-today-are-1000-square-feet-larger-than-in-1973-and-living-space-per-person-has-nearly-doubled/ https://www.aei.org/carpe-diem/new-us-homes-today-are-1000-s...
- Frost1x 5y ago
  This was linked elsewhere and it only talks about home ownership and says nothing about renting which is the only viable option for many Americans. It doesn't say how many are renting vs owning and how renting has fared in growth/decline per capita.
  - throwkeep 5y ago
    Agree, it also doesn't help that we haven't been building enough new housing to keep up with growth.
hallway_monitor 5y ago
Or even worse, poor. These are honestly very decadent habits and the majority of people can't afford them.
HarryHirsch 5y ago
I'd disagree about "not necessary". Cellphones are a necessity now because payphones have gone the way of the dinosaur, there go 100 dollars for a family plan, internet is a necessity, there go 50 dollars more, and especially the expenses for the second car because no one can make do on one income, especially at the lower end of the income scale. And childcare expenses, of course. Especially childcare.

randomdata 5y ago

> And yet today, I hear so many stories about 30 year olds with masters degrees who are still living with their parents Stands to reason. Dedicating five or more years away from the workforce at least partially, if not in full, is an enormous setback financially. As money compounds, your earnings when you are young are dramatically more important to your financial stability than those when you are older. It would be surprising to learn that such a person is on equal footing with a janitor of the same age who started working at the age of 14.