31 ms·

Agatha Christie could afford a maid and a nanny but not a car

• rvr_ 5y ago
  Things got cheaper because they are being made where wages are cheaper. At the end of the day, everything that is a expense to me is a source of income to somebody else. Only robots don't get paid.
  • dragonwriter 5y ago
    > Only robots don't get paid. Their owners do, though. (And their makers.)
  • codekansas 5y ago
    Is it impossible to believe that someone harvesting corn with a combine would be able to sell it for cheaper than if they had harvested it by hand?
• hn_throwaway_99 5y ago
  Baumol's cost disease has been discussed on HN a bunch in the past, but I really liked how the author reframed it as "Baumol's bonus", i.e. nannies are certainly not lamenting that they're getting paid more.
  • csours 5y ago
    I've just read about it now and it reminds me of Universal Basic Income
• legulere 5y ago
  Baumoll’s cost disease doesn’t explain though why some things like healthcare or education rise more in price than wages.
• andygroundwater 5y ago
  > But Starbucks would never adopt such a robot, because they know customers wouldn’t like it. Incorrect - I would much prefer getting top-quality coffee from a robot than some barista all other things being equal.
  • hogrider 5y ago
    Starbucks is conspicous spending, a flex as much as convenient coffe. If you are an utilitarian like this of course you are not their target demographic.
• pkulak 5y ago
  Really good Planet Money on this here: https://www.npr.org/2019/10/04/767095401/the-baumol-effect-and-rising-health-care-and-education-costs https://www.npr.org/2019/10/04/767095401/the-baumol-effect-a...
• fnord77 5y ago
  that chart shows the price of TVs as basically approaching free over time, but that doesn't include cable or internet, which in earlier times were not necessary to have a functioning TV
  • foogazi 5y ago
    Well OTA broadcasts still exists today, as for cost - with ad revenue we might see TVs given away for free Look at fire sticks / tablets
  • wmf 5y ago
    You can still get a lot of TV free with an antenna. It's a small fraction of what's available, but in absolute terms it's a lot.
    • Talanes 5y ago
      This might also be a small town to major city thing, but I have about as many channels OTA now as we had with pre-satellite basic cable twenty plus years ago.
  • Rebelgecko 5y ago
    My TV works fine without either of those, and I get at least 10x more channels than someone would have just 50 years ago.
    • asdff 5y ago
      Are you watching more TV though? Probably not. I had "modern" cable maybe 4 years ago. 500 channels or however many in the package, not really sure, but it was pretty much the works. It looked really impressive on the bill seeing all those channels, but in reality you are only using like the same few dozen or so major channels you've been coming to since the 90s and you just scroll on past the remaining 470 channels of pure junk garbage like QVC and clones, local news in varying states of HD, gem shows, highschool sports, etc.
      • 5y ago
• mherdeg 5y ago
  I stopped reading this about four paragraphs in and did a bunch of web searches to try to find the phenomenon it reminded me of. Once I had successfully found it with my second search ([economics name for effect raises orchestra]) I came back and found Baumol in the very next subhead. Whoops. All a great read though! In retrospect every year at the student newspaper when we ran the "here is how much tuition is going up and here is how much financial aid is going up" article we probably should have invited an administrator or professor to comment on Baumol's cost disease.
  • e4e78a06 5y ago
    The price of college in particular is commented on in the article - prestige matters and prestige is zero sum, so supply is constrained and demand is highly inelastic. Add on to that vastly increased purchasing power made possible by subsidized student loans that can't be discharged in bankruptcy and you have a recipe for out of control prices. Limited supply of a highly inelastic good combined with massive demand way above what people normally could pay yields prices going to the moon. There's not an easy fix for this. If you have the government pay for college then the race to get into college gets all the money that would have been spent on tuition. On top of that, it's not inherently clear what amount private universities should be paid or if they should be allowed to charge on top of what public money pays for. I went to a public school and I'd trade my crappy experience (caused by budget shortfalls and bureaucratic overhead characteristic of government-run institutions) for a more expensive private school any day of the week. You really don't want overfilled classes, extreme competition for research positions (even basic things like being an experiment monkey are competitive), and a system that in general only pays attention to you if you have above a 3.8. If you kill government subsidized loans you fix the market for less prestigious schools, but the top 20 or so are still going to have substantial pricing power. Private market loans and ISAs still have the potential to jack up purchasing power.
    • vintermann 5y ago
      > bureaucratic overhead characteristic of government-run institutions Whenever I read something like that, I wonder if the speaker ever worked in private industry. IME, government gets all their bad organizational ideas from us.
• snidane 5y ago
  The article is good, but the comparison to cars might not be exactly apt. You might ask why can J.K.Rowling afford a maid and a nanny but not a Falcon X rocket today. Perhaps her great grand children will.
  • hn_throwaway_99 5y ago
    Nobody is selling "Falcon X rockets". Space X sells rocket launches, because that is what other people want to buy. And JK Rowling could most definitely afford a couple rocket launches if she were so inclined.
    • Dylan16807 5y ago
      > Nobody is selling "Falcon X rockets". Space X sells rocket launches, because that is what other people want to buy. You don't need to be so nitpicky. > And JK Rowling could most definitely afford a couple rocket launches if she were so inclined. Yes, that was the point of the comment. Agatha Christie could have had a car if she wanted. Only 3 months of income, even!
  • ijlx 5y ago
    The Model T was released over a decade prior to the point mentioned in the article. Sure cars weren't the staple of American life they are today, but they were definitely accessible to the well-off people of the time.
    • bombcar 5y ago
      They also weren’t as common - and so not as necessary. Those who wanted to could get one but it wasn’t considered a necessity when there were so many other options - including sending a servant to the market for your servants, so no need to drive yourself.
      • Kon-Peki 5y ago
        The article mentioned that the Christies lived in a 4th-floor walkup in London. When I first moved to the big city, I quickly discovered that the cost of parking and insuring my car was more than the cost of the car. This scenario was most likely worse back in those days as the infrastructure was designed to “store” horses, not cars.
• addaon 5y ago
  "Even if someone managed to invent a robot nanny that kept kids safe as well as a human being, I wouldn’t want it to take care of my baby. I bet you wouldn’t either." This glosses over the purpose of child care -- it's more than safety, it's socialization, learning, etc. In a world where some level of automation (or offshoring) is possible for these services, I could definitely see some adoption. Think "Diamond Age."
  • sgarman 5y ago
    I always feltin Diamond Age they were basically describing the iPad. We have that now but it's still not quite there. Maybe it's not personalized enough or comprehensive enough?
    • addaon 5y ago
      Well, it's describing the iPad... with off-shored real-time tutoring providing most of the value. Even for the niche that can afford that (which should be larger than the niche that can afford in-person tutoring), I'm not aware of any services.
      • divbzero 5y ago
        > with off-shored real-time tutoring providing most of the value Yes, a critical part of the Illustrated Primer was that it was paired with real-time tutoring by a remote human, and turned out to be most effective when the remote human was regularly the same person who cared for the child on the other end.
        • addaon 5y ago
          But, returning to the subject of the article, this is interesting. Among my peers in the U.S. right now (upper middle class, tech heavy), live-in nannies and full time tutors are unheard of, as the article says. But friends who have families in lower labor cost areas (Mexico, Thailand) often do still have live-in help. Even though they're no higher on the relative income ladder in their countries than I am, the floor cost of labor is so much lower that this is still a reasonable -- and quite common -- option. Meanwhile, early education is (to my extremely limited knowledge) not an area where one-on-one off-shoring facilitated by technology has really been explored. Seems like an interesting space.
• kureikain 5y ago
  off topic but in many stories of Agatha Christie why husband and wife never slept in same room? Is that how English people in the old day live, sleep in separate room even after marriage?
  • bombcar 5y ago
    It was pretty common, yes - sleeping together may have been considered lower-class.
  • drzaiusapelord 5y ago
    I read this is surprisingly common especially with older couples. People like to have their own space and when you get older comfort is more important because your body isn't what it used to be. Snoring, keeping separate hours, stealing blankets, freezing feet, etc. It all adds up. People don't need to sleep all night together to be a couple or to have sex. If anything, its kinda weird we are expected to share a bed and a room with someone else. I'll be honest, if I had this setup, I think my previous relationship would have lasted longer. Its not for every personality and attachment type, but I think its for many. What's the better relationship? The one where they each have their own personal space and aren't resentful over being kept up with snoring? Or the couple that toughs it out because they're supposed to? I also think the long-tail economics of capitalism is about shrinking worker entitlements to enrich capital holders. Not too long ago you'd have a house with a spare bedroom or two or three. Now you're huddling in a condo or apartment that's 1bd or two, if you have kids. So we romanticize having less because its easier than challenging the system.
    • Karrot_Kream 5y ago
      > I also think the long-tail economics of capitalism is about shrinking worker entitlements to enrich capital holders. Not too long ago you'd have a house with a spare bedroom or two or three. Now you're huddling in a condo or apartment that's 1bd or two, if you have kids. So we romanticize having less because its easier than challenging the system. This is way too sweeping a statement on the very complicated housing market that's constructing a strawman (capitalism is a system, it doesn't have long-term goals like a person does.) In the past, most women would not work, so the demand for jobs was nearly half of what it became once women started entering the workforce. As automation became more effective and manufacturing jobs became less necessary, regional centers of production became unnecessary (when you don't need to ship your output you don't need to have a center of hard goods in different physical locations) and jobs began to be concentrated in cities and metros with lots of highly educated labor. In America in particular, new housing construction plummeted after the early '70s and so housing around job centers became very expensive. That and several other macro trends contributed to making job centers in the US expensive to live in. There's plenty of cheap land/housing in the US still if a job is not a factor.
• freddie_mercury 5y ago
  Agatha Christie's quote is well-known but the exact same situation still holds today in many countries. Here in Viet Nam it is extremely common for middle income families to have a maid or nanny (or both) but not a car. The cars themselves are quite expensive. A Honda Civic is $33,000 by itself whereas a nanny (6-days a week, 10 hours a day) is $400-500/month and a maid who works 9 hours a week, i.e. 3 days a week, 3 hours each time) is $90-100/month. So a single car not very expensive car costs the same as 5 years of a full-time nanny and part-time maid. And that's without figuring in all the extra costs of a car, especially parking. There's not really free parking most places here. So you'll be paying for parking literally everywhere you go. Even worse, most houses (unless they are luxury houses >$500,000 built in the last 5ish years) aren't built with a garage for a car, so you're looking at buying land, smashing down the existing structure, and then rebuilding something with a garage. And the space for a garage isn't cheap either. If you're a middle income family you're probably living in one of the capital cities and most people would probably be shocked at how expensive land is in the capital cities nowadays. [1]: https://www.honda.com.vn/o-to/san-pham/honda-civic/index.html https://www.honda.com.vn/o-to/san-pham/honda-civic/index.htm...
  • jerry1979 5y ago
    Plus, I imagine if you can find a maid at that price, you can certainly find a driver.
    • beerandt 5y ago
      Depends on training, licensing, and liability costs. Which vary wildly between countries.
    • paxys 5y ago
      You'll still need to give them a car to drive.
      • freddie_mercury 5y ago
        Exactly. Everyone I know here with a driver owns the car themselves and hires the driver separately. I don't know driver salaries since I don't have one but I'm guessing they are similar to nanny salaries since they are usually full-time 8am-8pm, 6-days a week kind of jobs. The only people without their own car tend to be foreign executives who are only going to be here on a 2-3 year contract.
• Ericson2314 5y ago
  This is why I consider the shift in spending from services to goods somewhat of a good thing. Low productive services have at least a few shades of exploitation, inherently. The less the richest person can afford of the poorest's time, the better!
• tonymet 5y ago
  I call into question $xxx in today's dollars because inflation is not uniform . They are explaining labor vs goods costs when both grew at different rates. Even among goods and assets there's variation
• manquer 5y ago
  Housing cost being not too far from 100 years back seems suspect even inflation/per capita wealth adjusted. Increasing urbanization in cites and sheer population growth would have increased housing costs whichever way it is measured (ownership /rental/median /average) over 50-100 year period.
  • beerandt 5y ago
    Construction methods and materials have significantly reduced the amount of required labor and the cost of materials over that time period. And commuting/ communications is easier which increases supply of land/space, and reduces relative demand within cities.
    • manquer 5y ago
      Building to code today is lot more expensive than building 100 years back. Labour was a lot cheaper at that time, which was the point of the post ? She could afford two servants but not other things . Commuting was not a problem then most people lived and worked in rural parts of the country.
• walrus01 5y ago
  Being able to afford a full time housekeeper is really dependent on the local economy - in any major city in Pakistan if you were to convert 330 USD a month to rupees that would be a very competitive market rate salary for such a position. To the extent that I met a number of people who had 2 or 3 full time domestic staff but if they had decided to emigrate to the UK or USA would not be able to afford any, and based on their career/education/experience would likely be living in a 650 square foot apartment.
  • paxys 5y ago
    Heck 330 USD is also probably on the higher end. In India (which is considered the "expensive" country in South Asia) it is pretty easy to find full time household help for $200/mo even in large, expensive cities. Stuff like iPhones and imported cars, however, cost double their price in the states.
    • asdff 5y ago
      Seems there is a huge business opportunity just mailing things like Apple products from Oregon, where you don't pay sales tax, straight to india to be sold far below their market rates for that same product.
      • deleted 5y ago
        [deleted]
      • paxys 5y ago
        You just described the smuggling industry, and it does already exist
      • selimthegrim 5y ago
        You know, India and Pakistan do have excise/tariffs beyond a personal exemption
      • hogrider 5y ago
        That's called contraband. Protectionist tariffs are there to deter exactly this.
• pcurve 5y ago
  Live in maid is fairly common in other countries still including Hong Kong where you can hire one for less than $1k / month with allowance, other expenses included. It's not just for the riches. Many dual income families have them even if they're little above middle class.
  • kingcharles 5y ago
    My girlfriend is Qatari and it is almost universal there to have a live-in maid.
    • drivers99 5y ago
      Maybe a dumb question: How could it be universal. I’m assuming the maid doesn’t have a maid, right?
      • jakear 5y ago
        Based on what I've heard from people of the area, the maid is usually an immigrant. And "universal" tends to mean "universal amongst proper citizens". Relatedly, I was surprised to learn that some women who "universally" wear a hijab before men feel no need to do so before a male immigrant.
        • selimthegrim 5y ago
          Even if the immigrant is Muslim?
          • jakear 5y ago
            More about social standing than religion as I understand it. The rule of thumb as I was told is basically: "is there any slight chance in I marry this person? If yes, hijab. If no, doesn't matter." Religion plays a role in such analysis, but considering a Muslim immigrant laborer versus some arbitrary Abrahamic doctor (for instance), the doctor would be more likely to see the hijab. (For married women, the husband decides)
• mrkentutbabi 5y ago
  The best of both worlds is to have dual citizenship/green card with one country where you can earn a lot of money in one and live like a king in the other. I’m fortunate to be in such position. I hope to amass enough riches to help the other poorer country.
• xmprt 5y ago
  > You’ll sometimes see pundits declare that American workers haven’t seen their standards of living improve since the 1960s. Economists can and do debate the methodology underlying such claims It's an interesting article but I'm not sure I believe his arguments in the last few paragraphs. It's absurd to compare health care, child care, and education to things like cars, television, and manufactured goods. I do believe that quality of life has gotten better but I don't think it's because of cars or things like smartphones which many could argue have actually made life worse.
• buescher 5y ago
  Television's "The Brady Bunch" depicted an upper-middle-class household with a live-in maid and a nice house in an LA suburb that did not otherwise live extravagantly by the standards of a decade or two later, when basically no one in the US except maybe the out-of-sight-rich had live-in help any more.
  • asdff 5y ago
    They were using very fast and loose definitions of both economics and physics on that show. That house only has 3 bedrooms in reality and no basement, pretty typical for LA home specs unless you are looking at the old money neighborhoods like Hancock Park where some of the homes look a lot more like the rich people's homes out east (albeit on much smaller lots).
    • buescher 5y ago
      Yeah, television, so a big grain of salt. The point is they were depicted as having a live-in maid, which was going away in the US at the time but still not nearly as remarkable in 1969 as it would be by 1980 or 1990. Or today. The house was depicted as nice and up-to-date but not extravagant - the kids shared rooms, right? I was implying that another thing that's changed is that that house would cost a much larger multiple of income today than in 1969. Otherwise they weren't depicted as living as extravagantly as a lot of comfortable people do today. No luxury cars, fancy vacations, etc. Marcia and Greg weren't flying to Africa or the Caribbean to do charity work for their college applications like plainly middle-class kids will do today. Mrs. Brady doesn't chew Alice out for buying tomatoes from Safeway instead of organic heirloom tomatoes at Whole Foods. All that would have been absurd in 1969.
• RangerScience 5y ago
  Huh. I remember awhile ago someone did an attempt to analyze inflation and purchasing power over the millenniums, using the cost of light. Looks like you could probably do the same thing with, say, miles-per-day?
• jacknews 5y ago
  The point is how much money does it take today to have the equivalent wealth status in society as Christie. It is almost certainly far more than $50,000, which is a tradesman's salary these days. So, irrespective of what that money now buys, the true inflation figure (how much does it cost to live at a certain level in society) is far greater than the official figure.
  • metacritic12 5y ago
    Inflation is defined based on utility, not a certain level of society. The second would be something like GDP growth, much higher than inflation, and definitionally a zero-sum game. Inflation says that you would rather prefer to live it today's society at say $60,000/year (with smart phones, cars, Internet TV), than yesterday's society at say $50,000/year (with two maids, but none of the technology). Introspecting, I would say the above decision is true for me.
    • manmal 5y ago
      Looking at the maid's and nanny's income, I think 2020's incomes are _definitely_ preferable to 1920's for many.
    • jacknews 5y ago
      'Hedonic' inflation can't really be measured objectively, and is somewhat useless for financial calculations, since people need to live in society. If Christie enjoyed an 'upper-middle-class' lifestyle on an official inflation-adjusted $50k salary, then it's clear that the offical inflation figures do not actually measure the 'cost of living', but something much more diffuse and subjective like the 'quality of living'.
      • vba616 5y ago
        There's a direct relationship between other people making similar wages to you, and your inability to get someone to do a good job on anything at a price you can afford. If the cost of living hadn't "increased", then the middle class would still be tiny, and we wouldn't be in it. The whole thing would be moot.
• notfbi 5y ago
  " The couple’s annual income was around around £700 ($50,000 in today’s dollars)—£500 ($36,000) from his salary and another £200 ($14,000) in passive income. They rented a fourth-floor walk-up apartment in London with four bedrooms, two sitting rooms, and a “nice outlook on green.” The rent was £90 for a year ($530 per month in today’s dollars). To keep it tidy, they hired a live-in maid for £36 ($2,600) per year, which Christie described as “an enormous sum in those days.” The couple was expecting their first child, a girl, and they hired a nurse to look after her. Still, Christie didn’t consider herself wealthy. " Ignoring the point and rest of the article but it's a strange and uncanny framing to start it, while simultaneously giving the true numbers, trying to suggest that Agatha Christie in this circumstance of having income 25x that of the working class might not be considered well-off.
  • amscanne 5y ago
    They didn’t suggest that, it said: > Still, Christie didn’t consider herself wealthy Almost no one considers themselves wealthy. Even people that are very well-off typically consider themselves some variation of middle class, because they can so obviously and clearly see the next rung up the ladder, and how they are not on it. This point is made perfectly by her quote about how only the rich have cars.
    • adrianN 5y ago
      The middle class is just very wide. Essentially anybody who doesn't starve when they're out of work for a couple of months is middle class. Upper class is distinguished from middle class whether you have to work at all. Very few people have enough passive income to afford a ~median lifestyle. Agatha Christie might not fit into middle class, but today a lot of people do.
      • deleted 5y ago
        [deleted]
      • R0b0t1 5y ago
        I've seen an updated definition that kicks in at the time you can take one or more yearly vacations, so basically just doctors, highly paid laywers, highly paid SWEs, and executives.
• olliej 5y ago
  The most obvious thing that this fails to address is literally the largest expense that the vast majority of people have, and the need for it has not changed: housing. The idea the Christie’s multi bedroom apartment would be as cheap as stated is laughable and demonstrably false. The unwillingness of governments to include cost of housing in inflation calculations is more reflective of their pressure to make the landed happy than any attempt to reflect reality.
  • betwixthewires 5y ago
    While you're right, bear in mind, the worldwide population was 1/8th what it is now 100 years ago. That would mean, on average, worldwide, using naive metrics, housing cost would be 1/8th what it is today, even adjusting for inflation. One thing to keep in mind, the population in the UK at that time was very high, the population replenished back to pre WW2 levels only in 2017 and that includes immigration that didn't exist back then, so it wouldn't have been 1/8th for her, only slightly less. But all in all, housing costs worldwide would've been significantly less back then.
    • asdff 5y ago
      you are also making an assumption that the homebuilding rate globally for the past 100 years has been zero
      • betwixthewires 5y ago
        No, I'm assuming that the available land has not increased. Historically until very recently (the past ~50 years) the vast majority of human beings built their own housing, available land would be the limiting factor and therefore most of the cost factor.
• dmz73 5y ago
  Interesting that he compares everything that is hard to compare but ignores one thing that would be very easy - rental pricing. You had to pay it then and you have to pay it now. "four bedrooms, two sitting rooms, and a “nice outlook on green.” The rent was £90 for a year." According to one CPI calculator (https://www.in2013dollars.com https://www.in2013dollars.com) "£90 in 1919 is equivalent in purchasing power to about £4,951.54 today" and "£700 in 1919 is equivalent in purchasing power to about £38,511.97 today". Google search also reveals that average yearly wage in London in 1920 was £205 and average wage in London in 2021 was £53,700 so £700 income in 1919 was 3.5 times the average which in 2021 would be £187,950 (quite a bit more than "equivalent in purchasing power to about £38,511.97 today"). A quick web search for 4 bedroom apartment (not sure about sitting rooms) in London shows that rent is between £2,000 and £8,000 per month - let's say £5,000 for a nice one like what Christie's sounds like which is £60,000 per year. They paid £90/£700 = 13% of their (3.5 the average) annual income for rent and now the equivalent rent would be £60,000/£187,950 = 32% of the 3.5 the average annual income. Even just comparing the plain average income, person in 1919 could rent the same apartment and still have £205 - £90 = £115 to live on for the year (which seems possible considering maid lived on £36 per year but in 2021 the average income leaves you £53,700 - £60,000 = £6,300 short on the rent alone. So ignoring the tvs, computers, holidays, cars, healthcare and all the things that we cannot compare and comparing what we can, it is obvious that just to live in 2021 we need more money that what we are making and so it is easy to see how most people feel that the living standards have gone down.
  • AussieWog93 5y ago
    That still doesn't seem like an "easy" comparison. Rents tend to be tied to the infrastructure/facilities and earnings potential within a given radius of the property. 1919 London was dirty with terrible air quality (far worse than Beijing or Mumbai today, literally choked my great grandmother to death on a bad day) and with nowhere near the infrastructure or work opportunities it has today. A fairer comparison to 1919 London would be a hypothetical working class town where the primary employers are steel mills and environmental standards are simply unenforced.
    • dmz73 5y ago
• School-Cotton 5y ago
  Quip from a friend from a (relatively) poor country: “Before I moved to the US, it would have seemed bizarre to me that someone could be rich enough to afford a car but not be able to afford a driver”.
  • SilasX 5y ago
    Reminds me of another discussion where some of us were confused about someone retrofitting child seats in a Ferrari: how would you be rich enough to afford a Ferrari as a toy/show-off car, but not also have a normal, functional car for when you need to drive the child around (or a chauffer)? https://news.ycombinator.com/item?id=24762683 https://news.ycombinator.com/item?id=24762683
    • lagadu 5y ago
      I was in that situation. My only car was a two-seat convertible lovely car but at some point when I got good at surfing I needed a way to transport my board from my house to the beach (about 5km). I decided to sell my car and buy a larger luxury one that could carry my board and still be enjoyable to be in. Obviously I could afford to get a second, cheap, car to do that but the hassle of having two cars just wasn't worth the trouble for me. It's the same for your example I suspect: if you can do it in a single car, that's often the option with the least amount of hassle.
• ulfw 5y ago
  Still the case in cities like Hong Kong or Singapore. A parking spot here costs a lot more to rent than hiring a full time live-in nanny ("helper"). Sad but true.
• dustintrex 5y ago
  > “The full treatment, including surgery and chemotherapy, can reach between $8,000 and $10,000 for a dog or cat.” Meanwhile, full cancer treatment for a human can easily cost 100x that, because care for pets is a free market and care for humans is very far from it.
  • ryeights 5y ago
    Also because many people are willing to let their pets pass rather than pay over $10k for treatments. The same cannot be said for people.
    • tonyedgecombe 5y ago
      Even the idea of spending $10K sounds bizzare to me. Probably because pet insurance wasn't really a thing the last time my family owned a pet.
• riffraff 5y ago
  I remember reading Hobsbawn's The Age of Extremes, where he mentioned his realization that the world really had changed as a communist unionist told him after a visit to some factory in northern England "would you believe it, Comrades there have cars!"
• rodric 5y ago
  ‘they hired a live-in maid for £36 ($2,600) per year’ It should be noted that in those days low-wage workers might spend half their income on food.* Presumably as a live-in maid her room and board were provided, so her compensation was not as low as her salary alone might imply. *cf https://ahundredyearsago.com/2019/05/30/percentage-of-u-s-total-household-expenditures-spent-on-food-1919-and-2019/ https://ahundredyearsago.com/2019/05/30/percentage-of-u-s-to...
  • manmal 5y ago
    Still, it's pretty much impossible to have a family (or provide for any other human being, e.g. sick relatives) on such an allowance alone. Marriage, and maybe even partnership, was often out of the question for two people who both held such jobs.
• dustintrex 5y ago
  Interestingly enough, I'm typing this in Singapore, where in 2022 it's quite common to have a "maid" (helper/domestic worker, in the current local lingo), but no car. Singapore imports domestic workers for poor neighbouring countries like the Philippines and Myanmar, which keeps wages very low, on the order of US$450/month, not too far off Christie's inflation-adjusted US$220/month. Even the fully loaded cost with government levies, insurance, food & board etc is on the order of $1000/month, considerably cheaper than most other childcare options, particularly if like most Singaporeans both parents work longer hours. By comparison, Singapore strictly limits the number of cars on the road, auctioning permits called "Certificates of Entitlement" to the highest bidder and imposing around 100% taxes on the cars themselves. As a result, a plain vanilla Toyota Corolla costs US$120,000 all in. What's more, half of that is the COE cost, which is valid for only 10 years, meaning the value of the car depreciates by around $10,000 every year. Add in petrol, servicing, parking etc, and having a live-in helper to run errands and drop off kids etc starts to look quite affordable in comparison.
  • hsbauauvhabzb 5y ago
    Do more expensive cars get taxed at 100% also?
    • dustintrex 5y ago
      No, they get taxed on a sliding scale of up to 180%. Expand "Car" on the page below for details. https://onemotoring.lta.gov.sg/content/onemotoring/home/buying/upfront-vehicle-costs/tax-structure.html https://onemotoring.lta.gov.sg/content/onemotoring/home/buyi...
  • Arnavion 5y ago
    Sure, the cost of a car is one factor, but the bigger factor is that Singapore is small and well-connected with public transport. It's quite normal for someone to live in one end of the city and take bus / train to the other end for work.
    • dustintrex 5y ago
• aaron695 5y ago
• fredliu 5y ago
  I would assume that chart is for the US or Western/Developed world. Maybe a more easier explanation for the phenomenon is: everything that can be oursourced/built in lower cost regions are getting cheaper (not many toys, cloths or to a certain degree, cars, are still built in the US), while services, by nature, are not able to be out-sourced. With limited supply and more demand, cost of services would definitely go up.
• baron816 5y ago
  It’s crazy to me that the Democrats haven’t made increased immigration a plan for helping mitigate inflation. More immigrants means more construction workers to build housing, more nannies, more nurses, more truck drivers, more meat factory workers, etc. I guess they haven’t done that as labor groups also don’t like immigration. The whole position of the left with regards to immigration is about race anyway, not about economic opportunity for the people we’re letting in and the economic benefits the country gets from immigrants.
  • Hamuko 5y ago
    Isn't immigration reform basically one of the biggest legislative vaporwave projects?
    • baron816 5y ago
      I think when there is a prevailing narrative about a shortage of labor is a really good time to push a narrative about the benefits of importing labor.
  • waynesonfire 5y ago
    > immigration is about race anyway it's not about race, it's about winning elections.
  • Ericson2314 5y ago
    The is true, but tight labor markets are also virtuous, and something for their core constituencies Decades of slack on the labor markets has made many Americans see immigrants as scabs, and one bout of inflation is not enough to fix that.
  • dr_dshiv 5y ago
    Is technology and software a deflationary factor? Aren't there so many parts of the economy that get mach cheaper over time?
• PraetorianGourd 5y ago
  You mean the thing we can automate and mass produce is cheaper than the thing that needs 18 years to produce and requires a whole ton of maintenance cost? Really?
• rustybolt 5y ago
  Not sure if it was a bad thing or not. If you look at the things of which the prices have increased, they are all essential things. The things of which the prices have decreased are mostly luxury (and bad for the environment). And cars, but with good enough public transport you really shouldn't need a car.
  • hogrider 5y ago
    We don't pay the real price for those things bc companies externalized any cost as much as possible. And we took a huge environmental debt borrowing from our future (works out great for boomer who will die before it affects them too much )
• bjarneh 5y ago
  > Today economists call this phenomenon “Baumol's cost disease,” I love that economist call rising wages a disease; I hope they never catch it.
• shadowofneptune 5y ago
  The rent seems insanely low, it's hard to find a single-room apartment for that price in a medium-size city. By 1919 you have most of the utilities we expect to have in an apartment, so that doesnt seem to be a factor. Is there some factor not mentioned in the article, or have rents just gone up more than other things?
  • mattlondon 5y ago
    Lower demand perhaps - e.g. the maid is living with you so they don't need their own place to live.
    • dmurray 5y ago
      It's a four-bedroom apartment for one childless couple, so this particular case doesn't support the idea that there was less demand. And the population of London is within 20% of what it was.
      • mattlondon 5y ago
        I don't follow your point. The less demand is that the maid lives in the place they work, so do not need their own property to live in. The article seemed to suggest that having live-in staff was common compared to car ownership etc, so I would imagine there were a lot of adults living in their places of work, thus not needing to rent their own apartments etc so reducing demand.
  • roel_v 5y ago
    Do you mean water, electricity etc? Because in 1919 those were not universal (not sure about how 'common' they were in London, but in much of Western Europe they weren't even that), and heating would have been done through coal too, I presume. No double glazing or any other insulation really, wooden stairs and wooden beams between floors, no hot water taps, ... 'Living' (as in, living in a house) back then was vastly worse than it is now. Just over the last 10 years, the required (as in, required by building codes) comfort levels of houses (in Western Europe) have gone up so much that they add at least 20% to the cost of building, not counting inflation. (source: am a part time real estate developer).
• janmo 5y ago
  Nowadays they call it an au-pair and often the pay is 0.
• Lamad123 5y ago
  Foolstackecnomics!! Dude, economics is not a jQuery plugin!!
• j7ake 5y ago
  In 1919, one did not need a car to live, especially in London (true even in 2021). It was a luxury item. The lifestyle improvement of owning a car in London in 1919 was probably marginal except for social status. On the other hand, having a maid and nanny would dramatically improve your life, especially before inventions of washing machines. It is analogous to living in places like Singapore or Hong Kong, where owning a car is less common than having a domestic worker.
  • thriftwy 5y ago
    The car was probably more akin to a private jet. It would require a professional driver, for starters.
• shellfishgene 5y ago
  As an aside, I doubt the example of a musician not getting more productive is correct. The invention of cheap recording media and especially radio and TV has made musicians massively more productive if you measure it by number of listeners. Also fast travel makes them more productive, if you can play 5 major cities a week you make much more money than with 5 shows in the same city, hence musicians going on tours.
  • roel_v 5y ago
    But not (or much less so) in 1965, which is when Baumol made his observation.
  • Mvandenbergh 5y ago
    Fast travel and recording media lead to gains for the very best or most popular musicians who are now able to sell their music much more widely and play large venues in many cities more easily. It doesn't make the equivalent of the talented bar cover band any better off, in fact it socially demotes them to being something called a "cover band" when before these technologies that would have been almost any band.
• NoPie 5y ago
  I have a different conclusion. The article mentions that the car would have cost her 3 months of income. That doesn't sound too much and is roughly about the same what people pay for cars today, maybe even more. The reason she thought about the car as a luxury and not a necessity is that then the society wasn't dependent on cars like we do today. They travelled less, worked closer to home, milkman brought milk to home and grocery shopping could be done closer to home as well.
  • throwawaygh 5y ago
    > maybe even more Average new car sale price at the end of 2021: $47,077 Average monthly household income at the end of 2021: $5,307 Even highly paid FAANG engineers are probably spending a few months income on a new car.
    • NoPie 5y ago
      Many people, maybe even majority, buy used cars which cost less. They are probably more reliable than new cars in 1919. I was probably biased because I recently bought a used car without getting a loan which cost me about 3 months of income. In any case, she actually had a nice income if should could have bought a new car with 3 month income only. She just didn't have a real need for it. The story should have been not so much about her but that most other people were much poorer than today and had to work as maids to survive.
    • speby 5y ago
      Yes, that's true, but even cars are not the same as the model T or other cars available in 1919. Besides cars being relatively "new" to society at the time, they also lacked, well, everything on this list and then some: * No heater * No air conditioning/cooling * No radio/CD/Bluetooth/Carplay/Android Auto * No speakers, let alone not 6 or 8 speakers that some cars have * No heated and cooled seats * No power mirrors * No power seats * No power steering * No power brakes (!!) * No ABS brakes or traction control * No self-driving capabilities, blind spot detection, automatic lane change, "smart" cruise control or any cruise control at all * No rear defrost * Not even a dome light! * No power windows * No power locks * No all-wheel drive. In fact, it was mostly single-wheel drive! * No in-screen dash or touchscreen controls * No massage seats * No "slow close" doors * No door sill illumination * No turn signals (until later, that is)! * No seatbelts (or if there were, they crude early versions) * No meaningful safety mechanisms, like collapsible steering columns and automatic airbags, side impact airbags, and proper crumple/structure design * No in-car entertainment options for movies, etc. * No in-car navigation systems * No OBD diagnostics to let you know when you are running low on oil or other critical fluids We could keep going ... but on the one hand, cars might cost "similar" or even more in today's standards, but they also DO so much more. Even if you said, well let's build the same vehicles they had then today, you couldn't. Government regulations force things like safety mechanisms that will cost more to deliver a final product.
• knorker 5y ago
  Three months wages to buy a car? Ok. Isn't that about the name now, at least for a new car?
• netcan 5y ago
  This article puts its finger on some interesting questions. Circa 1930, when Agatha's domestic servant was an affordable basic but a car was not, JM Keynes famously predicted a 15 hr workweek. His productivity and GDP growth projections that this prediction were right. But, the workweek didn't change much. "Work hours" changed, but it wasn't productivity that caused changes. Wars, women's' liberation, college, child labour norms and such caused changes. Increased productivity did not. Why? The most common economics-ey answer is "the hedonic treadmill." As wages increased, so did our demands. We want smartphones, fancy cars, expensive medical care and such. Essentially, this argument implies that we choose to work a lot to consume more. I think hedonic treadmills are this is part of the answer, but grossly insufficient. A better answer. Economics should be providing better, more curios treatment of the question. This article mentions “Baumol's cost disease,” but like the hedonic treadmill, I don't think it's a sufficient answer. Economics is cursed by "post fact storytelling" issues. I think it needs to be balanced by post fact question-asking. Did GDP-per-capita "really" grow 5X-10X during this period. What does that mean exactly, considering that an average person can afford more of some things and less of others? A 15 hr workweek pays less than a month's rent. Car prices themselves are also an interesting case. Until about 1930, auto manufacturing (US) experienced its proverbial "hockey stick growth." Each year processes improved, prices went down and the number of units went up. By about 1930, the US market was saturated. Cars continued to evolve and improve, but prices stopped decreasing as production volume leveled. From this point on, productivity/GDP trends are means faster or nicer cars... it stops meaning more affordable cars. In short, I think there are some serious discrepancies in the meaning of GDP when considered over short periods and long periods of time.
• ricardobayes 5y ago
  My boss in London could afford a live-in nanny from the Philippines. From what I know she was paid 500 pounds as 'pocket money' plus all expenses covered (food+lodging). So maids are definitely still a thing in the 21st century among certain upper middle-class families.
• jll29 5y ago
  Both the car and the nanny have a TCO that is vastly higher than the purchase price/salary: the car needs maintenance/service, parking, repairs, fuel, taxes and insurance, and the nanny needs a place to stay, food, and he/she consumes water and electricity. People tend not to calculate TCO or even be aware of it, they just look at their monthly incoming and outgoing money and check if their cashflow doesn't hits 0.
• oleg_antonyan 5y ago
  I can easily afford a car, but don't want to. The hidden cost of ownership, driving, all that stuff take a lot of attention. Not to mention that cars in a big city do more damage to your quality of life. Please, stop using cars as a proxy for prosperity. I hope one day personal cars become luxury again so only rich will be able to afford one, the rest would use public transport including self-driving car-sharing
• jmnicolas 5y ago
  TIL that Starbucks is a luxury experience (I'm not a coffee drinker and there's no Starbucks in my town). I thought it was the McDonald's of coffee, I mean if it's luxury why are they using Styrofoam cups instead of glass?!
  • Jaruzel 5y ago
    If you are in city with lots of 'premium' coffee shops, Starbucks is generally considered the worst of the 'premium' brands. However, every other shop in large city is a Starbucks, so for many convenience of locale wins over.
    • KptMarchewa 5y ago
      If Starbucks is a premium shop, what is the lower quality, non-premium one?
      • bhelkey 5y ago
        McDonald's, 7-Eleven, ...
        • KptMarchewa 5y ago
          Are those thought as a coffee shops in the US?
  • tintor 5y ago
    Because people buy Starbucks coffee to go. Glasses are heavier.
  • christophilus 5y ago
    McDonalds coffee is better. Dunkin’ and Chick-fil-A are better. (None of those is great, mind you; just better than Starbucks.) Starbucks is utter swill. Their coffee is always burnt, and if you’ve had anything citrus-like beforehand, their coffee tastes moldy. I have never had a good coffee there, and have never understood the appeal.
• AussieWog93 5y ago
  Interesting that he brings up "a robot to automatically brew Starbucks-caliber coffee". Here in Australia, you can get a really high-quality coffee from just about any petrol station for $1 (in AUD; around 70c in USD). Yet in spite of this, we have a thriving cafe scene where people will gladly pay $4-$5 for a take-away latte. What's equally "irrational" is that Starbucks, despite the high amount of effort put into each drink, is generally considered to be worse than the $1 coffee from 7-11 or Coles Express. I'm not 100% sure what the takeaway point is, but it was just so jarring to read that Americans view Starbucks as a luxury rather than some kind of bizarro-world meme.
  • ascar 5y ago
    As a coffee enthusiast I wonder what the definition of "really high quality" is here. For me the coffee bean needs to be well roasted (most/all big brands roast too hot to save time and burn the bean. Starbucks too, they cover it with milk and lots of sugar), freshly grinded before brewing and made with a portafilter. No full automatic coffee machine I used produced high quality coffee, at best acceptable coffee, usually nearly undrinkable office caffeine shots. While Starbucks coffee isn't top quality coffee, it still beats your usual office space full automatic poison by a long shot and is readily available everywhere. That's why it's considered good coffee by many.
    • SuoDuanDao 5y ago
      I'm curious, how do you find Starbucks and McDonald's coffee compare? I find McDonald's coffee superior, though I prefer the ambience of Starbucks.
      • tristor 5y ago
        I'm not the parent, but McDonald's coffee in the US is far superior to Starbucks for typical drip coffee. The flip side is that Starbucks has more options than McDonalds for coffee drinks.
  • tourist2d 5y ago
    > Here in Australia, you can get a really high-quality coffee from just about any petrol station for $1 7-11 or Coles Express coffee do not have high quality coffee. Everyone I know who drinks it does so just because it's convenient.
• jaclaz 5y ago
  The basic flaw in the article is that they used the Bank of England calculator, actually explicitily saying how it wasn't suitable, to then make the conclusion: >What we can say, however, is that there are far more people who make $50,000 in today’s America than earned £700 in 1919 Britain. Agatha Christie claimed she wasn’t rich, but her income was far above average in 1919. In contrast, most American households earn more than $50,000. It is more likely that the "real" correspondence is to current 100,000-150,000 US$ today (after taxes).
• SergeAx 5y ago
  "Back in the 1960s, the economist William Baumol observed that it took exactly as much labor to play a string quartet in 1965 as it did in 1865—in economics jargon, violinists hadn’t gotten any more productive. Yet the wages of a professional violinist in 1965 were a lot higher than in 1865." This is actually brilliant and deep. We may argue a lot that music education became more expensive, violins themselves cost more, musicians should pay their rent, which is also increased century over century, but the fact stands still: it took exactly as much labor. Talking about the rent: housing prices are driven by the average income (because the balanced market will extract maximum wealth from its participants). So the Baumol's cost disease can be one of the key inflation factors.
  • jerrre 5y ago
    Didn't read the full article, but couldn't you argue that with audio recording and distribution 1 hour of string quartet playing labor can yield many more person-hours of string quartet listening in 1965 than 1865?
    • SergeAx 5y ago
      Studio recording is a different type of labor, to produce a one hour record musicians should put at least 6-8 working hours. This is for quartet, bigger orchestras will tend to take even longer to properly record. We also need to factor in a work of recording and acoustic engineers, equipment and sound stage cost. But to be precise, one full take of one hour recording will still take exactly the same amount of labor from musicians) The whole idea of record distribution is actually a different type of economy. Live broadcast would be an interesting twist in this path of reason, but it was not a thing in 1960s.
    • missedthecue 5y ago
      Even for orchestras that don't publish albums, the musicians earn more.
  • mFixman 5y ago
    > housing prices are driven by the average income They are driven by the average income of the wealthiest $number_of_homes renters. If there are not enough homes in a single city then a lot of people will pay very significant part of their salary to have a place to live.
• varundhawan5792 5y ago
  Still true for so many living in India
• schnitzelstoat 5y ago
  The near flat graph of housing costs since 1993 [1] seems really suspect. It's from the BLS so maybe housing costs have been much more stable in the USA, because in the UK they have soared since the early 90's - so much so that Millennials are often called "Generation Rent" due to the declining rate of home ownership. [1] https://fullstackeconomics.com/content/images/size/w1600/2022/01/07Inflation-1.png https://fullstackeconomics.com/content/images/size/w1600/202...
• avgcorrection 5y ago
  Things that were luxuries in the past could at the same time be necessities today. That’s not counter-intuitive. Maybe you need to have a cell phone for work. Clearly that was optional in the year 1900. > They rented a fourth-floor walk-up apartment in London with four bedrooms, two sitting rooms, and a “nice outlook on green.” Did people who lived in London back then require a car? Maybe some people would prefer to be able to rent a place in London without owning a car rather then to commute to London for work with a car.
• SergeAx 5y ago
  "we don’t have a substantial labor force willing to work for a few thousand dollars a year" Few thousand dollars, room and food, to be precise.
• angry_octet 5y ago
  On the Baumol effect, I recall that the renowned composer Philip Glass worked many jobs apart from composing, even after he became well known: “While working, I suddenly heard a noise and looked up to find Robert Hughes, the art critic of Time magazine, staring at me in disbelief. ‘But you’re Philip Glass! What are you doing here?’ It was obvious that I was installing his dishwasher and I told him I would soon be finished. ‘But you are an artist,’ he protested. I explained that I was an artist but that I was sometimes a plumber as well and that he should go away and let me finish.” [1] He also says "I was careful to take a job that couldn't have any possible meaning for me." [2] In contrast, people stick at Bullship Jobs, which are unsatisfying and unproductive, because they come with self-referential status [3]. I might argue that is we eliminated a lot of bullshit jobs then labour would be cheaper. [1] https://improvisedlife.com/2014/06/11/phillip-glass-world-renowned-composer-taxi-driver-plumber/ https://improvisedlife.com/2014/06/11/phillip-glass-world-re... [2] https://www.independent.co.uk/arts-entertainment/interviews/philip-glass-i-think-i-m-built-for-this-kind-of-life-i-train-like-an-athlete-1688870.html https://www.independent.co.uk/arts-entertainment/interviews/... [3] https://www.newyorker.com/books/under-review/the-bullshit-job-boom https://www.newyorker.com/books/under-review/the-bullshit-jo...
• anovikov 5y ago
  Another way to look at it is that maybe it's because of economic development per se? Inflation adjusted incomes look fine but real per capita incomes has grown since 1919 by about 7x. So the social-ranking equivalent of their salary wasn't $50K but about $350K, they were in ~top 5%, and maid's salary "social" equivalent was about on the level of today's minimum wage. It is quite fitting that top 5% of families can afford maids earning a minimum wage. In particular case of UK, nominal GDP per capita was 119.05 pounds in 1919 so maid was making 36 pounds = 0.3x of it. Now nominal GDP per capita in US is $70K and it's completely OK if the maid makes $21K, that's even well above minimum wage. Surely one can be hired for the amount.
• bobthechef 5y ago
• dgreensp 5y ago
  It’s consumerism and society being shaped for profit. It doesn’t actually cost much money for everyone to have a place to live and food to eat, but our economy (in the US) is considered healthy when people are shopping a lot and spending money on relative luxuries. Paying big mortgages on houses built by real estate developers to maximize profit. It should be a lot easier to live on not much money than it is. We exalted the “middle class” and their spending. That seems like part of it, at least. I can’t believe people still repeat the old “productivity” canard from economists. There was this idea that technology makes workers more productive, raising wages, which hasn’t been true since the 1970s, because it’s just wrong. Technology makes companies more productive, and the workers make the same. Economists hold their wrong theory above reality and act like this gap is some kind of mysterious “dark matter” that defies the known laws of the universe. As I always say, when a company upgrades their copy machine to one that is twice as fast, they don’t pay the person who makes the copies twice as much. Also, without unions, and with an abundance of people to do the unskilled work needed, there is no force pushing wages up.
• ravedave5 5y ago
  Manufactured items SHOULD always be getting cheaper, that's part of capitalism & progress. Humans & buildings don't follow that same curve. So to attempt to compare those with items is folly. Also notice how cell phones & cell phone bills are not present in his items curve? That's a modern item that doesn't fit his desired outcome.
• cwbrandsma 5y ago
  "Every leap of civilization was built on the back of a disposable workforce." Blade Runner 2049 Such a horrifyingly true statement.
• neuroma 5y ago
  Lots of fascinating commentary; But I've not seen mention of these core concepts: Social mobility Equality of opportunity Labour arbitrage I suppose the first two are worth pursuing vigorously. The last is core to capitalism, and some other complex systems, like cells. But it can be abused and thr former two are indicators of whether society is healthy.
• stevage 5y ago
  Everytime I see a reference to Starbucks on some kind of luxury experience it takes we a moment to work out what the hell they are on about. Around here it is literally the McDonalds of coffee, somewhere that nobody I know would ever even consider going to. A place for confused tourists and international students as far as I know.
• stevage 5y ago
  Surprised the author didn't make any attempt to estimate the cost of renting an equivalent apartment today. 4 bedroom flat with extra living room in London today? Whee.
• bandris 5y ago
  That is being said, she managed to buy one soon after, when cars were still an exotic luxury. “I will confess here and now that of the two things that have excited me most in my life, the first was my car: my grey bottle-nosed Morris Cowley. The second was dining with the Queen at Buckingham Palace about forty years later.” Agatha Christie in her autobiography