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Curious how all of the issues are resolved. If workers (as they should imo) get paid more, it will result in more inflation, resulting in their purchasing power

Curious how all of the issues are resolved. If workers (as they should imo) get paid more, it will result in more inflation, resulting in their purchasing power on key things like housing effectively not changing as inflation adjusts the cost of housing to be more expensive. I'm also curious to see if companies run by Gen Z pay better or worse than Boomer run companies. If they're not I don't see how the situation will change for the next generations.

frankbreetz 5y ago
The answer is to build more housing, it is simple supply and demand
- endisneigh 5y ago
  Housing is not free to build, though. I agree in general that more housing should be built, but it's not some sort of silver bullet.
  - JonathanMerklin 5y ago
    It's usually seen as immoral to bring up in this context, but if you can't increase the denominator, you can try to decrease the numerator.
  - robertlagrant 5y ago
    It's fairly cheap to build if you're allowed to build, though. The issue is all the paperwork.
- jm__87 5y ago
  Or just continue raising interest rates. At least where I live, the majority of the excess demand during the pandemic came from investors. It was easy to leverage up and buy more houses using home equity loans while interest rates were low and home prices were appreciating rapidly. Higher interest rates should in theory pop all of these asset bubbles we're seeing.
einpoklum 5y ago
Wages in the US have been stagnant in real terms for decades: https://www.epi.org/publication/charting-wage-stagnation/ https://www.epi.org/publication/charting-wage-stagnation/ but the prices of houses have shot up massively. So, not sure why you are so certain that wages rising would lead to significant inflation in housing prices.
- endisneigh 5y ago
  Your chart shows that pay has been up a lot. Why wouldn’t extra pay lead to inflation? If you hypothetically doubled everyone’s pay you think that wouldn’t lead to significant inflation in housing prices? In any case real household income is up: https://fred.stlouisfed.org/series/DSPIC96 https://fred.stlouisfed.org/series/DSPIC96 https://fred.stlouisfed.org/series/MEHOINUSA672N https://fred.stlouisfed.org/series/MEHOINUSA672N
  - einpoklum 5y ago
    > Your chart shows that pay has been up a lot. No it doesn't, continue reading. Your own first data series suggests there's over ~15,000 Billion USD of personal disposable monthly income. Per capita, that would be something like 45,300 USD disposable monthly income. I suppose this takes into the account all of the millionaires' and billionaires' capital gains, illustrating how little of the overall income is garnered by the US working class. And even in the stats I quoted, you can see the unequal distribution: The high-wage-earners' wages didn't stagnate, they increased; but low-wage earners earn less. Anyway, the reason extra pay does not immediately translate to inflation is that price levels are the result of a combination of factors, including power relations of different social forces, and the distribution of income in society. If all wages were to double tomorrow, I suppose there would be some inflation in various sectors of the economy, but not uniformly, nor by anywhere near a factor of two.
    - endisneigh 5y ago
      Literally most of the charts show wages going up drastically for the upper echelons - the same folks buying the houses. Not to mention it’s old and real wages have gone up far more than then as shown by the FED as I’ve linked.
pharmakom 5y ago
So unaffordable housing is a law of nature? How depressing.

frankbreetz 5y ago

The answer is to build more housing, it is simple supply and demand

endisneigh 5y ago
Housing is not free to build, though. I agree in general that more housing should be built, but it's not some sort of silver bullet.
- JonathanMerklin 5y ago
  It's usually seen as immoral to bring up in this context, but if you can't increase the denominator, you can try to decrease the numerator.
- robertlagrant 5y ago
  It's fairly cheap to build if you're allowed to build, though. The issue is all the paperwork.
jm__87 5y ago
Or just continue raising interest rates. At least where I live, the majority of the excess demand during the pandemic came from investors. It was easy to leverage up and buy more houses using home equity loans while interest rates were low and home prices were appreciating rapidly. Higher interest rates should in theory pop all of these asset bubbles we're seeing.

einpoklum 5y ago

Wages in the US have been stagnant in real terms for decades: https://www.epi.org/publication/charting-wage-stagnation/ https://www.epi.org/publication/charting-wage-stagnation/ but the prices of houses have shot up massively. So, not sure why you are so certain that wages rising would lead to significant inflation in housing prices.

endisneigh 5y ago
Your chart shows that pay has been up a lot. Why wouldn’t extra pay lead to inflation? If you hypothetically doubled everyone’s pay you think that wouldn’t lead to significant inflation in housing prices? In any case real household income is up: https://fred.stlouisfed.org/series/DSPIC96 https://fred.stlouisfed.org/series/DSPIC96 https://fred.stlouisfed.org/series/MEHOINUSA672N https://fred.stlouisfed.org/series/MEHOINUSA672N
- einpoklum 5y ago
  > Your chart shows that pay has been up a lot. No it doesn't, continue reading. Your own first data series suggests there's over ~15,000 Billion USD of personal disposable monthly income. Per capita, that would be something like 45,300 USD disposable monthly income. I suppose this takes into the account all of the millionaires' and billionaires' capital gains, illustrating how little of the overall income is garnered by the US working class. And even in the stats I quoted, you can see the unequal distribution: The high-wage-earners' wages didn't stagnate, they increased; but low-wage earners earn less. Anyway, the reason extra pay does not immediately translate to inflation is that price levels are the result of a combination of factors, including power relations of different social forces, and the distribution of income in society. If all wages were to double tomorrow, I suppose there would be some inflation in various sectors of the economy, but not uniformly, nor by anywhere near a factor of two.
  - endisneigh 5y ago
    Literally most of the charts show wages going up drastically for the upper echelons - the same folks buying the houses. Not to mention it’s old and real wages have gone up far more than then as shown by the FED as I’ve linked.

pharmakom 5y ago

So unaffordable housing is a law of nature? How depressing.