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HCOL has an interesting parallel to when women entered the workforce in large numbers, you'd think that households going from single-income to dual-income would

HCOL has an interesting parallel to when women entered the workforce in large numbers, you'd think that households going from single-income to dual-income would make them better off, but much of that new income went into property prices leaving a lot of households little better off in the long term, and leaving single-income households much worse off. To be clear, NOBODY is suggesting women in the workforce is a bad thing, I am merely saying that HCOL's housing cost just suck almost all the regional income gain back out of the market leaving households little better off overall. The best thing we could do as a society is more full-remote jobs, to break up HCOLs and revitalize more rural areas.

TimPC 4y ago
Georgists have studied the mechanism by which land captures the value of labour quite extensively and many of them even predicted this trend. The solution to land capturing excess amounts of labour is to reduce total labour capture by taxing land instead of labour.
- newaccount74 4y ago
  Would that not just lead to increased rent? Is there a way to do it so that rents become lower?
  - throw123123123 4y ago
    Taxes on land dont have economic incidence on rents. The reasoning is that land's profit stems from its location and the land owner doesn't have any bargaining power - his only choice is to not rent the land and absorb the loss of all value. Its not the same with property taxes because builders/buyers can choose not to build, so there is some distortion.
    - pandaman 4y ago
      A land owner has a whole continuum of choices because he is setting the rent price. It's no different from any other seller on the market. The higher price will push the potential tenant elsewhere but if other places are taxed the same way they may also need to raise prices so it will be a wash in lost customers and higher rent across the board.
      - TimPC 4y ago
        You can draw the supply and demand curves to see what happens when you add the tax. The supply curve is a straight vertical line since land is in fixed supply. When you tax someone $2000 for land, their demand for the same land falls by $2000. So if you charge the tenant the tax, prices will fall by $2000 making the landlords absorb the cost. If you charge the landlord the tax both the supply and demand curves are unchanged and the tenants pay the same. Taxes on most things change prices by adjusting both supply and demand, it’s the adjustment to supply that can pass on part or most of the tax to the customer. If supply doesn’t adjust you can’t do that.
        pandaman 4y ago
        I really can't. What are supply and demand curves for non-fungible goods? Each plot of land is unique. The asking price doesn't not affect its size. It does affect the time on market: the higher the ask, the longer it will take to rent out.
        TimPC 4y ago
        And some pieces will take infinite time to rent out if the price is set too high. The point is the land was just as unique before and after the tax. If you believe in supply and demand curves at all, this example is straight forward. Land has essentially fixed supply, so the curve is vertical and outside of a few weird exceptions can't change. The demand curve for your individual unique piece of land will be unchanged if the landlord pays the tax (taxes don't cause tenants to be willing to pay more) or be lowered by the tax if the tenant pays the tax (total spend by tenant unchanged). The new intersection of the lines determining the market price is either unchanged or lowered by the tax depending on who pays. This is unlike other supply and demand examples where in response to the tax you reduce supply causing the supply and demand curves to intersect at a higher price point.
        pandaman 4y ago
        >And some pieces will take infinite time to rent out if the price is set too high. Yes. Same as the demand curve goes to 0 if price is high enough. >If you believe in supply and demand curves at all, this example is straight forward I believe in supply and demand curves for fungible items. It's easy to observe that you can acquire less of a particular item at a lower price than at a higher price and also true that you can sell more at at a lower price than at a higher price. I don't see how, say, a particular painting becomes bigger or adds detail with price increase or how one can sell two Mona Lisas by cutting down the price.
- soramimo 4y ago
  Interesting. Can you recommend a book or an article on this?
  - TimPC 4y ago
    Progress and Poverty is the most interesting original source but the first few chapters are an outdated theory of capital. I’d recommend one of the modern abridged editions that skips this.
    - soramimo 4y ago
      Thank you! Quick follow up question, which abridged edition would you recommend? Also, are there any recent books on the subject that you would recommend?
beiller 4y ago
Maybe its a chicken egg type problem. The solution was that households became dual income. I think the drive for a household to become dual income was probably the HCOL and not vice-versa.
- bumby 4y ago
  >I think the drive for a household to become dual income was probably the HCOL and not vice-versa. I'm not sure that's correct. I don't have the statistics off hand, but I believe the average home prices were much smaller multiples of household income when most households had a single income.
jjoonathan 4y ago
It's almost like the economy is designed to funnel money away from labor.
Aloha 4y ago
This is more than likely confusing correlation with causation. There are a host of regulatory issues that made building anything expensive that arose just as women joined the workforce. The largest source of increase in COL over the last is housing. Rents have nearly doubled in constant dollars in most large cities.
- BlargMcLarg 4y ago
  FWIW the rise in women working has increased individualism and requirements in men pre-dating, which partially reflects in RE (more individual space, less families). This doesn't mean women working is the problem, rather we should've thought harder about what measurements should've been taken when introducing women into the workforce. Several countries are now "fixing" this retroactively, though more so to give women a fighting chance rather than actually helping out workers as a whole (e.g. forced paternity leave).
noelherrick 4y ago
I regret to inform you there are lots of people who think that women in the workforce is a bad thing. Fundamentalist evangelical Christians often view this as a negative. There was a conservative thinker on the Ezra Kline show who espoused this view just recently.
dragonwriter 4y ago
> NOBODY is suggesting women in the workforce is a bad thing Lots of people, and not just religious conservatives, are arguing th as that, because the exact effect you point out makes it hard not to either say that or that capitalism is a bad thing or that people working more for less is a good thing.
62951413 4y ago
NOBODY? How about anybody who cares for the future of their people or the stability of their society? Forcing women to work is arguably the root of most social ills in the last two generation.

TimPC 4y ago

Georgists have studied the mechanism by which land captures the value of labour quite extensively and many of them even predicted this trend. The solution to land capturing excess amounts of labour is to reduce total labour capture by taxing land instead of labour.

newaccount74 4y ago
Would that not just lead to increased rent? Is there a way to do it so that rents become lower?
- throw123123123 4y ago
  Taxes on land dont have economic incidence on rents. The reasoning is that land's profit stems from its location and the land owner doesn't have any bargaining power - his only choice is to not rent the land and absorb the loss of all value. Its not the same with property taxes because builders/buyers can choose not to build, so there is some distortion.
  - pandaman 4y ago
    A land owner has a whole continuum of choices because he is setting the rent price. It's no different from any other seller on the market. The higher price will push the potential tenant elsewhere but if other places are taxed the same way they may also need to raise prices so it will be a wash in lost customers and higher rent across the board.
    - TimPC 4y ago
      You can draw the supply and demand curves to see what happens when you add the tax. The supply curve is a straight vertical line since land is in fixed supply. When you tax someone $2000 for land, their demand for the same land falls by $2000. So if you charge the tenant the tax, prices will fall by $2000 making the landlords absorb the cost. If you charge the landlord the tax both the supply and demand curves are unchanged and the tenants pay the same. Taxes on most things change prices by adjusting both supply and demand, it’s the adjustment to supply that can pass on part or most of the tax to the customer. If supply doesn’t adjust you can’t do that.
      - pandaman 4y ago
        I really can't. What are supply and demand curves for non-fungible goods? Each plot of land is unique. The asking price doesn't not affect its size. It does affect the time on market: the higher the ask, the longer it will take to rent out.
        TimPC 4y ago
        And some pieces will take infinite time to rent out if the price is set too high. The point is the land was just as unique before and after the tax. If you believe in supply and demand curves at all, this example is straight forward. Land has essentially fixed supply, so the curve is vertical and outside of a few weird exceptions can't change. The demand curve for your individual unique piece of land will be unchanged if the landlord pays the tax (taxes don't cause tenants to be willing to pay more) or be lowered by the tax if the tenant pays the tax (total spend by tenant unchanged). The new intersection of the lines determining the market price is either unchanged or lowered by the tax depending on who pays. This is unlike other supply and demand examples where in response to the tax you reduce supply causing the supply and demand curves to intersect at a higher price point.
        pandaman 4y ago
        >And some pieces will take infinite time to rent out if the price is set too high. Yes. Same as the demand curve goes to 0 if price is high enough. >If you believe in supply and demand curves at all, this example is straight forward I believe in supply and demand curves for fungible items. It's easy to observe that you can acquire less of a particular item at a lower price than at a higher price and also true that you can sell more at at a lower price than at a higher price. I don't see how, say, a particular painting becomes bigger or adds detail with price increase or how one can sell two Mona Lisas by cutting down the price.
soramimo 4y ago
Interesting. Can you recommend a book or an article on this?
- TimPC 4y ago
  Progress and Poverty is the most interesting original source but the first few chapters are an outdated theory of capital. I’d recommend one of the modern abridged editions that skips this.
  - soramimo 4y ago
    Thank you! Quick follow up question, which abridged edition would you recommend? Also, are there any recent books on the subject that you would recommend?

beiller 4y ago

Maybe its a chicken egg type problem. The solution was that households became dual income. I think the drive for a household to become dual income was probably the HCOL and not vice-versa.

bumby 4y ago
>I think the drive for a household to become dual income was probably the HCOL and not vice-versa. I'm not sure that's correct. I don't have the statistics off hand, but I believe the average home prices were much smaller multiples of household income when most households had a single income.

jjoonathan 4y ago

It's almost like the economy is designed to funnel money away from labor.

Aloha 4y ago

This is more than likely confusing correlation with causation. There are a host of regulatory issues that made building anything expensive that arose just as women joined the workforce. The largest source of increase in COL over the last is housing. Rents have nearly doubled in constant dollars in most large cities.

BlargMcLarg 4y ago
FWIW the rise in women working has increased individualism and requirements in men pre-dating, which partially reflects in RE (more individual space, less families). This doesn't mean women working is the problem, rather we should've thought harder about what measurements should've been taken when introducing women into the workforce. Several countries are now "fixing" this retroactively, though more so to give women a fighting chance rather than actually helping out workers as a whole (e.g. forced paternity leave).

noelherrick 4y ago

I regret to inform you there are lots of people who think that women in the workforce is a bad thing. Fundamentalist evangelical Christians often view this as a negative. There was a conservative thinker on the Ezra Kline show who espoused this view just recently.

dragonwriter 4y ago

> NOBODY is suggesting women in the workforce is a bad thing Lots of people, and not just religious conservatives, are arguing th as that, because the exact effect you point out makes it hard not to either say that or that capitalism is a bad thing or that people working more for less is a good thing.

62951413 4y ago

NOBODY? How about anybody who cares for the future of their people or the stability of their society? Forcing women to work is arguably the root of most social ills in the last two generation.