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In 1981 my father bought 3-bedroom home in the suburbs for about 2x the annual salary of his blue collar job. The same home today costs more than 12x the annua

In 1981 my father bought 3-bedroom home in the suburbs for about 2x the annual salary of his blue collar job. The same home today costs more than 12x the annual salary of the exact same blue collar job.

stufffer 2y ago
The Simpsons started playing on TV in 1989. Single income family, no college, working low skill blue collar union job. Yet they still owns a large home with a yard. That premise is absurd by modern standards.
chii 2y ago
So in the 40 or so years since 1981, has that blue collar job's output as a percentage of global GDP increased, decreased, or remained the same? I would argue that the same blue collar job might've been reduced as a percentage of global output, which means the value creation is lower, and thus, the 12x salary for a house might be justified.
- StanislavPetrov 2y ago
  >So in the 40 or so years since 1981, has that blue collar job's output as a percentage of global GDP increased, decreased, or remained the same? It is a blue collar government job. Like most government jobs, one could easily argue that the "value created" was zero then and is zero now. In any event, the job remains the same, and salary has risen (more or less) with the official rate of inflation. There is no reasonable argument to be made that the same house that this government worker could buy 40 years ago for 2 years salary should now be worth 24 years salary.
AnimalMuppet 2y ago
Sure. Now tell me about his monthly payments on a 30 year mortgage for that same house, as a fraction of his monthly pay, then and now. The demand part of the supply/demand curve on houses is set by monthly payment, not purchase price. Interest rates change the relationship between the two.
- StanislavPetrov 2y ago
  Sure. He had a 20 year fixed mortgage, which he paid off entirely on the same blue collar job, with low monthly rates because he was able to save and put down 50% in cash, which represented only 1 year salary. The same worker today has to save up 12 years worth of salary to put down 50% on the same house. It is amazing how so many can't understand that the USA has entirely changed for working people in the last few decades. I should include that on his salary he was also raising two children, could afford for us to see the doctor/dentist on a regular basis, owned a car outright while my mother stayed home to raise the kids.

stufffer 2y ago

The Simpsons started playing on TV in 1989. Single income family, no college, working low skill blue collar union job. Yet they still owns a large home with a yard. That premise is absurd by modern standards.

chii 2y ago

So in the 40 or so years since 1981, has that blue collar job's output as a percentage of global GDP increased, decreased, or remained the same? I would argue that the same blue collar job might've been reduced as a percentage of global output, which means the value creation is lower, and thus, the 12x salary for a house might be justified.

StanislavPetrov 2y ago
>So in the 40 or so years since 1981, has that blue collar job's output as a percentage of global GDP increased, decreased, or remained the same? It is a blue collar government job. Like most government jobs, one could easily argue that the "value created" was zero then and is zero now. In any event, the job remains the same, and salary has risen (more or less) with the official rate of inflation. There is no reasonable argument to be made that the same house that this government worker could buy 40 years ago for 2 years salary should now be worth 24 years salary.

AnimalMuppet 2y ago

Sure. Now tell me about his monthly payments on a 30 year mortgage for that same house, as a fraction of his monthly pay, then and now. The demand part of the supply/demand curve on houses is set by monthly payment, not purchase price. Interest rates change the relationship between the two.

StanislavPetrov 2y ago
Sure. He had a 20 year fixed mortgage, which he paid off entirely on the same blue collar job, with low monthly rates because he was able to save and put down 50% in cash, which represented only 1 year salary. The same worker today has to save up 12 years worth of salary to put down 50% on the same house. It is amazing how so many can't understand that the USA has entirely changed for working people in the last few decades. I should include that on his salary he was also raising two children, could afford for us to see the doctor/dentist on a regular basis, owned a car outright while my mother stayed home to raise the kids.