8 ms·

Wages for the average person (working class) typically remain stagnant while cost of living increases, particularly through inflation. I imagine minimum wage wo

by ljm 1y ago

Wages for the average person (working class) typically remain stagnant while cost of living increases, particularly through inflation. I imagine minimum wage would be 25-30 bucks an hour if it did track inflation and that would only serve to keep your purchasing power constant. Credit, in this sense, is also used to solve a cash flow problem. It’s a bad sign when that credit (or Klarna Pay-in-3 style setups) is applied to basic day to day expenses like buying groceries or other necessities. Basically the market’s answer to increasing poverty: you’re not getting paid more, so how about we give you a payment plan to spread things out?

9rx 1y ago
> Wages for the average person (working class) typically remain stagnant while cost of living increases, particularly through inflation. If wages were stagnant, nominally, you'd be making like 25¢ per hour. Wages are stagnant[1] only in real terms (i.e. adjusted for inflation). Cost of living and inflation are very different concepts, but since you indicate that inflation is responsible for most of the cost of living increases, wages have kept pace anyway, so... [1] Technically not even. Wages are growing faster than inflation, but the margins are small enough that we accept calling it stagnant as a close enough approximation.
bryanlarsen 1y ago
That's not true. Wages have generally outpaced inflation as long as we've measured inflation properly. Up until the early 1970s this was very palpable, since the early 1970s the delta has been much lower, wage increases have been very slightly above inflation. Why does it feel different? 1: the amount of stuff we buy has increased a lot. Anybody who owns what would be considered solidly middle class in the early 1970s will feel quite poor today. 2: financial security is way down. In the early seventies a middle class family of 6 would own a 1200 square foot house, a single car, a single TV and a single radio would be the sum total of the entertainment electronics they owned, they'd have less than a dozen outfits apiece, they'd eat out about once a month, a vacation to a neighboring state would feel like a splurge, et cetera. But they were relatively content. 1: they were much better off than their parents and grandparents, who experienced the depression & WW2. 2: they were "keeping up with the Joneses". 3: they had a feeling of financial security due to job security and the fact that serious health events were unlikely to financially devastating.
- kiba 1y ago
  Average American household budgets are dominated by housing, transportation and taxes. Maybe some of that problem is about spending too much money, but it cannot be denied that housing are unaffordable and that transportation is inefficient and is a mess.
  - 9rx 1y ago
    > Average American household budgets are dominated by [...] transportation Huh? Doesn't the average American live in a city? The whole reason for accepting being squeezed in tightly with other people is so that you don't have to worry about transportation; enabling everything you could ever want and need to be found in short walking distance. Transportation is for people in rural areas. Yes, it is expensive, but that's exactly why most people left rural areas for the city long ago.
    - smelendez 1y ago
      Most American urban areas are dominated by suburbs where it’s not practical to walk everywhere and public transit is very limited. So a car is necessary and often a car per working adult.
      - 9rx 1y ago
        Yes, but why would anyone want to live on what is effectively a farm, but without the benefit of separation from other people or land (read: income) that a farm offers? That completely defies the whole reason for the density. I'm not saying it doesn't exist, I question why people are doing it.
        acuozzo 1y ago
        FWIW, I grew up in Brooklyn, NY. I know about both urban and suburban living. I now live in Columbia, MD: a suburb from the late '60s planned with high ideals. My three children each have their own room. They can ride their bicycles on our sleepy street without having to constantly worry about reckless drivers. They can explore the walking trails and wooded areas our community maintains. They can play baseball in one of the nearby fields without having to worry about breaking a car window in doing so. My wife has a large crafting area. I have an office. We have a home theater. We have a workshop in our garage. We have a large sunroom which opens to a large deck suitable for entertaining many friends at once. Getting even a fraction of what I described above in a city would cost a fortune.
BobaFloutist 1y ago
I do wonder if there's hidden benefits to using Klarna to get, like, bulk discounts. Buy three months of toilet paper/chicken broth at once at Costco, pay it off over three months, save a few bucks each time.
- ndileas 1y ago
  You don't need klarna for this. Credit cards already fill this need, and with careful use are free. Most people (in my circles) already do this type of thing
  - johnnyanmac 1y ago
    That "woth careful use" is carrying a trillion dollar industry on its back, sadly. Clearly society is in fact not careful.
    - cyberge99 1y ago
      Not really. The people that pay interest on credit cards are the ones that pay for the luxuries/points/rewards of those who use credit cards wisely. If I get a 0% apr credit card for 18 months, i put all of my expenses on it for 16 months. I put that equivalent cash in to a high interest yield savings account (HYSA) and pay the card off before it’s due. I pocket the difference since the bank just gave me a free loan.
      - johnnyanmac 1y ago
        I don't think we are disagreeing here, you're just describing the model on why (as usual), the credit card industry punishes the poor or irresponsible. And people who can exploit the system benefit.
      - SirMaster 1y ago
        I thought the businesses pay it? Isn't it like 3% for a transaction fee that a business has to pay to accept a credit card, and the credit card company gives me the card user back like 1% or 1.5%.

by ljm 1y ago

9rx 1y ago

> Wages for the average person (working class) typically remain stagnant while cost of living increases, particularly through inflation. If wages were stagnant, nominally, you'd be making like 25¢ per hour. Wages are stagnant[1] only in real terms (i.e. adjusted for inflation). Cost of living and inflation are very different concepts, but since you indicate that inflation is responsible for most of the cost of living increases, wages have kept pace anyway, so... [1] Technically not even. Wages are growing faster than inflation, but the margins are small enough that we accept calling it stagnant as a close enough approximation.

bryanlarsen 1y ago

That's not true. Wages have generally outpaced inflation as long as we've measured inflation properly. Up until the early 1970s this was very palpable, since the early 1970s the delta has been much lower, wage increases have been very slightly above inflation. Why does it feel different? 1: the amount of stuff we buy has increased a lot. Anybody who owns what would be considered solidly middle class in the early 1970s will feel quite poor today. 2: financial security is way down. In the early seventies a middle class family of 6 would own a 1200 square foot house, a single car, a single TV and a single radio would be the sum total of the entertainment electronics they owned, they'd have less than a dozen outfits apiece, they'd eat out about once a month, a vacation to a neighboring state would feel like a splurge, et cetera. But they were relatively content. 1: they were much better off than their parents and grandparents, who experienced the depression & WW2. 2: they were "keeping up with the Joneses". 3: they had a feeling of financial security due to job security and the fact that serious health events were unlikely to financially devastating.

kiba 1y ago
Average American household budgets are dominated by housing, transportation and taxes. Maybe some of that problem is about spending too much money, but it cannot be denied that housing are unaffordable and that transportation is inefficient and is a mess.
- 9rx 1y ago
  > Average American household budgets are dominated by [...] transportation Huh? Doesn't the average American live in a city? The whole reason for accepting being squeezed in tightly with other people is so that you don't have to worry about transportation; enabling everything you could ever want and need to be found in short walking distance. Transportation is for people in rural areas. Yes, it is expensive, but that's exactly why most people left rural areas for the city long ago.
  - smelendez 1y ago
    Most American urban areas are dominated by suburbs where it’s not practical to walk everywhere and public transit is very limited. So a car is necessary and often a car per working adult.
    - 9rx 1y ago
      Yes, but why would anyone want to live on what is effectively a farm, but without the benefit of separation from other people or land (read: income) that a farm offers? That completely defies the whole reason for the density. I'm not saying it doesn't exist, I question why people are doing it.
      - acuozzo 1y ago
        FWIW, I grew up in Brooklyn, NY. I know about both urban and suburban living. I now live in Columbia, MD: a suburb from the late '60s planned with high ideals. My three children each have their own room. They can ride their bicycles on our sleepy street without having to constantly worry about reckless drivers. They can explore the walking trails and wooded areas our community maintains. They can play baseball in one of the nearby fields without having to worry about breaking a car window in doing so. My wife has a large crafting area. I have an office. We have a home theater. We have a workshop in our garage. We have a large sunroom which opens to a large deck suitable for entertaining many friends at once. Getting even a fraction of what I described above in a city would cost a fortune.

BobaFloutist 1y ago

I do wonder if there's hidden benefits to using Klarna to get, like, bulk discounts. Buy three months of toilet paper/chicken broth at once at Costco, pay it off over three months, save a few bucks each time.

ndileas 1y ago
You don't need klarna for this. Credit cards already fill this need, and with careful use are free. Most people (in my circles) already do this type of thing
- johnnyanmac 1y ago
  That "woth careful use" is carrying a trillion dollar industry on its back, sadly. Clearly society is in fact not careful.
  - cyberge99 1y ago
    Not really. The people that pay interest on credit cards are the ones that pay for the luxuries/points/rewards of those who use credit cards wisely. If I get a 0% apr credit card for 18 months, i put all of my expenses on it for 16 months. I put that equivalent cash in to a high interest yield savings account (HYSA) and pay the card off before it’s due. I pocket the difference since the bank just gave me a free loan.
    - johnnyanmac 1y ago
      I don't think we are disagreeing here, you're just describing the model on why (as usual), the credit card industry punishes the poor or irresponsible. And people who can exploit the system benefit.
    - SirMaster 1y ago
      I thought the businesses pay it? Isn't it like 3% for a transaction fee that a business has to pay to accept a credit card, and the credit card company gives me the card user back like 1% or 1.5%.