3 ms·

this is part of it. however, things are just out-of-whack economically. in my company, we pay our most-senior engineers above-market wages, for a variety of r

this is part of it. however, things are just out-of-whack economically. in my company, we pay our most-senior engineers above-market wages, for a variety of reasons including retention, schedule demands, etc. for example, we pay a senior remote sysadmin in the south/midwest $150k. we are based in southern california where that salary would still be above-market. the truth of the matter is even if we paid him 200 grand, his real income would probably not be as good as it was 30 years ago. our local california engineers can't afford houses+family no matter how much we pay them (within reason - assuming single income). i know people from the previous generation who own multiple houses on what were modest single incomes. something fundamental is driving the cost component of everything through the fucking roof, without a corresponding increase in purchasing power. employers/managers can be only so generous - the dollar just isn't going as far. in other words, the actual purchasing power is accruing at the very very top in an entirely different class of ultra-rich people. small biz owners, middle managers and employees are getting shafted even though everyone is trying their hardest to keep things on an even keel.

meatysnapper 11y ago
What is so expensive? Is it everday goods? Is it property in nice areas (or rent)? I suspect that the move back towards cities has something to do with it.
fraserharris 11y ago
There is little evidence of an unaffordability of everyday expenses (beyond inflation) apart from housing costs. There are three underlying trends driving super-inflation of housing costs are: a) House prices are correlated to what the maximum monthly mortgage a household is willing to pay in a geographic area. For most of developed world, the average household now has two income earners. b) The previous generation benefited greatly from the suburbanization of cities. Cheap land was converted into reasonably priced housing (subsidized by highway expansion). We've reached the point where this cheap land is now so far from the city center that the downsides (commute, job opportunities) exceed the cost savings. c) We are seeing large economic network effects in agglomerating around fewer large metros (ex: NYC, LA, Bay Area, Chicago, Houston, DFW, Atlanta, DC). These metros have not responded with sufficient housing construction or transportation infrastructure despite the continued growth in population.
eli_gottlieb 11y ago
>something fundamental is driving the cost component of everything through the fucking roof, without a corresponding increase in purchasing power. If I had to guess, the "something" is the conversion of capital gluts at the top of the economy, boosted by cheap borrowing rates, to drive speculative bubbles in all available "assets" -- things you can invest in to get a capital gain. Since most of the world doesn't tax land values, land values have soaked up much of the speculation, making real-estate unnaturally, uselessly expensive across most of the civilized world.
- meatysnapper 11y ago
  Real estate speculation by foreign investors has definitely driven housing prices to levels not supported by the locals- Vancouver BC being a prime example of this. I've always wondered what the best way to prevent this would be... if non-residents were prevented from buying more than a single small property in a country, would that help at all?
  - beachstartup 11y ago
    i've thought about such a law as well, but i think in the end, they would just proxy the purchase through residents (relatives, friends, etc.) or businesses in which they own a stake. it's extremely hard to get the desired effect of capital controls without failing completely, or unintended consequences. look at china.
  - eli_gottlieb 11y ago
    >I've always wondered what the best way to prevent this would be... if non-residents were prevented from buying more than a single small property in a country, would that help at all? Land-value tax is what experts generally recommend.

meatysnapper 11y ago

What is so expensive? Is it everday goods? Is it property in nice areas (or rent)? I suspect that the move back towards cities has something to do with it.

fraserharris 11y ago

There is little evidence of an unaffordability of everyday expenses (beyond inflation) apart from housing costs. There are three underlying trends driving super-inflation of housing costs are: a) House prices are correlated to what the maximum monthly mortgage a household is willing to pay in a geographic area. For most of developed world, the average household now has two income earners. b) The previous generation benefited greatly from the suburbanization of cities. Cheap land was converted into reasonably priced housing (subsidized by highway expansion). We've reached the point where this cheap land is now so far from the city center that the downsides (commute, job opportunities) exceed the cost savings. c) We are seeing large economic network effects in agglomerating around fewer large metros (ex: NYC, LA, Bay Area, Chicago, Houston, DFW, Atlanta, DC). These metros have not responded with sufficient housing construction or transportation infrastructure despite the continued growth in population.

eli_gottlieb 11y ago

>something fundamental is driving the cost component of everything through the fucking roof, without a corresponding increase in purchasing power. If I had to guess, the "something" is the conversion of capital gluts at the top of the economy, boosted by cheap borrowing rates, to drive speculative bubbles in all available "assets" -- things you can invest in to get a capital gain. Since most of the world doesn't tax land values, land values have soaked up much of the speculation, making real-estate unnaturally, uselessly expensive across most of the civilized world.

meatysnapper 11y ago
Real estate speculation by foreign investors has definitely driven housing prices to levels not supported by the locals- Vancouver BC being a prime example of this. I've always wondered what the best way to prevent this would be... if non-residents were prevented from buying more than a single small property in a country, would that help at all?
- beachstartup 11y ago
  i've thought about such a law as well, but i think in the end, they would just proxy the purchase through residents (relatives, friends, etc.) or businesses in which they own a stake. it's extremely hard to get the desired effect of capital controls without failing completely, or unintended consequences. look at china.
- eli_gottlieb 11y ago
  >I've always wondered what the best way to prevent this would be... if non-residents were prevented from buying more than a single small property in a country, would that help at all? Land-value tax is what experts generally recommend.