There will always be a bottom half, and that’s perfectly fine and is not a problem. Plenty of people out there take steps in life knowing that those steps will cause them to end up in the bottom half, or the bottom 25%, etc… Many of them are actually not slackers and are very hard workers, but they are just content with their chosen career paths. As long as they are aware of the likely consequences of their choices, I do not believe that we should be doing anything to change that (aside from continuing to maintain a safety net, and reasonable people can and do disagree about the level of this safety net).
I do think that good education is very important, and that we can do a lot more in this area, just as I think that it is entirely unacceptable that the US students tend to score fairly poorly in math and science, etc… Telling people to go to college is fine and dandy in the sense that people need to make the decision to forego it with their eyes wide open, but we can definitely do a lot more to improve the quality of our education, just as many other countries have done and are continuing to do. I also think, however, that personal responsibility is a critical part of the equation, and that those who choose to become carpenters (which I think is a very honorable profession) should not be measuring their success or failure by how much some billionaire somewhere makes.
You mean most of us here in this forum? I’m not sure if thats true that MOST of us live in HCOL areas.
FW at least had a fairly even distribution of people living in various places. Maybe more over representation from big / expensive cities but not “most” people.
Guess it depends on what you consider HCOL.
I’m in Portland metro. Probably considered high cost by most of the nation. I dont’ consider it especially high cost. Wages also don’t reflect it that well.
The cost of shoes (and all other household goods) has a lot to do with a lot of things.
Your point about health insurance “eating up” the increase is actually making the opposite. Considering the rising costs of healthcare and the fact that 55% of people receive insurance through their employer, the ones with the employer paying a chunk of the premium actually have received a very large increase in EARNINGS even though many of them may not be seeing an increase in their wages.
As for housing costs, considering how much that varies geographically, I’d have to do a little more research to concede that point to you, but I can definitely see how that could be true in some areas of the country.
If you look around the world over the past couple hundred years, I think you’ll see the easy answer to this question is to remove as many barriers to the free exchange of goods and services as possible.
The first thing I would do if I were king of the USA would be to abolish the minimum wage. That won’t do much for wage growth, but it would help with poverty. To go along with the points I mentioned earlier, wage growth isn’t nearly as important as many people make it out to be. The pain of living in poverty, however, should not be underestimated.
The jobs of the bottom half of workers are, by definition, not so well paid. Why is that? They are usually lower paid because of a combination of factors, including both business demand (what value does the job provide to the business) and labor supply (how easy is it for an unskilled person to be trained for this job).
It’s fairly hard to improve business demand, but you can take broad measures to incentivize new business growth, like fewer regulations to lower barriers to entry (to help create new jobs), or lower business taxes (so there’s more money available to pay workers, among others).
To reduce the labor supply, one easy step was a big campaign item in the election, which would be to enforce or reduce immigration rates. Unskilled immigrants, legal or otherwise, directly compete for low wage jobs, sometimes even undercutting legal workers by working “under the table”. It doesn’t take a genius to tell that twice as many people bidding for the same job openings means lower wages whether you get the job or not.
I don’t intend to be harsh, but perhaps you require a reality check. This is a perfect example of how you haven’t the foggiest idea what you’re posting about.
Nambia, Botswana, and many many more of the nations you have offered-up are not developed countries.
If you are saying that you can characterize a legitimate viewpoint held by many respected economists as an “oxymoron,” and then after being questioned, you simply refer to that characterization as “factual” and that it “explodes my point” then I don’t think we’re going to get anywhere on this issue.
It seems you would only like to talk about our income inequality in terms of a comparison of developed countries. I think it’s important to look at worldwide income inequality to get a proper picture of this issue. That is why I specifically addressed that post to Full Disclosure and not you.
Inflation hurts retirees who live off their savings, which is typically not fully inflation protected. Increased real wages don’t impact them, unless you’re advocating for them to re-enter the workforce.
It would be interesting to see a comparison on services. How much does it cost for a butler, maid (house cleaning), carriage driver / today’s jet pilot, top end restaurant meal?
OK I’ll agree that the cost of all consumer goods does matter. The decrease in apparel alone though is pretty minor relative.
Housing is absolutely up significantly nation wide since the 70s-80’s.
Median home prices by decade: https://www.census.gov/hhes/www/housing/census/historic/values.html
After adjusting for inflation median home prices rose ~80% from 1970 to 2000 Every state saw steep increases. In that same period real median incomes rose ~33%
From 1980 to 2000 the increases vary more and a handful of states saw declines.
This isn’t even accounting for the increases from 2000 to 2017.
Employers have been paying more and more for health insurance. This is a benefit to the employee. Even though the employee doesn’t necessarily SEE the increased benefit or spending.
THe increased spending on health insurance may be taking the place of increased wages.
Just look at 1999 to 2017 (KFF has handy data for that period) :
Now compare that to median family incomes :
Employer provided health insurance went from $5791 to $18764.
Family median incomes went from $48831 to $72707
Inflation adjusted thats :
health insurance $8520 to $18764
median incomes 71845 to 72707
If you look at median incomes alone thats only a ~1.2% increase. Stagnant.
But if you add the health insurance paid and the incomes then its total
$80,365 → $91,471
thats a 13.8% increase.
Health insurance increases have been undercutting wage growth for median income families.
I assume this is true generally for the bottom 40-80% of income earners.
In 1970 a median house costs $17,000.
Today median homes are $206,300
10% mortgage down in 1970 would be $149/mo payment
4% mortgage 2018 would be $985/mo
Median family income of $9867 in 1970 and today its $72,700.
18.1% of income dedicated to payments in 1970 versus 16.2% today.
So yes if you look at just the mortgage payment as a % of income then financing a home purchase is actually a bit cheaper today given the low interest rates.
I am using 100% financing for simplicity of comparison and I’m ignoring the impact of taxes, PMI, etc.
Getting a 20% down payment is certainly harder now than in the past. In 1970 you’d need ~34% of a years wages saved and now its about 57%.
OTOH ~30% of people rent and cheap mortgages dont’ directly help them.
Median rent is $1478 today vs 108 in 1970.
Thats 24% of income versus 13%.
here’s another source on rents vs incomes :
So in summary, yes cheap mortgage interest has helped keep purchasing homes relatively affordable even while home prices jumped. But renters are paying more as % of incomes and downpayments are harder to accumulate.