Squeezed: Why Our Families Can’t Afford America

https://nytimes.com/2018/06/27/books/review-squeezed-alissa-quart.html

by petethomas • 8 years ago

251 449 8 years ago

yosito• 8 years ago

Stretched would be more accurate.

cyberpunk0• 8 years ago

Death of the American dream was a decent doc about this subject. All of this has been engineered into place over a long period of time.

metalliqaz3• 8 years ago

The ownership class declared a shadow war on the New Deal and has won the long game.

danieltillett• 8 years ago

The New Deal was just a head fake while they dealt with the real enemy - communism. I do have to give the owners credit (or more accurately their advisers) for how they played the long game - a work of genius that has totally won.

skrebbel• 8 years ago

has been engineered into place

You're conveying an image of handwringing illuminati in a room who are out to get us. Is that what you mean? If not, who has been engineering this and why?

jinfiesto2• 8 years ago

That's a little overstated. The Powell memo all but declared a war on the working class.

rectang2• 8 years ago

Corporate entities evolve and adapt akin to biological organisms competing for survival. Rather than a group of individuals (the illuminati) winning out through elaborate conspiracy over other individuals, it seems to me more likely that the diminishing power of individuals is coming as a result of non-directed evolutionary improvement by corporations.

fergie2• 8 years ago

Capitalism has been allowed a free reign over western society with the consequence that _ownership_ is rewarded at the expense of _contribution_. The result is that owning property or a business is now really profitable, yet working hard in a salaried job is much less so.

In economic theory "the gravity of capital" dictates that lumps of capital attract more capital- the larger the lump, the larger the attraction. Once capital is concentrated in too few lumps that are too large, it stops being a force for good, and starts to act as a force of oppression.

Capitalism can work really well- but only if regulated. A modern nation state needs to have robust regulation of capital in order to keep it working for the benefit of society. Unfortunately this doesn't really happen just now in the US- most politicians are to some degree beholden to powerful, private interests who seek to increase their power by favourable legislation that generally involves financial deregulation.

An 'illuminati' totally engineers the US economy by lobbying politicians, and this is no great secret.

jaggederest2• 8 years ago

All the explanation you need in two graphs:

https://fred.stlouisfed.org/graph/fredgraph.png?g=ki8y

https://fred.stlouisfed.org/graph/fredgraph.png?g=ki8A

Cost of education over real median household income, and house price index over real median household income. Education is more than twice as expensive as the start of the century, and houses are almost twice as expensive as the start of the century.

metalliqaz3• 8 years ago

They are good graphs, but I think explanation is better given by graphs of where wage growth has gone. I don't have it handy, but I recall a very nice graph that showed nearly all wage growth since the mid 70's has gone to the top 10%

hectormalot• 8 years ago

Since the graph is by median (not the mean), this should really disturb the graph. I think they are spot on: a person on the center of the income distribution has seen housing and education cost double when compared to his/her income. And probably healthcare as well.

I’ll admit, income inequality has increased as well, but that by itself could be fine if the relative living cost for the average person had not increased that much

tafycent• 8 years ago

One interesting and slightly mitigating factor to consider is that during the same period of time far more people have moved from middle to upper class or lower to middle class than have moved down in income class. Part of the reason inequality is increasing is that as a whole we're largely moving up in standard of living, but the bottom tail of the distribution isn't really moving. And I'd argue that you wouldn't really expect it to. It's a lot more difficult to drag the destitute out of poverty than to increase the standard of living for most, but not all, people

coliveira2• 8 years ago

You're forgetting health care costs, which have skyrocketed since the 80s. Interestingly, all of these costs are not part of official inflation numbers, so real inflation for middle class is much higher than the reports say.

arethuza• 8 years ago

Why wouldn't you include health care costs in inflation figures? Seems to be something that most people have to pay one way or another?

jaggederest2• 8 years ago

You're right. Here's the graph for that one.

https://fred.stlouisfed.org/graph/fredgraph.png?g=kipg

Another factor of two increase.

roenxi3• 8 years ago

3 graphs.

https://fred.stlouisfed.org/graph/fredgraph.png?g=ki91

There is a vast quantity of new money being created, and it isn't appearing in household incomes. Something should be done.

AnimalMuppet3• 8 years ago

Looks like about a factor of 8 in 38 years (1980-2018). What is the total inflation over the same years? The best source I could find said a factor of 3.18. And what is the inflation-adjusted GDP growth in the same years? The best number I could find is a factor of 2.66. And if you multiply those two numbers, you get 8.4588. That is, the increase in money supply is (unsurprisingly) showing up as real GDP growth and inflation.

You could argue that, with less money supply growth, we'd have less inflation. But that works out to 3% inflation a year, which is... not much.

flukus• 8 years ago

Enrollment rates are up too (long term). So it's not only taking a bigger bight but it's taking it out of more people: https://www.washingtonpost.com/national/higher-education/num...

three in 10 adult Americans held bachelor’s degrees in 2011. In 1947, just 5 percent of Americans 25 and older held degrees from four-year colleges. As recently as 1998, fewer than one-quarter of the adult population held college degrees.

geargrinder2• 8 years ago

Higher education has figured out how to mortgage the future earnings of their students through the federally-subsidized student loan program. All while greatly increasing the number of administrators and squeezing real professors.

jonathankoren2• 8 years ago

That’s a simplistic take, targetting favorite scapegoats. At most 25% of tuition costs can be attributed to administration and faculty. The remaining 75% is attributed to cuts in government funding of public universities. Ironically, cuts that are often justified as targetting college administrators.

https://fivethirtyeight.com/features/fancy-dorms-arent-the-m...

metalliqaz3• 8 years ago

some sharp points about how workers are expected to “deny their biology” and “how little American businesses and legislators care about care,”

These are two wonderful, succinct statements that perfectly describe the American experience.

tracer4201• 8 years ago

My total comp this year is ballpark $240K. I'm still paying student loans. I'd like to buy a home, but in my area, there's nothing in a reasonable commmute from work under $750-$800K and anything less is getting bought in cash for some ridiculous amount over asking price.

You might argue that $800K is justified on a $240K income. I have anxiety from the thought that I could lose my job, and the barrier to entry in my field at other companies is so high that I would burn through my savings/investments and not be able to pay mortgage, taxes, + insurance.

cylinder• 8 years ago

You can easily afford that mortgage. It's $4100/mo. Aren't you netting $12-$14k/mo after income tax? Not sure what the property taxes are where you are.

Everyone faces the same anxiety when buying, but what's the alternative? Is your rent that much cheaper? If you lose your job, you still have to rent a place to live.

You're also missing out on a big capital gains tax exemption.

If you do lose your job, you can rent it out.

$800k is nothing in a city with $240k jobs. You should see other big cities in the world!

jacquesm• 8 years ago

If you do lose your job, you can rent it out.

Will you pay him back the difference if he can't? If not then why such definitive statements about what someone else should be comfortable with.

I could easily borrow a million or more from the bank to buy a house, but that wouldn't make it a wise decision. Instead I live in a house far smaller and more modest than what I could be living in and I feel better for it knowing that in a downturn (when most likely more people are experiencing a downturn) I will not have to change my life-style one bit.

bradstewart• 8 years ago

While I agree with you, the big difference (I think) is that you burn a significant portion of your savings on the down payment. So that cash is no longer available to cover your monthly costs if you lose your job.

pmorici9• 8 years ago

The Zillow home affordability tool[0] was helpful to shape my thinking about what is "affordable" at a certain salary. Even if you are super conservative you could afford a place up to $1 million on that salary assuming you have the discipline to save for the 20% down payment.

[0] https://www.zillow.com/mortgage-calculator/house-affordabili...

yourapostasy4• 8 years ago

These calculators do not model job stability. GP is correct to be concerned; unless they have a truly unique skill set in high demand for the foreseeable future, steady employment is not a given in many fields. In the US, one needs about 7 years to break even on house purchasing costs (all the fees and commissions outside the titular selling price) before it financially makes sense to buy into another/different house. This is why you hear the rule of thumb that tells people to rent unless they plan to stick around "for awhile", or "for about ten years". We need a forward-projected statistically-inferred probability, based upon historical trends of the field a prospective buyer is in, on their income stability for the next 7 years.

It should come out as at 100% of current income, 50% probability they will increase at rate of inflation over next 7 years. At 80% of current income, 60% probability. At 70% of current income, 90% probability. And so on. Then the buyer picks where on the gradient they feel comfortable, given any side hustles, investments, etc. they have going on in their lives. This balances out the traditional DTI ratio that entirely favors the lending side getting their transactional fees regardless of the actual projected affordability.

The younger generations around the world are getting completely shafted on real estate asset overvaluation, and many are right to be skeptical of conventional affordability calculations. In the US, there is the triple shafting of higher education, healthcare, and real estate overvaluation. Median asset values are way out of line to median incomes, and only supportable by an over-lenient and captured debt system. The reversion to mean will be painful, and unfortunately most of the pain will not accrue to those most responsible for the overvaluations in the first place.

kennyadam• 8 years ago

After tax I take home $22k. House prices in my area are ~$600k. Your anxiety is hilariously misplaced.

thomasfedb2• 8 years ago

Being told that others are better off than you rarely makes anybody better off.

aidenn0• 8 years ago

At $240K, if you have no family to support, you ought to be able to save up enough for a sizable down-payment in 5 years:

Assumptions:

Health Insurance is funded by employer

50% of total comp as take-home (post 401(k), taxe &c.) -> $600k take home over 5 years

$2.5k/month for rent (I'm assuming from housing prices that this would translate to somewhere between a very nice 1BR or a half-share of a nice 2BR in your location) -> $150k over 5 years.

$450k after housing. Even budgeting $20k per year for all non-housing expenses leaves you with $350k which is nearly 50% down. Having "not quite a 50% down payment" after 5 years of work puts you in rare company.

tostitos19792• 8 years ago

Not sure why you were downvoted. I feel the same way. People might be going boo-hoo ... but they don't understand the point you are making. I presume you have a high paying job in a very expensive area. If you moved to a cheaper area, the job would either not be available or be at a much, much lower pay. Also, you probably pay 40+% of your income in taxes.

Just because I get a high software salary now, I have no confidence this will be the case 3-5 years from now. I feel the same.

murph-almighty• 8 years ago

Around 100k here, but living at home while aggressively paying off student loans and maxing my 401k. It's weird to effectively not be saving money to knock off debt and shove my money into a retirement account I won't see for a while.

I've also been strongly contemplating reducing my 401k contributions because I suspect a downturn is around the corner...

claydavisss2• 8 years ago

You should be much more anxious about the risk of losing a great deal of your lifetime earnings (more than enough to buy a house outright) to rent. Some people rent out of necessity; for you that is not the case.

Everyone who has purchased a home lives with economic risk.

I am very concerned that an entire generation that has flocked to expensive urban centers will wake up at age forty five as renters and realize it is basically too late to enter the housing market.

ska3• 8 years ago

There is nothing wrong with not entering the housing market so long as you have an alternative savings plan. Depending on lots of factors, of course, but you may end up much better off in the long run by renting + saving.

In the US particularly there are a number of incentives that help tilt this toward home equity, but it's not a given - it does work as a reasonable forced saving plan for people who are not thinking long term.

bitcoinmoney• 8 years ago

you work on FANG? can you expand on the line of work you're doing?

rio517• 8 years ago

This. I was lucky enough to fall for a German woman who was studying in the states. We married and moved to Berlin when we realized having a family in the US would be a struggle. We could have moved to the suburbs, but we really hate car culture and wanted to live in a biking city. I worked in tech - didn't have to learn German or jump through hoops to get a job.

Now, on a single high 5 figure salary, I'm 15 minutes biking to work and live in one of the nicest parts of the city. We have two kids in free day care. My wife works part time, and she is finishing a year off of 60% paid maternity leave. She really doesn't earn much after taxes, but we save all her income - more than 15k per year.

Salaries are lower here and things are getting more expensive for sure. But for 400k+ EUR, we should be able to buy a place for a family of four and bet set for a long time.

sneak4• 8 years ago

Having lived in Berlin for ten years, I can say with certainty that wages there are less than half equivalents in our industry in the US, and income taxes are much higher. Cost of living in some places, like Berlin, is lower (for now), but that only matters if you intend to be a low income earner over your career. I would rather have 50% higher expenses and 100-300% higher income, myself.

There’s more to lifelong financial planning than “can I afford house payments?”.

liotier2• 8 years ago

Nice - until you have kids and health problems... Then you appreciate how much Europe makes these a non-problem - at least financially.

coryrc• 8 years ago

Your children might not all be high income earners. You live somewhere like that and you're essentially condemning your (future) extended family apart and forcing yourself to stay on that same career track for a long time.

I'm jealous of one branch of my extended family that lives in one medium-cost city with a diverse set of career options and can keep their family bonds strong.

patd• 8 years ago

I think the main difference is kids. Daycare, healthcare and education is much cheaper in most of Europe (due to high taxes).

You can earn more in the US as a top earner, but you can have a more relaxed and care-free life in Europe while still making a good living and retire early if you're one of those top earners.

ItsMe000001• 8 years ago

I lived in the Bay Area for almost a decade until around 2005, the Presidio in San Francisco was my last address. I had a choice to stay - but I decided to go back to Germany. Wonderful city (for the most part), wonderful landscape, great climate, and I'll forever miss it - but different people have different priorities. I (still) don't really care where I live, but Europe (most of it) is hard to beat as an overall package deal. When you are young you don't care about much that you do care about in your forties or later.

About high incomes: What's the point of high income when you have to use it to buy things you otherwise get as part of the package anyway - or, more frequently, that no money can buy because the society as a whole has to provide it (includes the soft stuff like political climate and how much some arts of the population think they have to protect themselves from other parts)? I understand and accept when different people choose differently, but if there is only a single argument, a single data point "my income" then I see a lack of vision (almost literally).

raverbashing• 8 years ago

There’s more to lifelong financial planning than “can I afford house payments?”.

Being that the most expensive purchase one is going to make over their lifetime, while yes, there is more to that, it is an important factor.

Especially as not affording them can have a significant impact in quality of life.

arwhatever2• 8 years ago

I just moved away from Seattle after 6 years, where some argue the tech income-to-cost of living ratio might be the best in the world, due to the even higher cost of living in SF. (If I'm wrong, no matter, just substitute SF in your mind.)

Anyway upon moving away to a much lower cost of living area I've discovered one issue with the SF/Seattle-type areas is that you can't afford to be out of a job for very long, whether voluntarily or involuntarily, without the cost of living bleeding you dry.

If you don't want to live stressed out about losing your job due to bristling against some boss/company, or you might want to take a few months off from time to time to work on a personal project or just to relax, what I might do from now on is consider the pay-to-cost of living ratio of an area under the assumption that I work, say, 9 months out of every 12.

alkonaut4• 8 years ago

There’s more to lifelong financial planning than “can I afford house payments?”.

I think a key difference here is pensions and social security too.

I live in Sweden don't have any lifelong financial planning. I expect to have a decent pension coming from payments made by my employer, not saved by me (I save a little to extend it just a little bit). I expect that if I get sick I'll get by on my public and private insurances.

That is: I expect to have a whole working life where I don't need to put aside anything. As long as I afford my house, car, holidays etc - I'm fine.

There are no future massive expenses such as my own pension, my kids' college or a sudden illness. And that's also at least partially why my salary is so low, compared to a place where the salary would be required to cover an expensive education, pensions, healthcare etc.

I would rather have 50% higher expenses and 100-300% higher income

I think this is also a matter of culture. With 100-300% higher income you could argue that you can afford to take a month off every now and then, instead of having the 6w paid a german gets. But the cultural difference is that in the US, perhaps you don't. And with a huge income you can afford to take a year off after having a child. But the cultural difference might mean you can't (because management would object) and so on.

To paraphrase you: there is more to econominc planning than the purely economic too. I think americans often focus a lot (perhaps too much) on income and cost, when the real differences between countries are cultural and lies in how much holiday people take (not just are allowed to take), how long parental leaves are, and so on.

pmorici9• 8 years ago

I'm not sure what you consider the suburbs but I'm confident you could find that same situation or better so long as you looked at medium size and smaller cities or towns in the US.

mschuetz• 8 years ago

When I was living in suburbs for a few months, getting from A to B on a bike took a long time. 40 minutes to work. 30 minutes to the next mall/shopping street. Just one small house after another, with no amenities nearby. Vast low-density residential areas make for a long commute.

After I got back to the city it felt incredible to bike through it. Everything you need is within a few minutes driving distance. Work is 20 minutes on bike and I don't live particularely close to it. No worries about parking either, because there is always some place that you can lock your bike to.

dtech• 8 years ago

Berlin isn't exactly a medium or small city, and then you'd still have the problem that American cities are very car-centric.

lozenge• 8 years ago

How many different tech jobs are there at a medium size city? In Berlin hundreds of companies in a small area are competing to attract talent with the best pay, perks and work life balance. Even if you have kids and prefer stability, you get some of the benefits of that. And if a job change becomes necessary, you'll have a much higher chance in Berlin of finding a good fit without moving home or lengthening your commute.

barry-cotter3• 8 years ago

I’m not an American and I’ve never lived there but aren’t the only cities you can bike safely as a method of transport rather than exercise in the Boston Washington corridor or San Francisco?

There are many places with relatively high salaries and cheap rents for software engineers, but ones where you can live in a nice area, be 15 minutes bike from work and not have a car?

The daycare and maternity leave are probably irrelevant. The OP could probably make enough more in the US that no maternity pay and high childcare costs don’t matter much but he’d still need a car.

Also, comparing Berlin to medium size or small cities will not make the latter look good. Cultural infrastructure is much better if you’re into that. I doubt a parent of a small child has that much time to enjoy it but even just English language cultural events, meet ups etc. will be way more active in Berlin than in say, Raleigh.

cribbles• 8 years ago

You can't. US cities are uniformly car-centric. The exceptions to the rule are too expensive to buy property in anywhere close to city center.

Aside: I lived (and grew up) in several small-to-medium sized US cities prior to settling in Berlin. None come close to offering a similar range of cultural infrastructure to the typical medium-size European city, and quality of life is totally incomparable - again in Europe's favor.

maxsilver3• 8 years ago

I'm confident you could find that same situation or better so long as you looked at medium size and smaller cities

Are you certain? In my experience, there really isn't an "affordable medium size city" in the US. There are affordable suburbs of medium sized cities. There are affordable suburbs that technically lie within the cities legal boundary lines, and are so-called 'urban' (by legal/taxable status only).

But if "city" is being used as a measure of minimum density (and not a line on a map) then there is no such thing as an "affordable for families" large or medium-sized city in the US. Any urban area developed enough to have an average building height of 5 stories or higher is unafforable to the vast majority of US families.

This remains true even in the so-called "low cost of living" mid-sized cities.

tjr2252• 8 years ago

Eh....how many medium sized cities have you lived in? Most of them were designed for automobiles and are horrible for pedestrians.

CalRobert5• 8 years ago

Thinking about a change in country in a year or two and Germany comes up a lot. How is the cycling infrastructure? I understand it's not great compared to NL or DK but worlds better than where I am now (Ireland) and obviously incomparable to the disaster that is US bike infrastructure.

ocfnash• 8 years ago

Cycling infrastructure in Ireland is woeful but there are great people working to improve it: https://twitter.com/ibikedublin

They're eager for help ;-)

wolfgke• 8 years ago

Thinking about a change in country in a year or two and Germany comes up a lot. How is the cycling infrastructure? I understand it's not great compared to NL or DK

In my very culture-biased observation as a native German (who also goes to work mostly by bicycle (and if not, by tram)), I would say that the Germans who go by bike are more risk-tolerant. Where people of other cultures would refuse to go by bike, the group of Germans who love to go by bike will go by bike no matter what the cycling infrastructure is like (I know quite a lot such people). If your cycling annoys motorists, know the laws and simply tell them that you also advocate for better cycling infrastructure.

In this sense, my impression is that the central reason why the cycling infrastructure becomes improved in Germany is so that motorists become less annoyed by cyclists.

P.S. To answer your question: In NL and, I think, DK the cycling infrastructure is better (how much depends on the city; for example Münster is very bicycle-friendly). But this is not something that you care about when you bicycle in Germany (especially to/from work), since it is rather an attitude to life. Because you are convinced that going by bike is "the right thing", you will go by bike no matter how sketchy the cycling infrastructure is like.

KozmoNau72• 8 years ago

I guess everything is relative. I also fell for a German woman, who I met because she came here to Denmark to write her PhD.

As much as she likes being home in Germany for vacations, we're both pretty much settled on staying in Copenhagen. She certainly wouldn't want to live in Berlin, but of course she may be biased, coming from rural southern Germany herself.

For reference, she comes from a small town just south of Stuttgart, and she's lived in Munich, Aachen and Mannheim in Germany, and Dublin in Ireland, before moving to Copenhagen. So I figure she's got a reasonable comparison to make :-)

Copenhagen is simply outrageously amazing for biking, public transport, cultural events and food selection. I honestly couldn't imagine living anywhere else, and I've lived at both ends of the rural/urban spectrum in Denmark, as well as visited a fair few places around the globe. I wouldn't want to live in the city centre (way too expensive and cramped), I'd like to have a garden and such. But no more than 30-45 minutes by public transport to the city centre.

germinalphrase9• 8 years ago

I have heard that the cost of living is significantly higher in Copenhagen. Is that true (if you choose to live outside of the city center)?

I’m American, so the idea of emigrating to the EU feels mostly moot, but it’s fun to consider alternatives.

0x4f3759df• 8 years ago

Copenhagen is nice due to the efforts of Jan Gehl its an interesting story to read up on.

zerr• 8 years ago

But are you able to buy a decent detached house with a backyard and maybe some pool in Berlin with that income? The worst thing in Germany (and maybe in most of Europe) - most of the people (esp. millennials) live in rented flats.

thisone• 8 years ago

Why would this person make their decisions based on your personal requirements?

michaelt• 8 years ago

Berlin is at a higher latitude than London or Seattle.

For obvious reasons, very few people have outdoor pools.

jdietrich• 8 years ago

Flats are good, because they increase density. The UK has a weird cultural aversion to flats, so we have vast sprawling suburbs full of tiny houses with tiny gardens; British cities have noticeably less green space than in most of the rest of Europe. Residents in flats might not have a private garden, but they usually have a balcony, good views from their windows and access to a communal garden. New-build developments in Britain tend to feel stiflingly claustrophobic, because the developers have crammed in as many houses as the planners will allow - you might live in a detached house, but you could lean out of your bedroom window and touch your neighbour's house.

Renting is fine if your rental market is well regulated. The UK has very laissez-faire rental laws, so most tenants are desperate to own a home; Germany has very strict tenure laws, so most people are perfectly happy to keep renting.

crispyambulance• 8 years ago

    > But are you able to buy a decent detached house with a backyard and ...

People live in differently in different places. Many Europeans find the flimsy plywood-tyvek and fake brick houses we have in America a non-starter. And what's up with those sliding windows? Everyone knows windows should be hinged and have working shutters! :-)

orbifold3• 8 years ago

Ironically for a long time (and to a lesser degree even now) European politicians constantly tried to emulate aspects of the American System. This is true on the macro political scale with a „United States of Europe“ being one ultimate goal for some politicians, but also when it comes to reform higher education (the Bologna reforms) and other policies.

Yet even the most affluent parts of the US (east coast around Boston, Martha’s Vineyard etc.) have in my view never compared favorably to many areas in Europe.

It is really unfortunate that Europeans don’t have a sense of Manifest Destiny and Potential for the whole of Europe but instead fall back to nationalism, whenever a challenge like the financial crisis or refugee crisis emerges.

krageon• 8 years ago

It's not unfortunate, it's what makes Europe Europe. I'd say that if you changed the countries in Europe to be more like American states, you'd lose one of the factors that makes it the way it is today.

That is leaving aside the very loaded term "Manifest Destiny", which I originally thought was something people only used ironically. Perhaps I misread your text?

watwut2• 8 years ago

Wasn't Manifest Destiny all about territorial expansion? Cause European countries did the expansion thing and it gave us WWI and WWII. So it is kinda good they stopped.

Ntrails• 8 years ago

It is really unfortunate that Europeans don’t have a sense of Manifest Destiny and Potential for the whole of Europe but instead fall back to nationalism, whenever a challenge like the financial crisis or refugee crisis emerges.

It's not that people fall back to nationalism - it's where we all started. It's just that for a perceived mutual good politicians say "let's go for it". The reality is that Europe can only really work long term with much closer political/fiscal integration. Every politician knows that, but most have made a career of not mentioning the things that people don't want to hear.

As for the European dream - that's hard. The shared cultural capital isn't there, and it cannot be imposed from above.

sandworm1012• 8 years ago

>> European politicians constantly tried to emulate aspects of the American System.

Not today's system. The system they wanted to emulate was that of the 50s/60s/70s, which was a socialist utopia compared to the America of today.

No European politician today would suggest denying healthcare to sick children, or a return to debtors prisons. Those things are happening. Nevada is about to elect a literal pimp, a man who proudly operates several brothels, as a state representative. Things are very different today. Europe is not trying to emulate the US anymore.

bobthechef• 8 years ago

You are operating within a very simplistic -- and at this point outdated -- narrative of both Europe and the challenges facing the continent. Also, the comparison between Europe and the United States is a persistent but very wrong-headed one. The two are not comparable. States are not like countries made up of people with much that divides them, like culture, values, language, history, geopolitical interests, etc. The financial crisis was a reality check, history crashing the party, that put into stark contrast the forces, tensions, and interests that make up Europe but were simmering under a veneer of wishful thinking and cynical neocolonialism masquerading as fraternité.

Surely, European cooperation of some kind makes sense, if only to secure a basic peace and to avert war. But the dream of a federal Europe is dead, and frankly, was stillborn. It won't happen. Not only is there no path to that happening, not only has nothing like that ever happened, but it doesn't even make sense. Go ahead. Tell me what it means to be "European". You can't. There's no such thing. It can't compete with being French, German, Polish, Italian, etc. Worse, you can't even join it. The United States started as a British colonial possession (mostly) that formed the nucleus of the country. People moving to the US were joining a society that had already existed, even if loosely. There is no "European" nucleus and you couldn't impose it on Europe even if it wasn't a vacuous idea. Every attempt to unify Europe failed. It was always and can only be an imperialist endeavor. Right now, it's largely a German play. Look at Merkel. She has no position in the EU and yet is treated as if she had. That's not a coincidence. Nobody wants to be part of some crypto-German empire. Those who do move to Germany.

This is why we're seeing Central/European European coalescing into a web of alliances based on the historical and present need to form a cohesive bloc able to repel both German dominance and Russian aggression. It is a geopolitical necessity and an act of self-preservation. They don't want to vegetate in a state of permanent neocolonial mediocrity. They didn't throw off the yoke of Russian dominance just to become a second-class corral of cheap labor and an economic dumping ground for Germany and other Western countries. They don't want to be what Piketty calls "foreign-owned countries". A federal Europe wouldn't magically dissolve the power relations in Europe, it would formalize this dominance under the guise of unity, cooperation, and some "new European man" nonsense. Gee, where have we heard that farce before.

A better solution, grounded in the hard facts of reality and not insipid bromides, is to respect national sovereignty and to maintain a forum or forums for fostering, organically, European cooperation and the resolution of disputes. The US will play an important role in maintaining the geopolitical balance.

P.S. Manifest destiny make no sense in relation to Europe, and it is a dubious concept anyway.

jklinger4105• 8 years ago

We could have moved to the suburbs, but we really hate car culture and wanted to live in a biking city.

Oh, so it is totally possible. But not if you want to live in a big city.

chrisabrams• 8 years ago

There are plenty of cities in the US where this is possible but they may not be as desireable. Europe has a couple thousand years advantage on the US in offering cities vs suburbs.

vostok11• 8 years ago

I feel like every statement of that form has an implied "with the lifestyle that I want".

If you remove that constraint then it's always possible for a software engineer because they make more than average and that average person does live somehow.

and0• 8 years ago

There's no way a single software dev in the States could live that close to work, in a nice part of a major city, and also be able to afford space to house and take care of two kids. So his story seems pretty relevant.

Besides, if you're going to do software dev you typically need to be in a city to have options, so the squeeze factor is still there. I can attest to this as well; I'd much rather take the lower rent and live further out. I never even do anything in the city.

madeuptempacct• 8 years ago

My understanding is that dev salaries are dramatically lower in Germany, England, and Switzerland - the only European countries where you would even consider going to work in tech.

blobbers• 8 years ago

Urban design in the United States and North America has generally been evolved in a way you'd expect. Larger spaces caused people to spread out further. North America is a (relatively) new place where people seeking land struck out from their ancestral homes for places with space.

The return to urbanization and need to be around other people is only now really starting to take hold as people see the benefits of european cities, which by North American standards are ancient.

Maybe they were that way for a reason? Imagine that...

For comparison: https://www.worldatlas.com/articles/european-countries-by-po...

https://en.wikipedia.org/wiki/List_of_U.S._states_and_territ...

CalRobert5• 8 years ago

Regarding salaries...

I work in tech. I make less than I would in the US (though with a new job that's fully remote, the delta isn't as big as it might be).

My wife, however, makes a good deal more than she would in the US. She doesn't work in tech.

Also, she gets a full month off a year. 6 months' paid maternity even if the job itself is crummy. Paid public holidays (or double-pay if she has to work).

On top of all that, we don't have to drop thousands of dollars a year on car ownership.

It's worked out pretty well.

kylestlb3• 8 years ago

The USA tried to balance this with crazy tax rules and brackets, where you will get rewarded if you massively out-earn your partner. My buddy was actually lamenting the fact that his wife got a nice raise at the public library because it would actually mean less take-home money after tax day.

sgregnt• 8 years ago

When you compare your salary do you include taxes and differences in the commodity prices?

tmaly• 8 years ago

I have two neighbors, one from Germany and one from Austria. Both have extended their work contracts here in the US. They both told me they are staying for higher pay and lower taxes.

The German family gets a good amount of subsidies from the company to stay here in the US, so I think that has to be one of the primary factors in them deciding to stay.

lg• 8 years ago

of course, then they have the luxury to go home to a country with universal healthcare in case of, say, lost job due to serious/chronic illness.

magduf5• 8 years ago

Basically, the US is a good place to stay and work and make a lot of money that you can save up, but it's a terrible place to have a family. So if you're a foreigner, it pays to just retain your foreign citizenship, stay in the US a while and save up a big nest egg, then eventually go back home to settle down and have a family and enjoy living off your nest egg.

Mvandenbergh• 8 years ago

High earners, in good health, and especially with no kids will definitely make more money - even after costs for healthcare - in the US.

The difference is in how protected they are from downside risk. You can even price it if you want: how much would it cost to buy a level of income and health protection in the US equivalent to the German safety net? Germany by the way isn't that generous by Western European standards. I'd be interested to see someone price it - my suspicion is that it would be ruinously expensive.

Of course, German nationals have the option of returning if they have to. They can earn in the US if their life circumstances make that possible while fleeing to safety if required. It's a pretty valuable option.

Melchizedek• 8 years ago

It's not just the welfare state that makes this possible, it's maybe more so the fact that (as far as I understand) Germany has a functioning housing market, and Berlin especially is very cheap for such a big city.

In many parts of Europe housing costs would have killed you.

organsnyder• 8 years ago

Any ideas why Berlin has such an affordable housing market?

angmarsbane• 8 years ago

My mother, sister and I are applying for Italian citizenship so we can move and work in an EU country more easily. My brother is a university student in Germany with no plans to return to the USA.

For my partner and I the drive to move to the EU is the opportunity to have a good family life. A reasonable commute (30 mins or less, and the option to bike or take public transit), a modest home, reliable childcare, and predictable healthcare. Your current life is our goal!

softawre2• 8 years ago

A 400k home in a ~80k salary, thats 5x what you make.

I make 150k and live in a 300k home in the midwest. I do like the privacy of my area (you'd call it "car culture" for sure), so tradeoffs, I guess.

timwaagh2• 8 years ago

i would love to participate in this discussion. unfortunately i cannot, because although i do not have to complain about money, unfortunately my financial situation is not so amazing it would be smart to throw away money on a NYT subscription.

chrisseaton2• 8 years ago

There is a rule in this site against complaining about pay walls.

timwaagh2• 8 years ago

my bad. i thought the rule was against pay walls itself. maybe something changed.

edit: cannot find any rule on this in the guidelines. perhaps you could give me a reference.

sdf43543t345• 8 years ago

* delete cookies or * block cookies = free NYT

pmorici9• 8 years ago

Is it just me or do these articles about economic hardship always seem to use the most unsurprising examples for their prototypical struggling subject. The example they use here is freelance writer. Hasn't that job title always had poor prospects? I remember a similar article posted here about people struggling to find work after the 2008 crash and their example was a person who had been laid off but instead of trying to find a new job they purposely blew through their savings for a couple years and were then surprised when they went to look for work and something didn't immediately materialize.

ForHackernews• 8 years ago

One of the other examples in the same article is a middle-aged aerospace engineer, so maybe that's more to your liking.

pmorici9• 8 years ago

Sure, that's more plausible to the central point they are trying to make.

troupe3• 8 years ago

An aerospace engineer who decided to become a personal chef and went into deep dept at a culinary school. I'm guessing this individual is a bit different than the engineers I know.

dalbasal2• 8 years ago

There are all sorts of aspects to this. In terms of the bigger, longer term trends, I think the dynamic described by Thomas Picketty is the most important aspect. Long term trends towards increased wealth disparity.

On the other hand, at the micro level people actually experience, I think the cultural dynamic is more important. It determines how people feel about the economy.

The people she talks to believed their educations and backgrounds (most of them grew up in middle-class homes) would guarantee some financial stability

Upward mobility is ideologically important to any major, modern political camp. Few deal with downward mobility in any way. Individuals will have a much tougher time politically tolerating being poorer than their parents (or their cohort) than just being poor. Losing is more emotional than winning and the grudge lasts longer than the opposite.

Ideologically, I think most of us would say that social class should not be inherited. Emotionally, few of us can live with downward moves in the economic hierarchy. It creates an unmistakable feeling of having been robbed of one's birthright.

branchless2• 8 years ago

Nope this guy has a good job. Not about mobility. This is about rentiers. People need to read "Progress and poverty" by Henry George. Land prices are the issue.

dalbasal2• 8 years ago

Not having a job isn't the only way to move down a tier. I think what a lot of cohorts are feeling (the economy is broken) comes down to (1) middle class upbringing (2) did the things middle class kids are supposed to do, like college, "professional white collar job" (3) results are worse than expected.

People's expectations can be set all sorts of ways, but the most obvious is comparatively to the group they believe they are or shoybe part of. Ie, parents, friends...

This is all at the personal level. There are also macro trends and dynamics in the economy overall. Haven't read George, but Picketty (recent Nobel laureate) has a very good theory for this. I don't know how George uses "rentier" but "returns to capital" probably encompasses.

pierotofy• 8 years ago

Book can be downloaded from http://www.gutenberg.org/ebooks/55308

mruniverse2• 8 years ago

Is it worth reading or is it just about how things are more expensive and we don't make enough?

throwaway73122• 8 years ago

It's that, + "middle class going broke after being conned by Trump University & the gig economy."

mruniverse2• 8 years ago

I like the writing from Paul Krugman. He tries to explain systemic reasons for inequality.

EZ-E• 8 years ago

Where did the money go?

teekert3• 8 years ago

Honestly as a Dutch man with a family but only one income (the norm about 40 years ago), we are are also really at the edge. And I have a relatively decent income (1.5-2 times modal as we call it). And where does all that money go? Well, more than 25% goes to interest on our mortgage. We get some of that back but from tax money so it's a cigar from our own box.

Whatever we earn more as a family is taken away by the banks by allowing us to loan more, which increases housing prices, which increases the interest they receive. Our economy is very much rigged to keep everybody working near full time to be able to live.

lifty2• 8 years ago

Do you have an opinion about what caused this situation where people are in a constant chase to keep up with their expenses, especially in Netherlands? I have my opinions but I am really curious what is the perception of a middle class western person. Thanks!

abhinavkulkarni4• 8 years ago

Loosening of regulation and cheap influx of money, on the whim printing of money by the Fed. Case in point, the current situation with student loans.

It's politically beneficial to make slogans about housing for all, education for all, etc. and then institute policy to distribute cheap money. Least time we did that, you know what happened (2008).

teekert3• 8 years ago

I think it is housing prices. Banks sign money into existence as your debt. And then you work to pay it off plus interest. We bought our house from a single old lady for about 195.000 euros (plus 40.000 for restructuring and then some for taxes), this woman bought this house in the sixties for 19.500 guilders (8.850 euros), she got about 186.000 euros just for living there for 50 years.

Meanwhile we pay the bank 4.85% of 245.000 yearly for 30 years (ok, it's less now for sure) but that 4.85% would amount to 349.000 euro's for the banking system, just for signing my debt into existence. In this way they constantly squeeze society.

If you do the math you see that you pay over 300 a month to decrease the debt while paying about 1000 in interest. If housing prices rise more than wages at some point both parents have to work full time and can afford less and less luxury items. Then we are at "maximum squeeze".

Can you imaging that my parents once payed 12% mortgage interest! of course houses were cheaper then (this was early 80's) but still.

People with 2 incomes by the way can save a full income (although I know some people that really can't afford to have one parent at home), they really don't feel anything, but banks are eating away are our wealth people, wake up. And when the banks fall because they took to much risk, they require our money again, to be saved!

dbatten3• 8 years ago

This raises two questions in my mind:

I admittedly come from a very privileged background (in terms of both an upper-middle-class family and genetics), but how have so many people found themselves in places where it's so hard to make ends meet? My parents paid for college (like I said, admittedly privileged) and the State of North Carolina actually gave me free tuition and paid me a stipend to get my Master's degree (free/cheap government education is a benefit which you don't have to be privileged to get, at least not as privileged). I chose the "wrong" programs from a job prospects / earnings perspective - Sociology and Public Administration. I still managed to fall into a career as a data scientist. I'm not paid a bay-area salary, but then the suburbs of Raleigh/Durham don't have a bay-area cost of living either. My wife and I have a bigger house than we need, drive two old (2005 & 2009) but functional cars, have two kids, take a reasonably nice week-long vacation each year, and give quite a bit away, all on one salary. We've both made sacrifices to be debt free other than the mortgage, which helps. Most of my close friends went to very reasonably-priced state schools (e.g., NC State University), got the "right" degrees, and are now gainfully employed and able to support a family. Do I just live in that much of a bubble? Are my and my friends' experiences really that out of the ordinary in America in 2018?

Second, is it just because I'm young? This article suggests a lot of programmers/engineers end up being un-hireable by middle age, and struggle to find another career to make ends meet. Does that match the experience of a lot of folks here? From my perspective, most of the middle aged programmers/engineers I know have just moved on to become software architects, managers of development teams, CTOs, consultants, etc. - in other words, they're doing even more lucrative work facilitated by their years of experience.

RubenSandwich• 8 years ago

I'm sorry but you do live in a bubble. Here is a UN report on poverty and rising inequality in the USA: https://digitallibrary.un.org/record/1629536/files/A_HRC_38_....

Here are a few notes from the report:

* In September 2017, more than one in every eight Americans were living in poverty (40 million, equal to 12.7% of the population). And almost half of those (18.5 million) were living in deep poverty, with reported family income below one-half of the poverty threshold.

* In the OECD the US ranks 35th out of 37 in terms of poverty and inequality.

* The youth poverty rate in the United States is the highest across the OECD with one quarter of youth living in poverty compared to less than 14% across the OECD.

* US healthcare expenditures per capita are double the OECD average and much higher than in all other countries. But there are many fewer doctors and hospital beds per person than the OECD average.

* The Stanford Center on Inequality and Poverty ranks the most well-off countries in terms of labor markets, poverty, safety net, wealth inequality, and economic mobility. The US comes in last of the top 10 most well-off countries, and 18th amongst the top 21.

* According to the World Income Inequality Database, the US has the highest Gini rate (measuring inequality) of all Western Countries

The truth is poverty and inequality is uncomfortable and pushed to the edges of society.

dbatten3• 8 years ago

I don't disagree with any of this being a reality, so thanks for the post. At the same time, I'm not sure it quite addresses what the New York Times piece was getting at, or what I was trying to get at. (Sorry if I was being unclear.)

Most of the UN stats are about poverty and inequality. But the NYT piece wasn't talking about poverty, and I don't deny that there's a small portion of the population stuck in a trap of cyclical poverty - I can see that every day. I also don't deny that inequality has been rising - every time I see a news update on Jeff Bezos' wealth, I'm reminded that his net worth is going up _way_ faster than mine is.

But what the NYT piece (slash the book it was summarizing) was _actually_ focused on was a changing experience for the American middle class - the Americans that aren't stuck in poverty, but also aren't the rich. The author was arguing that there's been a shift in the middle class experience... that you can now grow up in the middle class, do all the "right" things career-wise, and still find yourself struggling to make ends meet and keep up the standard of living associated with a middle class lifestyle.

All I'm saying is that, in the experience of me and my friends, that doesn't seem to be representative of middle class America over the last 10-20 years. Sure, I don't live in a McMansion and drive a nice new car, so maybe I don't define the middle class lifestyle as aspirationally as some people do. But the vast majority of middle class people I know seem to be finding it relatively straightforward to get an education, find a job that pays reasonably well, and start a family, without struggling to pay the bills.

frockington8• 8 years ago

I don't understand the inclusion of wealth inequality stats. How do rich people making more money affect the "average" American? The idea of forcing an upper limit on wealth is the exact opposite of the American system.

leetcrew4• 8 years ago

personally i think the situation is fairly exaggerated. anyone who gets through an undergrad program in CS can probably live like you if they are smart about debt and adjust their expectations (ie, not living it up in NYC/SF).

that said, the main thing that gets people is educating their children. a lot of highly desirable places to live as a single person or young couple have pretty bad public school options. the places with good public schools are genuinely expensive in a lot of locales. take a look at home prices in areas around you with good schools and/or look at private school tuitions and you might see how professionals with kids can start to get squeezed.

JKCalhoun4• 8 years ago

anyone who gets through an undergrad program in CS

Yeah.

severine• 8 years ago

LOL. Yes and yes, but mainly it's your privileged genetics.

Lo que hay que oír...

mbroncano• 8 years ago

Which also seems to pretty much indicate where root of this issue lies ...

justin666• 8 years ago

the State of North Carolina actually gave me free tuition and paid me a stipend to get my Master's degree (free/cheap government education is a benefit which you don't have to be privileged to get, at least not as privileged).

If having your advanced education paid for doesn't make you "privileged" you might as well stop using the word since it no longer has any meaning. I mean, seriously.

PurpleBoxDragon5• 8 years ago

Is a kid who studies and gets all A's in class privileged with getting the reward for all A's? Generally the idea of privilege is dealing with something you didn't work for. Having your parents pay for college? Privilege. Earning a scholarship anyone can earn? Not privilege.

The issue is with privilege that impacts what you can earn, but compared to someone born with a mental disability due to lack of nutrition while developing (or maternal drug abuse in pregnancy, etc.), everyone born healthy is privileged by a great deal.

dbatten3• 8 years ago

The point is that anybody from any background could have gotten into the same advanced degree program and done the same work/study arrangement that I did. In fact, the program was super diverse in terms of race, gender, and socio-economic background... very intentionally so.

golergka2• 8 years ago

Quart describes her own experience of slipping into the “falling middle-class vortex” after the birth of her daughter seven years ago, a time when she and her husband were freelance writers facing new child care costs and hospital bills.

TBH, couple of "freelance writers" deciding to have a child sounds like recipe for financial disaster right from the bat. I understand that "freelance writer" is a broad term, but most of the writers I know are very far from affording a child or two.

I understand that having a child, unlike, say, buying a sports car, is a luxury a lot of people around the world decide to indulge in even if they don't really afford it. But if you spend money and resources on something you can't really afford, at least be honest with yourself about it.

z0r2• 8 years ago

Raising children being relegated to luxury status is a symptom of an oppressive and/or failing economic system.

golergka2• 8 years ago

Not at all - it's a sign of an economic system that finally accounts for ecological externalities. If we want to save the planet, human population needs to stop growing. So, on average, a person should only be able afford one child. And when you remember that wealth inevitably follows a pareto distribution, it's obvious that most families won't be able to afford any children at all.

dqpb• 8 years ago

They are people on the brink who did everything 'right'

One of my favorite lessons of software engineering: it doesn't matter how right you think you are.

notacoward• 8 years ago

People often lump freelance/contingent work and the "gig economy" together, but they're actually two different things. Yes, both are often used to avoid the cost of taxes and benefits, or to gain flexibility and not have to lay off regular workers if the business doesn't thrive. However, freelance and contingent work has generally been about hiring people who chose to work under those terms, to accept the uncertainty and some of the costs in return for gaining their own kind of flexibility or a higher hourly wage. The gig economy to a large degree seems to rely on a pool of involuntarily unemployed (or under-employed) people who would very much prefer to have a more regular job with a more regular paycheck if only they could find one. If the economy, or economic policy, changed so that there were more decent jobs available, the freelancers and contractors would go on as they always have but the gig workers would all bail and the gig-economy companies would have to make some serious adjustments to stay in business (if that would even be possible in such a different labor environment).

rdlecler1• 8 years ago

High housing prices are a massive tax on both middle class and investment. It all flows to landlords and lenders. Cut housing prices by 1/2 - 2/3 and the middle class has money for other things. We need an Elon Musk for housing.

cozzyd3• 8 years ago

Hate to break it to you, but none of the products Elon Musk is peddling are meant for the middle class.

abhinavkulkarni4• 8 years ago

Well, Tesla is transitioning from luxury cars to the mainstream ones.

Secondly, how about reducing our reliance of fossil fuels and instead using electricity for driving the cars (I know, I know, electricity comes largely from fossil fuels, but net, it is beneficial to use it for driving cars than gas)? That's not going to benefit the common public?

rm_-rf_slash• 8 years ago

Starlink?

dionidium4• 8 years ago

The problems facing housing are regulatory in nature. We don't need a savior from the investor class. We just need to make it legal to build more housing.

There is nothing confusing about it. There's no difficult problem that needs outside-the-box solutions. It's currently illegal to build as much housing as we need.

Make it not illegal.

JTbane• 8 years ago

The problem is that owners of property want their holdings to increase in value, so they will always torpedo any laws that would make it easier to build affordable housing.

kindatrue2• 8 years ago

Voters (who generally skew towards homeowners) unsurprisingly hate more housing.

It's like half the tweets on https://twitter.com/nextdoorsv

Also, in California, building more housing is a net negative for city finances due to Prop 13 (1978) passed by citizens.

carapace• 8 years ago

In the San Francisco Bay Area you could remove all legal and social barriers to development and the best you could do would be running-to-stay-in-the-same-place.

"Employment, construction, and the cost of San Francisco apartments"

https://experimental-geography.blogspot.com/2016/05/employme...

Building enough housing to roll back prices to the "good old days" is probably not realistic, because the necessary construction rates were never achieved even when planning and zoning were considerably less restrictive than they are now. Building enough to compensate for the growing economy is a somewhat more realistic goal and would keep things from getting worse.

- - - - -

I'm a Bucky Fuller fanboy. One of his ideas was factory-built helicopter-delivered homes that installed on a single mast (low site prep costs) and had all plumbing, electrical, kitchen, etc. pre-installed. You could roll out a neighborhood in less time than it takes to build one regular house. He was stymied by resistance from the construction industry, they didn't want to see their jobs vanish in a puff of automated efficiency. At one point they were going to require all the innards of these "Dymaxion Houses" to be installed on-site just to make work for the crews.

Our problem isn't that we need a technological savior, we already had one! Our problem is that we won't apply what we already have to efficiently solve our problems.

Did you know that early light-bulbs didn't burn out? There's a bulb in Livermore that has been lit for one hundred and seventeen years.[1] Modern light bulb break because they are built to. This kind of b.s. is all around us. We're living well below our possibilities as a species.

[1] http://centennialbulb.org/

dangjc2• 8 years ago

I'm in the bay area, and the main thing that is expensive is housing. Groceries are cheap. Eating and drinking out are the same as other cities. To help the middle class, remove restrictive zoning policies. It's a uniquely American problem because these policies were the product of racism. Requiring single family homes kept out poorer, usually black, renters.

frockington8• 8 years ago

How is it a product of racism? I always assumed it was due to the city's constituents wanting to protect their real estate invesments

kindatrue2• 8 years ago

Err... you may want to visit some more US cities. Eating and drinking out is definitely cheaper in Chicago, San Diego, Boston. Heck, lunch is cheaper in many parts of Manhattan than Soma.

In fact, it has to be that way given the housing/cost structure of the Bay Area and its ripple effects: https://www.nytimes.com/2018/06/25/dining/san-francisco-rest...

abhinavkulkarni4• 8 years ago

How is eating and drinking cheap in the Bay Area? A $4.25 latte with tips and taxes easily adds up to $6.50-7.00. That's a lot of just a cup of latte.

Add to that imminent price increases due to impending minimum wage hike in SF in July.

gascan6• 8 years ago

It's a uniquely American problem because these policies were the product of racism

So America is the only racist country?

rootusrootus2• 8 years ago

I visit SF periodically and my experience has been that eating out is at least twice as expensive as PDX. I spend more on eating breakfast in SF than I spend eating dinner out in PDX, it's crazy. Even groceries seemed 1.5x more expensive when I did some shopping down there.

firstplacelast• 8 years ago

NIMBYism has adversely affected more Americans than Russia. So I think it's fair to say that NIMBYs are more Anti-American than Russia.

Time for NIMBY concentration camps??

projectramo• 8 years ago

I can tell the ages of people posting on here from their comments.

I love Berlin because of the nightlife and culture. 20s.

I love Berlin because of the free schooling. 30s and 40s.

I love Berlin because of the free healthcare. 50s+

mrfredward• 8 years ago

A lot of things in America are really cheap, but there are a few areas where we are denied cost effective options. I like colleges as an example because you don't need any domain specific knowledge to see the excess.

I went to a cheap state school. The buildings were made of red brick, the paths were paved with brick and replaced every 3 years, and the gardens were meticulously maintained...the place was meant to look like a palace, and this was one of the most cost effective options I could find. If I don't strike it rich, I'll probably never live or work in a place as fancy as where I went to school.

Of course there are ugly colleges too, but the point is that the price of tuition includes a lot that has nothing to do with education, and a lot of this is stuff people wouldn't pay for if given the choice.

Does it make sense to pay for an upper middle class lifestyle when you're a broke 19 year old? Don't worry, the government will give you a loan...

troupe3• 8 years ago

the price of tuition includes a lot that has nothing to do with education, and a lot of this is stuff people wouldn't pay for if given the choice.

This is a very good point. There are colleges that are quite a bit less expensive, but as a whole the fact you can get a loan for pretty much any amount without needing to justify the return on investment guarantees that colleges will keep increasing their expenses to get students to spend their debt at their school.

downrightmike2• 8 years ago

On undergrad, there is a life time limit of $60k, so expect the average cost to go up to that. And then the limit will be increased.

speeder3• 8 years ago

I am Brazillian

Still, sadly that stuff also applies here...

Me and my friends around my age, that were born in solid middle-class families (of the sort that could own only one car, a cheap house or apartment and so on), were taught that the path of life was: go to college, get a job or public sector job (here in Brazil those are popular), marry, have a boring life.

Instead we went to college paid with crazy loans, found no jobs, jumped around from gig to gig trying to repay the loans, people don't want seriosu relationships, only flings, and now I am 30, living back in my parents house, still with no job.

A 30 year old college friend of mine that is excellent designer and know some coding, is living on his parents home with his kid (no wife), to pay the kid bills he found a illegal-ish gig as construction worker, and after he lost that job, he can't find a new one.

My grandparents used to tell me what was their "poor life", where they had to walk to school, work their asses off early, date in front of dad of the bride, eat eggs because other food was expensive...

Now we have a "rich" life, with cars (that belong to parents, I never could afford my own, neither my friends), computer, internet... but can't afford our own house, we can't "work our ass off" because there is no work, eating enough protein in some months have been hard, as food prices inflated way beyond the wage growth and what is affordable now is basically cereals and starchy foods (like potatoes), and your food choice become: eat enough nutrients and baloon in size wildly as all food availble has too much calories comapred to other nutrients, or control your calories, have nutrient deficit...

To me is no surprise people live in slums or invaded areas, one time I rented a apartment with cracked walls, non-working fire alarm, elevator that often had issues (like operating with doors open and stopping 20 centimeters off-level), no garage, and the rent was 4 times the mininum wage, I could only afford living there when my income due to some coding contracts landed me in the top 3% highest earners of the country... made me wonder, where everyone else was living. (or one time I shared a normal 3 bedroom house, with literally 35 persons, most of them already had bachelor degrees, several in STEM, and were there to train in a nearby police academy, hoping such dangerous work was better than having no work at all in their own field)

somethingsimple3• 8 years ago

Wow, things have gotten really bad since I left the country. Mind if I ask in what state you live? I never had trouble finding a full time programming job in Rio Grande do Sul.

speeder3• 8 years ago

I am in São Paulo

I never got full time job offer, only contracts, some that were joblike (ie: company treated me as actual contractor but expected me to be present 9-5 every day in the office).

When I was fresh out of college I did got some offers for part time work, but with wage so small it wouldn't cover any of my costs at all (for example wages were smaller than my monthly debt repayments of student debt alone).

st1ck2• 8 years ago

Does something prevent you or other STEM guys from freelancing or finding a remote job?

bdamm• 8 years ago

Immigration laws? Sufficient social mobility to build the requisite contact network? It's not quite as easy as hanging a resumé out on github.

yourapostasy4• 8 years ago

...eating enough protein in some months have been hard...

Do you happen to have enough space for raising rabbits? If you cook a lot of fresh vegetables for your family and yourself, then there is almost certainly enough to feed the rabbit from the trimmed vegetable scraps, and nearly any restaurant would be happy to give you vegetable scraps if you ask and arrange for it ahead of time. If you have more time than money, then this might help your protein deficiency.

Start with one rabbit, then a breeding pair if you can get over the butchering part. Otherwise, a couple of chickens will yield lots of eggs, some of which you can trade for other proteins.

Rabbits and chickens can be raised in most apartment-scale situations, but the key is setting aside enough daily time to diligently tend to them. Usually only 15 minutes a day is sufficient, but YMMV.

mathiasben• 8 years ago

It's the concentration of wealth causing this as the economy is being bled dry. the fix is to restore the progressive tax code, income in excess of $5M/yr taxed at 99%. not rocket science, but nearly impossible because politics, so get used to being poor America. currently half of jobs in usa pay less than $18/hr. only going to get worse unless the root cause is addressed.

CNJ7654• 8 years ago

This just in! Most major businesses moving outside of the US pending radical tax code reform!

matthewwiese• 8 years ago

Your comment was dead but I thought I may as well vouch it. Although you wrote your point in a snarky tone, taking large corporations into account when discussing this topic seems at least halfway in good faith.

FWIW I too am a jobless Millennial at the moment, so it's not like I am playing devil's advocate because of a nefarious hidden agenda.

EDIT: Spelling.

kindarooster• 8 years ago

I wish I heard this view on taxes more often. Have a nice smooth tax curve up to like 95% at some income level (5 or 10 M). The rich are not taxed anywhere close to enough.

rich-and-poor9• 8 years ago

If someone figures out how to make 5M/year of income, I am absolutely certain they are better at capital allocation than the current administration. You are suggesting that they are not, and that we need to have the state decide where the money of the top earners go. I'm sorry, but we have tried that before. It does not end well.

gok4• 8 years ago

A 95% tax on incomes over $5M/year would raise about $100B per year in the US. That would be about a 3% increase in total federal revenue. Even if that were directly redistributed, every American would get a $400 check. It would not affect income inequality measurably.

tjr2252• 8 years ago

I think the pendulum is bound to swing that way...hopefully sooner rather than later.

rich-and-poor9• 8 years ago

Hopefully sooner? I think, hopefully never. As soon as you take the money away from the geniuses, the insanely industrious businessmen, and allow the lame bureaucrats and politicians to decide where it goes, then you destroy a generation: No more will angsty, thirsty, motivated young bloods work 20 hour days for a decade to build a business.

rich-and-poor9• 8 years ago

EDIT: I rewrote this comment because I thought it was too combative, and not with the guidelines.

So. I think that the idea that we should tax the high earners of their entire income is a very bad idea! Would it not destroy the motivation of those top earners to work hard, to keep innovating, and to strive for success? It also makes the assumption that, should we take the income away from the top earners, that the state will do a better job at putting that money back into the economy. I think that assumption is incorrect. A person who has figured out how to make 5M a year, whether it's through advertising or a manufactured product, is probably better at capital allocation than a bureaucrat or politician.

You also mention that "the root cause needs to be addressed." Unfortunately, we don't know what the root cause of wealth inequality is, and all historical attempts at "fixing the root cause" with wealth redistribution have ended in catastrophe; we really do need to remember that because your comment is quite similar to Marx's famous quote "From each according to his ability, to each according to his needs". In fact, unequal distribution of resources is a natural law, called the Pareto Principal, and it is everywhere: The height of trees, number of progeny of chimps, number of players that win Monopoly in a given game... Inequality is not an evil force, it is a natural force that has been fought historically at the great peril of the populations that decided to fight it.

Now, perhaps there is some variation of this progressive tax law that encourages investment. Perhaps that is even suggested in your comment. I would be open to something that allowed people to have 5M/year in income, but above that, they were heavily incentivized to invest.

munificent2• 8 years ago

taking all the money from the businessmen that are most effective will demolish what is left of the economy, overnight.

Do you have any data showing that top marginal rate negatively correlates to economic growth?

I'm looking at the charts right now and, if anything, a high marginal rate appears to lead to greater growth.

gok4• 8 years ago

Extremely progressive taxation isn't effective. The very rich have ways of hiding or deferring income.

There's also the problem that there simply isn't very much money at that level. Just to put it into perspective, the top 1% of tax payers only had an AGI of about $2 trillion. Let me get even more extreme than what you propose. If you taxed at 100% over $1M/year, you'd only get $431 billion. So that would only add about $200 billion (about 15%) of Federal revenue per year since they're already paying about half of that on earnings over $1M/yr. Oh yeah, BTW, how would they pay local and state taxes out of that?

xenadu02• 8 years ago

Then close the loopholes.

The long-term alternative is revolution where the rich are lined up against a wall and shot.

There is no natural law guaranteeing a right to private property. Nor is there anything guaranteeing wealth shall accrue to the wealthy. We could just as easily make it the law that accumulating net assets > $10m is punishable by death.

This same pattern has repeated itself many times. The people at the top accumulate all the money, the economy grinds to a halt, the 0.1% use propaganda and control of state power to suppress any attempts to change the status quo (whether violent or not), then eventually the system collapses under its own weight. The outcome is often quite bad for everyone but since the 90% have nothing to lose that hardly matters.

Unfortunately it was fear of communist revolution kept capitalism in check. Now nothing does. I fear we're going to continue our slow slide downward, with ever more cuts, voter suppression, and various fascist policies in an effort to control "the people" and prevent change. Without a relief valve pressure will just continue to build until it can't.

amelius2• 8 years ago

The problem is the rich using their wealth for more wealth accumulation, e.g. through rent seeking. Even if progressive taxing doesn't get you much money directly, indirectly it will improve wealth through a better wealth distribution.

In other words, it is no problem that the rich have more money; the problem is them using that money against the rest of us. If you don't see how, try entering a game of Monopoly a few rounds after it has started.

itchyouch5• 8 years ago

It's not the additional tax revenue that becomes the benefit. If anything above X amount gets eaten by tax, then it makes sense to increases business spending by:

- reinvesting into the business (cascades to more economic activity)

- paying for more employee benefits

- increasing employee compensation

- the cascading economic activity provides even more people with opportunities to make more money. virtuous effects.

softawre2• 8 years ago

The problem isn't the tax rate, it's the growing wealth inequality. Since you seem to have thought much about this already - do you agree it's a problem, and how would you fix it, if not for progressive taxation?

dragonwriter2• 8 years ago

Extremely progressive taxation isn't effective.

It pretty clearly is, which is why each downward shift of the nominal tax burden in the US (stretching back to the income to payroll tax burden shift under Reagan) has had noticeable effects on accelerating inequality.

The very rich have ways of hiding or deferring income.

Mostly, as a direct result of tax policy directly designed to frustrate tax progressivity, most notably giving preferentially low tax rates to kinds of income mostly earned by the rich (long term capital gains are a big example), and loading up extra taxes (on top of normal income taxes) on labor income.

Making taxes more progressive is less about increasing progressivity in nominal rates as it is about addressing those issues (though making the nominal rates more progressive may also be part of it.)

aantix• 8 years ago

How is the U.S. economy being "bled dry"?

96% of the population have a television. 90% have a cell phone. 80% have access to the Internet. Catastrophic healthcare is now capped, and low-income families are subsidized on health plans. Public education is mandated and provided everywhere. Public libraries are available in virtually every city.

itchyouch5• 8 years ago

The truth probably lies somewhere in between you and the OP.

Most of the things you've mentioned are at the top-half of Maslow's hierarchy of needs. For many, they are one pay check away from homelessness.

Public education, while mandated, is not equal, as property taxes pay for education across most of the U.S, which equates to, rich folks/better neighborhoods having access to better funded schools.

There was a hackernews comment some time ago that pointed out that the fundamental problem seems to be that over the years, the distribution of risk has moved from institutions to the individual. The individual bears the brunt of the risk, with cascading burdens tied to small emergencies.

The oft cited scenario of low-income folks losing their job due to car troubles, thus being on the brink of homelessness, due to non-payment of rent is becoming more of a reality for the middle class.

ntsplnkv25• 8 years ago

A television is a sign of wealth? TVs can be bought for $100 nowadays.

Cell phone? You can get those EXTREMELY cheap.

Define access to the internet?

Catastrophic healthcare is now capped, and low-income families are subsidized on health plans.

This is simply untrue. Many changes Obamacare made have essentially been gutted by the current administration.

Public education is mandated and provided everywhere. Public libraries are available in virtually every city.

Public libraries have been around decades as has public education.

mcantelon• 8 years ago

Outsourcing and automation still have much of the economy to eat in America and the rest of the West.

User232• 8 years ago

Funny how the word "immigration" never appears in these articles. Any intellectually honest assessment of the waning American middle class needs to consider the overwhelming post 1965 demographic changes.

Regardless of your personal feelings on the matter, adding tens of millions of very poor people to a population over the course of decades is, as a mathematical certainty, going to reduce the median wealth of the population.

Then add to that dynamic effects such as increased demand for housing and other necessities, higher taxes to cover increased costs of health, education, welfare, and so on, and it's no wonder the fading middle class is getting squeezed.

kylehotchkiss• 8 years ago

https://www.recode.net/2018/1/12/16883260/trump-immigration-...

"Immigrants and their children have helped found 60 percent of the most highly valued tech companies in the U.S"

User232• 8 years ago

I was very careful not to make any value judgments or even prescriptions. I'm simply looking at facts and reasonable inferences from them. Some people will prefer to conclude that immigration is bad and should be reduced. Some people will prefer to conclude that immigration is great and should be increased. In the vast majority of cases people's preferences appear to align with their own perceived self interest. The people down-voting this post and my original one are assuredly members of the latter class.

Immigration isn't a binary issue. One can reasonably conclude that tens of millions of poor uneducated foreigners are bad for the US population median wealth distribution, but tens of thousands of educated entrepreneurial foreigners are good for it. One can also do so without succumbing to the puerile some's good more's better pseudo-reasoning that dominates the Overton approved discourse on the subject.

Also, supporting my original post, that massive influx of affluent foreigners has observably greatly increased the cost of living in the bay area. A person can make 6 figures and still be considered in poverty. This is clearly germane to any discussion of the middle class withering away.

downrightmike2• 8 years ago

A large part of the problem is the psychology of being middle class. No one wants to be poor, or to think that they are poor, they affiliate themselves with the middle class. The social definition of what is middle class has been broadened to include people who would otherwise fit in the poor definition. Thinking themselves to be middle class, they try to act it and over spend and never save. A more stringent definition used to be something along the line of being a professional that would allow you to be able to afford to retire early and have the funds to get into politics or some other service. Poor people will continue to be bled dry, while the middle class shrinks and everyone refuses to accept they are technically poor and they need to act with purpose to improve their situations.

itchyouch5• 8 years ago

Isn't it just percentiles? I recall 30-80th percentiles being considered the middle class. 50th percentile household income is around 55-60k. 30th-80th is somewhere around 40-160k/year ish in income.

The problem is that "incomes have stayed relatively flat" aka, people were still making the same 40-160k/yr 20-50 years ago, thus they have lost earning power.

eulers__number• 8 years ago

thats why we need anarcho-capitalism

jk_danson• 8 years ago

There is opportunity everywhere. The middle class is fading more from a lack of individual drive to succeed. My parent went from middle class to absolute broke. They lost their home and lived with their parent for several years while rebuilding what they lost. Now they own a better home and are doing very well. They are a one income family (my father works and has no college degrees) with 5 kids still living with them.

jiveturkey• 8 years ago

TFA is a rather thin "review" of the book, almost completely unsubstantive.

“It’s not your fault.” Based on the diligent people she meets, it’s hard to disagree.

Sorry, but one can be diligent and still have made wrong choices. And the irony is thick. The author found herself in this boat through years of being a freelance writer, and now in heavy debt from culinary school.

I haven't read the book but I very much doubt I would find it compelling. I do agree, some and maybe most of the blame doesn't lie on the middle class's shoulders (except for lack of civic engagement), but it doesn't seem like this book is going to get to the heart of it.

I also laugh at this quote from TFA:

Even lawyers, a traditionally risk-averse bunch who tend to choose their profession for its stability, are getting caught in the vise between increasing law school tuitions and decreasing job prospects. Precarity, Quart suggests, can translate into solidarity.

Even lawyers? It is well known that law schools are pumping out too many and too low qualified grads. The information about job prospects is available. Those who went into tier 3 law schools thinking that they would come out the other end successfully have made their own bed. Yes indeed much fault lies with the law schools themselves, but let's not absolve the students of blame here.

exabrial• 8 years ago

Should have been entitled, why people on the coasts can't afford America.

Squeezed: Why Our Families Can’t Afford America

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