Of course, home prices are not completely isolated from the rest of the US economy, but I think that's a far cry from the idea that each household just now has twice as much money to spend on goods, entertainment, food, etc.
This was the topic of conversation this weekend between my wife and I and 4 other couples that we are friends with, each of us with young children. We live in SoCal. We have young kids. We basically can afford to live here, despite having high-paying, dual-income households. That's it, we can afford living. We can't afford to go to Disney very often. We can't afford to go to the San Diego Zoo very often. We're keeping pace with house and car payments (this was a big one for my wife and I, we no longer have car payments and are doing everything we can to make our situation work with the automobiles that we have), with childcare, and trying to put away money for our kids at the expense of the local economy.
I somehow don't feel any more financially secure or independent; I don't feel like I have more discretionary income than when I first moved to California and was making $10/hour. My own conclusion is that it's a feature of our economy, it's by design.
I have a mortgage, insurance, and taxes.
> multiple cars
I'm really tearing up the road in my 2004 Scion (that I got used in 2010) and my 2014 Honda.
I also have exorbitant childcare costs that are leading my wife and I to question the value of my wife or I continuing to work and live in this place.
I'm not rich. I don't live in Ladera Ranch. I don't own a Tesla and a Range Rover. But fuck me for thinking it'd be fun to take my kids to Disneyland or a Zoo.
Plenty of people would love to live in CA, and make enough to stay there. I'm also going to bet you are fully funding your retirement, it's a lower percentage of your income to max out your 401k.
I understand you don't feel rich, but be grateful for what you have and enjoy life. If your not having sleep for dinner or worrying about the electricity being turned off; you have it good.
If you can follow a plot line, you'd intuit that I came to this state poor. I'm very well aware of what the lesser fortunate and folks in poverty are dealing with; I've been there myself. Thankfully without children, but I can certainly imagine what it's like to be homeless with children, having been homeless for a brief period myself and now having children of my own.
And that was the entire point of my comment. If I'm sitting here today, given my current economic status, without the ability to direct my discretionary income in a way that would benefit the local economy (Disney and the SD Zoo are just two relatable examples, they're being cherry-picked to support that persons rant) then what hope do those in the lower-middle class or below have?
I've watched my economic output get sucked into a vortex by landlords and banks and government and now I can add on the insane costs of childcare. This was true when I was poor and it's still true today when I am not.
Where in anything that the other commentor has said are they making a point about what I am saying?
The main point is that these are presumably upper-middle class families. You would expect that with their higher-than-average incomes they would have greater amounts of discretionary income that they would be spending and that their expenses would be spread out across more of the economy, supporting many other businesses and services. Instead the high salaries are being captured by housing costs. Sure they're not hurting, but it is surprising that dual-income, high-earning families are basically breaking even.
I’m making a great deal of assumptions but not being able to go to Disney land at the drop of a hat seems awfully trite.
Dual income families are — and for decades have been — spending their extra second income on housing rather than the rest of the economy. The comment you’re referring to is therefore very relevant because it shows that trend in action. Housing — and other opportunities in life it enables, like access to schools, (real life) social networks, safety, etc. — supersedes everything else in importance for many families, so second incomes are just spent on what is ultimately a bidding war over housing.
If the highest-earners of the middle-class have their discretionary income locked up in housing costs, how much more difficult is it for those who don't have the same level of income. Housing then eats into non-discretionary expenses.
And as a non-American, from an ex-Communist state, where salaries are still a fraction of those in the US, that standard of living sounds anything but affluent. Here, families with two upper-middle-class incomes and 1-3 children are more likely to own multiple houses, than barely be keeping up with their mortgage. It's just another story for the growing pile of reasons to never move to the US. Being in the top 5-10% of earners and in debt just from housing is not normal.
Boggles my mind...
I would even expect this to be true, though on a smaller scale, in areas where housing supply isn't constrained, since, in general, each individual house is unique to some extent; two dual-income families fighting over the same house will have more resources to throw at their bids.
It's very clear that an increase in labor supply puts downward pressure on wages and there's plenty of evidence that the economy is not growing fast enough to offset that pressure.
And, making that worse: Once you have two careers to plan for, it's much harder to move to a smaller cheaper city to escape. Perhaps both of you can find good jobs in the big city, and in 5 smaller places... but not the same 5! So you have to pick the big center.
If you increase workforce but not increase capital (or increase workforce more than capital), then it is true that economy as a whole (GDP) will grow, but GDP per worker will go down, there would be downward pressure to wages and upward pressure for capital yield.
> it's a simple supply and demand curve. Increasing the number of workers decreases their value.
You are leaving out a crucial factor - the wages that the 'new' workers earn are going to be spent in the economy, growing the economy as a whole. This is increasing the 'demand' side of that supply and demand curve.
This is the same flaw that anti-immigrant people use when saying that immigrants 'take our jobs'. They take a job, but they also create jobs by spending the money they earn. That is what an economy is. Every worker creates more value than they take (otherwise no one would hire the worker in the first place!)