However, is the same true for purchasing power?
Sometimes you hear about these mythical stories of janitors who could afford to actually buy a house, despite having two children and their partners being stay-at-home moms.
And yet today, I hear so many stories about 30 year olds with masters degrees who are still living with their parents because they can't afford to rent a studio.
Like I said, and I can't find good stats on this online. If you have any stats on which you based your comment, I'd love to see them!
Spoiler: it’s not pretty.
The other half is that if they are too high they don't create jobs that pay minimum wage. You can't legislate private jobs into existence.
The more coherent argument against the minimum wage is that it destroys jobs which cannot be profitable for the employer at the higher wage. The problem with this argument is that the preponderance of research indicates a small magnitude for the elasticity of minimum-wage employment with respect to the minimum wage, generally around -0.05. If a 50% increase in minimum wage results in a 2.5% increase in unemployment in the cohort of people earning near the minimum, and if your aim is to increase the average wage for that cohort, then minimum wage increases do work. The idea that they don't is based on non-quantitative reasoning about the rightness of interfering with markets, or the virtue of work, or a value judgment about a small amount of unemployment outweighing an overall increase in compensation, etc.
I've elided a bunch of detail here, in particular the distinction between minimum-wage elasticity and own-wage elasticity, but this is a good starter:
https://www.gov.uk/government/publications/impacts-of-minimu...
You can still find apartments built in the 1950s that are functional (places where the maintenance was done so they are essentially just as good as 70 years ago) and the rent is cheap. Most people want better.
The key information missing here though is a more generalized cost of living space per person, beyond housing. This data can still be biased, in general, because it may be the case that fewer people own homes, say more successful wealthy people, while the majority are renting these properties. I have a bucket of anecdotal examples of friends who still don't own homes in their 30s and are still renting.
This data would exclude all of those people painting a picture that people are doing well while some unknown population is renting, paying more per square foot than owning, and rates could be increasing per person per square foot over time. That population could be smaller or larger than those who own homes. I'd be interested to see those distributions of renting/owning and a similar cost comparison for renter square foot costs per capita.
Part of the problem here is a different problem -- the concentration of jobs in super high cost metro areas, and often also, the NIMBYism that prevents such high cost metro areas from building more housing to address demand.
There are so many affordable studios to rent. And so many jobs, and sadly they aren't co-located...
GDP does not correlate to "average wealth" and is itself a dubious measure for economic progress depending on what figures you pick to calculate it.
Also, no matter what metric you use, the "average wealth" of the younger generations, particularly millennials, is not in fact higher than their predecessors. The level of their productivity is a historical high point, but this is infamously contrasted by stagnating wages, assets, and by some metrics even overall quality of life.
That's only if you look at developed nations. The average wealth in Asia has exploded. The market for labor is far more globalized now, so you have to compete with people used to lower standards of living.
>The level of their productivity is a historical high point
Who's deserves credit for the productivity? Warehouse workers didn't suddenly get twice as good as good as moving inventory by themselves, they did so because Amazon investors invested in automation
Depending on their use they can save a lot of money relative to the the products/services they replace
And childcare expenses, of course. Especially childcare.
Also, when your cellphone is how you access the Internet because you can't afford a decent laptop, at some point it makes sense to go for a more powerful phone.
Sure but they’re not the majority. This article from forbes (a bit old now) was enlightening. But note that those running their phones into the ground aren’t too far behind those upgrading as soon as they can.
https://www.forbes.com/sites/niallmccarthy/2015/07/09/how-of...
I suspect that the answer to these types of questions is that most people don't want to admit how mind-fucked we all are in to believing the bullshit that we are inundated with from the most powerful classes and how little freedom and financial mobility exists in the USA.
Because when someone pushed back on you, saying that smartphone ownership now is like car ownership became at some point in the past -- a necessity -- and then you changed it from "smart phones" to "the latest hot gadget".
So it's no longer clear whether you think smart phones and unlimited data are indulgences like ubereats is, or where one might draw the line according to you.
https://www.aei.org/carpe-diem/new-us-homes-today-are-1000-s...
What percentage of the western population eats out 3-4 times a week? I'd bet it isn't more than 10-20%, depending on the country.
> Uber Eats delivery
Not sure the people who do the delivering can afford having food delivered in turn (at least not 3-4 times a week).
Fully 10 percent said they eat out 4 to 6 times a week, and 6 percent said they eat out everyday.
https://minnesota.cbslocal.com/2019/05/16/survey-shows-how-o...
https://www.fourth.com/resource/truth-about-dining-out-infog...
is now dead. All this is is a news site quoting it, second-hand, and I have seen enough news sites get original reporting wrong not to place a great deal of stock in them getting it right.
Stands to reason. Dedicating five or more years away from the workforce at least partially, if not in full, is an enormous setback financially. As money compounds, your earnings when you are young are dramatically more important to your financial stability than those when you are older. It would be surprising to learn that such a person is on equal footing with a janitor of the same age who started working at the age of 14.
It's a mistake to think all masters degrees are equally 'bankable'
My college US history course ~20 years ago very much drove home the fact that (at least at the time) social mobility in the US was the same as in India. The surprise, of course, was that India has a caste system, while the US narrative is freedom; if you work hard, you’ll get ahead.
I don’t remember the sources, but the rate of social mobility (up and down) we learned in class was ~20%, as defined by ending up in a different quintile than one was born in, meaning put people into 5 categories according to socioeconomic status, and see whether they ever change categories, for example going from middle class to upper middle class.
Wikipedia says that overall average social mobility in the US hasn’t changed since then. https://en.wikipedia.org/wiki/Socioeconomic_mobility_in_the_...
The reason I say this is as you point out, in the US we frame everything as being highly mobile. The illusory framing of our society in "the American dream" in K-12 education and freedoms dangles this carrot of possibility of high social mobility to children. It's not completely invalid, it is possible to make massive transitions in socioeconomic brakets, but it's just a framing of the rare exceptions, not the norms.
Most of us are going to be the norms, so these narratives are a disservice to people about what their real socioeconomic mobility potential and probability is. It's fine to dream, aim high, and shoot for the moon as a society-- that promotes growth and avoids stagnation. At the same time, we should be very clear what is and isn't a moonshot that way many aren't so resentful when they later discover what they thought was reasonable was actually incredibly difficult bordering on impossible. What's possible and what's probable need to be distinguished and the American dream framing doesn't talk to probability.
There's this whole lie painted to children that the US is somehow a meritocracy when it's not. Merit can help, but it isn't everything and we need people to understand this.
Going back farther, 120 years ago cars were the play thing of the super rich. Now the poor have much nicer cars (including options like electric start, not to mention the unheard of AC), that are fast and never break (by todays standard they break down all the time).
But yes, they do have access to cell phones and refrigerators, so good for them.
Section 8 apartments and double wides are such a massive step up from that. There will always be a bottom of the economic latter. But that bottom has moved up a lot over the past couple generations.
Mobility is a somewhat separate topic from what standard of living constitutes the bottom.
Also, the myth of mobility is not an entirely separate topic, in that it's another distraction frequently employed to place problems on the individual and avoid talking about systemic changes that could take place to benefit people on a broader scale.
I recently visited the ER for some chest pain which amounted to nothing and was charged $4,000 for it. Imagine what that would do to the 60% (!!) of Americans who can't come up with $500 for an emergency (see my top comment about stagnant wages, rising rent, and astronomical health care costs).
Comments like yours are easily and frequently used to distract from very real systemic problems that working class people still face. Access to cheaper smartphones doesn't mean much in the grand scheme of things, but food and housing security and the ability to get medical treatment without fear of going bankrupt sure do.
This is what classist "but they have refrigerators" arguments love to obfuscate. Yes, a poorer person might still have a roof over their head and a smartphone. But they're spending a huge chunk of their income on rent. They want to move somewhere cheaper, but there are fewer opportunities, or their pay would go down too. They avoid seeking medical care because of how astronomically expensive it is, which makes future negative outcomes more likely (and more expensive). And seeking higher education amounts to taking on tens of thousands in debt from predatory lenders, with only a few college majors actually amounting to a good ROI.
It's not that poor people now have it worse than poor people in the 50's, it's that we shouldn't set the bar that fucking low in the richest country on earth. Our society could do so much more. That's what all these commenters are missing, willfully or otherwise.
Medical care has always been expensive. We have made a lot of progress: 200 years ago those ER bills would be zero: because everyone just died from what we consider solvable today.
2. Have you considered that Adam Smith's anecdata from 200 years ago may not be accurate anymore?
Having made progress since 200 years ago is no excuse for piss-poor progress compared to where we could be.
I'll restate my earlier point. The vast majority of Americans would suffer huge financial setbacks (to put it lightly) from one visit to the emergency room. Health insurance historically being tied to your employer isn't the problem, health insurance itself is the problem. It's a predatory industry which has successfully lobbied to make healthcare immensely lucrative for themselves and financially ruinous for average people.
It's interesting to me that you still think nationalized healthcare is "stupid" even though dozens of countries [1] have successfully implemented it. And yet you can look at the system we have here in the US, and say "oh it's just that it's tied to your employer. Otherwise it'd be fine." Healthcare isn't a commodity and shouldn't be marketed as such. The evidence that nationalized health systems can work well is everywhere. I also refused to see it for a while because of internalized fear of the "socialism" boogeyman, but turns out you can just do it and still have a capitalist market for other things. Go figure.
1. https://www.health.ny.gov/regulations/hcra/univ_hlth_care.ht...
What people say is often very different from the truth. It is hard to measure make an objective measure of quality of life, but that doesn't mean the subjective measure is actually correct.
Edit: High rent grants you access to higher paying jobs but not everyone actually gets those.
There are many different religions in the world, but I don't think it is a coincidence that the major religions tends to be very convenient for the top 1%.
They often teach that your life situation is a result of your actions (either in this life or the previous life), and if you follow all the rules you will be rewarded in this life or the next. There's a natural order to things, and it is all part of $deity's plan
Maybe people are waking up and realising that there are more to life?
Edit: This is not a rant against religion as a personal choice. I don't care about what you believe, so long as you do not use your religion as a tool to control politics.
This is flatly false, and to be honest it's a little embarrassing that you would parrot it without Googling it (which you were happy to do to pull up a tangential stat that didn't contradict the dishonest narrative you're pushing). The US is ranked 27th out of the 82 countries the World Economic Forum studied in 2020, and India is ranked _76th_.[1]
On top of that, note that Denmark is ranked #1 for social mobility in the WEF study. The relevant topic to this thread is pre-transfer social mobility (ie before taxes/welfare), where the US and Denmark look almost identical![2]
That doesn't suggest that Denmark's policies are useless: transfers are an effective poverty-fighting tool, and I have no doubt that the economic floor in Denmark is a much more comfortable one. I'm all for a stronger welfare state due to the human costs of poverty.
But this is all irrelevant to the topic at hand, and the false claim all over this thread that the US is uniquely bad at providing opportunity and mobility to those without it. We're better than the majority of the developed world at this, partially due to the productivity incentives created by how much more precarious poverty here is compared to OECD countries with the strongest safety nets. I should be clear: I don't think we're at an optimal point on the spectrum, and I think sacrificing some economic dynamism to palliate the human costs of poverty is worthwhile. But the claim that we're uniquely socially immobile by global or even OECD standards is a flat lie, propagated by people too simple-minded to understand the concept of a trade-off.
[1] https://en.m.wikipedia.org/wiki/Global_Social_Mobility_Index...
[2] When looking exclusively at wages (before taxes and transfers), Danish and American social mobility are very similar. It is only after taxes and transfers are taken into account that Danish social mobility improves, indicating that Danish economic redistribution policies are the key drivers of greater mobility. Additionally, Denmark's greater investment in public education did not improve educational mobility significantly, meaning children of non-college educated parents are still unlikely to receive college education, although this public investment did result in improved cognitive skills amongst poor Danish children compared to their American peers.
A sibling comment to yours explains succinctly why your comment misunderstands mine: standard of living in the US is higher than India. The WEF’s metric is based on ranking the standard of living of each country against each other. It can be simultaneously true that the US standard of living is higher than India, and also that people born lower class in the US improve their lot at the same rate as people in India.
The difference is that the average standard of living ins the US far exceeds India's standard.
Yes you may not make your way to billionaire high class status from the lower class but you certainly can drastically improve your circumstances by working hard. The alternative is not to work hard which definitely isn't going to make your life better.
Additionally, I'd like to know how you think society should be shaped? It seems the other option would be to follow a more socialist or communist route where "equity" is the ultimate utopia... and that typically just brings everyone down to a lower status instead of raising everyone to a higher one.
US immigrants are, statistically speaking, at an even worse disadvantage than the American born lower class. https://en.wikipedia.org/wiki/Socioeconomic_mobility_in_the_...
If human ability follows normal distribution, there is a hard physical limit of how many people can move up the ladder each year. It physically impossible for every one to be at the same highest level. The good news is all level are getting higher year by year. The pie is growing for everybody.
> The article you linked in an opinion pieces of a single economist, who is critical of immigration.
What article? I linked to a section of Wikipedia, and that section alone has 9 different citations by as many authors.
> The good news is all level are getting higher year by year. The pie is growing for everybody.
Others in this thread have misunderstood my remarks as you have. The metric of moving from one class quintile to another during your lifetime is relative. It does not depend on standard of living at all. The pie can grow, and social mobility (as defined by changing class quintiles) can be stagnant, at the same time.
That is a laughably low bar, and it is unlikely for the trend you are describing to continue past the move from poor to lower middle class.
In a fair society, with equality of opportunity, it should be equally likely for a child born in a trailer park to become high income earner as it is for Bill Gate's child. That is the normal social mobility we should expect in a democratic society with no class structure. We are so laughably far off from this everywhere in the world...
And note that I completely accept that becoming a billionaire is going to be extraordinarily rare and a product of BOTH extreme luck and good work ethic. Or I would accept that, if not for the fact that being born the child of a billionaire is a guarantee to this future, or as close to a guarantee as one can ask for.
Every time I make this argument on HN I'm met with two responses
1) I worked my ass off when I was young to get to where I am, why should we make this easy for anybody, it will just create a lazy society
2) why should MY money go towards helping anyone else
Both are really hard to argue against no matter how much statistical data you pull out showing that improving equality of opportunity improves the society overall, because both are very emotional arguments. People feel that way and it's hard to change.
PS - the "funniest" response I had to this was someone saying that US has "perfect" equality because literally anyone from any walk of life can become rich or a president. Yeah he acknowledged that some people have it much harder than others, but it doesn't matter because at the end of the day anyone can get rich so everything else is irrelevant.
Hardly anyone who has done well wants to accept this reality. They would have to change their perception not just of the world, but of themselves. They might feel very guilty, and people don't like that feeling.
For most people their luck is about equal to anyone else. which means you can't get a head because everyone else is moving as fast as you. However you are still moving forward.
I mean, isn't that applicable everywhere? Even the most totalitarian country really only requires a military coup or revolution and, if you've worked really hard, you too could be King Dictator God Emperor for life.
That’s only if you assume there isn’t a generic component to traits that influence (broadly defined) success. But of course that’s not true.
We should expect Bill Gates to be much more intelligent, conscientious, and to have much better impulse control than typical people living in a trailer park. Ditto for many other traits. Therefore it’s much more likely that his children posses these traits compared to children born in trailer parks.
The behaviors that help you successfully move between lower rungs may (spoiler: they do) hinder you at higher rungs.
Post hoc ergo propter hoc. Even if there are genes for success, being successful is not proof of having those genes, and being unsuccessful is not proof of not having them.
Furthermore, if we assume that someone swapped Bill Gates' baby with a baby born in a trailer park, do you truly think that Bill Gates' genetic child will have a much better chance at success than the child Gates raised as his own?
Maybe aspirational, but it's not reasonable to expect this.
More educated parents both earn more money and educate their children more (and not per se due to their higher earnings).
It's hard to compensate for that.
It is not. In a meritocratic system, children wouldn't inherit resources, access to education would be conditioned purely by merit, and so would access to jobs, finance opportunities etc.
The nepotism rampant (edit: was "inherent") in corporations, government, the finance industry etc. are exactly the things that keep the rich rich and the poor poor.
- society (through local community funds etc) would ensure that everyone, regardless of anything else, has access to basic livelihood (food, shelter, clothes, transport, healthcare)
- society would ensure that everyone has access to the same educational institutions, including required resources (manuals, computer access etc.)
- people would strive to evaluate others based on actual aptitude, rather than class markers (e.g. someone speaking with a heavy "uneducated" accent or wearing low quality clothes wouldn't be looked down upon being evaluated for a professorship or top management position)
- inheritance would be heavily taxed; this would be set up in such a way that people would have a right to the human elements of inheritance - e.g. the home where they grew up, their parents' memories etc. - but huge transfers of wealth, such as inheriting your parents' Amazon stock would not be profitable.
Better off parents will still be able to give a better life and resources to their children, but the impact of that care on the ultimate outcomes will be much less. A "perfectly meritocratic" system would likely be horribly dystopic, such as entirely separating children from parents at birth, Brave New World style.
A good public education system goes a long way. At the moment in the US, rich kids benefit not just from the education their parents give them directly (which let’s face it is not necessarily that great just because they’re rich - how much has Ivanka benefited from Donald’s insights?) but also from the expensive schools that their parents can afford to send them too. Educational apartheid by wealth isn’t a necessary feature of a society. It can largely be legislated away given the social and political will to do so.
It is a fundamental feature in class-based societies like USA, the UK and much of the rest of the Anglosphere. Maintaining the class structure and preserving the accrued intergenerational wealth from the upper strata of society means that the kids of those wealthier classes must acquire distinctive social manners and culture which sets them apart from the commoners.
A reasonably fair society shouldn't allow for children to be born and raised in trailer parks in the first place. State policies should be directed towards strengthening the family unit and improving the conditions for the average working class people. Once you have eliminated the precarious forms of existence in society and have established decent cultural norms for working class people by which they value education, upward social mobility will happen much more widely.
I don't agree with this. You are measuring equality of outcomes, not of opportunities. They are different.
If you believe in a strong genetic component, than you can complicate the formula a bit.
That might be what we expect from a perfectly egalitarian society, but expecting any free, democratic society to come even close to perfect egalitarianism is completely delusional.
There are 2,755 billionaires in the world and 7.6 billion individuals, thats around 2.7 million to one. Not great odds for anyone to be frank.
Also is it any wonder people believe that they can't get anywhere when they are constantly told, they can't get anywhere. Seems a little self fullfilling to be frank.
It's disingenuous to suggest that a minimum wage worker with no safety net isn't getting anywhere because they're not trying, and to contrast their accomplishments with someone who started with wealthy, powerful parents.
For some, the adage "shoot for the moon - if you miss, you'll land among the stars" is fine. Take some risks, start a business, make a bet; the worst that can happen is you have to declare bankruptcy and move into a family member's vacation home. For others, the adage is more like "don't you dare shoot for the moon, if you miss, you and your family will be hungry and cold in a homeless shelter".
What looks better on a millionaire:
* The poor guy that invested every cent he had and kept slaving away for years every day at the brink of certain failure.
* The rich kid that got several hundred thousand from his parents for his first company and knew exactly that failure just meant asking his parents for another go or having to switch to a management position that has probably been waiting for him since he was five?
Of course the first one looks better, you can also bet that any millionaire telling it is a habitual liar that paid a good sum to have some PR guy find ways to navigate around his actual rich kid background without looking too obvious about it.
And everyone seems to think that the fact that all the billionaires came from a situation of decent familial wealth enabling them to make big bets refutes the fact that most people who don't screw up too bad end their career much better than they started and that most people's kids manage to start a rung up or so. Plumber sends his kids to community college and all that.
This is precisely the wrong model, one which accepts that there is no guarantee of equal opportunity. You're describing a promise almost as unworkable as the promise of heaven: if you're born poor, and you do everything well in life, your grandchildren's grandchildren will have a chance to enjoy the good life!
That is not what a democratic free society should mean.
Is this fair to them? Definitely not.
Instead of ensuring certain comforts in old age, your parents made an investment into future. This way they get a peace of mind, a feeling of beating their own mortality, leaving something (well, someone) behind after they are gone. It's a great deal if that's how they see things.
Immigrants doing it in one generation, working blue collar jobs while sending their kids to the ivy league or med school, prove it's not based on real barriers either way.
It is extremely clear that our society, nowhere in the world, doesn't offer equality of opportunity; based on your birth, even accounting for genetics, your mid-life expected income could be predicted with decent accuracy.
It's great that you agree with me about barriers, but you might mention it to the posters in this discussion who are explicitly making claims of feudalism and apartheid. Beyond that, my post gave a logical explanation for probabilities. I don't see where you provided a counter to that logic, or even addressed what I said. How is my statement about three generations, for example, countered by your claim about predicting mid-life expected income for a single generation?
There always was some upward social mobility and that is usually called IIRC a safety valve. Very bright and fortunate can come from rags to riches, but honestly there are very very few. But from what I remember from my sociology book, the large majority of people stay the same or, go to +1 or -1 social class level (if there are about 7) compared to their parents.
My hypothesis is that working hard can move you a few deciles on the income ladder (and position your children to start from higher up the ladder than yourself).
I also think though that people misestimate the slope of the income curve at various points, and that it becomes exponentially harder to get up the curve in the top quartile (I.e. going from a ~$30k (~25th percentile) to ~$60k (~50th percentile) to ~$120k (~75th percentile) to ~$500k (~99th percentile))
Lastly, I generally don’t see people that are not hard workers advancing (perhaps they might not advance as much as they should or would like) but I definitely see them make marginal progress vs people who haven’t worked as hard
https://www.weforum.org/agenda/2020/09/social-mobility-upwar...
Sure, maybe if your parents are affected by one of those factors.
Statistically nobody goes from trailer park to billionare by working hard.
You have very, very, good odds of doing better than your parents if you manage to get to age 25 without incurring a felony record, addiction to something that will likely kill you or too many child support payments.
edit: I'm only talking about the US