If you're going to make a statement like that I'm going to need an example of what you consider middle class, what you consider affordable and what a reasonable square footage is for a family of 4.
The trend in US wages/employment for youths doesn't seem to signal that. The trend in wages/employment for youths in nations with even lower fertility rates (Spain, Italy, Portugal...) doesn't seem to signal that. Even Japan, where absolute population decline is already underway, has good-but-not-amazing trends in wages and unemployment for youths. Where's the race to bid up the prices for young workers, and buy all their labor that's for sale, if an aging work force really is leading to crisis-level worker shortages? If the market expects a huge impending shortage of (e.g.) coking coal, you don't see the same lackluster demand for the output that's currently available.
Maybe you meant that the shortage isn't coming in the next couple of months or years, but in a generation or so, so the market reaction isn't there yet. The view that I subscribe to, which seems common here on HN, is that technological change is going to significantly reduce the market demand for human labor in a generation or so. I expect that automation will generally deflate the market price of human labor faster than an aging work force can inflate it.
Social Security solvency currently depends on lots of middle class workers earning wages, because its funding is structured that way. But that's a policy choice that is more easily reversed than fertility rates or technical progress in automation. If the problem is more about paying for retirees than lacking warm bodies to do work, higher fertility just makes government funding problems more severe: you end up with more people who need non-market support mechanisms if the market demand for additional human labor isn't there.
- 15% on "luxury" goods and services such as travel, coffee shops, restaurants, event tickets, and my car, all of which I can do without at slight to moderate annoyance.
- 5% on necessary goods and services such as groceries, household supplies, and transit across the Bay.
- 80% on rent, including parking.
The cost of production isn't entirely absent from my true expenses; I do need groceries, and some tiny proportion of my rent pays for the actual materials, construction, and maintenance on the structure and associated infrastructure. But my dirt parking space next to BART certainly didn't need producing (the most produced thing in that lot is the fee collection machine), and I spend as much on that as I do on food.
So, I would not mind even a massive increase in the cost of goods and services, if it came with more money overall (which I can also use for space) and/or a decrease in the cost of space (i.e. fewer people contending for it).
OTOH, all Bay Area tech jobs ultimately rely on consumer spending, so if there is not enough of that going around, probably no paycheck.
I think there is a reason why everyone is railing/downvoting on Ryan here, and it's because of a difference in definition. There's two ways to define "middle class". One is by what you can afford: house, car, but not stuff like a private boat, etc. The other way is just by taking some middle percentage of the income brackets (middle 60% or whatever).
Historically[1], Ryan is actually right here. For the baby boomers, both groups are right because they overlap.
Much of the societal issues were seeing and will continue to see for the near future are because those groups are once again starting to not overlap (in certain areas, as highlighted by the original article).
[1] Right by historically, I mean that centuries ago the lower class was like 90% of the population or something... Middle Class was mostly not a thing.
Nationwide the middle class is more like $40-50K (household income).
If your household (how many earners it is comprised of) is over $100K in annual earnings then you're in the top quartile (25%!) of the entire country in income, and decidedly not "middle class" (though, depending on where you live, you may or may not have enough to afford a home, much less a boat, a beach bungalow, eating out, going to the bars, etc.). Keep in mind that a lot of these cities are okay for singles, but once those singles get married and have kids they rapidly discover they can't afford the big city anymore and have to leave.
Perhaps another way of thinking about the situation, is not that the middle class can't afford traditional middle class amenities, but that the proportion of people who can afford those amenities is shrinking.
<pedant>That's not how this works. Middle-class, is by definition, somewhere in the middle of the household income range. Exact position is open to debate, but you can't just declare "only the top 6% are middle class!"</pedant>
Throwing out $200k as a typical middle-class income just demonstrates the bubble the OP lives in. I live in one of the wealthiest counties in the nation (Fairfax) and we don't come anywhere close to a $200k median household income.
But I agree; 200k is not the bottom bar or average for middle class.
Of course, all the space also has massive drawbacks... car-centric culture, sprawl, long commutes, harder to implement public transit, etc.
In 1973 average house size was ~1500 sq ft. In 2010 it's ~2200 sq ft.
In the area I live in -- not even a big city -- you're basically forced to choose house size and house age at the same time. If you want only 1400 SF you're buying an old house with old quirks (asbestos, a history of lead paint, old wiring...) If you want a new house you're buying more square feet and the additional burdens thereof (more space to heat and cool, more space to clean). There's practically no such thing as a new well built small house, or at least none that I could find when I was buying. I ended up in a 1940s house because all the newly built houses were too large for my tastes. And those huge new houses often had huge lawns that needed a riding lawnmower and ridiculous amounts of water (why is everyone landscaping a desert climate like we live in rainy England, argh...)
Is there some weird feedback loop going on? "Our sales indicators show that buyers preferred even-larger new houses this year than last! (Because we didn't give buyers any options to buy smaller new ones.)"
Wages have not been keeping up with costs or you might have a point.
You realize the median household income is 50000, right? So, in a small city you have to make 4x the national median to just survive?
Wow, I know the West Coastians live in a well-protected self-imagined bubble, but this comment really brings it to light.
Glibly saying that having fewer kids on average is better is awfully bold, verging on ignorant (as would the opposite argument).
It is true that in order to make ends meet in a big city, many families have many fewer kids (one or two, from what I saw in San Diego).