Squeezed: Why Our Families Can’t Afford America
nytimes.com
nytimes.com
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.
There’s more to lifelong financial planning than “can I afford house payments?”.
PS: not me... family, friends & acquaintances who had spent decade(s) with employers and after returning to work able bodied only to be subsequently let go for reasons other than their abilities to perform their duties.
Expensive diagnoses like cancer or pregnancy are not good for the career.
Of course, it being optional doesn’t stop people from hyperventilating about our reduced fertility rate.
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.
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.
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).
it doesn't just cancel out though. software devs in the states make much more money, to the point where you can easily afford the things that the government would provide you in europe. plus you obviously have to pay for those things through taxes anyway, and guess who pays the lions share of that. if you are in a high income bracket, you are always going to pay more in than you get back in direct services.
Call me when the SF metro holds a candle to Berlin. Or really, any functioning city.
Gauntlet thrown. Transit in SF is a trainwreck. And you're not gonna fix it with your big big paycheck.
Well, okay.
I also regularly uber around in SF. Because there's no alternative. And yet: even ignoring dollar cost, I'd say it's comically, pathetically slow to get around the city compared to what a functioning mass transit system should be able to do. SF is tiny, geographically speaking; the time it takes to cover ground in SF using a car is a travesty, and more ubering will not make this better, unless we get a new ultra-high-cost variant which has rockets to blast the other traffic off the road like some terrible action movie come to life.
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.
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.
Absolutely true. Some years ago a contract gig I was working at in NYC was abruptly cancelled, and the following month or two were pretty stressful as I watched my emergency funds get so rapidly depleted due to the high COL there. Thankfully I was able to line something up but it was a valuable shift in perspective.
And as much as I'd love to do the 9-months-out-of-12, I'm not sure there's an easy way to pull that off in the US (or anywhere really).
Frankly, after the expensive 6 years in Seattle, I'm now spending some time in Budapest, Hungary, where the cost of living is particularly low and the city is particularly good.
The local salaries are remarkably low according to American expectations, but all I need to do is land an occasional part time project, or work perhaps 1/3 of the time to do quite well.
I've met some local folks who have pulled this off quite well, also, getting remote jobs in higher paying areas and living quite handsomely here. It has been a bit of an eye-opener for me.
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.
That's not to say that ambitious and driven individuals are rare, but the amount of social judgement around career is significantly less in most circles than in the states.
As an American, I think this may be the hardest thing to wrap my head around. Since I was a kid I (and anecdotally, many of my peers) have been told to never rely on a government or business-sponsored pension. What happens if the government swings in a different direction in the 3 decades before I retire? What if a couple bad administrations screw things up? What if the company who has my pension goes under or poorly invests it?
It seems that having nothing saved for yourself for your decades-away end of life care is putting A LOT of trust in a system that is less than 100 years old. I think this is where my desire to trade earnings for government services comes from... I can't guarantee that the services will be there for me, but if I manage my money conservatively I can more-or-less guarantee that it will be there.
Keep in mind that I'm also a software engineer, giving me the privilege to choose higher earnings over government services. If I were lower-income or in a line with less future earnings potential I might feel differently.
If there was suddenly a broad political support in the US for a pension system guaranteeing anyone to retire at 65 with at least a minimum wage equivalent - then that would increase your taxes and make it harder for you to set aside part of your above-average income.
Same if voters suddenly realized that state funded maternity leave would be a good thing. Again a huge, expensive tax funded reform.
We have had all these reforms. Single payer healthcare, Free higher education, 1-2 years parental leave (state, not employer funded) etc.
All of this means I pay 30% income tax, a hefty payroll tax, and 10-25% vat on most goods - which in turn means I can’t set aside a ton of money for retirement. So in a weird sense we made ourselves dependent on the state, even those of us with high incomes are.
There’s no way you can spin living in Europe as being a financially beneficial choice.
It’s fine if you want to live in a 40qm flat and never have any substantial assets your whole life, but don’t pretend that it’s a sound financial decision.
Oh I don’t mean financially. I mean simply as a quality of life trade off.
Choosing where to live is rarely purely a financial decision. If you migrate permanently it’s probably for other reasons. If you expect moving back to the US where you’d need your savings (e.g to retire) then you need to make it a partially financial decision of course.
Not sure what you mean by the 40sqm flat and no assets, that obviously depends on how much you make and what you decide to do with it. I live comfortably (new car, decent sized house etc) but that is at the expense of not putting aside much. In the US I could probably have more stuff and still set aside a lot of money because I’d be making 2x the money and have lower taxes (If I made 3 or 4 times the money it would probably be in places where I’d be living in a studio flat such as in SF).
But I think what’s being lost is that it’s hard to put a price on things like having long holidays, good working hours etc. None of that is exclusive to any country but it’s certainly differing on average.
In the end all of this is about what you value as quality of life. What kind of money you need to cover the kind of lifestyle you want.
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.
i rent a 4br house just over the city line that's listed for ~$200k . 10 minute drive to downtown and a 30 minute commute to work. if i wanted to i could easily come up with the down payment for this house in a couple years on my entry level engineer's salary. in my office park alone, there are already several other software companies right there that i could conceivably work at.
once you rule out NYC, Boston, and the other megacities, there are still many mid-sized cities with good food, music, etc. they don't have nearly the same troubles with traffic, so it's often pretty easy to find a good job in the burbs if they dont do software in the city center.
Accepting a longer commute means more options, but the price is steap. Mine is currently 10 minutes and in a prior job I walked to work. However, that means I either need to move regularly or have a lot of options very close to me.
You can light your money on fire by renting or you can be paying off a house at the same rate at the time cost of whatever your commute is.
If you want to eat healthy the options for fast meals get expensive. If you prepare everything from close to scratch you can eat just as health at the cost of time.
I can easily live in the US, have a minimal commute, and save 1/3 of my income with my current lifestyle. I can't do that and have kids.
A medium or large city in a major metropolitan area will have better options for indoor recreation.
I'd personally take the city surrounded by BFE if given the choice (actually, I'd rather live in BFE and commute into the medium city).
I've lived in Baltimore for 5 years(to escape DC), but I'd never work in Baltimore. I came here to because it isn't technically advanced. Beyond that it's packed to the brim with dope fiends. You've gotta be in third world don't get robbed mode 100% of the time, there are 17k abandoned townhouses in Baltimore, garbage everywhere, but the rent is super cheap if that's what you're into.
I've never been to Grand Rapids. If all goes to plan it'll stay that way.
Berlin is one the most incredible cities on earth right now.
You really have to be careful with those articles -- most of them are basically marketing fluff. Grand Rapids has a good welcoming inclusive, but tiny tech scene. GR is only 'huge' when compared to smaller neighboring cities, which have practically nothing.
This isn't a comprehensive measure or anything, but just for a quick sense of scale, on Stack Overflow right now Chicago has 79 tech job listings. Seattle has 68. Detroit has 15. Grand Rapids has 2.
Grand Rapids isn't even remotely comparable to Detroit, much less any actual tech-focused city. And that's just jobs, ignoring all housing / transportation / cultural amenities and all other quality-of-life differences.
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.
I’m not saying Raleigh is a cultural wasteland. I’m sure it has much to recommend it but to compare it to Berlin? Really? Berlin has almost eight times the population and has many very heavily subsidised national cultural institutions. I’m sure Raleigh has a better live music scene in English.
You should travel in Europe some. You would not compare anywhere in Western Europe to the US in terms of bike friendliness if you had.
[1] https://en.wikipedia.org/wiki/List_of_U.S._cities_with_most_...
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.
I don’t know what your vision of cultural infrastructure is, but I feel culturally satiated.
I’m in the "Midwest" and that’s at least 100-150k lower than I’d expect in an urban area.
I doubt there is anyplace on the planet that fully meets the HN-Platonic ideal of a magical land with no cars, cheap rent in exclusively brand new or prewar mid-rise building, and bountiful jobs at hundreds of tech companies.
Ask a bunch of middle managers in a downtown office what they would consider too far of a commute for their current job.
Housing prices will fall off a cliff somewhere between the median response and the max response.
Multiple theatres, a decent opera house. A regular meetup for my favourite obscure card game. Being able to reasonably expect that essentially all the bands I like will play my city sooner or later.
There may be specific things you care more about that one city might have more of than the others, but, in general, all cities have this stuff (and it's a tragedy of human flourishing that people on the coasts think they don't).
But, also, don't get confused by looking only at the statistics for core cities. People look at, say, St. Louis, see that it has only 300k people, and stop there. But that's a wildly misleading number that's really more of a reflection of the fact that lots of people in the U.S. live in what are called "suburbs," even if those "suburbs" are actually still part of the urban core.
The St. Louis metro has 2.8 million people. 1.3 million of those people live in the core, urban city/county. That 300k number isn't useful at all. It's based on silly, irrelevant historical border-drawing.
The same can be said for most Rust Belt cities.
I used to live here, for example:
https://goo.gl/maps/RAYSkfs4Dtn
That's two blocks from a Whole Foods, walking to everything else you'd need, and 4 blocks from the light rail, which can take you to each of the region's two largest employment centers (Downtown and Clayton), its two largest universities, and the airport.
Amen. I live in a US locale that is routinely described as one of the top 5 bike friendly towns in America. I bike around, look around, and all I can think is, are you kidding me? Narrow shoulders, aggressive drivers, high road speeds, poor air quality, no shade, etc...
Don't get me wrong, there's lots of good, but it's sad to think this is the best the US has got.
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.
Minneapolis.
A very, very rich urban environment (there are two cities there, after all) and cultural scene. Is currently, very affordable - even in the most desirable neighborhoods.
Denver also fit this bill up until 3-4 years ago.
You simply cannot compare it to a similar sized European city, or to any of the "big city" style US cities on the East coast.
For this exact reason I split my time between Minneapolis and Chicago and plan to move to Chicago as soon as possible full time. The lifestyles are not remotely comparable.
Minneapolis is a cool place, this is not an slight to the city or it's residents in any way. But Minneapolis is almost entirely suburban, and the parts of Minneapolis / St Paul that are actually urban (where "urban" means more than 75% of the buildings are 4+ stories), those parts are not affordable to families.
Honestly, I think it's a shame to limit the definition of "city" so stringently. Why can't a quiet neighborhood with tree-lined streets and kids playing outside be considered a part of the city and not a "suburb within a city?"
But whatever, I still think of it as the best city I've ever lived in and although I still work here, I miss living in it sometimes.
They're eager for help ;-)
Incidentally, I made a tool for finding homes:
1) Near a decent bike route, or the few that exist (grand canal, Phoenix Park, Waterford Greenway, etc.)
2) Near an Educate Together school.
Any comment is appreciated!
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.
But I'm tired of feeling like I stand a decent chance of dying any time I decide to go anywhere.
More importantly, though, I'd like to be happy watching my kid ride a bike to school, and not filled with abject terror.
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.
I’m American, so the idea of emigrating to the EU feels mostly moot, but it’s fun to consider alternatives.
Personally, I think it's worth it, for one of the safest, happiest and fairest countries in the world.
We do however stock up on a lot of stuff like cosmetics and shampoo and such, which costs almost 3 times as much in Denmark, compared to Germany.
We have extended family (cousins) on my wife’s side of the family that are Danish. Lovely people. My wife and I have toyed with the idea of moving near them; however, we are in careers that would make likely make that process very challenging (k12 teacher & mental health therapist are unlikely to be in such high demand to obtain occupational sponsorship).
For obvious reasons, very few people have outdoor pools.
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.
This is exactly why some of think "flats are bad." I really hate living on top of other people.
Is that sentiment due to the concept of living in a high density environment, or the execrable execution of practically all high density residential developments?
There are known ways to develop high density without it feeling like high density. But they all subtract from the profit margin of the developer, and there is currently no customer demand for it over the lower-cost, higher-margin and more miserable executions, thus you very rarely ever see high density actually executed well.
I haven't been able to find a forum that specifically discusses affordable, high density design. Because I'd like to pepper them with a lot of questions I've pondered, but as a layperson, can't find answers to. Like: assuming cost can be absorbed, lots of people see digging below grade space as more trouble than its worth, because water is always seeping in. I see the water and think, great, let it flow into a cistern even deeper down to pump up and water plants. Why aren't we using the capital concentration of high density housing to make more space below grade and reduce water consumption off city mains at the same time?
I like having my neighbors at arms' length.
As for the water thing: well, living on a farm I have to take care of my own water and its far cheaper to buy municipal water than to dig wells and process your own, so no developer is going to do that.
In the context of OP, we're talking about the bulk of the population, who in the US have a median household income of $57,230 to $59,039 in latest census statistics. By virtue of sitting around chatting on HN, there is a very high probability that you have a very privileged position where that median household income is close to or below your individual income. It certainly is below my income.
I get it. I like living in a large space, too (50-100 acres is my ideal). And I get that there may be individuals like yourself in that bulk of the population who feel the same way. But realistically, when discussing policy decisions over how to structure a nation's infrastructure so it is affordable for most of its citizens, at our population levels, with our energy infrastructure, IMHO you're only looking at high density. The energy consumption profile alone of living low-density, combined with prevailing low-efficiency stick builds in the US, makes low density a punishingly expensive proposition over time for middle income families.
Those of us who are wealthy and/or privileged enough to avoid high density, I'm not prescribing we should do anything but pursue what we enjoy and are able to afford. But for a disturbingly large and increasing segment of the population, I don't see low density as a viable option, absent some pretty radical changes in the socioeconomic and cultural order. I welcome discussion to the contrary, as we need a solution for the burgeoning middle classes in developing nations better than the US model, and I'd prefer a low density approach because it is simply currently an easier sell.
> ...far cheaper to buy municipal water than to dig wells and process your own...
My thinking was more along the lines of, if you're building mid-rise to high-rise for high density, then you're going to be digging into the ground anyways for the foundation. You might as well dig a bit further for the marginal cost of getting your own cistern, letting the water seepage that is normally fought against fill the cistern, and use the water like gray water for a food forest and orchards, and let the filtered runoff feed downstream aquaculture arrays.
> But are you able to buy a decent detached house with a backyard and ...
You would need very thick reinforced concrete to be sure of surviving most tornadoes. And you'd have to solve the roof problem.
You are severely underestimating the power of tornadoes.
Several have been hit by tornadoes. There is even an older design (thinner with less reinforcement than modern designs) that survived an EF4 or EF5 tossing cars at it.
> No standard home construction even with brick
Regardless of the sheltering advantages of dome homes, it's misleading to say they're just as affordable. They don't resell well at all, making it an extremely risky investment. Costs of the basics (as told by the marketing documentation you sent me) can be just as cheap, until you realize you lose significant floor space and you need more materials for a similar sized home and you realize nothing standard fits. No nice doors, no normal windows. Now you need custom ones - price goes up.
Compared to the homes rebuilt after disasters, most of those are significantly cheaper to build than a dome and that's where insurance goes. People aren't willing to pay more for a non-resell-able and frankly ugly structure that isn't as practical.
Each room in a dome home will normally have at least 2 flat walls, frequently 3. That's enough for shoving things against walls, not that you should damage your paint that way.
Usually people use normal windows and doors. You can install them the ugly way or the pretty way, and oddly there are people who choose both. The ugly way has them on bulging protrusions. The pretty way has them recessed behind openings that are often rectangles or trapezoids with rounded corners, with the space between acting as a balcony or sheltered porch.
Here is a pretty one on sale now, having gone up in value by more than a factor of 8:
https://www.islandpacket.com/news/business/real-estate-news/... http://www.monolithic.org/homes/featured-homes/the-eye-of-th...
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.
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?
There is no need to conquer anyone, if it is mutually beneficial to cooperate and compete with external forces instead, such as the US and China.
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.
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.
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.
Oh, so it is totally possible. But not if you want to live in a big city.
K.
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.
Invoking Reductio Ad Absurdum, there's always a place for us in the ghetto too, the only question is do we want to live there?
OP said that they didn't want to live in a suburb, which is a reasonable view to have. I don't want to live in one either.
My car-related expenses per month for two commuting drivers are $100 insurance, $150 in gas, and maybe $100 depreciation and maintenance. My cars are old and are not a fashion statement by any means. I would have to pay much more than $350 to get the same amount of house near city center. I would also sacrifice the ability to conveniently go long distances.
The perspective confuses me - isn't "having kids" the lifestyle that they want? If that is the priority, then other aspects of life must be flexible to accommodate.
* Have space for two children, presumably with separate bedrooms. Potentially even more than one bathroom in the apartment.
* Live in a nice, urban area.
* Bike 15 minutes to work.
They are able to afford this in Berlin, but probably would't be able to do the same in the US.
But from having bought a place in a high demand area recently, the thing is always "who are you competing with". When the average person with 2 kids and a dog are looking at the same houses in the same places as the other family with 2 kids and a dog, there will be differences, but overall it won't be too bad. The problem start when that family wants the exact same house/condo/whatever as the 2 highly paid software engineer with no kids.
Then you're screwed: you're competing on a different level. And there's starting to be a lot of people with high dual income and no kid. The US is generally a nation of divide between the haves and the have nots, but the cultural divide is making things waaaaay worse.
Even in SF, the housing is a lot larger than almost all of Europe. London is a disaster if you expect much if any space.
I'm not sure why that is. Being physically cut off from the world helped keep prices down for sure, but it doesn't explain why apartments are large relative to the number of bedrooms.
So we live in the city in a “small” (by modern American standards) condo and we’re super happy with it.
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.
I think that's generally the conclusion that I come to: I'm very happy being realistically rich in America, but I'd much rather be in Europe if my financial situation were average for a software developer.
https://www.bls.gov/ooh/computer-and-information-technology/...
I am not arguing that this is or isn't a lot of money. For the record, I think that it is a lot of money. It's just not enough money to live OP's lifestyle in the US.
It is disingenuous to equate the two.
Usually 'lifestyle' in the context of affordability is used to describe a set of activities that cost a certain amount. Like eating out, going to the movies, having multiple cars, etc.
In SLC it's easy for a software engineer to make 100K and support a family in a large home on a single income. We moved out here from California for this very reason.
Maybe you don't consider SLC to be a 'major city', but you will probably find similar lifestyles for engineers outside of California, Boston, and New York.
There are SO many cities with environments that this is possible, you just have to do a little cursory research. Businesses in these cities are hiring all the time because no one thinks about them. They don't have enough Starbucks or bike lanes. So we get articles talking about "can't" when it's really "won't."
Austin, Dallas, Kansas City, Des Moines, Detroit, Tampa, Miami...
The list goes on and on of medium sized cities starving for dev talent without enough coworking spaces or incubators.
It's more that the rest of the country isn't comparable to Berlin. The cities that you listed are a great example of this.
> Austin, Dallas, Kansas City, Des Moines, Detroit, Tampa, Miami...
None of those are nice, dense urban cities in the way that Berlin is.
The real issue here is that quality urban environments in America are becoming increasingly expensive to live in. If you can't afford it, but refuse to try and work to turn a medium-sized city into the city you desire, maybe you should tone down your "why our families can't afford X" rhetoric, because it's disingenuous.
If a software developer likes Berlin and wants to live in a city that provides a similar lifestyle then how do you propose that they turn Des Moines into something that provides a similar lifestyle to Berlin?
If there is any disingenuity in this discussion it's in equating Berlin to Austin or Dallas or Kansas City or Des Moines or Detroit or Tampa or Miami.
Those are perfectly reasonable places to live, but they are not substitutes for Berlin if you want to live in that kind of place.
I'm going to repeat myself one more time because you seem to be missing my point: I am saying the premise is flawed. I am not comparing Miami to Berlin, I am saying that the author is insisting on certain prerequisites and then saying that his family can't afford to live in AMERICA at all.
If you can't agree that this is disingenuous then we are going to have to agree to disagree.
In contrast, the place that I actually want to live, Seattle, has everything that I need in a layout I like except that I can only afford to live on the outskirts in a crappy neighborhood. If they would let people build 6-story buildings in better neighborhoods then it would be perfect.
I grew up in the Bay Area. I see the same thread talking to people who still live there.
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...
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.
Choose the hill to die on carefully.
There are relatively few scenarios where this would occur. It would have to be something like a sharp phase out of a deduction or credit or some sort of benefit. I don't think the usual graduated phase outs would do it for any material change.
Are you sure that this is not just a misunderstanding of how marginal tax rates work?
Other situations with cliffs
taxB > taxA
$salary * (1 - taxA) = take-homeA
$salary * (1 - taxA) + $raise * (1 - taxB) = take-homeB
take-homeB > take-homeA
Commodities - not in a rigorous fashion. I know we have more at the end of the month. If it's because we just buy less stuff that's OK with me. As I mentioned, we save a lot just not having to own or operate a car; we walk or cycle most places. Health insurance is also far, far less expensive (about 2500 EUR per year for a family of three), and even if that was "included" in my pay in the US, somebody was paying for it.
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.
Like pretension? Portland calling here. Like Theatre? NYC calling. Like the cold? Alaska on the line. Like surfing? Hawaii here. Like the great outdoors? Pick one of a million places.
You just can't do that in any individual countries in Europe, as they are all smaller than most US states, with far less varied environments.
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.
In many parts of Europe housing costs would have killed you.
Can someone from Berlin confirm that this is accurate?
[1] https://en.wikipedia.org/wiki/List_of_German_states_by_GRP#2...
The city was built for a population bigger than its current population.
Today we have a housing shortage and the fastest rent increase in Germany.
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!
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.
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)
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).
One of my difficulties was when I had college debts, I kept trying to find remote work for around 25 USD, and people still thought it was too high, on freelance.com and whatnot, but I couldn't go lower because then I would lose money (ie: not cover my debts and expenses).
If you don't mind (remote) full-time, you can try remoteok.io, Angel list, stackoverflow jobs etc. Recruiters can also help.
I imagine you do have to stsrt lower to get some reviews first. That’s a big thing clients look for.
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.
I think it's worth thinking about the conditions that could lead to a person seemingly torpedoing herself with an expensive, debt-ridden culinary certificate. Things really have gotten tougher for many Americans over the past few decades. Some people make it extra tough on themselves by refusing to handle downward mobility gracefully and taking the best options available to them. On the surface, borrowing money for culinary school seems like an objectively (very) bad choice, but people are complicated, and I'd be interested in understanding what brought her to this.
I think, instead of looking at individuals, the trends are more important. Are jobs paying as much? Is there the same abundance of jobs? Is housing more costly? Is debt worse? What kind of debt?
As opposed to just looking at individuals, such as the engineer turned chef, which, I mean, come on. It's a bit ridiculous.
Well that is kind of my point. I don't know any engineer that would go to an expensive culinary school as a way to enter another career. I have yet to meet a competent engineer that wouldn't look at the return on investment of something like that. I'm not saying they aren't out there, but the things that make you a good engineer are the very things that keep you from going into debt at an expensive culinary school.
I'm not trying to insult the person who is looking for a new career, but too often I hear these stories about how hard life is for someone, but when you look at the entire story it doesn't add up. In this case, I think there is a reasonable chance that calling her an "aerospace engineer" is an overstatement of her engineering skills. It is possible she is an exception is actually a skilled aerospace engineer, but it seems unlikely or that there is something being left out.
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.
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.
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...
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.
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.
And this argument is garbage. Individuals accumulating massive amounts of wealth doesn't do any good for society.
1) They are competent at wealth accumulation, which indicates some level of aptitude and intelligence
2) They have a large mass of capital with which to fund new businesses and ventures, and are likely to pick good candidates because of 1)
So, I don't see the problem here. It seems to me like they have an enormous good thing to offer society.
Many people argue that it's the best mechanism we have for achieving whatever our actual goals should be, but few if any will claim that running businesses is itself the higher purpose of human civilization.
In order for this conversation to be productive, we'd all have to agree on some underlying moral framework prescribing what society ought to achieve. And then we'd have to evaluate whether ultra-wealth people allocate their capital in a way that achieves that outcome.
No small tasks! But I expect that in the course of such a conversation, we might discover that there are a wide variety of rich people who spend their wealth in a wide variety of ways. Some of those people will typify your caricature of the rich, and some of those people will typify Harvey-Specter's caricature.
Finally, as an aside, you put the ultra-rich on quite a pedastal. They're just people who decided they wanted to accumulate wealth and then did a good job at achieving that.
It's admirable to do so well in a competitive environment, but no more or less admirable than the top 1% in anything else (a sport, medicine, religious/military leadership, teaching, etc.). Being great in a competitive atmosphere is a good signal, but wealth accumulation is not the only place where great humans compete and wealth is not the only metric which great humans use to measure their life's work...
Yes. And the irony is that the wealth accumulators ultimately do so using achievements made by other people, who cared more about other things than accumulating wealth.
Also, I don't think that the top 1% should have all the benefits (winner takes all).
Just for fun, what is your underlying moral framework?
Mine would be population and economic growth, environmental protection, and disaster avoidance.
And #2 just sounds like a rephrasing of trickle down economics, which is economically questionable at best.
Taxes.
> Well what other "economics" are there if not "trickle-down" economics?
If the people have money you can make money by making things they want and selling to them.
For example, there is a good chance that said individual would invest the money in more regulatory-capture extraction schemes. In this case, we would be better off if those resources were just straight-up wasted by the government proper.
Of course there's also a good chance that the government would use it to fund their own citizen-hostile totalitarianism (eg the NSA). The point is that the general heuristic of government inefficiency is inapplicable.
A successful white-collar criminal can be said to be good at capital allocation, to make an extreme example.
My argument is not that wealth means someone is criminal (although I do think criminality has as a goal wealth rather than poverty, which is the inverse but relevant). However I do think there are lots of hidden costs that people advertently or inadvertently manage to get out of paying for, and taxes are meant to recognize that fact.
The bailouts of the great recession are good examples of this to me in some sense. The government saved certain businesses, or ameliorated their crash. Whether or not this was the right decision is one thing, but given that they did get bailouts (or outs), suggests that what we should expect is taxes and regulation to support these kinds of things. There are lots of other things like this that conveniently get glossed over, like hidden environmental costs, education and infrastructure, research, etc.
I find it incredibly manipulative, for example, for arguments to be made against net neutrality on the grounds that telecom companies somehow bootstrapped their way up from nothing, when the internet itself was a government invention, and much of their infrastructure is made possible by public right-of-way laws or other privileges given by municipalities.
I think the fundamental problem with US society today is an extreme form of survivorship or fundamental attribution bias, where we grossly overattribute success to individual characteristics and not other factors. Then we get locked into these strawman debates that pit extreme capitalism against communism, as if there's no moderated grey area, that our only choices are complete equality of wages etc. or winner-takes all gross inequality.
What I increasingly see in the US are the haves and the have nots, and I no longer believe that the haves, by in the large, deserve what they have in a way that the have nots do not. Income inequality, to me, is bad not just because of the disparity itself, but because it tends to exaggerate market errors in valuation.
We tend to have these conversations and HN and elsewhere where we look at these examples of downward mobility and point to everything someone did wrong, but then do not turn to management, administration, business, etc. and ask "did they really do everything right"? We also tend to act as if, if they really made an error, that is really worth the downward mobility they accrued.
"My boy, not at all! What followed was one of the most prosperous times in the country!"
I'm not saying correlation, causation, blah, blah, blah. But such rates not only didn't "destroy a generation", it's a time many look back to fondly (in which case they're probably white and male).
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.
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.
I'm making a joke, but your analysis is exceptionally weak.
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?
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.
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.
- 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.
Even if the personal tax was capped at 5M, it then doesnt make sense for personal distributions greater than 5m, so the money stays in the corporation for reinvestment.
Progressive taxation is good. Progressive taxation that only targets the top 0.1% isn't effective unless income inequality were much worse than it is.
To make a meaningful amount of more revenue via income tax without hurting the bottom 90% too much, we'd need to target the top 10%. That probably means the top tax bracket should kick in around $130K. Much lower than where it is now, but high by the standards of many other rich countries (in the Netherlands 52% kicks in at $63k/yr, in Denmark it's 60% at $55/yr).
We should add a VAT too. Possibly with a simple UBI-style system to offset its impact on the poor (since they consume more of their earnings than the rich)
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.)
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.
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.
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.
Our poorest people are in many ways wealthy compared to both people of times past and compared to people in poor nations. Homeless people can get apples and potatoes all year long, something even William the Conqueror couldn't have.
> The fact that you can purchase one for an amount of money
You can get TVs free off the sidewalk in most places. It is not an indicator of wealth.
> Our poorest people are in many ways wealthy compared to both people of times past and compared to people in poor nations. Homeless people can get apples and potatoes all year long, something even William the Conqueror couldn't have.
Homeless people are so wealthy...they don't have shelter? I think you're putting your foot in your mouth. Also can they get apples? With what money? Apples are available to purchase. That doesn't make them affordable.
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.
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
https://fred.stlouisfed.org/graph/fredgraph.png?g=kipg
Another factor of two increase.
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.
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.
Because I hadn't thought about that before, but it is actually quite a concerning identity - eg, looking at the price of gold, clearly asset prices are rising in response to increases in the money supply. A kilo of gold in 2017 has nearly the same utility as in 2000, but there is a substantial price rise.
Since inflation doesn't measure things like that (only measuring changes in consumer goods EDIT - [1]) - wouldn't a substantial portion of the growth in GDP then be a response to the fact that the M2 is rising and there is trade in goods that are not included in the inflation indicies? Basically, if the central banks were forcing growth in the M2 (which they are), wouldn't that call into question the value of the real GDP as a measure of real economic growth? All it would take is that price rises in assets or business costs, caused by increases in the money supply, not be at the same percentage rate as price rises in consumer goods.
EDIT - [1] - Obviously you can get the real price of gold after adjusting for inflation, but that is assuming that the impact of inflation on the price of gold is identical to the impact of inflation on the price of consumer goods. I hadn't realised that assumption was being made before, and I'm going to read up on it to see what evidence there is that it is true, because if the impact of monetary supply increases on business and asset prices is different, then that undermines GDP growth as a meaningful measure. Thanks for the thought, it is an interesting one.
> There is a vast quantity of new money being created, and it isn't appearing in household incomes. Something should be done.
You seemed to be implying that things were out of control on the money supply. My point was that this is not so. The money supply has to grow as much as the growth of real GDP, or it's deflationary, and deflation is much more damaging than inflation. Money supply growth on top of that results in inflation, but 3% inflation isn't the kind of level that causes real problems.
I don't think that gold is a good metric. Yes, it rose in price from 2000 to 2018, but it fell from 2015-2018, and we still had growth in the money supply and inflation. The price of gold is basically a measure of distrust in fiat currencies. It reflects inflation, true, but it also incorporates sentiment, which can change much faster than the money supply.
I think that invalidates the premise of your third paragraph. (Somewhat: I don't totally buy the official inflation statistics either. But measuring by gold isn't the answer.)
I absolutely was, and still am.
> The money supply has to grow as much as the growth of real GDP, or it's deflationary, and deflation is much more damaging than inflation. Money supply growth on top of that results in inflation, but 3% inflation isn't the kind of level that causes real problems.
There is an assumption there though, and that was what I was excited about. The assumption is that everything that isn't a consumer good increases in cost by (inflation_CPI + real growth).
If that assumption is wrong, and I take my prior (ie, out of control money supply) then the result is that real GDP growth is decoupled from the growth of the underlying economy, and now I have a formula to play with.
So the next step is for me to go and look up why they think that, eg, change in the price of gold (or anything not measured as part of the CPI) is equal to (inflation_CPI + real) instead of (inflation_asset_markets + real). Because I think that the way the money supply is being expanded would cause the rate of change in expected price of assets (sans real changes in value) to differ from the inflation rate of consumer goods.
EDIT I'll just add my reasoning for why - we can establish that new money isn't going to median households by looking at the average median household wage (and growth in household numbers isn't high enough to make up the difference). Therefore, the money is likely being directed towards people who already have lots of it, and businesses. At this point, assuming that this is spent on and causes inflation first and foremost in consumer prices seems like unclear thinking. It isn't going to entities who compete for consumer goods, it is going to entities who compete for assets and business supplies.
The extra money goes to raise prices of financial assets, not just of consumer goods. Those financial assets may go up more than consumer goods do.
This is why we have https://en.wikipedia.org/wiki/Consumer_price_index vs https://en.wikipedia.org/wiki/Producer_price_index vs https://en.wikipedia.org/wiki/GDP_deflator and chained vs non-chained versions of some of these. Measuring "inflation" is hard.
> 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.
https://fivethirtyeight.com/features/fancy-dorms-arent-the-m...
"At private nonprofit colleges, the spending categories described above — student services and faculty and administrative salaries — together explain most of the tuition increase over the past two decades."
You’re just trolling now.
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?
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.
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.
"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.
Anecdotally, when my parents bought their house in the east bay, it came with old (now invalid) covenants that literally said no black people could live there unless they were servants. The house was built in the 40s!
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...
Add to that imminent price increases due to impending minimum wage hike in SF in July.
So America is the only racist country?
While European countries would've been racist as well, it was uniquely American to have, in the country, such a large number of the people they were racist towards. If there's not many people the racist policy would have an effect on, it isn't going to have much of an effect at all.
Time for NIMBY concentration camps??
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.
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!
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.
[0] https://www.zillow.com/mortgage-calculator/house-affordabili...
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.
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.
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.
I've also been strongly contemplating reducing my 401k contributions because I suspect a downturn is around the corner...
Btw ... kudos for living at home while making good income. It is very, very easy to go on the hedonic treadmill and rent a fancy apartment, but a nice car, etc. The longer you can maintain a student lifestyle, the better off will be your pocket book.
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.
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.
People haven't run the numbers of a lifetime of renting. You will more than pay for a home outright...you will simply have nothing to show for it other than shelter.
On a five year horizon, it is a questionable if you should buy or rent. After that, there is basically no rationale for renting. There is also no rationale for renting past age forty-five. If you are in this situation, move immediately to a place you can afford to buy.
In the US, it is assumed that retirees live off their home equity. Your 401k will probably be spent within five years. Without home equity, people are going to be in big trouble.
And to preclude a popular counterpoint: you are paying for maintenance and property taxes implicitly in your rent.
So yes, lots of people have run the numbers. When they do it properly, they always come up with "it depends". The US is unusual in tax benefit for mortgage payments, which often bends things in that direction, but there are still definitely situations where renting can win.
It's also rather careless to assume homogeneity of an populations needs like "over 45", everyone is different. Someone with 3 teenage kids will have different parameters than a single person post-divorce, etc.
What you are correct about is that housing has worked as a retirement strategy for people who haven't planned - but that doesn't mean it's the best strategy.
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.
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).
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!
Yeah, it got up to around 17% in the US back in the 80s. It sounds crazy, but I've actually been told that it doesn't matter too much because the house prices would be lower to compensate for it (because people don't magically have more money to buy stuff, so if the rate goes up the house prices have to go down).
I've actually read that it's better to get a high percentage mortgage, especially if you know that mortgage rates are about to go on a downturn, because you can buy a house at a much cheaper sticker price than you would normally, and then you can refinance your mortgage once the percent goes down and get the lower mortgage rate on top of that!
It's actually supposed to be a lot worse to get a house with a low mortgage rate when they're about to start shooting up (which is right when we bought a house, four months ago, yay), because a) you won't want to refinance to a higher mortgage rate, and b) if you do decide to sell in a higher mortgage rate market, then the sticker price of your house is going to have to go down quite a bit to reflect that in order for the house to sell, so you might end up losing money on your house, or at least see much more reduced gains.
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.
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.
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.
A lot of them are working in service jobs which are definitively low paying and often unstable. I also see a worrisome level of cynicism more generally: with the exception of entertainment, things are not getting better and the corruption of our business/political class will only continue to screw us.
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.
Yeah.
Lo que hay que oír...
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.
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.
Additionally, I know this is UK and not US, but it does bring up other factors that economic factors can have on kid's performance: https://www.gov.uk/government/news/socio-economic-influences...
I'd rather depend on the dictionary definition which is more subtle and less judgmental, but I'm aware that it's become a rather loaded term recently. (A special right, advantage, or immunity granted or available only to a particular person or group.)
> Is a kid who studies and gets all A's in class privileged with getting the reward for all A's?
Overwhelmingly the answer is yes. Children who come from a privileged background tend to make better grades as a rule, and the privilege continues from there. There is no need to get defensive about it or guilt-ridden, either, if you're one of the people in that position. (what, I'm supposed to perform badly so others can catch up?) It is just useful to recognize what is happening.
If nothing else this kind of awareness prevents people from having to ask questions like "Do I just live in that much of a bubble?" Well, yes.
> Earning a scholarship anyone can earn? Not privilege.
It wouldn't be a scholarship if anyone could earn it. No organization that awards scholarships awards them to all applicants performing above a certain objective threshold, as far as I know. It's a contest with winners, and the winners enjoy a certain privilege. There's nothing inherently wrong with that.
(although it might be a big-picture problem if there aren't enough scholarships to go around, if increased credentialism requires too many people to win that particular lottery, etc. etc.)
You can't hand wave and cite some difficult to quantify "privilege" in early childhood to explain all the differences in individual achievement among a group of people who share a common trait.
At what point does privilege stop and taking advantage of opportunity begin?
I'm not denying the role of luck in determining the course of one's life but to treat it as the global predictor of what one will achieve is basically denying the ability of people who do not have good luck in one way or another (e.g. who you were born to) to move up the ladder in spite of that.
Yes, it's better to be lucky than be good but being good can still get the job done.
Hard work and personal achievement is not all that matters. I believe I worked plenty hard to get where I am today but I had the fortune to be born to stable parents who could always put food on the table, took an interest in my education and could afford to send me to college without massive loans. Take away any of those things and my same effort would likely not have yielded the same results - I was set up for success.
I don't feel guilty about that, but I do try to recognize that people who are struggling can't just "work harder" to fix their problems.
The other thing that's useful to recognize is that while where we start is not destiny, you really can study what happens to entire populations of people. It is absolutely not difficult or "hand wavy" to quantify early childhood privilege to a meaningful extent. Nobody is saying the correlation between privilege, academic performance, economic performance, even crime and so on explain "all" of anything or treating them as "the global predictor of what one will achieve."
I assume people are defensive about this stuff because they're sick of feeling like they're being accused of having something they haven't virtuously earned, or perhaps more thoughtfully, because being studied sociologically as part of a population makes people feel like ants instead of beautiful, unique snowflakes. Well.
In which case doesn't the word become entirely pointless because everyone alive is privileged? The discussion then can only happen when comparing the amount of privilege between two people, which becomes almost entirely subjective since it involves comparing different privileges and deciding some sort order. The subjectivity is even worse when we look at the intersection of different privileges. And what of the privileges which we don't even consider to measure, or which the lack of such privilege is socially taboo to call out the lack of?
I feel like we need some formal calculus to discuss privilege, which to my knowledge doesn't exist.
A sociologist might discuss factors in the home like household wealth, childhood exposure to crime or violence or disease, quality of education, parents' education level, and a whole bunch of other things and their effect on a child's future wealth and educational outcome and so on. (and yeah, something like IQ is a little more taboo, but you can always look at that) That's sociologists, but even among normal people that looks like a reasonable list of things that would constitute privileges, at least as a first approximation.
Oh yeah, I don't know where you live, but in a country like the one I live in, where money by design tends to trump just about everything in importance and effects the ability to obtain or maintain everything else, guess which factor tends to constitute the most important privilege?
None of this makes me want to wave my arms around and cry out "oh my, this privilege thing is so complicated we do not even have a vocabulary to talk about it!" but YMMV.
That 'just about' gets overlooked to an extreme degree. How much money makes up for being autistic? From having a learning a disability? From a history of abuse?
And even if the sociologist are looking at all the right factors, once we are a single level removed from them lots of those factors are dropped from the vocabulary and not picked back up. For example, sex is often brought up in regards to some issues, but completely dismissed from others. Other issues are considered to minor to be worth mentioning, and while that may be true for any single one, someone who suffers from multiple such small ones can end up being declared privileged despite the combined effect of multiple minor issues completely eliminating privilege granted by others.
How does a wage gap and expectations of putting children before career compare to having a law preventing genital mutilation? How much benefits stereotyped to men are to be canceled out by someone with a gender neutral name who sounds female over the phone? How does being white, tall, and handsome compare to auditory hallucinations?
The 'normal people' discussion of privilege is an abstraction of what privilege actually is, and it is a very leaky one. That some can choose to ignore those leaks and the impacts of those leaks on themselves does not validate the abstraction as a good one worth using.
Anecdotally, my well off college friend still applied for many scholarships and got a decent 50% chunk of her education paid for via scholarships.
There are also many students that do not have the mental (either intellectual or psychological) potential to get all A's in school because of a history of family discord and stress and physical environmental effects associated with poverty. (That is, even if you took away any effects of current poverty holding them back from what they intellectually and psychologically could do under ideal circumstances, they still would not do well because of past circumstances.)
http://www.driscollchildrens.org/patient-education/food-nutr... Children with severe enough emotional stressors can cease to grow despite adequate nutrition and no physical ailment.
https://hub.jhu.edu/magazine/2013/winter/adverse-childhood-e... Adverse childhood experiences appear to set people up for increased likelihood of chronic illness for life.
Well, I assume there were some residency and academic requirements. (a taxpayer funded program that only benefits those of us smart enough to get into grad school constitutes a "privilege," but I digress)
> In fact, the program was super diverse in terms of race, gender, and socio-economic background... very intentionally so.
It sounds pretty great. I think, circling back to the "am I living in a bubble?" question, you need to realize how unusual that really is. It sounds like the kind of thing people who are concerned about this stuff would really like to expand and make available to more people.
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.
These are two wonderful, succinct statements that perfectly describe the American experience.
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+
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.
One of my favorite lessons of software engineering: it doesn't matter how right you think you are.
> “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.
'Totally won' means there's nowhere to go but down.
Resource depletion and pollution might be their formidable enemies.
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?
http://reclaimdemocracy.org/powell_memo_lewis/
Hadn't heard of it. Just read it. Interesting stuff.
It's very clearly a call-to-arms for business leaders against Marxists/communists. Not the working class.
Most Communists, at least in the West, spring from the middle- and upper-middle class, not the working class.
And Communist countries, historically, tend to make their working classes worse off, not better.
Equating a defense against communism with an attack on the working class would seem a stretch.
In the Powell memo, you can see some of the precursors to what's happening today. For instance, I think the demonization of academia in right-wing circles as well as the death of organized labor (unions) probably start with this memo (I'm not the only person who thinks this. Chomsky as elaborated on this at length.)
The Powell memo was also started the process of making lobbying both widespread and acceptable to society (even when it was legal, it used to be frowned upon.) I think most people would agree that lobbying is a cancer on our democracy.
This is a popular line of thought (try googling "corporation evolutionary biology", which gets you to pages like https://hbr.org/2016/01/the-biology-of-corporate-survival ), but it has a weakness: it's hard to be rigorous. In the field of evolutionary biology, experiments are hard to design and hypotheses are hard to falsify, so a lot of the writing is deeply infected by the author's prejudices.
I'm sure there's something there, and I'm confident that whatever it is is more plausible than fragile conspiracy theories like the Illuminati. But exactly how non-biological entities compete and evolve is hard to say.
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.
edit: cannot find any rule on this in the guidelines. perhaps you could give me a reference.
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.
"Immigrants and their children have helped found 60 percent of the most highly valued tech companies in the U.S"
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.