Comment by Ccecil | Hacker News Reader

Comment by Ccecil | Hacker News Reader

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I see this problem currently coming to a head in my area (Coeur d'Alene, ID) We have long been a destination area for people looking to escape the cities but in the last year we have had 33-50% increase in housing prices (limited inventory seems to be the driving factor coupled with the urban flight).

Rental prices are to the point where even apartments are out of range for the average person who lives here. If you rent they want your income to be 3x your rent price. So currently if you are a single individual looking to rent that means you need to earn ~$36k/year to be eligible (also, a clean criminal and financial record as well). Issue is the minimum wage is $7.25/hr still...and if you work foodservice they can pay you ~$3.50/hr because your tips offset it.

We have a steady influx of people buying houses at over the already inflated asking cost because it "seems cheap" to them compared to where they live. What they do not realize is that if they lose their remote job (or if their pay is scaled to the region) they will have little/no chance of finding employment locally which will pay the amount they need to simply "live".

About 4 years ago University of Idaho released a study saying that 22% of the people living in this town cannot afford to do so...I wonder what that rate is now. I am starting so see more and more people sleeping in cars parked near the recreational areas and parking lots. Tons of multi family houses. Things are going to get bad really soon.

I can't speak for every area of the country...but in our case I suspect a large part of this is the waves of real estate investors who came through in the last couple years to buy up homes and are leaving them vacant (or vacation rentals). It seems like inventory is being artificially limited. To the people investing it is a win-win...either the house is vacant and you make a ton of money...or it gets rented as an airbnb for $3k/mo and they make even more. I suspect if they were to impose a 2x property tax on any property vacant for more than 6mos or vacation rentals it would very quickly effect the issues we are facing...but being as this town was structured by the tourism/real estate industry I do not see much hope.

https://cdapress.com/news/2021/feb/22/housing-market-heats-n...

It is bad in a lot of places. A starter home less than 10 years ago was $75k. Now it is $300k without an increase in wages for people starting out or working less technical jobs.

The housing pinch has already hit Twin Falls if you can believe that. One would have to move all the way to Idaho falls to know what it was like in the Boise area 10 years ago.

Idaho in general is getting hit hard. Montana will be next once things like Starlink take off. The primary limitation to living out in the middle of nowhere has been commute to high paying jobs.

I wonder how many people would move to Coeur d'Alene if they would have made the lake a superfund site...like they did the Silver Valley which drains into it. The whole bottom of the lake is heavy metal contaminated...but they don't show you that in the real estate ads. :)

Without an increase in wages. And economic instability causing lost jobs, as well as increasing rip stripping away earning power.

I make a lot of money as a software engineer and I don't think I'll get a home until I'm 45.

What is going on with your local economy such that you can equate "average person" and "minimum wage" like this?

Out of the 155.75 Million working Americans, 80.4 million make minimum wage. That's 51.6% (a majority) of workers making minimum wage.

So yeah.

That isn't true. In 2017, 80.4 million Americans were paid hourly, and out of those only 1.8 million made minimum wage or below. (https://www.bls.gov/opub/reports/minimum-wage/2017/home.htm#)

More generally, I'd encourage you to question the mental model that made this sound like a potentially true claim in the first case. An economy where most people are paid minimum wage would be incredibly different than the one we actually have.

Per BLS, 80.4 million workers make an hourly wage, with 1.8 million at or below at the federal minimum. [0]

It is kind of fascinating that people have such wildly different ideas about what the objective facts are, and how that must flow downstream into their worldviews and politics. Between 51.6% and 2.3% is not a small difference! Those are very different worlds we could be living in!

[0] https://www.bls.gov/opub/reports/minimum-wage/2017/home.htm#....

It is fascinating and horrifying at the same time. On the one hand, I am hoping the person was simply quoting something they heard in a rant online. On the other hand, I am hoping it is just a case of misreading available BLS data. Neither is exactly ideal and both paint rather sad picture of how we interpret reality.

You are off by a factor of fifty. That's like confidently announcing that US median household income is 3.4 million, or declaring that the US has a population of 16 Billion people. How do you react when people hold such crazy views?

Here is a recent BLS study called "Characteristics of minimum wage workers" https://www.bls.gov/opub/reports/minimum-wage/2019/home.htm

"In 2019, 82.3 million workers age 16 and older in the United States were paid at hourly rates, representing 58.1 percent of all wage and salary workers. Among those paid by the hour, 392,000 workers earned exactly the prevailing federal minimum wage of $7.25 per hour. About 1.2 million had wages below the federal minimum. Together, these 1.6 million workers with wages at or below the federal minimum made up 1.9 percent of all hourly paid workers."

Just eyeballing it looks like only 25% of the US population lives in states where the federal minimum wage is also the prevailing minimum wage: https://www.dol.gov/agencies/whd/minimum-wage/state

So I'd guess closer to 10% of people make the minimum wage in their jurisdiction (1.9% x 4 + I assume more people make min wage when it's higher)

Very interesting though that 3x as many people make below the min wage as actually earn the "minimum" wage.

Those below the minimum wage are exempt workers such as waiters because they earn tips, and I guarantee you that their real income (on average) is much higher than minimum wage, but data is hard to come by as much of that income is unreported. Thus the 2% figure is a generous over-estimate.

Most people I know in town make $10-20/hr. There is a startup scene here but most of those companies either use interns or pay less than $20/hr.

There is a large portion of the population in jobs like nursing, banking, tourism or real estate but they are not the ones who are doing the jobs we are talking about.

Who is going to serve/cook the food? Where will they live?

Teachers make $29-49k in my area. Nurses $39-68k. (based on glassdoor).

Average hourly rate is $17.39 (payscale.com)

If you work 2000hrs/year your pre tax income is ~$35k. Right now there are 1bd apartments going for $1100/mo (albeit brand new with amenities such as pool/weight room).

So if you are lucky enough to make the "average" pay in the area that means you can get a 1bd apt...assuming you qualify. A very low end house you need to make $75k/year to purchase...again assuming you qualify.

> So if you are lucky enough to make the "average" pay in the area that means you can get a 1bd apt...assuming you qualify. A very low end house you need to make $75k/year to purchase...again assuming you qualify.

I think in many parts of western Europe average earners can’t even afford a 1bd apt.

I believe he means that if you were to randomly pick people from the working population (excluding children, disabled, unemployed, etc.), there is a 50% (or higher) chance that person makes minimum wage.

Extreme inequality combined with familial support. It's not uncommon now to have one or more kids living with the parents into their 20s while they go to college and build up their career, right as the homemaker enters the workforce with limited professional experience so you get 2+ minimum wage earners and one established professional bringing in support. Throw in the gig economy, which hoists capital and operational risk onto the employees (sorry, "contractors"), and you've got a majority of the working population making minimum wage.

It's even worse in university towns, where the college kids are almost guaranteed to be working for minimum wage while receiving external funding from loans or parents which can skew the numbers even more.

That's what I mean! On average this number is less than 3%. If it's managing to be 50% here, what is going on here to make the local economy so staggeringly poor? What does a place this devastated have to offer if the housing is not even cheap?

It is semi remote...but still has the "city stuff". Very beautiful area, year round recreation assuming you enjoy winter sports.

But it is a right to work state. I suspect that is part of the issue. There is very much a "Good ol' boys club" in town which has a tendency to employ people due to favors or connections (regardless of qualifications).

Even in the 90s when we had Agilent, Itron, and several other large companies in Spokane the area directly across state line was significantly cheaper to operate in. So we ended up with a few electronics contract manufacturers who got their start being basically sweatshops (yes...solderers get started out at minimum wage or barely above it).

I know a person who in the 90s was making $50/hr as an EE...last I heard he was making $25/hr to do the same job now. (When Agilent shut down it flooded the local market with engineers and techs).

edit: Adding this link for more data. Look at the percentage of renters below poverty level http://www.city-data.com/poverty/poverty-Coeur-d-Alene-Idaho...

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