Hacker News Reader

Comment by chiefalchemist | Hacker News Reader

You singular? Probably not. You the household (of at least two earners)? That's the more likely scenario.

The point being, as we've moved to the two incomes per household standard the price of things driven by demand (e.g., housing) has also naturally increased.

In those 8 urban areas compensation is higher. It's not advance economics to understand that housing - especially when supply is limited* - is going to increase. And as a percentage of the entire population, these are outliers. We always have outliers.

All that said, the better question is: As a percentage of salaries, which areas are most the most expensive?

* There's a cost to NIMBY and these communities seem to be okay with that.

View on HN

* Two earners...until you have kids and look into the price of daycare for say 2 kids...then it literally makes $ sense to have 1 spouse stay home. The cost of daycare and childcare has significantly outstripped inflation since the pandemic.

Yep, paying $1900 a month for daycare for one kid right now.

Where do you live that daycare for 2 kids costs more than one full-time salary?

Really depends on what the spouse does for a living but in the Bay Area Peninsula two kids is easily $4000 a month for daycare.

If you both are making FAANG comp sure, keep working. If your spouse is a teacher? Maybe not.

Given those numbers maybe the right move is to open a daycare!

The right move for everyone is to stop having kids. Wait until things change so that it's economically comfortable to have kids, though this may take a generation or two.

Challenge is housing costs. A 3/2 SFH will run about $2M, which at current interest rates is about $12K. It takes childcare income from 6 kids just to pay the mortgage, and sole-proprietorship home daycares are limited to 8 kids total (less if some are infants).

For people who already own their own home, though, it's a pretty attractive living if you like kids. Most of the home daycares we looked at are run by people who bought ~10-15 years ago, and they make a very good living, and oftentimes have the house fully paid off. Either that or they bought recently but are pooling resources from multiple family members to afford the house, and then have them helping out with the childcare.

The 2nd wage earner gets hit with the marginal tax rate. So you have to factor in roughly a 30% ish reduction of that 2nd salary, not to mention transportation and other expenses. And tech workers don’t always marry high salary tech workers.

That's the irony. Both parents work and the market swallows a good chunk of the second income.

But now, simultaneously, there are two income households with zero kids. That's the new benchmark.

I'm not going to judge / critique / question why it is, but the shift from one income per household to two has create economic chaos. Chaos we have yet to come to terms with.

But more irony, from an economic POV there are couples opting out of families because of the costs. And the new benchmark nudges up...

My friends without kids typically find ways to spend money doing other things, people need to occupy time. They travel more, have memberships to wineries, and eat out multiple times a week.

People without kids also tend to compete in different areas for housing. A place with a great view in a bad school district could be appealing. Where people with kids typically want a SFH in the burbs in a good school district.

Really the strongest competitor in the housing market is the older generation with more disposable income and a house(s) already.

The age doesn't matter, more "disposable" income will drive up prices. A home here, a home there, comps. Poof! Prices nudge up.

And you don't see the younger ones because, yes they still have economic headroom to travel.

The market has priced in a move from 1 to 2 earners, which is reasonable given societal expectations around household formation. Given a move from 2 to 3 would be highly unexpected, ceteris paribus home prices could plateau.

Elizabeth Warren wrote a book about this called The Two Income Trap [0]

[0] https://a.co/d/iA9xxIX

Fun fact, her Cambridge house is worth north of 3.1 million.

She’s just like Bernie Sanders, a lot of talk about the poor and no action. Hypocrites.

Having a house worth that much isn't evidence of inaction and it's definitely not hypocrisy.

Their argument isn't "if you have 5 million dollars you're a bad person".

But that is their hypocrisy. If you have a thousand times more than most people, nbd. If you have a thousand times more than them, then that’s an outrage.

The outrage is not having that much money, it's that taxes are too low for those people.

But also, those two are not that rich. The top 1% is the biggest net you could reasonably cast for "too much wealth", and they're below that $11M threshold.

Another good reference point is "what would have gotten you called a millionaire around 1800-1930, before we had several decades of consistent inflation", and the answer is at least 25 million dollars today.

Perhaps. But it doesn't help that instead of paying taxes many don't donate significantly on their own.

The argument against taxes is that the government will squander it. It is, in the context of history, a solid argument. Futhermore, much of such wealth is via capital gains, not income. Are we going to discourage investing? (Maybe we should, but it's a complicated answer compared to upping income taxes).

It's strange the Warren and her ilk could be a model for such a path, and yet refuse to do so. *Nothing* is preventing them, not even the tax code (as they could often make such donations tax deductible). But maybe they need that bigger more expensive home? The rest of us don't understand where that is.

Donating a significant fraction of their money is not a model for how higher taxes would work. At best it shows they're 110% serious, and at worst it encourages the "all welfare should be based on donations" crowd.

According to this article from a couple years ago, "Elizabeth Warren and her husband have contributed about $420,000 to charity since 2008". That's not a huge percent of her income but it seems like a solid amount to me, depending on which of these wealth estimates is actually correct. So sure "nothing" is preventing them from doing more, but there's also no big pressing reason to do so. It's not like she doesn't donate at all, and if she's actually in the 99% then whatever that's enough of a donation. And Bernie's definitely in the 99% and donated a hundred thousand over the same time period.

> Futhermore, much of such wealth is via capital gains, not income. Are we going to discourage investing?

I feel like "discourage" is much too strong of a word here. Capital gains taxes could be 80% and people would still invest their money. What else are they going to do with it?

Not a bad person...but to say,"we need to help the poor" and then to have a home value that could buy 10+ homes (in most areas) certainly feels askew.

Nothing stops her and similar from donating a higher percentage of their wealth to non-profits. She could have brought a $2M home - and lived quite well - and donated $1M*. But she didn't. What are we to make of that, if not hypocritical?

* I understand it's a mortgage. But she could have went smaller and donated the difference monthly.

What's most areas? The median US home is $400k, for reference.

And would donating 25% of her wealth make people stop complaining? I doubt it. But it's more of an increase than any tax proposal I've seen.

In many instances owning an expensive house is just a matter of time and location. My parents have a $2M home in NYC. They struggled to buy it for $30k in 1980.

In all instances, it's a matter of time and place (moreso the former than the latter); we can see huge generational divides in homeownership rates by generation.

What exactly do you expect them to do?

? They literally try to help for a living.

Sometimes I agree with them, and sometimes I don't. But it's lazy to label them hypocrites.

ah yes. anyone who is poor is jealous, and anyone who is rich is a hypocrite! How dare they espouse values like... the betterment of society? sick burn!

>and anyone who is rich is a hypocrite! How dare they espouse values like... the betterment of society? sick burn!

This is funny to hear after a few days of FTX/SBF threads, where a common talking point was how SBF's activities in effective altruism (aka. "espouse values like... the betterment of society") was some sort of selfish ploy to improve his public image.

Based on recent statements by Warren, her economic chops should be highly suspect.

https://finance.yahoo.com/news/disregard-livelihoods-million...

“These statements reflect an apparent disregard for the livelihoods of millions of working Americans, and we are deeply concerned that your interest rate hikes risk slowing the economy to a crawl while failing to slow rising prices that continue to harm families.”

She's a populist. Say whatever get the masses riled up with no regard to actually making sound decisions.

Reply on news.ycombinator.com