Gimme a good argument why good conditions should diminish, or deteriorate, despite the fact that workforce productivity, as well as corporate margins, have been growing steadily ever since.
Also more classes of people now have much better things: women, minorities.
Labor is not the only input to productivity, so there is zero reason labor rewards should match productivity. As capital expenses increased to obtain modern productivity gains, the reward should go towards capital, which enabled purchase of upgrading tooling. Also as people demanded more rights and benefits, some is taken from wages. When you track total cost to employ, which is what an employer pays to have an employee, you can see all the gains. BLS tracks this and many other related variables (like wages, total remuneration, and a host of other costs and benefits employees have gained over the decades.)
And corporate margins are pretty much the same as ever, net profit ~10% of revenue, since time immemorial. That 10% is what provides cushion so businesses don't implode every hiccup, leaving lots unemployed. [1] has some 1950-now data. There's plenty more places to find more. Fairly constant profit is why stock returns have averaged what they did over 100+ years. If now had vastly more profitable companies, it would have vastly increased returns.
[1] https://cdn.pficdn.com/cms/pgim-fixed-income/sites/default/f...
No, you can't.
People lived in smaller houses, but the vast majority of the increase of property values is _land_. If you want a house that's anywhere near as cheap as the average was 50 years ago, you get to live somewhere with no jobs. That is not equivalent.
As for everything else, the majority of the modern day luxuries we enjoy amounts to a rounding error next to the actual necessities that people also had back then. Consumer electronics are _cheap_, not having them will not meaningfully increase anyones wealth.
Want to read what did increase? Houses got bigger as I stated [2].
[1] https://www.ers.usda.gov/webdocs/charts/55910/farmrealestate...
[2] https://www.supermoney.com/inflation-adjusted-home-prices/
EDIT: worth noting as well that the source you cited was specifically for farm real estate, not residential.
Here is a source for land price: https://www.aei.org/housing/land-price-indicators/
On the last chart, change the indicator to Change in Land price (standardised). Note that this is only for 2012 to 2021, not even 10 years, and the _smallest_ increase is 44%, while the highest is 807%!
Some numbers from each: Feb 1954 house price $206,717 inflation adjusted. April 2023, $392,780 (the largest value). House sizes: 1950 was 983 ft^2. 2014 was 2657 ft^2 (feel free to chase down sizes for now if you like). 1950 was ~$210/ft^2. 2023 likely ~$147/ft^2.
Care to check the math? Sure seems like housing has not increased (well, it actually decreased significantly by this check) when correctly measured.
Houses cost more now because people want more, and also because they make more than in 1950, inflation adjusted.
Next, new houses in most of the country are built on new residential land as cities expand. Where do you think that land comes from? Farmland. Farmland provides a price floor on new housing, as developers buy it up and add subdivisions.
As to your oddly chosen subset of land: your list is not inflation adjusted. It's also the top 100 metro areas, not the median of house prices in the US. Of course you can pick smaller and smaller subsets to get the answer you want.
The median house in 1950 was under 1/4 acre. From the table below on price per acre, it sure would seem land is not the major factor in house costs.
So, can you provide the correct stat or not? Don't pick the highest cost subset of land. Don't pick non inflation adjusted values. And make it the median of all housing.
Here, I'll help. Here is median price per acre of land with housing on it in the US, by state [3]. It also has the median price per acre, including farmland. Use Excel, check the correlation. If you are to do it, you can also population weight these, add median house cost per state (easy to find), etc.
It's pretty clear the cost of a house is not majority the land, except perhaps in a few really dense, extreme outliers like NYC and SF.
No wonder you believe the highest component of house cost is land. You have not presented actual numbers, only picked the subsets that you like.
Try again. Also, please address the now 3 links I presented about housing costs when size adjusted.
[1] https://dqydj.com/historical-home-prices/
[2] https://www.newser.com/story/225645/average-size-of-us-homes...
>median home prices since 1950, inflation adjusted, have not even doubled since 1950
"Not even doubled" = basically flat.
Sure buddy. The single biggest purchase most people will ever make, let's call an 80% increase a rounding error.
>No wonder you believe the highest component of house cost is land. You have not presented actual numbers, only picked the subsets that you like.
If you're going to put all this effort into finding stats then you should first work on your reading comprehension. Here's what I actually said:
>the vast majority of the *increase* of property values is _land_.
They're now choosing to buy a > 200% size home. And this is because inflation adjusted median household income has gone up, tada! you guessed it! Over 200%!
And here's some real number voodoo for you - put inflation adjusted median income and median house size over time into Excel and look at the correlation. What do you think happens there?
So, here's the facts, which you don't care to address: 1) House cost is around flat per inflation adjusted sq foot for decades. 2) The main component of median house prices in the US is NOT land, as you claim 3) The reason houses now cost more is because they are bigger (and looks like a slight lower amount per sq foot than 1950), and.... 4) the reason houses are bigger is because household wages are equivalently bigger, correlating quite well for at least 70 years, so people choose bigger houses because they can afford them, as well as 2 cars, many TVs, more trips, relative food cost has declined, and on and on.
Now, I cited good data for all of these. Do you still dispute any of them?
Go ahead and cite some good data - median, complete US market, any time period, that supports any of your claims otherwise.
> Here's what I actually said:
>>the vast majority of the increase of property values is _land_.
The link where I gave you average per acre cost for housing completely blows that out of the water. Did you not look at it? Here are the steps: 1. Look at the per state average acre for housing price. 2. Look up median house acres (< 0.25). 3. Look up median house prices. 4. Multiply the acres per house (0.25) by the acre cost to get the amount of land cost per house. 5. Subtract 4 from 3. 6. Note how large 5 is compared to 4. 7. Note that it's mathematically impossible that the small amount in 3 can contribute to the inflation adjusted increase in house prices from 1950.
Here, I'll even do a decent estimate for you: from the list Florida has the median land price of around $35000 per acre for housing. Average house land is still under 0.25 (one site said it's now 0.19). So land per house in Florida is around say $8500. Zillow says average Florida house price is ~390,000. This likely has doubled in price and size since 1950 (and if it's an outlier, then some other place in the US counters it, thanks to the magic of medians).
Tell me again that the current cost of $8500 land in a $390,000 house is the cause of the near doubling in price? Did the land cost negative $400,000 in 1950?
So, keep claiming your claim. It's so mathematically impossible as to be ludicrous at this point. If you want to continue to make that claim, show me the numbers broken down just like gave you.
Or are we done since you keep ignoring facts you dislike, and misrepresent the double prices ~ basically flat by completely ignoring that the doubling in price is also a doubling in size which was my very first point (and a doubling of incomes which is why it all fits).
[1] https://www.cbpp.org/income-gains-widely-shared-in-early-pos...
Inflation adjusted median income has gone up over 200%... what do you think inflation is?
Total braindead understanding of how productivity and labor works, but it sounds great if you own the tools.
This is what people miss about the conversation: That temporary period of brief prosperity was partially due to some of the relative differences across the world. Raising living standards across the world came at a small price of popping that bubble.
Although median disposable income of Americans is still significantly higher than the rest of the world.
We saw this dream start to disappear as we un did those things in the name of freedom.
Now, we produce more per capita than we ever did before and we get less of that pie as wages have stagnated and taxes go to corporate hand outs and entitlements (healthcare and social security), which are more or less a corporate hand out since they no longer provide pensions for people that work a life time for them.
It's unclear to me why the conversation is centering better standards of living elsewhere as if we haven't added a couple billion people/consumers to the world in that time.
If favorable, but short lived conditions were behind this sudden change, then it would affect the entire economic system, not just the workforce.
How well people are off is a function of how many resources there are to go around. Since the end of WWII, these resources only ever increased. So did worker productivity, aka. the amount of resources produced per worker. So if people are worse off now, that leads to the very easy deduction that the fault lies in how these resources are distributed, not with a scarcity of the resources themselves.
Or to put this another way:
If the previously better conditions were just a fluke that couldn't be expected to last, how come that corporations seem to rake in ever more money as time goes on?
This is a very US-centric view.
Demand for resources across the world has increased dramatically as everyone’s living standard increased.
The situation isn’t going to make sense if you continue to ignore the rest of the world and try to understand the United States as if we lived in a perfectly isolated bubble.
As has productivity.
Also some industries can barely keep up. We have seen this during the pandemic. “Chip crisis” is a great example.
And can we see this in any dataset, that the post-WW2 boom eventually gave more away in charity than it produced?