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Comment by betaby | Hacker News Reader

> household disposable income

That doesn't matter a slightest if people can't afford housing. Income is indeed disposed, without much to show off.

That's unlikely to change the conclusion. US household income is so high and south east asia is so poor that it's impossible to claim it's poorer than some "Southeast Asian backwater", even if adjust for high housing prices, healthcare, and cost of living (which already includes both).

Disposable income by definition is post-expenses, which includes housing expenses.

"Disposable income" means income after taxes. The word you are looking for is "discretionary income", which means income after taxes and necessities.

No, that's not what disposable income means.

Disposable income means income after taxes. It does not include any expenses, housing, health care, or otherwise.

from the OECD website:

> Income includes wages and salaries, mixed income (income from self-employment and unincorporated enterprises), income from pensions and other social benefits, and income from financial investments. It is less taxes on income, wealth, social security contributions paid by employees, the self-employed and the unemployed, interest on financial liabilities, and the change in net equity of households in pension funds.

A bit of a clearer explanation here: https://en.wikipedia.org/wiki/Disposable_household_and_per_c...

The reason why the US has such high disposable income is because Americans have to pay for so much more out of pocket than other OECD countries do. Once you factor in health care, education and other social services that are cheap or free elsewhere, Americans are generally worse off than many OECD countries.

From that wikipedia article:

> It may include near-cash government transfers like food stamps, and it may be adjusted to include social transfers in-kind, such as the value of publicly provided health care and education.

Additionally from the OECD website:

> Household adjusted disposable income additionally reallocates "income" from government and Non-Profit Institutions Serving Households (NPISHs) to households to reflect social transfers in kind. These transfers reflect expenditures made by government or NPISHs on individual goods and services, such as health and education, on behalf of an individual household.

that still doesn't take into account the fact that US households must spend much more on healthcare and education than the expenditures made by EU governments on those same services.

Also housing is more expensive in the US (total cost, not per sqft), as is food; in fact, the cost of living in general in the US is more expensive than Europe or Japan, with the notable exception of cars and gas.

For example, I just searched cost of living in France vs USA and the first two sites I found gave similar figures of 30% more in the US. Not representative of all of Europe of course but an interesting data point.

https://www.mylifeelsewhere.com/cost-of-living/france/united...

https://www.numbeo.com/cost-of-living/compare_countries_resu...

Accrding to the wikipedia article you referenced, the OECD data is already adjusted for purchasing power parity (PPP), which is a cost of living adjustment. [0]

[0] https://en.wikipedia.org/wiki/Disposable_household_and_per_c...

good point, I missed that; that does take into account COL differences then, though not healthcare and education expenses

Interest on financial liabilities? Does that include mortgage interest? That's a big chunk for many Americans, but wouldn't include rent?

This isn't true. And while you're welcome to disagree with me, I've never seen anyone refer to it this way outside of this HN thread.

The Oxford dictionary states "income remaining after deduction of taxes and other mandatory charges, available to be spent or saved as one wishes."

Mandatory charges, to most people outside of this HN thread, are their bills and other common expenses. Mortgages, utilities, school and incomes taxes, etc are considered mandatory charges.

I'm not saying this to argue with you. Ya'll are welcome to interpret it how you like. But if you don't consider this perspective, you are going to misunderstand what other people intend to express when they use the term disposable income.

that may be what "mandatory charges" means to you, but it's not what it means in economic data.

mandatory charges are "mandatory" in the sense you are "mandated" by the gov to pay them; besides taxes these include social security contributions (some countries have more such "contributions"). The are no mandates (laws, regulations) that require you to pay for housing, food, education, etc.

disposable vs discretionary income perhaps?

yes

I think the confusion is that _colloquially_ we refer to "disposable income" as meaning the money we can spend on things we want after we've covered all the essentials.

All the replies have me so confused, I have never heard an actual real life human being use the term disposable income to mean anything other than post-expense income.

So you have at least one other person who uses the word like that.

Yeah how is rent money different from taxes? For most people, you HAVE to pay rent/mortgage/shelter expenses.

I suppose you can live on the street, or move in with relatives.

On that note, you can also choose not to pay your taxes, but you'll also have to deal with those consequences.

Housing isn't that expensive or unaffordable in the US unless you want to live in NYC or SF.

This just isn’t true

[flagged]

This is Texas:

https://fred.stlouisfed.org/series/TXSTHPI

It's worse in San Francisco, but it's a nation-wide problem.

I would argue that it's worse now in high COL TX metros than it is in the bay area, because even if home values are still lower in Austin, for example, Texas property taxes are brutal compared to CA and have increased dramatically [in line with property value appreciation], which Prop 13 doesn't allow to happen in CA.

I mean it's not just Texas either.

Florida: https://fred.stlouisfed.org/series/FLSTHPI

Pennsylvania: https://fred.stlouisfed.org/series/PASTHPI

Virginia: https://fred.stlouisfed.org/series/VASTHPI

Vermont: https://fred.stlouisfed.org/series/VTSTHPI

Tennessee: https://fred.stlouisfed.org/series/TNSTHPI

I can tell you haven't ever actually shopped for housing outside of a major city.

"Don't be snarky."

"Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith."

https://news.ycombinator.com/newsguidelines.html

Housing cost complaints are dramatically overstated on HN because SF and Seattle are dramatically overrepresented. Housing has definitely become more expensive on average in much of the country over the last few years, but it's not as crazy an issue in most places as it is in the places many HNers live, and there are plenty of places where housing is actually still quite cheap (for example, most of the Midwest).

It’s also quite bizarre to read these endless complaints, because by definition roughly 1 percent of communities must be in the 99th percentile of communities in terms of unaffordability.

Edit: That can never change either, in aggregate, so it’s literally futile to complain about it in general terms.

> there are plenty of places where housing is actually still quite cheap (for example, most of the Midwest).

The housing market in Madison, Wisconsin is crazy. I sold my house 8 years ago, and now its estimated value is 70% higher than my selling price. I know a lot of people in the area who are despondent about the prices.

I said most. There are exceptions, of course.

> I said most.

Ok, but what's the empirical justification for this claim? Why is Madison, Wisconsin a rare exception?

Madison is exceptional for a midwestern city. It has a large and excellent state university. Epic is based there and most of FAANG has outposts there to draw the CS talent. Additionally, it is the state capitol which means a lot of companies providing services to the state. Aside from all that, it is a pretty picturesque location for the Midwest, with the two big lakes and surrounded by rolling hills. Something you won't find in Urbana-Champaign for comparison.

When people talk about low cost of living in the Midwest they generally mean more depressed areas. I live in a very low cost of living rural (15k ppl) community in Illinois, with half an acre on a lake in a 3000 sq foot house where the mortgage is only 250k. Of course, if I ever lose my remote job, I'd never be able to find work. Most of the people here work at one of 2 medium-sized factories or the hospital. The median household income is only $40k.

The town I live in is a far more common case for the rural Midwest.

Ok, but the Midwest is also Chicago, Columbus, Detroit, Milwaukee, Minneapolis, etc.

> most of FAANG has outposts there to draw the CS talent.

I'm aware of a small Google office in Madison, but that's it.

when there are enough exceptions, they are no longer exceptions

there are areas where housing is still cheap (rural Iowa, Arkansas, etc.), but they're not areas where there are jobs so it doesn't matter how cheap it is

almost any major city these days housing is much more expensive than it used to be relative to income

> housing is actually still quite cheap ... most of the Midwest

not based on the data

change in median housing prices as per Zillow, since 2017

Minneapolis: +50% https://www.zillow.com/home-values/5983/minneapolis-mn/

Omaha: +80% https://www.zillow.com/home-values/40152/omaha-ne/

St Louis: +62% https://www.zillow.com/home-values/6891/saint-louis-mo/

KC: +94% https://www.zillow.com/home-values/18795/kansas-city-mo/

OKC: +68% https://www.zillow.com/home-values/33225/oklahoma-city-ok/

Des Moines: +68% https://www.zillow.com/home-values/17759/des-moines-ia/

Milwaukee: +119% https://www.zillow.com/home-values/5976/milwaukee-wi/

Indianapolis: +103% https://www.zillow.com/home-values/32149/indianapolis-in/

Little Rock: +38% https://www.zillow.com/home-values/52998/little-rock-ar/

etc.

Northern CO here, my daughter had big plans of finding someplace to live with 2-4 of her friends after graduating high school, but they all quickly decided that was not at all workable due to housing costs.

Disposable income is measured after housing expenses.

Incorrect. See below.

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