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Barely Half of 30-Year-Olds in the U.S. Earn More Than Their Parents Did at 30 (wsj.com)
243 points by Vannatter 313 days ago | hide | past | web | 383 comments | favorite

Compound that with the percentage of income 30 year olds spend on housing, education, health care and child care compared to their parents and we have a recipe for disaster.

The cherry on top is that our parents generation, who made more and had access to cheaper house, education, healthcare, etc., still barely saved for retirement. Unless, god forbid, your parents drop dead early, we are going to be stuck supporting them for a long time.

If the 0.1% can successfully convince people to blame their grandparents and magical robots for stealing all of the country's wealth then this trend is likely to continue.

I wish I could up vote this more. Supporting elderly people, or disabled people? These are good things that are good to do. Corporations paying for the negative externalities they dump on everyone else, and for upkeep on the society they owe their existence to? Also good things that are good to do.

It's not their fault we make less, but they should have personal responsibility for their own retirement, especially since the massive amount of growth in housing value and the stockmarket over their lifetime.

We're talking about people who fall within a certain age range. Personal responsibility is something that makes sense when talking about a person, not a population. To my mind, therefore, personal responsibility doesn't have much to do with good policy.

Is someone wealthy just because the house they own has grown in value? Practical wealth is how much you have relative to the cost of living. Someone in a $1M house is not necessarily more wealthy than when their house was $100K if all their other living expenses have also grown 10x.

If they are near retirement they could always reverse mortgage it. Our generation will not have that option.

Why won't we?

Because the increasing trend is that it is not financially viable for younger families to buy a home. So they would thus not have a mortgage to reverse in the first place.

Rather, they would be stuck paying rent and hopefully have enough savings/Social Security/other income to cover it as long as they needed.

There is also the issue of population growth rates.

Future generations CANNOT keep growing like that. Be it by directed reproduction limits or global resource wars/pollution/plagues/extinction from the preceding the population will shrink.

According to Google/Wolphram Alpha the US population is flat[1].


More likely people choosing not to have kids, which is a trend appearing in rich countries. Population growth is mostly fueled by poor people.

Or, more people not being able to afford to have kids, another trend appearing in rich countries.

What will become of all the homes (and wealth) controlled by older people and families once the owners are outlived by the younger generation?

Great question. I don't know the answer, but you can imagine what some of the considerations might be...

Population growth in the US is slightly declining and generally remaining flat, although life expectancy is increasing.

So it seems likely the older people will need their homes longer than previous generations. When they die they might pass them along, but that certainly doesn't happen to everyone, and in many cases they might be sold, increasing supply.

That said, home value distributions are interesting. Jobs are stagnant or disappearing throughout much of the country, and it is primarily the cities where people are increasingly moving due to availability of jobs. This means those cities are much more desirable, and there is still too little supply, even with people turning things over to children.

Realistically though, the vast majority of the population has near non-existent savings. Many of these Baby Boomer retirees will need to downsize, reverse mortgage, or do something to tap their home for cash as that is still by far and away most families biggest investment. This might point more to the house being sold.

Still won't be enough to meet demand though in big cities since that is increasing, not decreasing. And if fewer are living in places without jobs, those homes may not be options for many families.

I think the idea is that we won't have the option to help us support our parents, because we'll need to keep living in the house (and haven't finished paying for it so we don't have the equity to borrow from anyway).

Social Security lifted the responsibility of saving for their own retirement. It's not much use to blame them for following incentives.

You make it sound as if before Social Security, people saved for retirement because they recognized they had to.

But of course they didn't-- because they didn't earn enough to save-- just like people nowadays.

Social Security is insurance against destitution in old age. It really doesn't function to take away any saving incentive. It just keeps old people from being homeless and starving.



Good point. Those lazy bums can just sit in furnished rooms and sell apples in the street.

Um, what? (No seriously, wtf? Is this a reference to something?)

Should have included a sarcasm tag.

Pre social security, it was common for the elderly to end up like that.

It's hard for me to understand how my ancestors, alive since the beginning of time, reproduced so much that not every person in the family line has a house.

Could you imagine working your whole life and end up with not even a shelter to pass on to the person "replacing" you?

I never plan to have a kid, but if I did I would feel obligated to give them a head start in this shit life. They wouldn't be fucking renting or taking out loans that's for sure.

Isn't a lot of that problem due people moving to cities in the last few decades?

You'll be supporting all the old people through Social Security/Medicare anyway.

I don't judge people who didn't or couldn't save enough for retirement and are living on SS and Medicare exclusively. I like Socialist safety nets of those sorts, and am happy to pay into them. One day I will be old and sick too. We all will be, except those who die early.

I judge you if you didn't hold your government representatives accountable for excessive discretionary spending, which was borrowed out of Social Security and will need to be paid back with higher tax rates.

Medicare is fine, some social security facets are fine, such as disability.

Social security as a general retirement plan? Shitty program.

What it should be AT MOST: mandated investment in a retirement account that you can't touch. Although I would prefer to not even have policy here at all. This is only necessary because people are by and large shit with money and will not save without being forced to.

What is is: take money from workers and transfer it directly. It's not even invested to generate additional wealth.

> What is is: take money from workers and transfer it directly. It's not even invested to generate additional wealth.

Its invested, by law, in the safest asset known to man: Special issue US treasuries that can always be redeemed at face value (principal + interest), which come ahead of general issue treasuries.

"By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are "special issues" of the United States Treasury. Such securities are available only to the trust funds.

In the past, the trust funds have held marketable Treasury securities, which are available to the general public. Unlike marketable securities, special issues can be redeemed at any time at face value. Marketable securities are subject to the forces of the open market and may suffer a loss, or enjoy a gain, if sold before maturity. Investment in special issues gives the trust funds the same flexibility as holding cash."


Why not invest in bonds or stocks? The amount the US government would need to invest would disproportionally move markets, but most importantly, the losses (when they occur) would be backstopped by the US taxpayer. There is no reason to needlessly invest the Social Security trust fund in equities when its most important asset is the ongoing ability to collect taxes (equities can go to zero; the ability to tax isn't going away under almost any circumstance, barring a complete collapse of the US government).


> The treasuries are just an IOU in legal form.

All debts are IOUs in legal form. The reason the US government gets such low rates is because the market believes they're more likely to pay the debt back then Joe Schmoe. And the market would be right, which is why capital scrambles into treasuries at the first sign of global financial trouble.

"Invested". Only the US govt can use that term and mean "borrow" instead. The treasuries are just an IOU in legal form. Given the high debt level in the US, I wouldn't think of the literal term "invested."

The disability program is hurting society. You can get disability for having autism.

Once they are on it, they have incentives to stay on it forever. If they make even one dollar working they lose it all, so they make extra cash under the table through committing fraud, selling drugs, etc.

No one can sue them and take it away, so they do things like go without insurance, buy things on credit with no intent to pay, titling their car in someone else's name, and hundreds of other tricks they learn in their new 'job'. By day they can do whatever they want. People who work have to pay not only to sustain them but also for the damage that they are causing directly to them.

>The disability program is hurting society. You can get disability for having autism.

Autism can be a severe disability, not just the mild "geeky asperger" type. One could literaly not be able to communicate at all...

Seconded. That stood out to me too in his post. Disability seems to be widely abused in the western world. I'm for social welfare, but I'm not for mismanagement and abuse. Disability as it exists today is a concern that needs to be addressed.

You guys have the advantage of being able to work. Your minds and bodies are healthy. Man up and take care of those less fortunate, even if it means a minority game the system.

That's not at all what I meant, attacking the legitimately handicapped. You should be ashamed of yourself taking it out of context on purpose just to self-righteously complain.


> I know someone who is literally blind and he works just fine. Even know a guy with ALS who can barely move who still works.

> but I choose not to be a degenerate leech and actually work.

Your viewpoint is disappointing. It is not okay that someone who has ALS must work. You are not a leech if you are physically disabled and cannot work because of it. I'm not even mad man, I just feel sorry for you. Push the keyboard away and spend time cultivating some empathy.

Yeah, the Nazi's had a good idea, put those leeching cripples and ALS to forced labour camps /sarcasm

Everyone is for rugged individualism until they're incapacitated. Good luck.

I think you'll need the good luck with the reading comprehension displayed here. I'm as for disability assistance as much as anyone you'll find.

Well said. Critics rarely consider the potential personal benefit of SS in the future. Now, it's not a perfect system, but it has its upsides.

> Well said. Critics rarely consider the potential personal benefit of SS in the future. Now, it's not a perfect system, but it has its upsides.

Critics definitely consider the personal benefit. The problem is that they don't trust that it'll actually be there, or that it's a system that actually can work as it has been designed.

For example, in the 80 years that it's been in effect, the OASDI tax rate has increased sixfold and then some. That increase was fairly steady for a period of time - and the reason it's stagnated recently is not because the tax revenue is sufficient (it isn't) but because political ramifications have prevented the tax rates from increasing. Obviously this isn't sustainable. You can say, "well, the solution is just to raise taxes" - but relying on periodic changes to tax rates is not a recipe for creating a system that can achieve a stable steady state without being subject to political meddling in the long-run.

A further problem is that Social Security hinges upon the idea that the current working population will be responsible for paying for the current retiring population. Unfortunately, the respective sizes of these populations can vary dramatically, which means that some generations will end up paying far more than others. People talk about Social Security like it's true time-shifted income (ie, savings), but it's not.

One way we've dealt with this so far is to increase the number of people who are paying into the system while remaining ineligible for collecting benefits from it, but that's also not sustainable (and it's also a really horrible way to treat people).

Good points and very interesting, thanks.

Once again, getting the state involved just makes things messy. Let people be responsible for their own well-being as they age. Without safety nets, people tend to be much more cautious and thoughtful when spending. Plus, people who are fit to raise smart and healthy children will also be more apt to do so, which is a must for any society!

Nah, screw that. We all deserve comfortable retirements, and we should fund it as a society.

Wealth inequality being what it is, yes, the wealthy can afford to chip in for the well-being of the rest of us. Or rather, we can afford to redistribute our wealth claims as a society in this way.

Why not? Wealth is a logical fiction we've invented, as to who has what monetary claims we enforce, and we can bend this fiction to our goals (including, as stated, the moral imperative to provide comfortable old age for all, regardless of personal means).

Social security in its current form doesn't even provide a comfortable retirement; it single handedly is keeping millions of seniors just a bit out of poverty. For that alone, it should be protected.


"Researchers at the CBPP used the Census Bureau's definition of poverty, which in 2015 meant $11,367 or less for an elderly individual, $14,342 or lower for an elderly couple, and $24,257 or less for the average family of four, and compared poverty rates for the elderly (ages 65 and up), adults (ages 18-64), and children (under age 18) with and without Social Security benefits.

The findings showed that Social Security benefits have kept nearly 22.1 million Americans out of poverty, with a reduction in poverty rates observed in all 50 states and Washington, D.C. As you might have rightly imagined, the bulk of those being kept out of poverty are elderly Americans, which comprise about two-thirds of all enrollees to begin with. However, children and adults younger than 65 benefited, too.

In total, 15.07 million elderly folks, 5.94 million adults, and 1.08 million children are all lifted above the poverty rate thanks to monthly Social Security payments. For all ages, Social Security reduces the estimated poverty rate in American 7 full percentage points to 13.5% from an estimated 20.5%. But the biggest effect is seen on seniors.


As you can see above, without Social Security income, just over four in 10 seniors would be living at or below the poverty rate. With Social Security income, just 8.8% of seniors are living in poverty. We'd obviously like to see that figure fall to 0%, but for such a vulnerable group of individuals who may not have other forms of income beyond Social Security, this data would imply that the program is doing its job."

Right. Ideally, Social Security would be even stronger, but at any rate, it acts right now as a "safety net" which would be horrific to abandon. (Let's not forget the reasons we were led to institute it in the first place! Ah, but all of recent American economic policy is a matter of just such cultural amnesia…)

Perhaps without the safety net, children of seniors would provide more care for their parents rather than moving them into expensive senior centers.

> Wealth is a logical fiction we've invented, as to who has what monetary claims we enforce, and we can bend this fiction to our goals

What would the transition from our current state to one with significantly altered monetary claims look like? Would it be a voluntary transition, or a forceful one?

I may be reading too much into what you are getting at with your second question, but: What does it even mean to draw that distinction in this context? Our current state is already a forceful one (as would be any other distribution of claims with any real power of enforcement). Wealth, like anything else, is ultimately enforced by, er, force.

(E.g.: What is it for you to own land? It's the ability to have me forcefully expelled should I walk on it against your wishes. What is it for you to own a car? It's the ability to have me forcefully prevented from or punished for driving it myself. Etc., etc.)

To bend the wealth distribution is just to say: Ok, we as a society no longer recognize you as having $X amount of wealth, as we were doing before. We now recognize you as having $Y amount of wealth, and will carry on our claim enforcement mechanisms accordingly. We can bend the wealth distribution anyway we like… so long as we collectively decide to. (Sometimes we call this "taxation", sometimes we call it other names, but let's never lose sight of the fact that wealth, in the relevant sense, is a social construct in the first place, not a brute fact. It's numbers written down somewhere that we continually agree to.)

The people having their money removed from them may have a word or two to say about the plan.

Everyone may have a word or two to say about every aspect of how society is run; such is democratic politics. But you speak as though the amount of money someone is construed as having is a physical quality intrinsic to them, instead of a social relation we agree to. The idea that taxation is a taking imposed after the fact on an otherwise natural distribution is muddled; it's all just numbers in ledgers, the tokens of a game whose rules are chosen by society in the first place.

There is a cost for being allowed to collect wealth in society. Lots of countries to pick from if someone decides to leave.

The people barely scraping by with no rest to look forward to may have a word or two to say about the status quo.

I am of the opinion there are very few people who can be thoughtful, at least in that long-term sense..

Well, I hope you don't judge people for an accounting fiction.

Any treasury bonds held by the federal government (for example, by the Social Security) is money the government owes to itself and has no real-world effect. The only part that matters is treasuries held by private investors.

Less government spending in the past would mean lower government debt (owned by private investors) today. That's only real effect. You can blame people for running up government debt if you like, but might as well skip talking about Social Security.

> Any treasury bonds held by the federal government (for example, by the Social Security) is money the government owes to itself and has no real-world effect. The only part that matters is treasuries held by private investors.

I do not agree it has no real world effect. That money will need to be paid back to Social Security to pay people out. Its either paid by taxpayers, or by everyone through inflating our way out of the debt. Regardless, its an obligation to be paid.

Stop wasting taxpayer money and start using it to take care of citizens. That's what the role of government is.

Money has to be lent to be saved, of course. If the money is not invested in the provider or public sector, then the wealth won't exist later to meet the deferred needs.

I'm not sure you understand the implications of the argument you're making.

> Any treasury bonds held by the federal government (for example, by the Social Security) is money the government owes to itself and has no real-world effect.

That is 100% correct. Which is the point. Those bonds are not a meaningful asset for Social Security; they have "no real-world effect" because they're an IOU payable by the same entity who offered it.

But the promises Social Security made do have a real world impact, and those promises will need to be redeemed. But Social Security doesn't have any assets of the type you say "matter".

And that's a problem.

As I understand it, the implication is that it doesn't make a whole lot of sense to think of the government as saving money specifically for the future expenses of retirees. At the level of the federal government, it's a pay-as-you-go system. Current taxes and treasury sales (deficit spending) pay current expenses.

(And it's a bit weirder than that because the Fed can retire government debt if it wants to, just by creating new money out of thin air and buying treasuries.)

Looked at from a certain perspective, federal taxes exist mainly to keep the treasury bond market from getting too big due to deficit spending.

So the financial question is really whether the treasury bond market is bigger than it should be, given anticipated expenses. I don't have any opinion on this. I'm not sure the average voter would have any idea either? Low interest rates seem to indicate that the market isn't too worried?

There's really two (equally valid) ways to look at this, from an accounting point of view.

1) SSA is independent. It has liabilities (the promises made to enrollees), and assets (the trust fund). Liabilities exceed assets in the long run, but until then (currently projected as 2034) the system is fine. The federal government, on the other hand, needs to count those liabilities at full value. This means government debt is significantly higher than generally reported, the Clinton surpluses never actually happened, and a lot of spending decision, in retrospect, look quite reckless.

2) SSA is not independent, but is part of the federal government. Social security has liabilities (the promises made to enrollees), but the trust fund is a wash. This means that the lower "net" totals for government debt are technically correct, and that there was a budget surplus in the 90s...but it also means that no provision was made to cover those liabilities; the system is being run strictly on a pay-as-you-go basis. And while they may not be technically debt, given the scale of the liabilities social security represents to the federal government, a lot of spending decisions, in retrospect, look quite reckless.

What's important to note is that these two stories are completely identical. It's like arguing whether a liter of water weighs 1kg or 2.2lbs; the answer is "both". :) In both cases the money collected via the payroll tax was used to fund general expenditures, leaving an unfunded liability. The size of the liability isn't in question, nor is the matter of who has to pay it. It's really just a qyestion of what you label the boxes.

> it doesn't make a whole lot of sense to think of the government as saving money specifically for the future expenses of retirees.

That's not inherent in the concept of a pension system. It could have been run on a funded basis, with actual savings accounts; it was not due to political reasons. I took toomuchtodo to be decrying that fact. Yes, the system we have is a pay-as-you-go system, but in retrospect doesn't that seem like a pretty poor idea?


> the Fed can retire government debt if it wants to, just by creating new money out of thin air and buying treasuries

That is legally impossible. (It also wouldn't work from an economic POV; it's effectively the same thing as just printing money to pay for SSA liabilities directly, and we know that funding government directly via the printing presses doesn't work.)

You say "unfunded liability" like it's a bad thing, but it's perfectly normal for the government to promise to do things based on future tax revenue.

The choice here is (1) tax people ahead of time, invest in financial markets for X years, then pay it out, (2) wait until the money is needed and tax it then, (3) spend first, tax later (deficit spending).

In case (1) you'd have no government debt (no U.S. Treasury market) and the government owning a large part of the private sector. In (2) you'd have neither a treasury market nor assets. (This is sort of like how non-profits work.) For (3) you have what we have today, which is a huge number of treasuries available, which everyone depends on as a safe investment.

It's not clear that having $13.6 trillion in treasuries available for investors (including foreign governments) to own is actually a problem. Lots of investors like having a safe investment. There's sure to be some level that's too high, but it's unclear what it is.

> actual savings accounts

This is another way of increasing government intervention in the financial system via owning financial assets. (Presumably there would be rules about which investments are allowed and when they can be withdrawn, so the government would still have a lot of control over this money.)

> not inherent in the concept of a pension system

The difference is that individuals and private pension funds need assets because they don't have a guaranteed source of income and can actually run out of money. The main risk for the U.S. government is Congress deciding to start a financial crisis. But that's politics, not being unable to raise the money.

> legally impossible

It happens all the time. Look up open market operations. The Federal Reserve sent almost $100 billion to the U.S. Treasury last year. [1]

(That's just an aside. Compared to $3200 billion total revenue, it's not that much, and I agree that it would not scale to paying off government debt, or even paying the interest. Still, nothing to sneeze at.)

[1] https://www.federalreserve.gov/newsevents/press/other/201601...

I think you're focusing too much on accounting labels, and need to step back and look at the bigger picture. From the point of view of the economy as a whole, the baby boomer generation retiring is extremely expensive. In general, societies need to budget around extremely expensive events like that, eg, deferring other expenses, making sacrifices, saving up in preparation.

You seem to be arguing that, uniquely, the US doesn't need to do this; they can just promise whatever, then borrow all the money cheaply from foreigners. Perhaps so! And I really, really hope you're right (and all the textbooks, financial models, and experts are wrong).

> they don't have a guaranteed source of income and can actually run out of money.

That income is finite, therefore, the US can most certainly "run out of money", hence why the budget is a nasty political fight every single year. Now, it is highly likely that the politics of social security will make it a priority come what may, and thus I'm confident that money can be found for it, but only at the expense of other things. Hopefully none of them end up being important. But the reality of social security is that the national savings rate when the baby boomers were at their most productive was extremely low. (Even right now, the US savings rate is almost half that of the EU-15.)

In a different universe, the US would have saved more during the long post-war boom, and would be in a much better shape to, eg, pay for the boomers retirement and replace our aging infrastructure.

> It happens all the time. Look up open market operations

The Federal Reserve does not (and cannot) retire or forgive the US debt it holds.

I'd rather not live in a dystopic high-tech, low-life society where the elderly and destitute are tossed aside. But, as I walk down the street, I see homeless people sleeping just outside the entrance of Snapchat HQ (latest valuation @ ~$25 billion).

Frak it, bring on the Guilted Age!

Let them eat memes!

I'm personally hoping for Basic Income, myself.

The ines that worked for decent companies had a pension.

Hell, my grandfather had a defined benefits pension plan for his bar employees.

Maybe we should hope for more declines in life-expectancy then:


Why should we consider life expectancy in the dialysis, nursing-home and hospice era to somehow be a positive measure of societal health?

A older friend of mine who structured financial products said that the worst thing we did for the healt of the Social Secuirty fund was the war on cigarettes. He said it in jest... but he wasn't wrong.

Oh, I'd love to hear more detail on this if you remember any?

The TLDR is: smoking and obesity cause you to die sooner with less total medical costs[1]. This is great for things like social security since you can pay in over your entire life but never collect.

The story I remember hearing (and couldn't find a specific citation) was that anti-smoking groups made up a bunch of big numbers about smokers' high medical costs to scaremonger. To fight back Phillip-Morris did a study and legitimately found that smokers died sooner and total costs were lower. Unfortunately, that's not something you really want to publicize, so anti-smoking people can keep making up scary numbers and cigarette companies can't really fight back.

[1] http://www.nytimes.com/2008/02/05/health/05iht-obese.1.97488...

If I remember correctly he was structuring a derivative contract based on life expectancy/actual life time. The goal was to hedge risks between health insurers and life insurance policies.

Life insurance policies policies want to offset the risk of a group dying prematurely in the defined time window and health insurance companies want to offset risk a group of people living long but with signifiant health problems.

At the time it didn't go anywhere because some folks dubbed it "Death Derivatives" and he was working on it at the mortgage crisis was unfolding.

Probably because smokers tend not to live as long, and therefore draw fewer benefits.

The sense of entitlement is a lot higher these days. I grew up in a 900 sqft house with 1 bathroom. Yet all my peers (myself included) seek out homes 2x, 3x or bigger.

Same with cars.... my parents bought used, reliable cars. Today we want fancy things.

Growing up we had cable tv and a phone line. Probably spent $50/month total. The family cellphone bill, home broadband, various tv services easily top out over $300/month.

We went out to eat once a month. Tops. It was a treat. Nowadays people (myself included go out 1, 2 or more times per week.

Earnings aside, current generations are spending way more because they want more.

I hear this sentiment expressed a lot, as well as the sentiment that millennials only loaded up on education debt to fuel a 4-year party. In my experience they are both wrong in 90%+ cases and are typically used to invalidate any calls to pay more attention to growing inequality in this country.

You are probably noticing the people who go out to eat and have nice cars/nice things much more than the people that sit in their cubicle and eat their homemade lunch, etc. Probably don't pay attention to (or don't even have a clue about) the people you deal with on a day-to-day basis that rent a portion of a room (not even a whole room - eat your hearts out boomers).

Also, you are comparing your parents spending WITH A FAMILY to people who are likely single or DINKS. This is not a worthwhile comparison.

Your point with housing is semi-valid, but there are very few small homes where I'm living in southern California. I know tons of people that would jump at the chance to have a tiny house if it meant it was actually affordable.

I certainly don't mean to disparage college education, particularly as someone who has never gone to college but firmly believes that it can be a very rewarding experience, but from my own anecdotal experience it seems that for a not insignificant number of people it does seem to be more or less four years of partying.

I'm fortunate to have a diverse social group with many friends who did go to college, and even count a CompSci PhD among my close friends, but from my interaction with them I get the impression that not all programs are of even remotely equivalent rigor. In particular, I get the impression that for the non science/engineering related disciplines it can be somewhat easy to coast through the curriculum depending on the school.

Again, this is just based on my own observations as someone who has never gone to college so it should be taken with a large grain of salt. Normally I would completely discount my own opinion here as observation bias, the only thing keeping me from doing so is my feeling that if college was as universally rigorous as many say it is, and placed as great an importance on critical thinking and independent thought as I've been led to believe, we should be seeing a much more conscientious and knowledgeable citizenry considering we are living in a time were more people are going to college than ever before. I'm not sure that's the case however.

Agreed. I was merely comparing my situation. I am still (but barely) in my 30's and have a family of 4. And I agree about the SoCal thing (though there are smaller houses to be found, I lived in 1400 sqft in Orange County. But they are building McMansions because that's what people want.

Right. It can't reasonably be said that people aren't interested in small houses.

I absolutely disagree with this sentiment. I'm just at the 30 mark with many of my coworkers and friends in their mid 20s. The only entitlements they ever talk about are work related and that's because it's all we have to turn to when we're sick (like a pit crew on a track, we need to know we can get fixed up and back out there ASAP.)

Growing up I remember similar things as you do. Limited dining out, basic cable, etc. But that was a combined income household, and in my neighborhood, that usually meant the dad was a union guy and the mom was a 9-5'r. Back when there were fruitful jobs outside of the city.

Now, here I am, 10 years after the same point my parents became parents, happy to just now reach a point of self sustaining income that will finally dent my debt. Having now lived through 2 economic collapses, several major terrorist attacks, unpredictable employment, total displacement of entire industries, and a political environment that fuels extremists and extreme actions, I can't imagine making any kind of plans beyond the next 2 years, much less a lifetime.


US home ownership has gone up and down between 64% and 69% in the past 30 years, currently at the low end of that. But at the same time, the average new house went from 1,600 to 2,500 sqft.

Thirty years ago, how many people plopped down $5k for a TV? $700 for a phone? $150/month for telecom?

Life expediency has increased by 6 years from 1975 to 2010.

And to top it off, we're working less than we ever have. Average hours per year: 1,900 (1950), 1,800 (1970), 1,725 (1990), and 1,700 (2010).

Despite the "back in my day" doomsaying, on average, our quality of life has never been better.


My two cents why:

Cent 1: In a globally connected world, we are painfully obvious of the millions of people living more comfortably than us. When it was just Mr. Jones down the block, it didn't feel so bad.

Cent 2: Culture and priorities have changed. Rural population has been dropping for decades. People are more likely to rent a 500 sqft apartment in a large urban center than rent/buy a 900 sqft house in a town of 20k. Not a bad thing, just a different thing, and we have to take into account the whole picture.

> And to top it off, we're working less than we ever have

This really struck me. I am going to assume your numbers ar correct, but if you could point me to a source I would love that. (did a quick search on the web, couldn't find exactly what I would like)

My first thought was that it is fascinating that we would be working 12% less hours per person. I wonder how that break down by gender. The number I keep finding is per day men @ 8.4 vs women @ 7.7 which doesn't match your number because it is only talking about full time employment. Hence if you can help me find better numbers that would be great.

Then I realized the horrible truth residing in your numbers: in 1950 it was almost exclusively men who worked. Today women make up almost half of the workforce. On a per capita basis we are working much, much more than we used too. From this Wikipedia entry https://en.wikipedia.org/wiki/Working_time#United_States:

  The average working time of married couples – of both husband and wife taken together – rose from 56 hours in 1969 to 67 hours in 2000
Turns out things are worse than they used to be. Nobody spent $700 on a phone but they did spend $600, in 1986 dollars, on a microwave - which is roughly $1300 in 2016. And few people spend $5000 on a tv today. A $5000 dollar tv is likely 75 inches or more - I don't know if I have ever been in a home with a TV that large.

The middle class has disappeared and it is not because they became wealthy, lazy or demanding.

> if you could point me to a source I would love that

Data from FRED. Graphs: http://www.businessinsider.com/average-annual-hours-worked-f...

You're correct that more people working per household is a likely cause of less hour per employee, larger houses, etc.

First, homemakers aren't unemployed. They just work at different things.

Second, look at the employment rate charted over the last forty years or so. Some of that may be explained by retiring baby boomers, but it's the following generations that will need to pick up the economic slack to pay for retirement, healthcare, prop up their home values so they can retire, etc.

>First, homemakers aren't unemployed. They just work at different things.

So you are agreeing - since before one person was devoted full time to homemaking, and now they must find paid employment - that work still needs to be done so it must be done in addition to the hours worked at an employer.

so instead of one person doing 40 hours at an employer and one person staying home to keep up the house - we have two people working 40 hours each and then working overtime to maintain their house after work. We've added 40 hours of work to the equation.

The average new house is targeted at a small minority of relatively wealthy people, because they're the most profitable market. It's not going to be terribly representative of what normal people want. (Even here in the UK, where new house sizes are effectively capped now, they still cost more than a larger older house because house builders want to make money..)

Televisions themselves have come way (way!) down in price.

Bigger, better televisions cost 1/2 as much before accounting for inflation.

There was certainly a brief period where medium sized flat screens were a little bit pricey.

A 900 sq ft condo let alone home will run you $750k+ lots of places.

It's really not that many places when you take the whole US into account.

This logic is flawed in the sense of completely misunderstanding of "progress".

Sure, the 900sqft home argument might be somewhat valid. But in the majority of the situations I've seen, it's the opposite happening. So I'd challenge this one for sure.

As for the cable TV and phone line... Yea. There is something called technological progress. We have more services today because that's the world we live in, a connected world, where work and personal lives merge and access to the internet is paramount.

Your parents bought used reliable cars, great, people still do. But cars are relatively cheaper/easier to produce as well. Are you going to say the same thing when the next generation "rents" car rides as their monthly expense?

Eating out... yep. People eat out more. It's more efficient and frankly cheaper in some scenarios. That's not always the case, but often is. And in larger cities where kitchens are absolutely tiny, cooking is not only inefficient, but sometimes not even possible. So, I'd challenge this as a misunderstanding of the times - again.

Where money is spent vs how it's earned and the cost of living play into all of this. And just because the allocations aren't the same, the idea that it should be attributed to "entitlement" simply puts you on the "out of touch" spectrum.

Good day.

No kidding. The big three expenses in life are home (rent or mortgage), education, and health care. Those three expenses have gone through the roof.

Fancy TV set? Eating out? Smartphone? That stuff isn't why people are poorer these days. Not even close.

But they are. Because those are the difference between saving money per month and not. Disposable income is where we make a choice. We save it or spend it.

> Earnings aside, current generations are spending way more because they want more.

That's certainly true, but nowadays the incentives which nudge you to consumption are also much more intense, subtle and clever. We are tricked into things we do not need.

The ONLY escape is not clever consumption but no/reduced consumption, or actually more precise, any consumption which does not involve money to be transferred.

I don't mean to sound like just being contrary to you, but your anecdote doesn't square with the article. If half earn less than you did then that would mean they wouldn't afford what they want according to you and want you wanted at your age, so either way, they're hosed.

You seem to think that income always corresponds to expenses.

Good luck finding a 900 sqft house now.

Housing: Today's 30yo live in nicer houses, that are on the whole located in nicer places. Eg. in cities that have less pollution and more facilities than they had before.

Education: Okay, that kind of sucks. But in here Australia, as an example, costs of repayments for the education are way less than the reductions in tax rates over the last 30 years. We had a 60% marginal tax rate when I started work...

Health care: again, the amount and level of health care received today is far higher, and it seems that things are now "health care" that were something else 30 years ago... eg. my health fund has rebates for gym, massages meditation etc.

Child care: this is a little odd... have child care workers' earnings increased? Are there less kids/carer in kindergarten? Or are we just putting kids in kindergarten more, instead of leaving them with Grandma?

Finally: I would trade all of the advantages that the previous generation enjoyed for smartphones and internet. The quality of life today is, IMHO, incomparably higher that 30 years back.

> Education: Okay, that kind of sucks.

I'd argue that education has never been cheaper. Schooling is where the costs have often grown dramatically.

And as far as schooling goes, the interesting thing here is that while the degree attainment rate (in the US, Canada, and I expect even Australia) has effectively doubled since 1980, the supposed benefits, such as a higher income, that prompted more people to attend an institute of higher learning have not been realized. The youth, post-secondary schooled at a much higher rate than previous generations, are not making more money or better off as this article and many other sources of data point out.

With those promises not fulfilled, I am left wondering why the cost of schooling is even found among the likes of housing and health care? It's an enjoyable pastime, for sure, but not something essential to support (a long) life like the others.

This is only going to get worse with software eating the world and automation of every possible task that we can. It has already started with companies like Amazon (in their warehouses) using robots extensively.

Up until we finally get our collective heads out of our asses and implement something like Basic Income.

That isn't going to happen easily. My experience: I've talked about this to many people (highly educated, smart people) - most of them are adamant on the idea that human beings absolutely have to work to deserve anything, even food and water. This might very well be anecdotal, but very few people get ideas like Basic Income intuitively. It would likely take tremendous amount to first make people understand, then accept radical ideas.

I'm all for doing work, but never understood worship of hard work for hard work's sake.

I honestly feel basic income is a MUST have. I so much believe in it that I WANT the automation to come, I want to see the jobs disappear, I live for the day when robots do all the physical work and a job is optional--and we can pick and choose what we work on because having a roof over our head and food on the table, and healthcare is just a given.

We can be entrepreneurs, etc.. I have a ton of app ideas, but I work 45-50 hours a week and just don't have much time to implement anything. -- Even if we moved to 20 hours / week w/ lots of time for family, and leisure.

Mankind is supposed to rule the world, not be beasts of burden, and many are just that. Some horses live better than mankind. We have a friend who works at walmart and two other jobs, so his wife can stay home and take care of the kids. It's sad and pathetic - nobody should have to work over 40 hours just to have a house and home.

I think before that day comes there will be unrest and revolts, maybe even French revolution style, but in the end there has to be a better way.

The average adult hunter-gatherer only worked about 22 hours [1]

We've advanced so much technologically, yet we're working more than hunter-gatherers were hundreds of thousands of years ago.

What are we working towards again?

[1] https://www.psychologytoday.com/blog/freedom-learn/201611/in...

> What are we working towards again?

Having a worldwide population of more than 10000 people ?

What I don't get about basic income is the incentives this would bring, which invalidate the whole thing. It's not a Nash equilibrium. What this would create is a huge class of 100% dependent people who have no power, entitlement and are in a very unfair relationship (to their advantage) with the rest of humanity (by current standards).

The productive group will hate the basic income receivers because they "steal" money. And the basic income receivers will hate the productive group because they'll be the ones constantly saying "no you can't have any more", "no we can't do that", "no we can't save your little girl by dedicated 50 medical personnel to just her", "no no no no no no" ... And while I don't believe in Ayn Rand, I do believe that the productive group can leave.

This will bring tensions and hate between the productive side of the population, which will be only a few, and the rest. The government, of course, will be in the pocket of the productive side, because they represent (and control to some extent) the limits of what is realistically/economically possible. The smaller the productive group, the more clout they'll have.

Eventually they will get rid of the basic income receivers.

That's not the case though because THEY are basic income receivers too -- EVERYONE receives even the 1% and elites. That's one thing that makes it better than current welfare. People on welfare KNOW they're 'leeches' and with that comes a stigma of being a trashy person because you can't get enough jobs to supply enough income for your family.

Take away welfare, give everyone the same amount monthly, and it's a citizenship 'right' or contract for being a good citizen of the United States. The only stipulation is you HAVE to have a physical address to mail the checks to -- meaning if you still for some reason want to be homeless even w/ the added income then you're sol. The goal should be 100% end to starvation and homelessness.

On top of that it spurs growth of the economy. When robots do take over and 50% are unemployed -- who will shop at walmart, or amazon? Absolutely nobody. The money will still flow up to the 1% in droves, for the absolute necessities, but eventually even that will drip dry. Give money to the poorer people though and they end up spending 100% of whatever they make usually.

This goes right back to the Walton's most likely, but it increases economic power, and gdp. I also think if you give everyone enough to be across the poverty line, then we could move to a flat SALES tax over income which would have lower tax for legal citizens / etc and more for those who are undocumented, or travelling through the states. Then we could alter and adjust the national sales tax every year or so based on whether we have a surplus or deficit. We can also do away w/ the IRS completely and end more bureacracy.

Perhaps I chose my words poorly, and we'll call them net-tax-payers and net-tax-receivers instead. The people involved will be pretty aware of which situation they're in.

Besides, total social spending in the US is about 2.5 trillion dollars, or about $650/person/month. That's what basic income would realistically pay (assuming illegal immigrants get nothing, otherwise it'd be $630). The flip side of this would be to kill all government support programs. No more Obamacare, no more social security, no more veteran pensions, nothing like that. All replaced by that pitiful amount.

Good luck paying cancer treatments from that. Hell, good luck paying getting bandaged after a simple scratch from a fall for that amount. If you don't cover medical insurance, then of course it would have to be less (to be exact it would be $360 per month per person).

Now you could say cancer treatments will become cheaper. And sure enough they will. However, even Martin Shkreli worked with a profit margin of around 30%. So ... if you make the treatments more than 30% cheaper (assuming all of pharma is as much of a scumbag as he is, which it isn't, 10% is more common), you can say goodbye to improvements. They won't happen. For quite a few treatments there is an actual reason to be that expensive (e.g. paying for a surgeon's training, 10 years of living, ... and then having them operate, with a staff of 5 each trained for 5 years, in an impeccably clean room, fresh expensive equipment that mostly gets thrown away after one use because it's just too risky otherwise, ... Oh, and don't forget : you replaced most spending with basic income, so you can't just fund that as well. This would have to be funded from that $650/person/month). You'd also have to accept market forces. You live in a town with less than 52 cancer patients per year ? (assuming 1 treatment takes about a week of work) No cancer treatment for you without long traveling, not included, of course, in the price.

You cannot just legislate your way out of economic problems. It doesn't work. When law fights economics, economics wins, and the whole country suffers. See the many attempts at doing it anyway, e.g. in Venezuela most recently. Or to put it another way: basic income will not stop the poor from suffering. Only having them do something useful enough to give them a good life will.

The incentive to make money and be rewarded for work is still there.

Regarding the unfairness concern, this is why I prefer rebranding it as a citizen's dividend funded by a land value tax. See my other comment in the thread: https://news.ycombinator.com/item?id=13141203 . Essentially this makes it morally justifiable. Not to mention our system is already unfair in that rentiers profit off the earth's land, and rich people don't have to work.

We're already seeing the same tensions due to automation reducing the number and quality of jobs. We have a 1% class that have orders of magnitude more than what everyone else has while the plebeians barely scrape by and can't find steady, quality, decent paying work. Basic income is the solution to reducing this tension. Another option would be guaranteeing jobs, but I think that would be extraordinarily inefficient, and it perpetuates this notion that people without money have to work for people with money to justify their existence.

We're already highly dependent on each other. Chances are you work in an office and aren't growing your own food, building your own homes, maintaining your own plumbing, building your own cars, manufacturing your own products, and so on. Basic income just says that we have enough wealth to go around and we're all shareholders of this land, so here's your dividend for permitting others monopoly ownership of our land and its resources. It also says that in an advanced enough society, nobody should starve and go homeless.

Without a basic income, mass job automation and extreme income inequality will lead to a French Revolution.

So far automation has not resulted in net fewer jobs, but more productive jobs replacing more mundane ones. That has been the story throughout human history.

I see no evidence that is going to change. Indeed "AI" has so far only created jobs, not killed them.

>So far automation has not resulted in net fewer jobs

Yes. Yes it has. Manufacturing has seen hundred of thousands of jobs replaced. And the amount of software developers or maintenance jobs created to make that work doesn't even begin to cover what has been lost.

As far as job creation goes, guess you'll have to check that up with the ever growing percentage of unemployment throughout first world countries.

yes there's less manufacturing jobs. There's also less farming jobs, and less clerical jobs, and fewer blacksmiths, cobblers, seamstresses and about a 1,000 other professions too. But the developed world is at near full employment.

And ever since 1990 or so the percentage of the population that is working has dropped. Very slowly at first, then much, much faster since 2008. We're currently at ~5% less employed, relative to total population than before.

Granted, there are more employed persons total, but population is growing faster. Therefore the experience that people keep referring to, that less people have jobs (relative to the total they know), is accurate (not in the Bay Area, though only by the slimmest of margins. It is not far from the truth that employment has been stagnant for coming up on 30 years even there).

In the US 152 million people have a job, for a total of 321.6 million people total, plus about 12 million (wtf) illegal immigrants.

So in the US, today, a little under 46% of the population is employed. 10 years ago that was about 47% and it was over 55% in 1990, about when the decline started. That means, of course, that the economic value a single individual provides today has to be distributed over 1/46%, or 2.1 individuals, whereas it used to be only 1.8.

Since the financial crisis there has, from this perspective, been no recovery. In fact, things continued to become systematically worse since 1990 (but with a huge dive downward in 2008). There is an uptic since middle 2015, but, frankly, that looks a lot more like a blip than a recovery.

Granted, in Europe, the situation is much worse, especially in Southern Europe (but it will be as bad in Northern Europe in a decade or so, as we're getting close to the point that even the massive and very much unsustainable immigration Europe is experiencing cannot keep those countries' labour forces from declining).

And of course, this situation is about half due to baby boomers retiring and half due to people "leaving the labor force" (having 2 family members who have "left the labor force" I feel the scare quotes are justified. They have not left the labor force voluntarily)

This is also disregarding that there has been a massive shift from manufacturing into service jobs. The problem with that is that it's a massive shift from $25/hour unionized, rigid hours, stable jobs for decades, with benefits into $9/hour without benefits, shifting hours, no unions, jobs lasting about 1.5 years, tops. That has happened, over the last 20 years, to close to 20% of the labor force, or over 30 million people.

Full employment is a meaningless metric. If 90% of the workforce is working meaningless minimum wage jobs and barely making ends meet, the economy is at "full employment", but that doesn't mean we're doing well. Full unemployment also doesn't take into account the labor participation rate, which has been on a downward trend.

All humans have a psychological need to be needed. The current way to best feel this is to provide income for yourself and your family through work, and provide a service for your employer. This is extremely satisfying for a majority of people. Take away work and these two things collapse.

To get UBI to work, we need a new way for people to feel needed.

I disagree entirely that work is the best way to feel needed, and that feeling needed is necessary. I work because I have to, not because I care about working. If I didn't have to work, I wouldn't. I would spend time on personal projects and enjoying my life with my friends. Relationships are far better than work for "feeling needed".

To be honest though, I don't care about being needed. I don't need to exist. I like existing, and I don't want that to change any time soon, but not being needed doesn't affect my enjoyment. I like when my existence is appreciated by someone else, but my happiness and mental wellbeing is not predicated on that.

>I like when my existence is appreciated by someone else, but my happiness and mental wellbeing is not predicated on that.

You might believe that but a lot of history and medical studies on retirees says otherwise.




From the BBC article you've linked to

> There are a number of reasons why health declines after retirement, said Dave, but, mental and social stimulation are a large factor. For many people, work is where they are the most social and do the most physical activity. When that core social network is removed, health declines.

Specifically, this.

> For many people, work is where they are the most social and do the most physical activity. When that core social network is removed, health declines.

By that notion, are all young Remote workers -- think 99% of the Wordpress core team -- declining in health and dying? I'm not buying this.

They're needed by their job, and their friends, society. For a lot of people, when they retire, they don't really have anyone to talk to anymore. Maybe they don't have many personal friends. Maybe they don't have a strong marriage, or their spouse passed, or they never married. Maybe their children have moved away, and are so busy with their exciting lives, it seems they never have time for anything more than the obligatory weekly skype session.

This can make your health decline.

Thank you, Sir. I will keep this in mind as I age...

I understand what you’re saying but I wouldn’t completely dismiss the psychological effect that a sense of feeling needed or the pride you can gain from work has on many people. The sense of being needed may not be important to you, and to be clear I make no negative judgement about that, in fact I’m glad to hear from anyone whose own self worth or happiness isn’t tied to their job as this probably leads to much richer lives, but for many people this doesn’t hold true.

I often see the sentiment shared on HN that if posters here didn’t have to work for a living they would be equally or more fulfilled working on their own projects or spending more time with friends/family, but in some ways I think this feeling at least partially correlates with intelligence, creativity, ambition, or simply being a confident well adjusted adult. I definitely get the impression that HN is filled with people on the higher end of the intelligence/creativity/entrepreneurial spectrum and that might be resulting in a particular narrative that doesn’t always hold true for the rest of us.

I would say that I definitely fall into the very bottom portion of intelligence/creativity among the readership here. I don’t really have much to contribute to this community beyond personal anecdotes, and I’m frequently in awe of the projects and overall knowledge I see on display here. As someone who isn’t smart or creative, never did well in school and has no formal education beyond high school, grew up in poverty and has been homeless for extended periods (12 months or more) twice in my life, doesn’t have a whole lot of self confidence or things to be proud of, my work (which involves machining and precision manufacturing) is pretty much the main thing that gives me a sense of self worth. For many people that statement may seem sad or somewhat pathetic, but it’s honestly how I feel.

I live in LA county, not exactly a low CoL area, and as a single person without dependents I can very comfortably survive on $1100-$1200 per month. BI could easily fulfill my financial needs but it wouldn’t do much to provide for the other things that my work provides for me, namely the sense of purpose and pride it gives me. I understand that BI doesn’t mean the end or work, or that people wouldn’t be allowed to work or seek out volunteer opportunities, so my comment isn’t a general critique of BI, particularly as the more I learn about it, increasingly from HN, the more optimistic and supportive I become of it, but a realization that while I think it’s effects would be very positive overall, I don’t think it would solve all of our problems. As a society we will still need to find ways to make people feel wanted. And as of now for many of us work is what fulfills that role.

I think it's great when there's perspectives from the non-typical-HN reader, it's easy to forget how exceptional most people's lives are here.

So, with that upbringing, how did you end up doing machining and precision manufacturing?

And how'd you wind up on Hacker News?

What brand of CNC machines do you work with?

Thank you for the encouraging words. I try and check HN every day before my shift but I usually never have time to comment until much later, at which point there isn't much activity in the threads, so I sometimes wonder whether or not my posts add any value or if I'm just writing for myself.

With regards to how I ended up in my current job I'll do my best to offer a succinct timeline. My prior work experience consisted mostly of manual labor or retail/customer service type jobs. I never enjoyed customer service, I'm too shy, but through circumstance and my own apathy and lack of ambition that's were I ended up. After some time my dissatisfaction with my work and my own wasted potential led me to reevaluate the seriousness with which I needed to focus on my career. Machining/welding and general manufacturing was something that always interested me even though I had limited experience with any of those fields. I've always been good with my hands and I'm obsessively detail oriented and like fixing things. I love following well delineated procedures and checklists actually make me smile so I felt something in aerospace might be a good fit.

I was fortunate to be living in an area with a ton of aerospace/manufacturing companies and I ended up applying to a number of them. I got hired for a very entry level low skill position having nothing to do with the manufacturing side of things. But, it got my foot in the door and I eventually moved into a role closer to the factory floor and from there worked my way into an apprenticeship that led to my current position.

As to how I found HN, I'm not entirely sure. While I've been reading HN for a number of years I've only relatively recently started posting, largely in an attempt to improve my writing, which is something I'm very self conscious about. I find this one of the few places online were I'm confident that if I say something stupid or make an argument lacking clarity, that I'll be called out on it in a civil and constructive manner. It's possible that I came about HN through one of those "We act like HackerNews" threads on /g/ but that would be slightly embarrassing so I hope it was through some other avenue.

I've worked with a number of brands like Haas, Fanuc, Mazak and recently some 3d printers from EOS. Haas stuff breaks all the time which can be infuriating.

Inconel please continue to comment whenever you think you have something to contribute to the conversation. I also appreciated hearing your perspective. Your writing is fine! No need to feel self conscious.

Well life seems to have worked out fairly well for you so that's good. Not sure why you worry about your writing, seems fine to me.

How many machines are in your shop? Do you guys happen to use any software that monitors all the machines so you can see various charts and what not on uptime, downtime by reason, that sort of thing?

Thanks again to both you and mswen for the kind words and encouragement.

Sorry to not offer more specifics but I need to be careful on what I reveal about our workflow and ops since my employer guards those things pretty seriously but we have quite a large array of CNC, milling, lathes, spin forming, autoclave, welding, 3d printing, and other machines. The building I work in is a couple hundred thousand square feet and is constantly overflowing. We definitely have software tracking uptime/downtime and things like that.

Thank you for sharing, it's good to get outside perspectives on issues like this. I'll share a bit about myself as well, so you can get a better idea of where I'm coming from.

I don't consider myself on par with most of the stuff I see here either. I consider myself above average intelligence, but nothing special. I'm not particularly creative, but I love being part of the creative process with other people. If there's something I pride myself on, it's my ability to facilitate meaningful and effective conversation. I'm not very confident in myself; I think my above average intelligence lead me into contact with enough people who are simply smarter and work harder than me that I don't have any false notions of grandeur.

I get how work can provide you with a sense of purpose, I really do. One of the things I would do, assuming I didn't have to work, is volunteer for a non-profit that tackles an issue/issues I feel are important (like clean water for everyone). My personal projects would basically be two lifelong ones and whatever else caught my fancy. The first would be a music recommendation system that works differently from most others I've seen (any I've seen? copyright Jeff Holland, 2016): it would let you find music in genres you normally don't or have never listened to. The idea is, you can say "I like Queens of the Stone Age. What rap artists do QotSA fans like?" and it would suggest artists (and songs) accordingly. The great thing is, the sky is the limit when it comes to refining and expanding something like that, the challenges are technical and algorithmic. The second project would be a traditional roguelike with a different progression model for characters and story than is usual, with a technical focus on being truly cross-platform and providing a means of playing games via TLS on a central server (a la DCSS).

I know that was probably way more information than you wanted, but I wanted to give you some background on me. I'm not amazing or confident, but I do have a few things I'm passionate about. If either one of my personal projects was successful I would be incredibly happy. It doesn't even have to make me money if it makes enough to be self sustaining and the users find it worthwhile. All to say, I understand the feeling you can get from producing something valuable for others, and even enjoy it. I made a conscious decision when I was young(er) to disconnect that from my sense of self-worth, and it's now ingrained in me.

Essentially, my hobbies take the place of where the need to feel wanted would be. There's so much out there to enjoy that I don't mind if I'm not necessary (are any of us, really?); I can share the things I love and appreciate with others.

I appreciate your response and it definitely wasn't more information than I wanted, the main reason I enjoy this site so much is because I get to see what others are passionate about.

I also want to make extra clear that I didn't intend for my comment to come off sounding like I was criticizing your point which is absolutely valid, and I'm not sure if it did, but again, that wasn't my intention. I was just providing a counterpoint on how I personally feel and the sense of fulfillment work gives me. Much of what you said resonates with me and I hope to one day be able to feel that same sense of accomplishment without outside validation. It sounds like we're probably on similar paths, I just might be a bit further behind, which pretty much describes my life.

Thanks again for sharing.

Yep, +1000. This is apparently very hard to grasp for some, or they just really love working (which I have my own doubts about). It's crazy to me that in this age of bounty, everyone is positively required to sell at least 40 hours per week of their time or face social exile, starvation, homelessness, etc.

I think another aspect of it is that people want it to feel fair, and that's a complicated thing. It doesn't take much hunting to find videos of someone chastising another customer at Walmart for paying with a government assistance card. We have this strange animosity toward anyone we deem doesn't work as hard as we do for the same result. Well, it's literally true that some people in this country make 1000x what others make while working less hours, doing less "hard" labor. Personally, construction, food service, mechanical maintenance, etc work much harder than I do, even though they might not have a clue how to do what I do (I would also likely suck at their job initially).

I love my work, and hanging out w/ the other coders on slack, but I would prefer not being forced to work, I'd much rather it be a 'choice' not something thrust upon me, or that I could live off 20 hours per week and spend the other 20 working on prototypes for web and mobile apps.

Basic Income does not mean people cannot work. What it does mean is people can choose to work at whatever brings them joy, rather than working at whatever job is available to have the money to meet basic necessities. And for people who don't actually want to work, they have that option too.

There are numerous ways to satisfy one's urge to "feel needed". To give two very different examples, volunteering for various projects (trust me, there's a lot of stuff that needs doing), and contributing to open source.

Kids need parents.

Amen to this. We need basic income if for no other reason than to bring one parent home, I don't care if it's the father or mother, there should always be a parent available and at home.

I very strongly agree. In the very much socially just rush to get women in the workforce we've lost sight of the damage done to children by separation from their parents, and the damage done to relationships by the staggering workload of managing children and a household with both partners working full-time. I would very much love being able to fluidly transition between periods of being a house-husband and employment, and my girlfriend feels likewise.

One can choose to work on whatever they want, however they want. Believe it or not, most people have an innate desire to want to contribute to society and/or improve/create things. Basic income is not communism, you'll still get compensated for doing paid work. As long as that incentive to make money is there, there will always be people working.

Basic income should be the solution we, as an organized group, give to all individuals to be able to express themselves. All human beings have basic needs and the State have to provide this. The State here is the expression of the will of the population. Do not take the State as something socialist or communist, taking from someone and giving it to someone for free; no,this is provided by us, the population, for us, the population. We care of each other and we want that our kids have good education, we want to have accessible health care for everyone. And definitely, we want that, if in a few years, a lot of jobs are automated or done by someone in the third country, no one is left behind.

This is a common argument for basic income and, even though you say "Do not take the State as something socialist or communist", your argument is the same as it is for socialism and communism.

You say, "Do not take the State as something socialist or communist, taking from someone and giving it to someone for free; no, this is provided by us, the population, for us, the population."


Here's the problem.

Can you think about what, exactly, "the population" is? Is it tangible? Is it a singular physical entity?

The answer is no, "the population" is merely a collection of individuals! Individuals, of course, exist-- they are tangible, singular, physical entities. You are one. I am one. Individuals exist.

Populations, on the other hand, are abstractions.

My point is this: when an abstraction needs to be represented, it cannot do so itself. In this case, individuals are required to represent the population because, well, individuals are the only ones with the actual ability to do so.

Under your proposed system in which the State provides basic income to each and every individual, who decides how much each is given? Who will be the ones to actually control the means of production; and who will be the ones to actually control distribution of goods? Only some will.

If you think democracy as it exists today already performs poorly in representing the ENTIRE population (i.e., representing each individual fully to their individual desires) (think of the surprising amount of people who feel conned by the election results), then just imagine the extent by which people will likely feel when the State is responsible for just about E-V-E-R-Y-T-H-I-N-G in E-V-E-R-Y-O-N-E-'-S life!

You're not wrong.

> Under your proposed system in which the State provides basic income to each and every individual

> who decides how much each is given?

Hopefully economists, mathematicians, business & social services leaders. It's extremely complicated.

> Who will be the ones to actually control the means of production, and who will be the ones to actually control distribution of goods?

Will largely be decided already at that point, we're well on our way already.

As for your final question, as automation increasingly destroys jobs, there is going to be increasingly severe social unrest - only then will basic income start to be seriously discussed, and by that time many people will likely be worrying for their safety, even wealthy people.

When I say the population I am referring to a set of people who actually believes that colaboration and resource sharing is the best way to success. This 'population' (countries), are the places I want to live. For example, I would never live in the USA, because you dont take care of each other, you are an individualist society.

I agree that it won't happen easily. Which is why I phrased it the way I did. But I do think that it must happen eventually (and really, it's just a stepping stone on the path to a post-scarcity society).

That's why I think basic income supporters should also be advocating for a land value tax to fund the basic income, which should really be rebranded as a "citizen's dividend". This shifts the source of funding from coming off "the backs of hard workers", to compensation for allowing others the privilege of denying you monopoly ownership over our collective land and natural resources. Rather than an "us vs. them" mentality, we're all collective shareholders of our land, and basic income then become's the dividend.

Regarding "hard work", we need to start seeing work as a means to an end rather than an end in itself. We need to focus more on what it is that's actually being accomplished rather than whether or not somebody's working hard. If society can operate without you needing to work hard, then hard work should be a choice.

People feel a natural obligation to be rewarded for their work. "Don't work, don't eat". The fact is, giving people a small income makes them inherently lazy. Lazy people don't like to work, but they will do just enough to get by, so if you give them a min amount of $, they'll do nothing. Others will look at that and say, "How come they get money for being lazy?" It actually acts as demotivation for people who would work some. The guy who isn't making much to begin with isn't rewarded - it only makes his labor less valuable. Does it make him strive harder to gain opportunity? Not really. People who have tried multiple times to jump over the hurdles in their economic careers won't feel that obligation to continue to jump if they have their precious safety net.

Is a safety net nice? Sure, but as much as it's nice, I know full well I wouldn't be sending out resumes or even looking for what I should be doing if I didn't feel some obligation to work, whatever that be from.

The idea of giving people a flat income sounds nice in theory, but that's all it is: in theory. Practically, I believe it fails to account for the basics of human nature after that point, which is why the idea wouldn't work in practice. That doesn't mean it isn't humanitarian, which is where I guess it shines for some people. After all, it's nice to think everyone is taken care of, much like social medical plans. But in both cases (income and medicare) I think it's the reverse solution to the problem: It's trying to raise people up rather than lowering the bar. Vague analogy, sorry, but maybe it makes sense?

>> I'm all for doing work, but never understood worship of hard work for hard work's sake.

I'm not sure what you mean by this, so let me try to answer this in a general way, for the sake of practice if nothing else. Personally, I view the body as being made to do work. It's very functional, well designed "equipment" - or at least better for all-purpose usage than anything humanity has ever created. Some people feel like they wouldn't be fulfilling their purpose without work. They wouldn't feel complete I guess. Notably, it is a personality-type thing, as there are types of people who enjoy doing much more than thinking, but everyone enjoys doing something, even if not work related. We'd get bored otherwise. Some people naturally associate the doing of things with working for a living. Some people find work to be therapeutic.

I'm rambling alot here trying to toss out ideas. Maybe I already answered the question in my feeble way.

What would you suggest to Walmart, Krogers, McDonald's workers and all Truck Drivers who will be displaced by automation in the next decade? Learn to code? Not everyone is cut out to be a coder, or has the money for education in the first place or the mentality to learn it online on their own.

Truck driver is probably the first job to disappear, this is also the #1 job in about 30 states. Truck drivers also touch many communities by travelling through po-dunk towns who's whole industry be it a couple mom and pop shops and a gas station IS because of truck drivers who frequent their route.

All of those communities will dry up, millions of truck drivers will be out of work. What do you expect people will do when they are starving, and the unemployment rises from 6% to 40-50%, by 2040?

There's currently an 83% chance that workers earning less than $20/hour will lose their job to automation in the future, and a 40% chance that those who earn between $20-40/hour will lose their job (forever to automation) in the not-to-distant future. Do you know anyone who falls in those ranges? Would you risk it all on 40-83% chance that your job will be here in 20-30 years?

What happens to the graduate who ends up graduating from medical school only to find out all doctors have been replaced by robots? They still have gargantuan loans and all, but zero employment options. Source: http://www.geek.com/tech/middle-class-workers-are-losing-the...

> Truck driver is probably the first job to disappear, this is also the #1 job in about 30 states.

That's not really true. This misconception came about from an NPR journalist who drew an infographic that appeared to show that truck drivers were the most common job in each state[0]. In reality, that infographic used BLS data - the BLS subdivides other professions to provide more granularity. In other words, all that infographic showed was that the BLS considers "truck driver" to be a less specialized profession than "teacher" (which is separated into different roles of teachers).

If you actually look at the number of truck drivers in each state and compare that to the size of the labor force in each state, it's a lot smaller.[1]

[0] http://www.npr.org/blogs/money/2015/02/05/382664837/map-the-...

[1] http://www.marketwatch.com/story/no-truck-driver-isnt-the-mo...

>If we look at data that is consistently disaggregated into the most detailed nonfarm occupations, retail salesperson is the most common job in 42 states. In four other states (Alabama, Louisiana, Maryland and Vermont), cashier is the biggest occupation. Fast-food worker is tops in two states: Kentucky and Ohio.

Wow, seems like worse news to me. The number of self-driving trucks on the road today is probably low to zero, but the number of non-grocery retail stores closing every year, largely due to competition from Amazon (but also stagnant wages keeping demand low), is clearly in the thousands. I don't think it would be crazy to predict closings and automation within the stores that remain (e.g. Amazon Go) driving a collapse in jobs over the next decade.

Some numbers on closings in 2016: http://www.clark.com/major-retailers-closing-stores

> Wow, seems like worse news to me. The number of self-driving trucks on the road today is probably low to zero, but the number of non-grocery retail stores closing every year, largely due to competition from Amazon (but also stagnant wages keeping demand low), is clearly in the thousands

Maybe, but clearly the net effect is positive, because unemployment has fallen by half since 2010, and is in fact currently below NAIRU levels[0]. So every job that has been lost has been replaced by more than one, on average.

(Before someone says "yes, but that's because the labor force participation rate has fallen" - that's another common remark that misses the point altogether. The economy has expanded during this timeframe, and while labor participation is a secondary concern, it's not a proximate one. If people are able to afford the choice not to work during a period of time in which the economy has expanded, that's unambiguously a good thing, even if it's not always the best case. Increasing participation in the labor force is often a goal, but not in and of its own sake. Unlike controlling excess unemployment or preventing GDP contraction, which are basically always bad, a drop in labor force participation is a more ambiguous signal of economic health).

[0] In other words, one could actually make the argument that unemployment is currently too low - although this would be a bit of a moot point, as it's still within measurement error of the NAIRU and has been for the last 13 months.

I've met very very few genuinely lazy people. I've come to realise that people who may appear lazy are usually somehow impaired or beaten down. In one way or another, they have lost or never gained faith in their ability to push through, and have fallen into "don't expect much, try to survive" mode.

> People feel a natural obligation to be rewarded for their work ...

If people are actively demotivated by seeing others idle and surviving, who cares? Provided that we as a society can afford basic income (including after it's been established and it's having various impacts on the workforce), it's no loss if people stop working. And there's only so much basic income could ever give you; it'll make the necessities of life free (or rather paid for), but if you want things beyond necessities (including any positional good), you'd still want to look for work.

> Is a safety net nice? ...

If we can afford to provide a basic income, you don't need to work -- unless the economy goes so pear-shaped that we stop being able to afford a basic income. (And this seems unlikely, since automated factories won't be offered a basic income. If anything, basic income might increase consumer demand...)

> The idea of giving people a flat income ...

I'd emphasize that this income will grow if you work -- and that it won't be enough to buy positional goods, by definition. You can keep body and soul together on a basic income, but to live better you'll have to find a way to engage with the economy. (And the presence of a hammock-grade safety net will give you more options, not fewer. Live on oatmeal and vegetables, and buy stock with your food savings; or work for years on a project that might or might not pay off.)

> I'm not sure what you mean by this ...

"Made to do work" could mean any number of things. Tribal warfare, hunting, gathering, and social climbing are certainly things humanity has evolved to do; subsistence farming, artisanal crafts, and management are close enough that we're pretty good at them; but factory work, we're just plain not adapted to. Keeping strict schedules, doing small parts of a large whole, and repeating a single task for a long period of time: these are learned skills at best for humanity, and that's why such jobs get automated.

> Some people feel like they wouldn't be fulfilling their purpose ...

They can find jobs and keep working. UBI isn't the end of employment, just the provision of support. Think of it as reverting to the economic structure of the classical world or the American South, except that this time the only slaves are robots.

I guess our ideas of how it would be implemented are different. Let's consider it from a practical perspective. What's the basic level of income? Right now, minimum wage helps some people (where cost of living is low) and not others (where cost of living is high), so asking this quantitatively, how much would you propose basic income be, assuming the dollar stays put? Of course, we have to get Congress to even pass such measures in a way that actually helps society, but let's ignore the government problem for our theorizing.

Second, what do you project would be future salaries? I know, that's very difficult to say, but let's toy with the idea since it's important that such salaries have an impact on whether people actually step out into the workplace... or if the sorts of jobs available are even something they can do.

Third, exactly where does this money come from? The rich have money, but it's awfully hard to get them to part with it. They're usually crafty enough to manipulate the system. The government can't keep printing money (without taking it out) because that makes it worthless. Money doesn't just magically appear when the economy "gets going". Let's not assume imports are going to decrease (at least not for this theorizing, even if Trump gets his way), or at least we should pretend that imports and exports balance out. I say this assuming that we might apply Basic Income at a global level, at which point "import" and "export" become meaningless. Money can't just cycle because the fact is, some people are in control of the resource supply and others aren't. On a small, small level, capitalism is like this: If we have two people, Mr A and Mr B, and Mr A has the resource supply, the way Mr B gets anything is if he works for Mr A, and Mr A pays him for the resources. Basic Income at this level would be taking from Mr A to give to Mr B some small, but significant amount, for just existing. Does Mr A get a stipend/basic income? And supposing Mr B works more. I wonder at what point would Mr B become like Mr A where he gets taxed more. Already we've seen companies move their headquarters to places like Singapore to avoid the heavy corporate taxing. I have no doubt that the rich (who can afford to move) will be glad to leave this country to find havens where their wealth is unaffected but from which they can still suck the wealth of other nations. Taxing laws here are critical because there are usually loopholes to get around it.

Fourth, how would this look with immigration? Seems - just from my observations - a number of liberals would like both immigration and things like Basic Income. These ideas seem opposed to me, since immigration doesn't necessarily bring much wealth, as it's often the poor who immigrate (assuming no wars or famine and such that drive people from their homeland, and those could be factored in, at least with Basic Income on a national scale). (I'm ignoring here, the fraction of people who immigrate just 'cause they like the country).

I await your thoughts.

> The fact is, giving people a small income makes them inherently lazy.

No it doesn't. Why do you think it does?

Why do you think it doesn't? If I'm getting a free hand-out, I don't need to work as hard to get the necessities, which is why I go to work in the first place.

> The guy who isn't making much to begin with isn't rewarded - it only makes his labor less valuable.

What? How does that make any sense? The labor market is a market because supply and demand still apply.

His labor from his point of view, not from the economy's point of view. Certainly labor from him is good for the economy. But for him, he already has what he needs, so there's not as much incentive to get more. Sure, there will always be people who want more, but they may pursue alternatives to [what I'd call] standard, ethical labor in order to gain those ends.

Excuse me? I don't work because I think I should have to. I work despite that. I work so other people can someday benefit from, you know, FULLY AUTOMATED GAY SPACE LUXURY COMMUNISM and all that.

I'm a supporter of basic income as an experiment but it is interesting to think about alternatives. Is basic income simply a stepping stone to some kind of Star Trek post-scarcity utopia where there is no concept of money or wealth at all?

We survived the industrial revolution, is it not just human nature to adapt?

One example I recently discussed with friends was the idea that most truck drivers may soon be out of jobs due to automation. Since this is a highly specialized skill it would be hard for those workers to find alternative work without learning an entirely new skill set. But would it be feasible for those drivers to simply buy self driving trucks much like they already buy their conventional trucks and simply enjoy their lives while the truck drives itself? So even if self-driving trucks show up tomorrow is it necessary to pay truck drivers just to live? Can we offer an incentive like retraining to those drivers?

Is basic income actually the solution or do we need to take a harder look at things like the income gap and a tax structure that strongly favors investment in creating actual value (goods and services) instead of wealth for the sake of wealth (investments).

Truck drivers can't simply buy self-driving trucks and kick back while the truck does all the work. That would require them to still be paid the same amount, and if trucking companies still had to pay everyone the same amount then why even bother with the self-driving trucks? Or more generally, why would the trucking company even keep the truck driver on as an employee, when it would be cheaper for them to just buy the self-driving truck and use it, instead of leasing it from the truck driver?

Many truck drivers own their own trucks and contract for the carriers so those are the ones that could buy self-driving trucks.

Regarding pricing I'm not so sure. If you run a trucking company and contract out driving to individual drivers that own their own vehicles you are paying for the service to get the cargo to its destination, you aren't paying for a person as much as a service.

I do agree though that in this situation truck owners would make less money but they would also have more opportunity to do something like purchase additional trucks or do other work such as last-mile driving to supplement the loss in long-haul income.

> Many truck drivers own their own trucks and contract for the carriers so those are the ones that could buy self-driving trucks

Except they probably couldn't, because the carriers are going to lease self-driving trucks from specialized agencies that will exist exactly for that purpose, as they won't want the administrative costs of dealing with individual owners (which makes some sense when it's an owner/operator as an alternative to hiring a driver and buying/leasing a truck separately, but none when the truck is self-operating.)

So, since no one is going to be likely to pay them for use of the self-driving truck, there's no anticipated income stream with which to finance the purchase.

Somebody has to make those leasing agencies. That will create some jobs, but it is easy to see how 1 person can easily handle 3 fully automated trucks even without the typical logistics that big companies bring to the table. If this cost reduction causes 3x as much stuff to be shipped it won't be a short term problem, but I find that unlikely.

So the opportunity for the current owner/operators is to pool their resources and become the specialized self-driving truck agency.

Sounds like a union. Do you do them anymore in the US?

It sounds like a business to me. Unions pool labor for negotiating power, they don't pool financial resources to create value.

Labor unions are alive and well in the United States. What's your implication? Don't beat around the bush.

Flatbed and LTL freight prices will fall through the floor. You can't yet automate those kinds of freight because the cargo is so diverse and handling isn't something AI can do yet.

Then you're just a serf of the State. Do we want to go back to feudalism?

-- edited for spelling --

The word is "serf", but your claim makes no sense anyway. A serf is not someone who receives money from their government. In fact, the whole point of Basic Income is you get the money even if you don't do any work at all, which is basically the complete opposite of a serf.

You're actually paying them to not riot. Serfs provided the core of a relatively stable body politic. They could be called on for war. They didn't have much economic power individually. They could be pushed around by the powers that be. They were also largely disarmed (Hillary and Obama).

BI == Serfs until the government can implement either forced sterilization or State assisted suicide.

For those down voting, picture the US if there was no welfare state. What would all of those people do if they didn't have the state to keep them fed just enough to not riot or declare war on their government? The answer to that question is not improve policies to balance environmental stewardship with pro-business expansion.

In practice, I think many of those people would probably just die of starvation or exposure, unless some charitable NGO picked up the tab. I don't have enough statistics to say whether it'd be most such people.

In my opinion, massive automation of tasks is going to cause a massive demand of programmers, developers and QA engineers, so no robot apocalypse yet. Basic income is not the solution to this problem because this is not a problem. The solution to this 'problem' is having a better education and making tech more accessible for everyone.

There will be more demand for a short while but a lot of that will also be automated away. Think about a period of 100 years aka your children and grandchildren. Not the coming 3 years as we programmers tend to do. Even if we will have another AI winter after this spring and summer; 100 years gives enough time for another spring and summer. Not only can not everyone do everything; many people cannot learn programming and QA. I would say by far most will not be able to. That is a difference with the industrial revolution; something like a horse carriage to bus driver transition is vastly different than a truck driver to a dev.

Sure for jobs like lawyer or doctor to programmer you can imagine but there are not many compared to physical labour anyway.

For both reasons, I do not see your opinion happening in the 100 year and after span. Maybe over the coming 10 but not 100. Wether I like it or not, my brain does not get over the choice of letting people perish, basic income or boycotting the future. Someone like Trump can bring jobs by just banning robots ; for instance by changing regulations so they cannot drive vehicles on public roads. But that would pretty quickly (again look at 100 year spans) lead to the US being no longer competitive on the world market for those particular (related) services.

Well, it is really hard to think about what is going to happen regading jobs in 100 years. I dont think that human mind is going to be removed from the equation. And if human intervention is, in fact, removed from most of the jobs, then what alternatives to get the basic needs are they going to have? Also, we have to be extremely careful because, even if we are not going to be there, we are paving their destinies now.

I agree we will need the human mind but for less and less jobs. And indeed my point is that we are paving that destiny now and therefor we need to work towards some kind of solution now.

> In my opinion, massive automation of tasks is going to cause a massive demand of programmers, developers and QA engineers, so no robot apocalypse yet.

The question is not how massive it is in absolute numbers, but how does it compare to the amount of jobs that are replaced by automation?

And you know the answer to that question. If all jobs so replaced would create an equivalent number of "programmers, developers and QA engineers", nobody would automate, because it would cost more than human laborers.

That's actually not true. The effect would be an increase in productivity. More things get built/done with the same resources.

The only resource conserved in this case is the amount of time spent to produce some good - it's not like robots can magically make more out of the same chunk of steel, say.

But if you need the same amount of people to produce the same quantity of product (jut in different roles), then, by definition, your automation does not conserve time.

On the other hand, if your automation does decrease amount of time spent per unit of output, and you run it at full capacity, then where do all the extra units go? If you say "other people", then that would imply that there was some heretofore unsatisfied demand that the market couldn't satisfy due to a labor shortage.

Automation is a great way to solve the labor shortage problem, but it's not always present. And when it's not present, you're just adding more goods without adding new workers (or increasing wages for existing workers) to afford those goods - so you'll end up with an overproduction crisis.

Note, this is not an automation issue. This is a capitalism issue, because in capitalism, the only demand that matters is the one that lets you make a profit. People who may need what you make, but cannot pay above cost of production for it, don't matter. Automation tends to increase the size of that category.

What's massive though? Programmers currently make up approximately 0.8% of the workforce. You could increase the size of the industry by an entire order of magnitude and you still would only be employing 8% of the workforce. About the same rate as manufacturing today; a sector often scrutinized for no longer providing enough jobs for the populace.

Massive automation of tasks performed by humans is pretty depressing because it indicates that some combination of technology focus/funding can't aim higher than what people are doing already.

You are assuming you cannot be automated away, why?

I wouldn't be surprised if QA is completely automated right about the time that facial recognition becomes viable. I guess that means many years from now, but if the hitch to automating QA is having person-eyes looking at a page and using the site in order to find problems, then I think they might ultimately converge their tooling because there's similarities in there. Something you can throw your PSDs or Balsamiq URLs at it and wait for the notifications. Web page recognition rather than facial. Heck, it might be simpler...or already exist.

Update: Here's a guy doing text recognition for localization: http://www.jebriggs.com/blog/2013/04/imug-computer-vision-an...

Also: http://browserbite.com/

Comparing screenshots from Selenium is a pretty nice way of doing it.

Didn't it start with auto makers using assembly line robots or long before then?

Most consumers are tapped out, bad news for a consumer driven economy. There can only be so much more debt accrued.

Don't you mean "bad news for a debt driven economy"?

This feels correct, anecdotally ... but is there data to support this claim? For example, savings rates going down, credit/debt going up, and consumer spending going down?

Here's savings rate data: https://fred.stlouisfed.org/series/PSAVERT

Note that this is savings rate net of taxes. It has been on a mostly steady decline since it has been calculated, with some spikes and a leveling out slightly higher than the rate before the last recession.

What happened from December 2012 to January 2013 for the personal savings rate to drop from 11% to 5%?

You also have to watch for savings going up and credit going down, to reflect people who are sick of being in debt and shying away from it wherever possible.

True that. I was like this for a good number of years, and it's only been recently that I've started using credit for a few things.

Sure, take a look at student loan debt for one glaring example.

Or the debt-to-income ratios required to get a home today versus 30-40 years ago. Credit card debt growth, medical debt growth, saving rates declines, etc.

You can always inflate debt away (if you control your currency).

Hacker news says: become a landlord! Yet amazingly compsci grads can't extrapolate this out and see that it cannot work at scale.

Hey, distributed systems is hard. The network is reliable // the market is rational.

"the market" (basically everyone) is rationally responding to the state and banks using credit creation via land to appropriate labour. That's killing productivity as people realise working doesn't pay and filching of others does.

Don't forget the vast expansion of government spending. That wealth it dissipates has to come from somewhere.

Don't forget student loan payments and smart phones.

The increase of housing costs is also a result of double incomes. So while housing is more expensive than a generation ago, at least we have double incomes now. But of course, this increases costs for child care, as nobody is home to watch the kids.

Price per square foot for housing has remained remarkably constant over time. People are spending more on houses than they used to because they are buying bigger houses.

30 year olds are buying larger houses because typically those are the only options.

It comes down to NIMBY local regulation enacted by the boomers with their FU I got mine attitude. Municipalities enforce size restrictions, ie you can't build too small, in order to ensure there isn't housing poor folk can afford. They enact parcel size restrictions which means a piece of land that could have 20 homes on it can only fit 5. They enact stricter and stricter building codes that the only way to make a profit for a builder is to build big and cram in features so the real estate agents can beat you over the head with them so you feel as though you'd be an idiot not to buy this massive house with things you don't need.

Houses getting bigger due to regulatory changes (as opposed to buyer preference) is a perspective I had not considered. Interesting! Thanks!

Say's law was the most counterintuitive concept I was exposed to in undergrad econ classes. After consideration it does make sense but runs counter to an entrepreneurial view of the world where products are created to serve a need.

It's counterintuitive because it is not true.

My uncle lives in an area where a new house must be on a minimum sized lot of 1 acre. A nearby area requires 5 acres for a new house! I'd never heard of those kinds of restrictions before.

We have that here in Portland, it's the urban growth boundry. To control the growth of sprawling suburbs and encourage higher density construction, outside the boundary you cannot get sewer service and so must build on a 1+ acre lot with a septic field. It works pretty well for us. I'm sitting less than 100 feet from our boundary right now (on the inside), and just the other side is acres and acres of open farmland.

I live in Seattle and while I am aware that not everyone lives in a similar environment the concept of a minimum 5 acre lot staggers me. I consider myself lucky to have 600 square feet.

What kind of area has these rules and who sets them? To me a lot with 5 acres is officially "the country" where I would expect very little to zero regulation of what you can build.

For example, here is a zoning map for New Canaan, Connecticut a suburb of New York in south western Connecticut. About a 25% of the town is zoned for 4 acre lots, 50% for two acre lots, and 25% for smaller lots (just my estimates from looking at the map).


He's in Western Washington, but not too close to Seattle. To him it's "in the country" but it's right next to town. I live in a rural place, "in the country" means something entirely different to me.

My definition of "country" is having a yard big enough to throw a tennis ball for your dog as hard as you can, as far as you can, within your property, and not have it hit something. Just any linear stretch of maybe 150'. People in cities very rarely have that, unless it's some kind of billionaire hilltop mansion type situation. Many people can't even own a pet because their apartment disallows it.

Same thing would apply to shooting a gun on your property. If you can do it without the cops coming, you live in "the country" as far as I'm concerned.

Miami County, KS requires 20 acres for a new house. That is to halt the urban sprawl from Kansas City.

> I'd never heard of those kinds of restrictions before

They used to go by the name of Jim Crow.

I think you know that in any kind of major metropolitan area with a strong economy that price per square foot is much, much higher (adjusted for inflation) than previously.

Taking the aggregate is deceptive because housing is much cheaper in economically depressed areas of the country.

Edit: Looked at the source of your data. It includes only new homes, and ignores existing housing stock. Your entire argument is deceptive and wrong. I regret wasting my time reading the source and realizing that you are cherry-picking.

That's simply not true, at least on the west coast in any reasonably active real estate market.

It was never $1,455/sq ft like it is today in Palo Alto, nor $500/sq ft or even $200 per sq ft. This is a recent phenomena.

Furthermore, price per square foot actually tends to increase nowadays on smaller homes, where you'll pay even more per square foot if you're trying to buy anything under 2000sq ft, and it gets really crazy when you approach 1200sq ft.

Shop around for a house, see for yourself.

Yes, there are exceptions to the rule. Palo Alto, home to one of the biggest wealth booms in human history, is one of them.

This applies to any west coast market.

You'll encounter it yourself if you ever shop for a home out here.

Yep, anywhere within a 2-hour drive of San Jose or San Francisco is crazy. You're lucky to get a single-family home for under a million, or a condo for under about 600. It's a big question of "do you have the right to live in a city you grew up in if you can no longer afford to live there", property tax laws, etc. It creates a situation where people are buying run-down houses I'd consider unlivable for close to a million dollars, and have neighbors who couldn't afford the smallest apartment in a 30 mile radius, but get to stay there and inflict their blight upon the neighborhood from which they are now very much priced out of.

One would think it's a kind move to not tax them on the actual value of their property, but everything else gets more expensive too, so now a quesadilla is $15 at the corner store and they can barely afford to eat, and their options for other housing are in a different state. It's very strange to me that people aren't taxed out of their homes, since if they can no longer pay for anything else in the area, their quality of life goes down dramatically , in a community who mostly just wants them gone, fighting against the merciless tide of economic "progress" just because they grew up there (and sometimes not even).

If you can't afford the rent, you have no say. Property tax is a form of city rent, from my perspective. Why are the rules different? It seems like people just like to pretend they can still afford to be in a place and resist the change for as long as possible rather than accept the world around them.

So let me get this straight...

You're saying that because they don't have the financial wiggle room to make their property something you want to look at they should GTFO?

As houses become less affordable, there appears to be much more demand at the "entry level" range of $1-1.4M out here. So you have much higher $/sqft often times on a smaller home than on much larger, nicer homes at higher prices. In fact, those have been leveling off lately as there are only so many buyers at higher levels.

Whew, in places near where I grew up, those are the prices for land by the acre

Yea, west coast real estate has become totally surreal.

New York, DC, Boston, are also insane.

Seattle, Austin, and Portland are quickly getting there as well. Denver kinda already is.

Real house prices are currently up 44% since the nineties. https://3.bp.blogspot.com/-OOfzxFgh8YE/WD2XUyaZeqI/AAAAAAAAp...

That is not accounted for by sq footage. Interest rates are a much more likely culprit.

> Interest rates are a much more likely culprit.

To expand on that a bit: Supply and demand in houses doesn't work on the price. Supply works on the price; demand works on the monthly payments. When interest rates go down, the same people can now spend more on a house for the same monthly payments, and so the price rises.

It would also be worth looking at the geographic distribution. I suspect that most of that growth is from urban areas. Which, then, would also reflect the ongoing urbanization (and corresponding rise in demand).

Got data on this? In my anecdotal experience price per square foot has shot up in urban places, which is where the jobs for young people tend to be concentrated.

"the inflation-adjusted price of new homes has been relatively stable since 1973 in a range between about $105 and $125 per square foot"

However this is only new homes, not used homes.


Maybe true in aggregate, but not true of many cities these days. For example, you can't touch a new home of any size in the Bay Area for less than about 750k, and that's even a long stretch. 250k for 2,000sqft would be a dream for many here.

It looks like they applied CPI directly to the cost of housing. That is not correct.

CPI has a component of "owner's equivalent rent", which should be removed before cost-correcting the price of housing. Otherwise, you are removing the increase of the item you are searching for an increase of (Housing accounts for 1/3 of the CPI correction.) Their graph is instead showing that the buying power of a dollar is roughly constant when 1/3 of the CPI basket-of-goods is corrected with CPI.

Calculated Risk has a more sane analysis, you will note that the graphs are corrected with "CPI less Shelter": http://www.calculatedriskblog.com/2016/11/real-prices-and-pr... He doesn't include price/sqft, but note that there is a 44% increase in real prices between the 90s and now. Square footage has not gone up by that much in 20 years.

As a side note: AEI is a fairly political org, I wouldn't rely on their accuracy for anything involving stats, or math in general.

Anecdotally, this is not the case, even in more rural areas. My parents bought 5 acres and built a house for $100,000 (adjusted for inflation). I recently bought a house with half the square footage and 1/10th of the land for double the amount. And I got a great deal in the current market by being willing to live even further from town.

Yep. Moved to high cost of living city almost a decade ago. Always lived frugally, even though I'm now making decent money. The plan was to get the hell out of this overpriced, over crowded area with a stash of cash and head back to Midwest to pick up a nice home.

It's terrifying watching Zillow on a few Midwestern cities that had avoided the bubbles so far. It seems as if the coastal cash and / or Chinese money has now trickled its way inward. 25% price increases in 2 years for some of the newer condos I'm interested in.

I don't want to move just yet cause I like my job and wouldn't be able to find something similar in a smaller city, but now I fear I'll be priced out again. This sucks.

* Because builders choose to make bigger homes to bring in more money.

It is true that suppliers do, to some degree, drive buyer preferences but I am skeptical that it's the primary driver of change.

What makes me upset is that the economic realities do not match what is taught in large swaths of America. We are taught (at least in my community, and I am 30 now still living within 20 miles of where I grew up) that a very achievable ideal is a middle class existence with one parent working, and a small house in the suburbs. I am in the top 1% income earners for my generation and do not even come close to this.

I think it's important for young parents to start breaking this cliche that economic prosperity is an American standard. Instead we should be teaching that life is hard and you should count your lucky stars if you are able to afford anymore more than an apartment.

You must be exaggerating or living in New York/San Fran.

Here in the midwest is is very reasonable for a top 20% income for 30 yr old age bracket to have only one parent work. If you're top 1% you can definitely afford a house in the suburbs and have one parent stay home.

Living near NYC/SF does include "large swaths of America".

I guess it depends how you define "large swath". Is it a certain amount of landmass or population, a percent of total landmass or population, or some other metric? I think this line is needlessly pedantic. It's reasonable to interpret rubidium's comment as just meaning "the expensive housing in the NY and SF areas are too expensive to be feasible for top 20% earners, as the OP said, but by and large, a middle class existence is possible for most land in America." Population centers with expensive housing may be inaccessible for the regular middle class (when top 20% income earner means only 60k/year or so based on 2010 data[0]). This isn't really the right data to use, because the pay for people in SF is different than say, somewhere in Missouri. With that being said, it seems clear that the American dream of a middle-class existence with only one working adult, isn't realistic everywhere for everyone.

I might be meandering here, but I think this reasoning is actually flawed or biased, because it was never true to begin with. A factory worker could never afford to live in the upscale street, right? The only difference now is that instead of a factory worker not being able to live on the upscale street, there are whole neighborhoods, downtown areas, and maybe even suburbs that are unaffordable to a typical middle-class family.

I haven't looked for data to support these ideas, and am very open to points for and against.

[0]: http://whatsmypercent.com/

In more affordable places are there a lot of jobs that would put you in that 20%?

I'm from Indiana - and that is exactly the problem. Sure, housing is affordable. But wages are a fair amount lower and a fair amount of jobs are low-paying. This is really a major problem with people looking at economic recovery - wages haven't caught up for a fair amount of folks. That all said, it might actually be easier to get to that 'dream' if you plan correctly and are willing to let a few things go: Alternatively, for some it might not be a choice because of the costs of childcare and transportation.

I live about 30-40 miles outside of D.C. The only people I know who have a house earn significantly more, or are dual income top-tier earning households.

>> I am in the top 1% income earners for my generation and do not even come close to this.

what? how is that even possible? what are your debts? how long have you been in the top 1%? something doesnt add up.

most of the people I know are making way more than their parents, and are able to move out of big metro areas and live in the suburbs just fine.

The tech sector is this nice bubble where we've seen lots of economic prosperity. If you look at the statistics you'll see that's not the case for a large swath of America.

Top 1% of income for a 30 year old (in the USA, in 2016) is, per this calculator, $188,000.


In overwhelmingly most parts of the country, that's plenty of money to own a house and support a family.

The people earning that much are (very) disproportionately distributed in those areas which are also the least affordable.

That's what the market in those locations will bear. Rich people, high prices. It's no different than a tourism economy.

Generation isn't the same as age. Being 30 means I'm part of the "millennial" generation which only takes $106,500 to be in the top 1%.

One thing to consider is that a growing portion of Americans (perhaps a majority, soon) do not want the small house in the suburbs with a white picket fence, 2.33 kids, a stay at home mom, and a 50 minute commute that the baby boomers' parents wanted. People are starting to remember that the reason we created cities is that city living is desirable, and they are willing to pay a premium for that.

Life is not hard for the rentiers extracting labour for your right to exist in said apartment.

Where is all your labour going? Food? No. Transport? No. Energy? No. Rent? Bingo.

Why is this happening? Because we came off the gold standard and there is no limit to the expansion of fiat money, therefore it expands via mortgage lending to mop up all productivity gains. Get the women out to work! Land prices up. Efficiency gains? Land prices up.

We bid for land. The more we have available after basic living costs the more we can pass over to the rentiers.

We need land value tax to suppress rentier activity.

Gold standard has nothing to do with it. What money is, at a fundamental level, is a promise you can later redeem for real goods and services. Why there's so much mortgage and student loan debt follows directly from the demographic changes - the retiring generation needs promises to provide real goods and services (both directly through saving, and indirectly through pensions and the like), so capital markets seek out the best opportunities to extract these promises and provide them.

No, banks are creating credit.


By creating credit faster than the underlying wealth creation of an economy banks are appropriating real goods and services and the wealth generation later (or rather now as they lent for decades like this) and they walk off with the goods whilst we all drown in asset inflation.

I would agree that demographics played a big part. Boomers borrowed heavily as though the demogrpahic inversion were not a problem, and banks played along. Now we have the money supply collapse as we have more olds than young, meaning a collapse in credit supply which is a problem as the model requires that principal + interest is paid back which cannot happen unless more debit is issued into the face of loan expiry which destroys the credit but still requires the interest be paid from some other debt source.

Why else do we need constant QE and ZIRP? To encourage more borrowing to try and maintain the rate of credit creation to keep the money supply up as boomers pay down at their end of life.

What a nuts system and also a terrible one as all productivity gains are soaked up by adaptable pricing on land to capture all gains.

excited for my HN "you're submitting too fast" soon when anything about banks or rentiers is mentioned!

Credit is money - there's literally no distinction between the two. Precious metal currencies are only money because it takes way less systemic trust to believe that the bearer of precious metal coins can get things for them later. Gold-backed paper currencies are an interesting intermediate, basically adding trust that you can exchange them for the actual metal at banks.

Credit costs nothing to produce. Expansion can cover infinite productivity gains to appropriate for the usurers/rentiers.

I think you are talking about fractional-reserve banking, which has been around for hundreds of years. This can exist with or without a gold standard.

Nope, read the bank of england blog above.

> While money is essential to facilitating purchases and sales of real resources outside the banking system, it is not itself a physical resource, and can be created at near zero cost.

> The fact that banks technically face no limits to instantaneously increasing the stocks of loans and deposits does not, of course, mean that they do not face other limits to doing so. But the most important limit, especially during the boom periods of financial cycles when all banks simultaneously decide to lend more, is their own assessment of the implications of new lending for their profitability and solvency. By contrast, and contrary to the deposit multiplier view of banking, the availability of central bank reserves does not constitute a limit to lending and deposit creation. This, again, has been repeatedly stated in publications of the world’s leading central banks.

The current model of understanding is broken. To issue money nothing has to be created, therefore if one issues money whilst wealth creation stands still one appropriates some of the total wealth through inflation.

Before if you wanted more money you had to have more gold reserves, or the govt/central bank had to lower the exchange rate.

> http://www.econlib.org/library/Enc/GoldStandard.html

Because new production of gold would add only a small fraction to the accumulated stock, and because the authorities guaranteed free convertibility of gold into nongold money, the gold standard ensured that the money supply, and hence the price level, would not vary much.


Again the boe blog from above:

> the availability of central bank reserves does not constitute a limit to lending and deposit creation

Private banks decide how much land costs. And they always lend as much as they can, so land will always be as much as people can possibly pay. This means that no amount of efficiency gains will ever improve life. All you will see is inflation and people who bought just before the jump have a gain, but again the next batch are pushed into servitude. Because we haven't had a big step-change in efficiency for a couple of decades (and in part because it's not passed on due to globalisation / migration) it's misery all round, unless you are a usurer.

Of course a gold standard would limit the creation of money, but the ability of banks to increase the money supply would still exist under fractional-reserve banking.


A lot of us landlords barely cover the mortgage with how much we can charge in rent. We don't simply get to increase prices and expect tenants to keep paying.

But at the end of it you get a free house for hardly any labour. Yes you have to do a bit now and again but it's hardly a full time job that your tenants have to do to cover your mortgage.

I never understand why you guys are doing it if you don't gain. You are doing it because it is easy money, an easy way to extract labour.

What are you expecting anyway in terms of an ongoing income stream from this endeavor? It's very low skill, to borrow you need a pulse and a job. To administer you need basic numeracy. Hardly any labour required, certainly not skilled. Sounds like minimum wage for the basic admin required, so what, a few hours a month?

The only "value" here is the ability to borrow to exert monopoly control over other wage earners in order to force them to give you a portion of their labour. That is the main ingredient in the majority of cases. Yes we need a rental sector but as I said it's low skill and the rewards should reflect this instead of dividing society into have and have-nots.

The rewards roughly do reflect this. Ordinary investing isn't clearly better or worse than investing in property. The problem is that ordinary investing requires many years of self discipline while paying a mortgage has the bank holding a stick over you to keep you from wasting your income on lattes and holidays.

"investing"? What are people who take an existing home to restrict supply, then rent it back out, "investing" in? Extorting more like.

Disipline paying they mortgage! Is that a skill now, taking $1500 from a worker, trousering $300 then handing the rest to a bank.

You are the debt collectors for the banks. Distributed extortion. No skill there yet the rewards for parasites are huge.

You know, you could actually study why the gold standard is a terrible idea, rather than just fantasizing about it.

The financial trickery you're talking about is caused by deregulation and would happen on the gold standard just as often, but with probably far more disastrous consequences.

I don't like the gold standard, I agree there. I do however think it provided some break on the unfettered issuance of fiat credit.

In any case it seems you agree that unfettered credit issuance is a huge problem, and perhaps the root cause of the upward pressure on asset prices that inevitably moves in step with productivity gains / more work?

very achievable ideal is a middle class existence with one parent working, and a small house in the suburbs

I guess it depends where? There is a large swath of the mid-West where this is true. Near a big city? Probably not.

> We are taught that a very achievable ideal is a middle class existence with one parent working

I'm pushing 40 (upbringing: United States, middle class, medium-sized city) and have never, ever heard of this dream of a single-income household.

I am 40, and it was a nostalgic conservative thing among my parents' generation. For my parents and their fundamentalist subculture, it was almost a religious obligation, tied up in ideas about gender roles.

Where did you grow up?

I'm more than a decade younger than you and grew up in a single income family, lots of children, solidly middle class, and neither of my parents had beyond a high school education. My dad was a straight C student through school and neither of my parents could help me with my math homework by the time I was in junior high...so hard working people, but not book smart by any means.

Lots and lots of my school mates families were similar.

Northwestern Pennsylvania. Rust belt, Great Lakes region.

Anecdotally, more than half of my peers had both parents working. My mother and both grandmothers had jobs. The attitude was that two incomes are better than one in an age of economic uncertainty - an era that kicked in no later than the 70s.

> we should be teaching that life is hard and you should count your lucky stars if you are able to afford anymore more than an apartment

Interestingly, my father did his best to instill this lesson with his persistently defeatist and pessimistic outlook on everything.

I now (in my 30s) make more than both of my parents combined.

No way you're top 1% when normalized to location.


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