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>> Your dad could afford to buy a Toyota Corolla and a new mid-line TV in 1980. You can afford to finance one with low interest rates in 2019. But your son won't be able to afford those things with spiked interest rates and more restrictive lending paradigms.

This is a misrepresentation of the real statistics around wage stagnation. Real wages (adjusted for inflation and/or purchasing power) hasn’t changed much for the lower and middle classes in the USA for the past few decades. So, the average American can afford to purchase exactly what they could a couple decades ago.

Source: https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...




The cost of "a normal middle-class lifestyle" doesn't completely track a CPI basket-of-goods. This is in part due to changing consumer expectations, and because some products simply change over time.

A mid-size sedan you buy today will typically have more airbags and better efficiency than dad's '80 Corolla. It's going to cost more.

Conversely, dad's mid-range TV was probably a 21" NTSC CRT. Yours is a 60" ATSC "smart" LCD , a product that no amount of money could buy in 1980.

A new house today is likely to be a few square metres bigger than a house of similar market position 40 years ago.

There are expenses that are everyday today that would be exotic or unthinkable in 1980: internet service, cable/satellite TV, and mobile telephone are obvious, but I'd also include 401(k) contributions (instead of employer-funded pensions), and college expenses, both your student loan debt service and the need to proactively safe for your children's attendance. Child care is also a changed factor, given the increase in two-income households.

Saying "well, you make as many inflation-adjusted dollars as Dad did" doesn't mean you've kept my position on the social treadmill. When cheap credit goes away, that becomes more obvious.


> So, the average American can afford to purchase exactly what they could a couple decades ago.

Sure, if you ignore the cost of health insurance and medical bills. Also if you ignore the cost of higher education.


No, the price index used incorporates both healthcare and education costs.

Source: https://en.m.wikipedia.org/wiki/Personal_consumption_expendi...


Those numbers don't pass the sniff test. According to that, the adjusted cost of education has gone down!?!?! That clearly ignores college, or is just factually incorrect. I also don't believe that the cost of medical treatment has gone down, although admittedly I don't have numbers to support that assertion.


Price and medical care should be approached as though there's a giant sign that says "Here there be dragons." There are a lot of weird incentives to have multiple prices for the same medical good. For uncompensated care the incentive is to have the price be as high as possible within the bounds of sanity. The prices that insurance companies pay on the other hand tend to be much lower while those same insurance companies have an incentive for a high price for those without insurance i.e. the higher the un-insured pay for procedures the more the insurance company is saving its customers.




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