> I'm a dad who is happy to have his daughter and fiancé living with me. They pay the utilities and make me nice meals, and it makes it a lot less lonely here. ... I like the multi-generational thing. I know it won't last forever, but it makes life better for now.
It's so easy to get into that cold statistical mindset about these large-scale trends, but it's good to remember that these statistics are the aggregation of a large number of very human stories.
The idea that having a multi-generational household means that the younger members haven't "grown up" and need to "learn to live on their own" is a completely manufactured attitude. I think many American families would have much stronger, more healthy inter-generational relationships if we lived together (at least for a bit) as adults. As it is now, most US kids leave home just when they're starting to be able to meaningfully contribute to the household as equals.
(Having said that, I definitely feel the pull of childhood and societal expectations. When I was a new adult I was thrilled to be out of my parents' house, and could never have imagined moving back there. I'm nearly 40 now, and thinking about the possibility of living in my parents' house during my 20s still feels weird to me.)
In my experience (talking to people from a variety of countries), most couples in their 20s/30s want their own place (even in the countries where it's not common). It seems it can even lead to happier intergenerational relationships when the roomate-type fights don't need to happen.
It would seem to me that it's most common in the US to move out because they can afford to... The US is just an incredibly rich place, even compared to much of western Europe (ex. the US has 40% more GDP per capita than France)
There are of course also family/social pressures in some places, but I really don't think it's the primary factor in the differences between many countries.
1. In the US, zoning laws discourage building things like the "mother in-law suite". These zoning laws were originally created as a way to get around federal laws prohibiting discrimination of race and sex by making it more difficult for people who can't afford housing to live within a certain neighborhood. Even if US residents wanted to add housing for some semblance of independence, zoning laws makes this difficult.
2. In the US, children are educated to become factory workers, and inegunity is deliberately suppressed. (See John Taylor Gotto's The Underground History of American Education).
3. When I look at Carol Sandford's work on regenerative business and regenerative life paradigms, I realized that people here in the US have been conditioned to think that being able to live independently is the mark of an adult. But that is an illusion. They are still largely treated like cogs, whether those are adults who are working full time jobs, or children in the compulsory school system.
4. In contrast, a regenerative business builds up the capability for each employee to figure out what they want to do that will make a meaningful contribution to the business and society in a way that aligns with the general direction the organization is going and the general strategy. Being able to do that gives a far greater sense of fulfillment, purpose, and agency to the people involved. It's as if every employee has the chance to be a mini startup within a larger organization, and the organization as a whole become more adaptive, resilient, without sacrificing being a responsible corporate citizen.
5. When I think about how that is applied to children, I am reminded by the NPR article about how indigenous families have children doing chores without resentment. (https://www.npr.org/sections/goatsandsoda/2018/06/09/6169288...) ... and then I realized that, it isn't really about chores. It is a way that children from indigenous families are encouraged to make meaningful contributions to family and community from a young age.
6. If your sense of self-worth and purpose is derived from making meaningful contributions to the family, community, and society, you're no longer pidgeonholed into the role of being a child. As such, I think a lot of the tensions and inter-generational drama we expect from adult children living with their parents is no longer there.
This times ten to a very meaningful exponent.
A large number of factors in society have combined against children being able to gradually assume the mantle of adulthood, gradually assuming responsibility and making greater and greater contributions to society as they grow.
It is obvious that this is in no way culturally sustainable.
This isn't something that you try to change the whole world. It is something that an individual makes the choice for themselves. It's something I'm in the process of implementing with my own children. That is one of the things I came up with when I ask myself, what meaningful thing do I want to contribute to the world? Your answer for yourself might be different.
Education in other countries is far more strict and regimented than the US. Especially Asia.
I've always thought the main driver for leaving home is instinctive, basically teenage rebelliousness. If there's cultural "programming" going on, it is just as likely to be in the societies that overcome these drives and keep children subservient to their parents.
That's correct. It gives some semblance of independence. My point with that one is that even if US residents were inclined to "cheat", current zoning laws in most municipalities makes building additions, or expanding to duplexes and triplexes illegal. Other things like, requiring onsite parking, setbacks, not allowing mixed-use zones impacts the ability to have affordable housing.
These laws are changing. Portland recently expanded the zoning laws to allow many of those. The activists who got that through campaigned under the banner of "walkability", but it was a lot more than that. Other cities may follow as they see how well Portland does.
> Education in other countries is far more strict and regimented than the US. Especially Asia.
I was born in Taiwan and was raised mostly in the US, so I have had a taste of what that strictness is. A lot of the structure that the US compulsory school system is based on, took their playbook from the way the Indian caste system educate their children. That educational system was there before the industrialization took that method for its own use.
To be clear, when we're talking about "education", we're talking about "compulsory education" that is part of the predominant paradigm of the modern world. Prior to the compulsory educational laws, the US had a literacy rate of 99%, in a nation of farmers. Kids were taught at home or in one-room schools. It was understood that the main purpose of education was not to create factory workers, but to have critically-thinking and informed citizens in a republic. The contrast between that and our current generation of algorithm-driven conspiracy theories is stark.
What I just talked about and more is in John Taylor Gatto's book.
There are alternative models showing up here. Alaska does not put all the kids all in the same grade. There are too many kids in the bush. Instead, kids learn each subject at the competency level independently. A kid might be at 8th grade reading level for example, and still working through 3rd grade math. Carol Sandford's work on education is much more radical -- no cirriculum, no teachers, no grading. Instead, capabilities like critical thinking are developed, and the kids are taught a framework in which they evaluate their contributions and actions. The kids decide what they want to contribute, and then they figure out how they are going to do it.
> I've always thought the main driver for leaving home is instinctive, basically teenage rebelliousness. If there's cultural "programming" going on, it is just as likely to be in the societies that overcome these drives and keep children subservient to their parents.
Adolescence is a distinct phase that is studied by psychologists during the modern era. It didn't really exist pre-industrialization, pre-compulsory schooling. It used to be, around the pre-teen age, kids were apprenticed and treated as inexperienced young adults. Some cultures had rites of passages that definitively marks when childhood ends, adulthood begins, in a way that the whole community acknowledged. I suppose in the modern era, the ability to be financially independent from the parents a sign of adulthood.
Compounding that is better nutrition, and perhaps, the way our food is grown (hormones), and artificial lighting all contributes towards an earlier age of pubescence. Modern kids' physical maturity are happening at a younger age at the same that the length of time before they are treated as a full adult gets extended.
That is complete bullshit. In 1870 there was a 20% illiteracy rate: https://nces.ed.gov/NAAL/lit_history.asp
I suggest you seriously reconsider your views on how the current education system works vs how it used to be back when people were on farms and learning in one room schoolhouses. It smells to me like you’ve been fed a line of bullshit by someone who has a beef with the current system and just wants to paint the ignorance-filled past with rose-colored enlightenment glasses. This society of highly literate, critical thinking farmers did not exist.
"The more recent focus on illiteracy has centered on functional literacy, which addresses the issue of whether a person's educational level is sufficient to function in a modern society. The earlier surveys of illiteracy examined a very fundamental level of reading and writing. The percent of illiteracy, according to earlier measurement methods, was less than 1 percent of persons 14 years old and over in 1979."
I don't know where that 99% figure that John Gatto Taylor came from. He did talk about a significantly lower literacy rate in the 1970s. I think if one were to use functional literacy as the metric, there would still be a similar decrease literacy rate.
And no, Taylor was not trying to paint the past with rose-colored glasses. Whether or not the farming society did a good enough job as citizens, the frame in which education was viewed was much different. The things from the past is not necessarily better, but neither are the way we are doing things right now.
See my comment above :)
Lol. Read Wealth of Nations by Adam Smith... having children was for the purpose of making you rich!
Also, that’s if you even made it to the age of 14. In 1870, survival rate of reaching to the age of 14 was about 30%
How does the survival rate of someone who has reached the age of 14 have an effect on literacy and citizenship?
> It was understood that the main purpose of education was not to create factory workers, but to have critically-thinking and informed citizens in a republic
Are you saying the seminal book in economics documenting at the time of the Declaration of Independence that having children in the Western world was to help you get rich (opposite was going on in China) was incorrect?
> How does the survival rate of someone who has reached the age of 14 have an effect on literacy and citizenship?
It doesn't, but when your literal survival is against the odds and you're task every day is to maintain sustenance, I'm not sure your comment about a whopping 99% rate literacy hold water.
Leaving aside whether I agreed with that point about children being there to make you rich (I don't), or whether everyone in America agreed with that (I doubt it), and we're just looking at the various colonists (excluding the Natives) making up the 13 colonies at the time of the Declaration of Independence, I don't know if that would be considered the seminal book to the point that it influenced how education is viewed. I see (at least according to Wikipedia), it had influenced Alexander Hamilton, but I also think Hamilton in many ways was ahead of his time. It is my understanding though, that those ideas become much more commonplace in the mid- and late 19th century.
> ... when your literal survival is against the odds and you're task every day is to maintain sustenance, I'm not sure your comment about a whopping 99% rate literacy hold water.
So I am to understand that you are saying, because conditions are so harsh, there is very little time to do things like studying or reading?
A curious thing happened in the Midwest in the early 1800s. Land was divided in a way where schools and colleges were deliberately set aside so that children would have access to it. For every N plots of land, there would be a school; for every M plots of land, there would be a college. I don't think any other region of the US was divided like this. The educated farmer, at least in the Midwest, is a thing.
That bit came from an article by someone observing that the Midwest seems prototypically boring, without characteristic. They were trying to explore just what makes the Midwest the "Midwest". The essay was not written as a criticism of the education system.
I'm not from the US but I'm just not sure I'm reading this right, you say these zoning laws are literally racist? And they're still around??
Note the description under population.
"Shifting or Infiltration: Negroes and Japanese increasingly numerous"
If a neighborhood had a couple of Black, Asian, or Mexican families banks weren't allowed to issue mortgages or other types of real estate loans. The US built a lot of suburbs post WWII those were restricted to white families only. Blacks, Asians, and Hispanics weren't allowed to buy and also were banned from receiving FHA Loans.
The current battle in the US politically is over whether to return to this state of affairs.
I have feeling you could make an argument that getting your own place is either an indirect or possible direct consequence of marketing. Lots of companies stand to make more money if they promote you moving out on your own. Ikea has at least one famous ad telling you to move out of your parent's house
Had the US not participated the suburban American dream, the excess WWII capacity would be wasted instead of being redirected to home construction, auto manufacturing, and all manner of new industry. And we would’ve plunged into yet another depression.
No one makes compromises unless they have to, and unless you have a big soundproof house, two or more couples living together are going to bump into each other.
I see older parents moving back in with kids due to declining health, but otherwise the consensus seems to be that having grandparents nearby in a separate home is ideal.
However, children of immigrants are especially keen to assimilate into the receiving culture, so much so that they often go beyond what natives do. For immigrants and their children, a clash of cultural values may be a larger driving factor than what's the natural for people in general.
The above might not apply if you have a large enough space with sufficient sound proofing and multiple kitchens, but that's not the reality for most people. There are positives, but my observations suggest that the biggest factor in determining if you live in an intergenerational household is whether or not children and the parents can both afford to live in different houses.
On the first point, from what I've seen, there is certainly a lot of conflict if intergenerational couples stay together under the same roof for prolonged periods of time, whether it's the parents living with the kids or the other way around. For short periods of time, it definitely works out positively.
I would argue that it's less because of wealth or even expenses, and moreso because of cultural norms, that children tend to stay with their parents for longer in Europe. I don't know if this comes across as anecdotal, but my SO's parents often requested her to choose a medical university closer to home, and even suggested we stay with them, even though they are extremely affluent and comfortable. Even now, after living separately in another city, her parents and relatives often stop by to check up and stay for a couple of days very often. Of course, the young will always prefer to move apart to retain some privacy, especially once the kids arrive. Obviously there's the shadow of European expenses hanging over everyone's heads.
Personally I have healthy 6000km between myself and the parents. To be honest something like the 300km we had a some point is nicer and for taking care if the kids from time to time something like a few kilometers is best but same houseld is just stupid and I have yet to meet someone (even Asians) that will willingly do that for longer than necessary if they can help it. If they do it, it's for one of the reasons stated above like a Vietnamese colleague who did move back in with her mum for like a half year while trying to find a new place. They're close but same household is just way too close.
In the context of the "housing affordability crisis", it makes that part of the context that much more interesting.
That's really depressing. I'm sorry your social circle has such poor family dynamics. The majority of inter-generational families I know quite like the arrangement. Grandparents love having grand kids around, parents enjoy the extra help of the grandparents, meals are a lot more fun, etc.
There's more to it than just learning to live on your own. In the US, we value individuality above all else. People who never move out and forge their own path in life are far less likely to find out who they really are and what they really want out of life. Whether you're aware of it or not, staying so closely attached to your family can massively stunt personal growth. You are constantly reminded of who and what you are "expected" to be, rather than defining that for yourself. You can see this very clearly by going back to your hometown and talking to the people who never left. Sure there's value in the stability and comfort of that life, but you lose out on the opportunity to truly express yourself and be who you want to be.
I moved back to my hometown after finishing college (in Germany!) and went to work at the family business. I was there for 4 years, and miserable for 3 of them. I finally told my dad that I didn't want to work there anymore, and it hurt his feelings for sure, but the last 10 years have been much better for me.
At the same time, I still live in my hometown and I find that the "get out" mentality in high school was massively overhyped. I like it here. My younger brother eventually went to work for my dad, and he seems to like it.
I'm just trying to say that just because you believe living with your parents would stunt your personal growth, doesn't mean that your neighbor can't live a perfectly happy and successful life in that situation.
My parents are good people, there was nothing wrong with my home environment. But it's more important that youth learn to act like independent adults and take responsibility for their own lives. Staying at home too long causes learned helplessness. When there's no one around to help it's sink or swim.
It might not be the same for everyone, but for me, there was a definite pride in being independent, making my own decisions and having nobody to answer to but myself.
I’m sure most 13 year olds plead with their parents to take them certain places or buy them certain things (e.g. specific food and clothes, etc.), and while I’ve never been to boarding school, I imagine you have to figure out how to get things for yourself.
The point is taken re: not being “sink or swim” (you won’t be left on a ditch on the side of the road), but surely it’s obvious that more independence is needed living without a primary caregiver in the same home.
The adults should be ensuring you don't grievously injure or harm yourself, and that you're returned in same/better condition.
You can always ring up your parents and ask for stuff, it's not like you are adopted by the school and lose all contact with your parents, nor are you earning a wage at 13 going to boarding school.
Lots of kids going to public school and/or with rough home lives learn "sink or swim" just as well or better than someone going to boarding school. I just found it odd to say you're learning to "sink or swim" when you have so many safety nets there to catch you if you did sink/fall.
Not only is there no multi-gen homes in our area (exurb an hour away from a major city) but it's difficult to find a layout where a part of the house can be a mini apartment or her own personal area. It seems like more basements are finished now and some of the design decisions have been quite odd to say the least.
Worst of all is that we're not allowed to buy some land and throw a small structure or trailer/rv on it for her. Even though it's for family it's not allowed as it could be rented out in the future.
The entire process has been stressful and aggravating, and is made worse by everyone sharing the same space working and going to school.
So, without making any judgements about how people want to live their lives, I think it is a negative for the US that more young people are living at home.
Many more regions besides England have also shown this pattern for centuries, but those are mostly within northwestern Europe to the west and north of the Hajnal line.
How do you have a grown up, likely physical, relationship with your partner... when your parents are sharing the same rooms? Do you just hide in your bedroom the whole time?
How do you develop your own relationships and life and way of doing things and way of raising your children, inside someone else's house? I can't understand that but I'm open to hearing about how.
Regarding your second point, I'd like to point out your particular phrasing which makes clear your point of view, that you consider a multi-generational house "someone else's house". It would be your home that you are living in, even if it is not your name on the deed or rental agreement. Now, whether you can develop your own relationships and life and way of doing things has to be independent of whether you are living with family. For every person that is an example that living with family is a burden, there surely is another example where it is a benefit. The growth in your relationship with your family can be hindered or accelerated by your time with them, I don't think there is a one-size-fits-all answer to that.
In my experience what happens is that the "family" raises the children.
In intergenerational households - in Asian cultures at least - it is still generally the older generations calling the shots, in patriarchy/matriarchy sense. In practical terms it depends on how much financial power each generation holds that determines how much say they have. But in Asian cultures age do grant at least some implicit authority.
Given the above cultural context, tensions can arise if the way of living/child-raising are not aligned. I would say this resolves how normal conflicts get resolved. Those who have the most time and influence usually win out. Although culturally people understand they have to pick their battles for the benefit of daily harmony.
I think a way to think about how the living arrangement works that may be more relatable is to think about a multi-generational family business. If you watch shows like Chef's Table there are stories were children take over the family's business by more-or-less following in a prescribed footpath, while others conflict and find that they have to strike out on their own.
On a day to day basis though, it's just like living in a very close knit community - you could say a family.
I think this is the simplest answer to why most people are opposed to it - they fundamentally don’t want anyone else calling the shots on their lives to any extent.
The difference is the prudishness of US culture. Those couples are living life as a couple. In a US household they would be treated as kids, with many parents not allowing them to even share a room.
I don't like what the title tries to suggest that living with your parents is something wrong/abnormal?
Why is that? I understand for many it is not a choice, but it doesn't necessarily meaning people are suffering as a result.
There has been golden eras, usually from expansion or industrialization where youths could acquire their own places relatively young. But it doesn't scale forever.
Is there any reason to believe this is due to a cultural shift amongst Americans? I don't believe it is controversial that the young have been the most negatively impacted by rising education and housing costs, as well as their demographic being the most heavily impacted by the Covid-19 pandemic. (is it?)
The implication here is that more young adults are staying at home, not because they want to, but rather because they cannot afford to leave (or in some cases, as the article mentions, because it is better than being isolated at home alone). I hope you agree that this is an important distinction.
To the degree that there's a stigma associated with adults living with their parents in the US, the stigma comes more from being the sort of person who would want to live with their parents when they could afford to be on their own. That's the stigma. It's not a stigma about poverty, it's a stigma about someone who would want a more sheltered and less independent life, and a stigma about someone who wouldn't get seriously annoyed at having their family around 24/7. Those are both pretty alien concepts to a lot of people in the US. There's also the rule of thumb that the #1 way to keep a family together and loving each other and constructively involved in each other's lives is to not see each other every day. Absence makes the heart grow fonder, and all that.
But like you said, this is independent of it being good or bad or right or wrong, it's really just cultural context, but that's the cultural context.
Usually any mention of living with your parents implies being lazy ( the whole "neckbeard living in their parent's basement" stereotype ) unless you qualify it with "but I pay rent". If you pay rent then it appears more like you can support yourself and still not relying on mom/dad to pay your way even in adulthood.
The title doesn't suggest anything, it just states an objective fact.
[p.s. one fine day, the internets will unequivocaly sing the same song, with not a single person suffering from misunderstandings. That fine day, HN will do away with anonymous downvotes, since we will be in a state of perfect harmony.]
After graduating college and finding a good job, he went to get a roommate and move out. His parents were horrified. "Why are you going to move out of your family's house so you can pay money to live with strangers you found on the internet?".
At first we all laughed because it seemed like a case of immigrant parents no getting how things worked here, but the more we all thought about it, the more the parents seemed to make an excellent point, and one none of us had really considered.
Not sure when families living together became a sign of failure rather than a sign of a close family.
I moved back in with my Dad with my husband. I'm 32, hubby is 30. He had two strokes and my little sister didn't want to be the only one nearby. It's been 6 months. Is it the easiest? No. But it's amazing to have this day-in-day-out time with my Dad again after not having lived at home for years.
My older sister moved back in with her husband and two kids for 2 months as she studied for her medical school USMLE exams so she could take advantage of the free baby-sitting.
Neither my sister's family or my own would've made this decision without the pandemic. My husband and I were both pushed remote (same salary) and my sister's child care plans went up in smoke.
While 2020 has been shit, moving home in some cases isn't an indicator of a problem. It's just a smart reaction to the new reality of working from home.
I'm a 90th percentile earner. Will 95+ percentile earner in a few years time. Yet it feels like I am not as well off as I should be. I don't live in an expensive area either. Yet I need to save so much money to even have the opportunity to buy a house. Then I also need to save a tonne of money for a nice retirement as government pensions get absolutely gutted.
I'm not going to pretend I won't have a good amount of disposable income even after maxing my pension contributions and paying a mortgage. But it just annoys me that I'm a relatively high earner and yet the money won't go very far. The most expensive thing I'll ever buy would be a brick box, and one that's not even as good as my parents.
This is in stark contrast to my house. We have two iPhones and get new ones every 2-3 years. We have two iPads, 3 computers, and gadgets galore in a house of 4. My countertops are stone, my appliances are stainless. We go on vacations yearly that require planes and hotel, and used to eat out often. I have a house cleaner, and pay for an expensive gym.
I realize I may not have the house my parents have, but I have nicer things. I make more money but I spend it very differently then they did. There was basically nothing we bought that compares to an iPhone every 2-3 years. I know so many people who travel regularly, and don’t seem to realize this was rare 15 years ago. I really feel we spend our money differently.
I say this as someone in the same boat, who could/would/will casually afford to buy an expensive home under 30.
The median net worth of millenial families (35 and under) is $10k. Probably trends negative if you filter down to people below age 30 only.
And it’s true. It is hard, if not impossible, to find a modest, small house. The median size of new construction is more than double what it used to be. And houses are full of glitzy appliances, fixtures, moldings, and counters. It really does just heavily inflate the price.
How much would a 1,000 square foot house with modest fixtures cost in your neighborhood, if it existed? That’s what the typical house used to be.
> It is hard, if not impossible, to find a modest, small house.
True, but small condos have seen similar appreciation
> houses are full of glitzy appliances, fixtures, moldings, and counters. It really does just heavily inflate the price.
This do increase the price of real estate, but not that much relative to the bigger picture. The price of a "glitzy" fridge vs. a non glitzy fridge is going to be what, $500? $1,000? Likewise, appreciation has occurred on older properties without these features unless you're below the inflection point where the risk of the property declining in value faster than the market appreciates is so high that the price remains poor.
>This do increase the price of real estate, but not that much relative to the bigger picture. The price of a "glitzy" fridge vs. a non glitzy fridge is going to be what, $500? $1,000?
That's an extreme understatement. A glitzy refrigerator might only had $500 but marble counters might add $20,000 or more. Same with flooring. The price difference on a house full of stick on vinyl and real hard wood might be an additional $20,000. Then you get to other cosmetics such as crown moldings, jacuzzi tubs, walk in showers, vaulted ceilings, heated towel racks, and more. You could take the exact same house structure, and through flooring, counters, and cosmetics alone you could easily jack the cost up by $60,000.
>Likewise, appreciation has occurred on older properties without these features
Not really. Houses get upgraded with better floorings, better counters, additions, and other renovations. Go find a house in your neighborhood built in the 1950s with no major additions, laminate counters, and cheap flooring. Good luck.
Most condos are small. If a sizeable proportion of people don't want to live in condos, that would make them cheaper. The fact that they're appreciating similarly that is further evidence that the premium for size is not the driver of what's happening.
> That's an extreme understatement. A glitzy refrigerator might only had $500 but marble counters might add $20,000 or more. Same with flooring. The price difference on a house full of stick on vinyl and real hard wood might be an additional $20,000. Then you get to other cosmetics such as crown moldings, jacuzzi tubs, walk in showers, vaulted ceilings, heated towel racks, and more.
Most properties don't have jacuzzi tubs or vaulted ceilings. You're not wrong, but they're not relevant to the discussion of what's happening to the median home buyer.
It's nonsensical to think that the price of housing has risen primarily because of quality increases because many, many houses have seen large appreciation with no changes.
So it should be absolutely no problem for you to take me up on my offer. Locate a home, built in the 50s or 60s, without any additions adding square feet. Cheap counters, cheap flooring, and cheap fixtures. If what you say is true this should be relatively simple.
How much is it, and how much more or less expensive is it than newer construction in the area. If homes are just rapidly appreciating while they sit there unimproved, this should be a trivial exercise.
The house is now worth $2.1M (+500% gain). Obviously if they sold a new buyer would tear the whole thing down and build some huge modern home on the land (which is the actual valuable portion of the asset) as has been happening in their neighborhood.
You are placing way too much importance on the relatively small value of fixtures and "nice" amenities vs. the global glut of capital chasing appreciating assets (made much easier through online platforms) such as land in desirable areas.
IF and ONLY IF: employers join us in the 21st century, and embrace remote work where they can.
(and the real danger, as I learned in the 1990's, is not even being remote - it's being "not at the home office" of a distributed organization - it is a career killer, and when that "business cycle" inevitably hits, your remote-office workers are always the first to get cut. This shit has to stop if we're going to get out of this "crowded into cities" nightmare).
Everything that requires local labor is very expensive (partly because our expectations and requirements increased, we are willing and able to spend more, so a very high equilibrium point formed), everything that can be mass produced is cheap. (And not just because externalities are hidden, but because technological progress.)
Since we have proven that a majority of people feel poor (i.e. they need to earn 20% more), and that this is true even of millionaire’s, we need a different definition of poor, because something isn’t right here...
> The average income is just $18,046 (£13,850) a year, and almost a third of the population live below the official US poverty line. The most elementary waste disposal infrastructure is often non-existent.
> Some 73% of residents included in the Baylor survey reported that they had been exposed to raw sewage washing back into their homes as a result of faulty septic tanks or waste pipes becoming overwhelmed in torrential rains.
And once you're caught up in debt that extra 400 doesn't go to a mortgage it goes to that credit card or that high car payment on a 72 month term..
It wasn’t as rosey as it is often portrayed.
You mentioned you had a house. I'm fast approach the top 1-2% by income and think I can maybe swing a 1 bed apartment. It'll be borderline. Not house...apartment.
...no idea what the other 98% of my peers are doing but they sure as hell aren't buying houses. Meanwhile all the landlords I've rented from thus far where a generation older and had entire portfolios of properties.
Pretty sure I'll come out on top of this because I'm doing well, but can certainly understand the disillusionment of the younger generation
The boomers passed laws to help raise their pensions and lower their taxes. The young are paying for it.
Then they blamed robots, immigrants, demographics and boomers.
"The can kicks back" wasn't bankrolled by a millenial, after all.
Financial sector means being in a financial hub though so not much choice.
I'll probably end up moving further out and accepting a long commute eventually.
My parents grew up in the "golden years" of the 60's and they couldn't afford it either. That's why they moved to a small town with cheap housing.
There's a reason Pittsburgh's population declined by the hundreds of thousands since the 1970s. Sure you can get a cheaper house. But you aren't making coastal money.
In the 60s those "small towns" had manufacturing plants you could just walk in and get a job at, many of which were union and paid extraordinarily well.
As many jobs as there are in SF, LA, NYC, etc, they don't comprise 100% of all jobs.
The reason many of these places have cheap housing is largely because of abandoned neighborhoods, vacant lots, condemned housing, ancient housing which requires A TON of work...the neighborhoods people want to live in are pretty expensive still.
Not to mention the old school mentality and opportunity cost. I left one of those old school firms. It was 8-5 everyday, no variation, no flex hours. No vacation in your first year. No comp time for travel. Expectation of working additional hours. Poor yearly raises, etc. Small job market = small network = less salary jumps.
I'm not surprised there is a utopian city where salaries are high and housing is cheap.
That's why people left Pittsburgh en masse and other cities have larger populations. Ultimately if it didn't make sense to go to big cities people would stop because of the costs - clearly the market says it's worth it.
Not everyone wants to live in the midwest with terrible food options just so they can afford a house built in 1940 with knob and tube wiring. These costs are never considered because people just want to say things like "lol move" without considering why people just don't move.
There are a lot of options for everyone, regardless of which trade-off one chooses to make.
Yea if you want to live in a crap, run down neighborhood with a crappy school district and a house built a century ago that isn't code and will cost 50k to fix. I lived there - these statistics are nonsense. They don't tell the whole story.
The median home is not always "crap, run down with a crappy school district". Yes, there exists a quality distribution, and the bottom quintile often has the worst quality, but that's true in every State and every Country.
This data isn't groundbreaking either, Zillow shows a comparable median home value in Pittsburgh: https://www.zillow.com/pittsburgh-pa/home-values/
Just eyeballing some CURRENT listings, you'll find:
On Zillow: A 3BR house in a top 10 Pittsburgh school district (Greater Latrobe School District) for $179K https://www.zillow.com/homedetails/34-Loretta-St-Latrobe-PA-...
On Redfin: A 2BR house in a top 5 school district (Hampton Township district) for $130K https://www.redfin.com/PA/Allison-Park/2695-Ginger-Ln-15101/...
These are perfectly good homes in perfectly good school districts.
Again, single data points only get you so far in an argument — but most importantly, the aggregate data corroborates it. Nobody claims that outliers don't exist, but we're talking about medians here.
Hampton is in Allison park which is a nice suburb. The median home price there is 295k. The house you selected is pretty small, 2 br, 1 bath, which makes a ton of sense - not a lot of young people looking for good jobs are going to want to live in a suburb with older people and families.
> Again, single data points only get you so far in an argument — but most importantly, the aggregate data corroborates it. Nobody claims that outliers don't exist, but we're talking about medians here.
But you cherry picked a value WELL BELOW THE MEDIAN IN HAMPTON. The median is 295k and rising fast. So tell me again, what cheap housing are you talking about?
Oh btw, unless you're lucky and at a FAANG (which have fewer jobs here) you ain't making anywhere near 6.
Go ahead, move to Braddock for that 50k house and breathe in the wonderful air from Clairton Coke Works and Edgar Thompson. I doubt you'd read that on zillow.
> Not a lot of young people looking for good jobs are going to want to live in a suburb with older people and families
You’re moving the goalposts. You started off talking about school districts — not a lot of young people care about that. If you want affordable housing outside of nice school districts, and not in the suburbs, you’ll find plenty of that in the Pittsburgh city center, also.
The fundamental argument is that if you earn the median income, and you need to live in a good school district, it is more than easy to own a home and build equity in property — you just have to sacrifice being able to live near dim sum and access to “Hamilton”. If you don’t care about school districts, you can find a place with a short commute from work. You might even be able to get some dim-sum action. Trade-offs!
> Pretty small, 2br, 1 bath
Are young people looking for 4BR’s? I seriously think you misunderstand what the “median home” means — it’s not a McMansion. Also 2BR is large enough for a couple with one child.
> Go ahead, move to Braddock for that 50k house
Yeah but...you don’t have to do that. You can move to a far nicer neighborhood in the Pittsburgh area for $150k. It all depends on which trade-offs you’re willing to make given your personal circumstances. $50k is many standard deviations below the median, we’re not talking about that. You don’t have to be a FAANG engineer to earn the median income, especially at the household level.
> But you cherry picked a value WELL BELOW THE MEDIAN IN HAMPTON
No, I showed you the aggregate median home value in the greater Pittsburgh metropolitan area on 3 different sources now, and then made a cursory sweep of the current state of the housing market to corroborate the aggregate metrics. It was pretty easy to do. The data doesn’t lie. That’s far more than you’ve done in this discussion: un-verified personal anecdotes devoid of any citation or sources. It’s honestly pretty remarkable.
That solves my property too expensive problem how?
More seriously...not super keen on living in the US to be honest. Could probably do it practically, but given my life circumstances it would be a net loss.
This forum isn't Teamblind.
Like if you want to do that power to you, but this seems like such an insane question to just ask a stranger on the internet given that there are very obvious reasons why a person might not want to do that
That said remote work makes middle american and rest of the world post wuflu much more possible.
I wonder what will happen to big expensive cities after all the young people leave for the midwest and south?
Everyone seems to think the oldies had it easy in the good ol' days and the youngens are a bunch of lazy good-for-nothins.
There are probably certain a ways it has gotten easier and others in which it is worse... But I think this is more about generational sentiment than actual facts.
I don’t think people have a problem with spending more on education, they just want a reasonable return on investment for it. Turns out pumping money into monopolistic schools doesn’t get you a better result
"Not liking change" is disingenuous, even if, broadly speaking, older people don't actually like change
This rarely matters unless you are looking to sell or borrow against.
> We had interest rates peaking at 15%.
But inflation was higher at the time. Also rates are 0% now at the Fed level, but if you are a consumer you are going to pay a bit depending on your credit score.
> I didn’t have student loans but only because I didn’t go to university, just like 90% of my peer group.
The governments (it's really a global phenomena) pushed the general public into universities. It's hard to blame the students when you take that decision at a very early age 17-19 and most of these youth doesn't have any life experience.
> Unemployment was much higher than it is now
I highly suspect the current unemployment rate is meaningful. To be counted as jobless, you need to register with the local employment office. It's possible today's youth no longer rely on that and use modern alternatives instead.
> schools were teaching subjects for obsolete careers
They still are.
> It wasn’t as rosey as it is often portrayed.
It was not. The only difference really is land and housing which was significantly more affordable and did matter less where you lived. Now you need to live next to a "jobs-hub" that have insanely high rent and purchase prices.
That sounds incredibly demoralizing.
Home ownership may generally be better than renting. But home ownership and value decline is much much worse.
The combination of artificially low interest rates with significant inflation in particular make housing spectacularly unaffordable. This combination simultaneously pushes up the costs of housing due to asset bubbles forming while reducing the ability of people who earn money to save for a down payment on a house.
But my wife and I are double earners, unlike my parents. And we both have really good jobs. We don't have it hard, but we don't drive new cars either; we've got a second hand Prius. The only sign that we've got it good is that our house in Amsterdam is not as tiny as most.
But I also wonder if maybe our expectations may be too high due to the constant stream of luxury lifestyles that we're being fed on TV, in movies and on other media.
I probably make 3-4X what he did at the top of his career, and am kind-of hanging on to a house with a tough mortgage and a no-frills lifestyle. My Millennial and younger colleagues' financial lives are even more of a disaster.
I remember when someone reported that GenX was the first generation for a long time whose finances were expected to be on average worse than the previous generation. It looks like this trend has continued at least 2 or 3 more generations. It's not a blip, it's the new actual trajectory.
I think both pay has gone up over time and tracked with inflation. I also think the things people are buying better and more expensive products than they did before.
A vague quote comes to mind, something about the peasant classes of a few hundred years ago would have overthrown the ruling classes a lot sooner if they had any idea the luxuries the ruling classes were enjoying.
I.E., maybe what's happening is thanks to TV maybe we're finally understanding how good some of those on the top have it.
And with Brexit, there's likely to be an influx of bankers driving house prices even further out of the reach of most people. Good for me I guess (at least if we ever decide to leave the city and sell; otherwise it just increases taxes), but I don't think that's good for the city.
In the US, pension is short for “defined benefit” pension, which is an annuity beginning at a specified retirement age. The liability for providing that benefit does not lie with the recipient of the defined benefit, but with the employer (or government).
A defined contribution pension is one where the recipient of the benefit owns and controls the assets that will be used to pay the retirement benefits, hence the recipient is liable for making sure to have sufficient savings and the right investments to be able to pay themselves in retirement.
In the US, social security is the defined benefit pension available to everyone provided by the federal government.
However, it is prudent to expect defined benefit pensions to decrease in value as the retirement ages are increased, and benefit amounts and future value of money are decreased due to slowing economic growth in most developed countries.
A Roth 401k is the opposite, where the income contributed is taxed today, but the withdrawals are not taxed after retirement age (unless politicians change their mind in the future...)
An IRA (individual retirement account) is similar to a 401k, except it involves no employer, and the amount of income that can be contributed pre tax is much less, and maybe zero if you earn too much in a year.
A Roth IRA is like a Roth 401k.
Do you have any data that support this?
Real wages have improved for the top 10% and remained stagnant or declined for the lower bits.
It wasn't a particularly palatial house, but the mortgage would have been paid off before retirement.
But this is a direct consequence of a rent-seeking economy which uses property rights as a proxy for political influence. The British economy started being converted from an industrial economy to a patrician rent-seeking speculative economy in the 80s, and the result was massive asset price inflation in property and shares.
This wasn't an accident. It made a certain kind of person extremely rich, and most other people increasingly poor to varying degrees.
Unless there's a change in strategy - unlikely - you can expect the wealth concentration to continue in the UK, with increasing danger to the personal circumstances of any kids you have - if not to yourself if there's a serious downturn.
Even a 95%er is in danger of losing their property if they lose their job for an extended period if they don't live off speculative investments and rent.
It's the same in the US.
>Even a 95%er is in danger of losing their property if they lose their job for an extended period if they don't live off speculative investments and rent.
I fear this the most. My husband and I make more money than the rest of our family combined (both mothers, both fathers, 4 adult siblings, their spouses), but I still feel uneasy about the future. Maybe everyone worries more during uncertain times, but being mid-career with savings/investments I never thought I'd be concerned about losing everything.
I imagine it's only going to be worse for my kids.
Every price is an exchange rate. If things cost more, it's because your income gets less stuff.
$10 for Nextflix, $90 for Amazon, etc. On top of Gas, Electric, Phone, Internet, Car, Insurance, Gas, etc.
It's easy to watch the money flow in... and right back out.
It is totally false. It blames citizens for national structural economic problems like hidden inflation and like bad housing policies discouraging building/planning.
People spend $10 for Nextflix, $90 for Amazon, etc as short term pleasures because they cant spend $GIANT on a mortgage. What are you supposed to do? Might as well treat yourself.
Of course, I'd rather get a home, but if I cant afford it, I wont just sit at home staring at a wall.
It's false for some locations but not for others. I checked on the two homes I lived in growing up and both appreciated slower than inflation from the late 90s to the early 2010s when they were last sold. In real terms they are about 20% cheaper than they were when my parents bought/sold them.
Flyover suburbia is more affordable than it was 20-30 years ago. All major physical items are better and cheaper than they used to be. Netflix is cheaper and better than VCRs + rentals + expensive cable. The big difference is health care and college costs. But most people don't have huge medical bills and college is somewhat of a choice.
The cost of living increase is largely driven by California, NYC, and Seattle. Pretty much every where else things are cheaper than they used to be.
As an example, there are depressed areas in flyover states where costs have indeed gone down. But incomes have gone down even more -- they are once thriving places like Binghamton NY which had industries that have since moved overseas.
There is also the cost of healthcare, education, and retirement savings. My father benefited from a pension plan -- I have to save myself in a 401k. My father paid no employee premiums for healthcare, I pay about $900/mo for the family premium (before copays and coinsurance.)
Healthcare is definitely eating up more of the budget. I'm open to the possibility that it's eating up so much more of the budget that it's making buying a house prohibitive, but the numbers I see don't back it up. Most people still have employer provided healthcare and don't pay 900 a month in premiums. Part of that is CoL. Your contribution are higher than my family plan premiums I got through the market place.
Actually the median 401k balance at retirement is only around 60k, so that alone would quadruple their retirement savings.
You are comparing apples and oranges. You are comparing today's values at retirement to future values at retirement. It is almost certain that $200k 40yrs from now will not be worth $200k in today's dollars. Inflation accrued over 40yrs -- however low and however faked -- is absolutely going to make that $200k seem not so much.
Presumably, some of the $200k invested will grow, but also, not all the 200k is invested right now, it drips in over 40yrs.
You also forget the wildcard of healthcare lottery. One large medical surgery co-pay and you lose half your nextegg.
This is the problem. $200k in 2020 dollars wont mean much 40yrs from now. Similarly, $60k sounded like a huge figure in 1980 for retirees planning for 2020. For a proper comparison, you'd need to compare purchasing power of $60k to a retiree today vs $200k to a retiree in 2060 -- i'll bet it is about the same!!!
Inflation is a huge unknown here. My parents' home in 1981 was $35,000. The same exact house today is over $1,000,000. Rent used to be $150 to $200/mo. The same rent today is over $3500.
I re-ran your numbers here:
I did a monthly $100 contribution at 6% assuming tax free comounding for 40yrs and came up with your figure of $200k. That is right -- you'll have $200k at this rate. But in the year 2060 that might be just a year of rent and you're broke!
you are right that inflation is a huge unknown. if inflation goes up massively without a corresponding increase in nominal returns (unlikely, but possible), it would make that 6% figure incorrect. in this case, you would have less than $200k 2020 dollars in 2060, but the real value of a 2020 dollar would not have changed.
as a concrete example, suppose I own a three shares of microsoft stock and you have a brand new ipad air. both are worth about $600 today. if I offered to trade you my microsoft stock for the air, you might be happy to do so if you don't have any use for the ipad. if the fed prints trillions of dollars overnight causing the value to collapse, it doesn't change the fact that my three MSFT shares have roughly the same real value as the ipad. "2020 dollars" is just a slightly more abstract way of describing this dynamic.
Except that CPI is a deviously misleading number. I wonder if the same approach applied in 1980 would come close to aligning with 2020 numbers (including healthcare, college, rent, energy, etc.)
Please be brutal in your response, I want to understand if my understanding of this is all wrong!
also minor addendum: someone with the median 401k savings might receive something close to the median social security payout of ~$15,500/year. since this is a guaranteed payment until end of life, this is like having >$375k in a retirement account at age 67. $200k is a meaningful amount to add to a $60k retirement account + social security payments, but it doesn't do anything close to quadrupling the person's safe spending capability. it's more like a 45% increase, which is still nothing to shake a stick at!
I would not bet on social security retirement age staying at 67, nor would I bet on the purchasing power of $15.5k remaining anywhere close to it is today.
. . . maybe . . .
4x nice restaurant or dates = $200
1x Weekend trip = $250
Hobby projects = $100
Drinks with friends = $100
Media Subscriptions =$50
Yes, managing finances takes some level of skill when there are many different expenses in a modern personal budget. But there are ways to live frugally and get ahead. They just aren't flashy or fun.
On two very small incomes my wife and I made big financial strides early in our marriage. We were very frugal but we made it work. We had the lowest tier Internet. We had a very conservative budget for eating out and groceries. We didn't have Netflix or Amazon. Once we paid off a number of debts, our spending was able to increase responsibly.
Edit: More tactful wording.
You didn't pay off $60k in student loan debt and buy a house by refraining from Netflix.
It's all about priorities, and having a vision for being financially "free". The victim mentality is an _enemy_ of human creativity.
You can say, "this area is too expensive; we need to find a way to move somewhere else". You can say, "I need to sell this gas guzzler and get a cheap, used commuter car." These things aren't _fun_. But they set you up for success.
US minimum wage is $7.25 per hour. 2 people working full-time at minimum wage would bring in a household income of $30k per year. But you couldn't possibly pay off $60k in debt and buy a house with that. So your household income had to be much, much higher.
One cannot save oneself into a higher income.
I'm sorry lapcatsoftware if it sounded like I was making light of poverty. Poverty is terrible. But at least in the US, there is _so much_ opportunity to not be stuck on a minimum wage salary. Resigning to the idea that, "Well, I guess I just have to work for minimum wage" is not going to help and it doesn't have to be true. It's sad to think that people give up mentally when there's so much they can do to help themselves.
That person is never going to move up the economic ladder no matter what rung they start on or what decade they are born in.
Even the car cost is not as big as the sticker price, because it has residual value. Granted it may be a big figure, but it is also spread over several years.
Seems to me you're literally one raise ($10K or so, and there's two of you?) away from making up such deficits, and you want to be near opportunity for that to happen.
Work another year or two, and you're doing just as well.
Following your own logic, it's almost like saying how dare you say you had _any_ budget for eating out? Why not just save even more money?
I think the reason we want to believe otherwise is because of the tremendous wealth we have experienced recently, so we expect that trend to continue indefinitely.
To me, it is the lack of gratitude for what we do have and can afford that galls me.
There is no reason why the current situation should be allowed to continue, and many reasons why it should not. Obviously it's a hard practical problem to crack (given that a naive approach to redistribution of this kind would be met with a great pushback and implode various systems that we depend on), but unless we do something effective, we'll keep ruining the planet while trampling the poor at the same time.
Also the interest rates vs asset prices thing other commenters have mentioned isn't helping.
What's especially worrying is that if I'm "doing well", and I'm so screwed, what's going to happen to the rest of the population below me?
I never had the money to take my kids on nice vacations every year like my parents did. Also never had the money to justify buying a new car. And while I do have a home, I have no hope of paying it off before retirement. (which, as an engineer, in the USA, could be 1-5 years from now, involuntarily - my father worked for the same company his whole life, while I've had to change jobs 6 times, due to either corporate buyouts or layoffs. NEVER had a bad performance review).
All of my kids, my brother and sister's kids (all in their 20's now), are all very much struggling, barely making it (and in a couple of cases, NOT making it). Only ONE of them (my son) got through college and found a reasonably decent job, and even HE is so bogged down with student loans, he may never own a home.
So as a picture of 3 generations, there's a very clear trend.
I don't know what you earn but if you are early 20s it might be less than that. There is a lot of money floating in London, the price of homes almost make sense when you realize what the top earners actually earn, the few percents competing for the same homes.
I’m generally a pro-market person. In the case of UK real estate, I support a ban on non-residents buying property similar to what Canada have.
> I'm a 90th percentile earner. Will 95+ percentile earner in a few years time. Yet it feels like I am not as well off as I should be.
You should correct your attitude then, don't you think? You are a 90%ile earner. I don't know what "should" implies, but put it in terms of where you "are". You'll be happier.
Housing is a market like any other. The going rate can change.
Landlord in the city here - land speculators and landlords own an outsized amount of housing here. Significant churn is caused by blighted house reclaimation by the city, but that's one of the few driving forces allowing residents to have access to housing stock - and by the time it's blighted, there's a good chance it's not livable without significant investment.
Blight is generated because many properties/locations provide such a low rental income low that non-resident purchasers just buy the land as speculation, often doing no maintenance until the house is no longer livable.
While the previous comment isn't as hard of a truth as it implies, large capital owners rather than those who would reside in a home are increasingly the main purchasers of property, at least in Detroit.
The same reason the used car lots don't own all the rust free classics in California, an exceptionally asinine regulatory environment that would put them on the hook for an obscene amount of back taxes.
This is what we saw with QE in 2008, and what we're seeing now. Asset prices are skyrocketing, while the price of bread is staying more or less stable.
The effects of inflation are somewhat localized at first and the movement of money in the economy matters significantly in terms of the purchasing power of that money for various groups over time.
However, they are supposed to maintain a budget and the CARES act alone cost over 2 trillion dollars so they finance deficits by selling US treasury securities. If you look at the outstanding debt, it has grown by about 3.6 trillion dollars worth of outstanding treasury securities from january to august . If you look at the federal reserves asset sheet trends , you'll see it grown by up about 3 trillion since january  with over 2/3 of that buying those same US treasury securities our government sells to finance the deficit .
My point is that if congress had simply decided to pay for all deficits including those direct and indirect payments to citizens this year with printed money and the federal reserve did nothing, we would be basically in the exact same position. Congress is spending to put cash in citizens pockets and the federal reserve is buying up most of the treasury securities that congress is selling to fund that.
The fed bought a bunch of crap bonds from the market at above market value (As prior to their involvement, those bonds were tanking), and the people who sold them those bonds then went on to buy treasures and securities.
It socialized the risk, and privatized the profits.
Reserve Bank credit: 6,968,229
U.S. Treasury securities: 4,391,505
Mortgage-backed securities: 1,949,547
High income is like delta-v, it's great. But you're still near the ground, and you're competing against people already in high orbit.
The beneficiaries of the housing explosion have equity which they can parlay into more ownership, whether for themselves as investments or their children.
Record low interest rates help prices by letting people lever up (letting them spend their lifetime earnings now) to compete but of course also bids up prices, again to the benefit of existing homeowners.
This is reflected in the fact that (for example) in the U.K over 1/3 of first time buyers did it by getting money from their parents: https://www.gov.uk/government/news/first-time-buyers-relying...
Furthermore, in the UK, Australia and NZ (less familiar with the US or Canada) it seems the government will move heaven and earth to prop up housing.
High immigration rates and supply restriction have not been helping.
I'm not as convinced as GP that the situation can last "forever", but I could see it lasting for another couple of decades. A true housing collapse would probably be a phyrric victory for the young.
How much is that in the UK?
US 90th percentile: $184k (£144.3k)
US 95th percentile: $248k (£194.6k)
kind of a silly thing to say you are a 95th percentile British earner when that puts you in the 25-50th percentile in America.
Those same migrants increase labor supply (thus lowering the equilibrium price) and increase demand for land and real estate.
The end result is high taxes and high real estate cost. Of immense benefit to your dad (and other Baby Boomers) who receive risk-free pensions, and supercharged capital gains for their own assets.
Disclaimer: I’m an immigrant.
life already sucks enough as it is, and is entirely too complex in so many aspects that no longer having the "can i afford to not die in an emergency" thought would be such a huge net plus for a huge majority of working americans.
second reason, middle class can't get savings any more. savings are essential for a wealth of reason, including starting a family, a business, investing in property or other people ideas. these are all essential for growing a solid economy long run.
angel and VC money works as a surrogate but it goes only so far as it aligns with the 1%
incentives; it burns as much as it elevates, maybe even more, and is more of a way to
extract money from growing SMB instead of a way to build a wealthy middle class, as they only play for the exit.
And the tax take as a proportion of GDP is 34.4%, the highest EVER.
We are living in the most taxed time in history with the rich contributing the most ever. Not the impression you get from people complaining about it.
The fact that the percentage of total tax collected attributed to the top 1% has risen from 24% to 30% seems to be more indicative of higher wealth inequality, especially if the figures the other posters have mentioned about lower total tax rates on the rich are true. To me that's a good reason to raise taxes on top earners and lower taxes on the middle class.
Do you want everyone paying more, and the poor paying tax as well, or more income inequality but less people paying tax? You can’t have both.
Germany had the highest tax rate > 50%, it's now 42/45%. At the same time, the income required to be taxed at that rate hasn't changed with inflation, so while it was e.g. 52.152€ in 2002, it's 57.051€ now - adjusted for inflation, it would have to be closer to 75k€.
Lowering the top marginal tax while not adjusting for inflation so more people get pushed into higher tax brackets from below is great if you're rich, but shit if you're not.
£55k today is £32,461 in 2000. In 2000 someone on £32,461 had a take home pay of £24,080 -- the equivalent of £40,800 today.
So not much change.
Some states have zero income tax but the effective tax rate is often similiar because pretty much every interaction with government is self-funded with fees so the effective tax rate is much higher than the on paper tax rate. Conversely you can have a tax rate and then let people deduct everything under the sun getting a lower effective rate. Kind of like how if you income is below the EIC amount (which is definitively not ideal) in the US federal income tax exists on paper (I forget what the rate is) but the effective rate is zero, possibly negative even)
like in sports, the size of the talent pool matters, and with an unbearable cost for entry entrepreneurship almost s losing proposition unless if under the heels of some financing partner whims, as it's the only realistic option to sustain the bottom line costs from handling vatmoss, letters of taxations and the other billion historical bureaucratic commitments
Historically rate of taxes were not much different than they are now, whether for North America or the UK.
The reality is that building houses for investment is more profitable for developers so they keep building it. As opposed to affordable housing actually used for living. The result is a glut of luxury investment apartments and lack of affordable nonluxury housing.
In Japan, houses don't really appreciate. People just knock them down and build new ones with much more ease. There's certainly no shortage of developers wanting for "investment" apartments, it's not the deciding factor. The demand can actually be met there.
Net wage on that is £40,543, so that's 26% tax.
Local taxes would be about £1200 a year (council tax - a property based tax), so call is £39k -- 29% total tax.
In the US a 90% income is $117k gross. Take home pay is 88,866, or 24% tax, that's after Federal Income Tax and Social security
On top of that there's local income tax, picking a random state -- New Mexico -- that's $4,856, leaving about $83k -- 29% total tax.
So seems that UK and US taxes are about the same, but in the US you have to fund your own healthcare.