The media coverage of the fact that Alexandria Ocascio-Cortez can’t yet move to Washington because she can’t afford to rent an apartment is another Versailles circa 1788 moments. Washington has so long been expensive that even before working-class AOC stormed the barricades there have long been stories of Congresscritters who live in their offices in DC rather than rent an apartment. The most famous case is Paul Ryan. As Kentucky representative Andy Barr said in 2015, “I think there’s more than you might expect. There’s quite a few of us, particularly the younger members with young families back home in our districts. There’s quite a few — men and women.”
Nevertheless, AOC’s disclosure had the effect of putting a sympathetic face on how housing costs chew up the budgets of young and not-so-young people. Yet is is hardly news that more and more people are living with their parents because they can’t earn enough to live independently. From MarketWatch:
Over roughly the past two decades, rent prices have increased 61%, while incomes for younger households have only risen 31%, according to an Apartment List study. That explains why 7.9% of non-student millennials receive financial assistance from family members to pay their rents. A study from Zillow ZG, +3.01% estimated that 22.5% of millennials are living at home with their parents.
Moreover, socio-economic status influences the reasons people choose to move. People with college degrees are more likely to move for a job, while people without higher education are inclined to move to find somewhere that is more affordable, another Apartment List study found.
Americans are moving to new cities at the lowest rate since World War II, with just over 11% of people choosing to relocate in 2016 down from roughly 20% in the 1980s. And factors such as restrictive land-use laws, which have driven up housing costs along the coasts in particular, have made it far more difficult for people with fewer financial resources to make a move.
And notice that this piece focuses on the rental market. As an aside, one of the big defects of the US housing market is that with short job tenures, workers are more likely to have to move to find work. And even when employers relocate them, the subsides aren’t anything like what they used to be (for instance, picking up a loss on the sale of a house). A seller can easily have 6% to 7% transaction cost versus his ~20% equity. Even if he has a profit on the sale, selling and buying homes eats into any equity appreciation.
It’s not clear that “socio-economic status” is the right frame for the college educated moving to get jobs more than high school graduates. On the one hand, given how economic mobility has dropped in the US, those with college degrees are much more likely to come from higher-income families where the parents will help them get set up, anywhere from lending them money to move and make a rental deposit to buying them an apartment. But another factor could be that jobs for high school educated people have shorter average lives than those for people with more education, and so it’s not worth it to move away from where you have a personal network and support if the payoff is questionable.
The MarketWatch data is over too short a time frame to give a full picture of how far the standing of blue collar and lower-middle-class workers has fallen. From a 2013 post by Lambert:
But my first real jobs came after I was ejected from the university — it was the early 70s — and I went to work in the mills. Not dark satanic mills, or metal sheds out in the ‘burbs, but multistory brick factories, in town, with tall windows placed next to the power source of the Atlantic Searboard Fall Line: Mills scattered across New England and the Northeast from Bangor to Augusta, Lowell, Fall River, Providence, Hartford. Though manufacturing then was nothing like it had been, it was also nothing like it is today; you could look in the Want Ads and get a job. Today, those brick mill buildings are condos, or artists’ colonies, or business incubators, or outlet stores, and kids get jobs in retail or fast food. Back then, on minimum wage, I could afford my own apartment, and have money left over for books.
Lambert had more detail in his Labor Day post this year:
The frontage of the first mill I ever worked at; the first full-time job I ever had.
I had made a list of jobs from the Classified Ads in the Providence Journal — there were pages of them — and this place was first on the list. They hired me, despite my long hair, immediately, for $2.25 a hour. (The ad said “will train,” which I would have needed for any job except shelving library books.)
That wage was more than sufficient for me to reproduce my labor power: I could afford an apartment of my own, close to the East Side, if not on the East Side proper, and could cook for myself, take the bus to work, get morning coffee, buy plenty of books, and even the occasional beer. I was then, I suppose, 22 or 23. After a year, they raised my wage to $2.35.
By contrast, when I started out at Goldman in 1981, like pretty much everyone in my MBA class who went to Wall Street, I shared an apartment. But even then, even in the wake of the fiscal crisis, Manhattan housing was pricey.
And as I pointed out:
And recall that many of the basics are much more costly in real income terms than they used to be. A reader who bought his first car in the 1950s pointed out how it took not all that many weeks for an average earner to buy a Volkswagen Beetle outright. Cars and housing are much more pricey in real income terms than they were when people who were born in the 1940s and 1950s were young.
For all of you old farts in our readership, can you give some examples of what major budget items cost in the stone ages of your youth, say in terms of how many weeks or months of work it might have taken you to save to buy it, or alternatively, what sort of lifestyle you had in your 20s and how much stress (if any) you had in paying for the basics (housing, food, transportation, etc.)? Thanks!
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In 1993 I bought my first house (and it was indeed a proper house, nice front and back yards, a generous master bedroom and a box room, shared bath), garage, parking — this was in a fairly convenient commuting suburb of a second tier U.K. city where there were good employment prospects and “middle class” jobs available. I was in my early twenties.
My salary at the time was £14,000 p.a. The house cost £45,000. So the mortgage multiple was c. 3.3x sole income — considered at the time to be the limit of what was allowable. I had a 5% deposit saved and my parents helped with the inevitable moving-in costs (second-hand dining set, bedroom furniture, sofa etc.) but the house was only a couple of years old so it didn’t need a fixer-upper budget. My mortgage payment on a 25 year term variable rate principal amount of £42,000 was around £350 a month and my income, after taxes, was £1,100-ish.
I remember having to live carefully and modesty and an occasional big expense had to be put on a credit card and only very slowly was that paid off. I usually carried a hardcore overdraft of about a thousand and maybe a revolving credit card balance of £500 to £1,500, depending on if I’d been hit with a big utility bill or car repair. I ran a bit of a clunker of a car when I moved in (a 10 year old heap, and it wasn’t GM’s finest hour) but it worked. After about three years, I got a loan (about £200 a month) on a nearly new Nissan Pulsar and that lasted years which improved my financial position as it didn’t keep dealing out unexpectedly high repair bill shocks. Auto insurance was a big overhead until I turned 25 — premiums fell sharply after that as my driver risk profile altered (for the better — which it did so long as you didn’t get involved in any serious collisions).
All in all, I always wanted a nicer house in a better area and a better car with more money left over for vacations, clothes and so on so I knew I had to climb the corporate greasy pole to do that. But many I worked with (who were happy to settle down and go in on joint property purchases) were entirely satisfied with their lot.
When I recall this tale of modest debt loads, affordable not-bad quality housing, home ownership and a path to getting up both a career and property/lifestyle ladder of the not-too-distant past to the equivalent millennial age group, they think I’m making it up. It is a world utterly beyond their comprehension.
I started university in 1993 and remember thinking based on the prices at the time that buying a house in Dublin should be very feasible when I graduated. The plan was, I’d buy a house, pay off the mortgage as quickly as possible and then living a reasonably comfortable life
After graduation, I went abroad for a few years but when I got back to Ireland in 2000, house prices had gone up massively and my well laid plan :-) was shot to pieces. In hindsight I still could have got a mortgage then but even at that early stage I thought property was way overpriced and refused to buy at those mad prices, but little did I know how much crazier it could get (Markets ability to stay irrational and all that) . Of course the crash did eventually come and when it did was devastating to the country.
> And recall that many of the basics are much more costly in real income terms than they used to be.
This is why I ‘m very suspicious of the inflation figures. These massive increases in house prices also were reflected in rents but apparently this was the time of the Great Moderation with low inflation. It sure felt like the basics needed for a decent life were getting very expensive very quickly though
My story is very similar to yours – my first job was in 1990 in Birmingham (UK), I started on £12,000pa. After 2 years, under pressure from family who insisted that ‘rent money is wasted’ I bought a little 19thC. mid terrace – I think it was £48,000 at the edge of a nice area south of the city. I could get a car loan from work as I needed a car as part of my contract. Money was very tight for a few years, but I never got in debt or felt very poor although I didn’t have holidays as I was doing part time studies too which took up all spare time. I was lucky that I never had a major house/car issue that cost too much, although I always dreaded that happening as I’d no financial cushion to fall back on.
I moved to London in 1996 and unfortunately had to sell the house for a slightly (but not significantly) larger sum, because at the time the rental market in Birmingham was weak so I couldn’t afford to keep it. London cost me a fortune – I wasn’t earning more than in Birmingham but rent was, even then, very high and took up a huge chunk of my earnings, despite living in some pretty grim shared houses. This was the first time I felt I couldn’t actually afford day to day living, the huge difference in living costs was something that took me by surprise. Although I learned a lot from my time in London and then later, Essex, I finished up poorer than when I started, just through cost of living issues. At one stage I got an offer of a job I really wanted in Sussex, but it was simply unaffordable for me to move there so I had to turn it down.
I’m the youngest of five, and its very apparent how, when you go down the generations, each of us has a slightly more miserable house and general lifestyle despite having pretty good jobs, and almost all down to the rising cost of property. We were raised in a nice part of Dublin, a big house in a good area, that my father could afford on a mid-ranking policemans salary, with my mother a housewife. That would be entirely impossible now.
On the other hand, I have relatives who inherited houses – not great wealth, just inherited a house from parents, etc and have regular jobs. I knew people in a similar position in London. Their lifestyle was and is immeasurably better than their other contemporaries, simply through not having to pay a mortgage.
Sorry to hear this and I can really empathise. My higher education (begun in early 90s) “should” have put me on easy street regarding home ownership and what it contributes to the “cushion” my peers have in terms of riding out economic uncertainty. Unfortunately career circumstances meant I missed the boat regarding property, even though for a long time, using money responsibly, getting good job opportunities working in 3 countries etc, I had a nice lifestyle. I’m much more philosophical as time goes on but there are inevitably times I get irritated by peers who simply don’t understand how much they owe to their unearned income compared to what wealth they actually generated via their job.
Ground floor for the 1%, 1980s style….
In parts of NYC where whitey could live without hearing “Yo! You lost?” in the mid 1980s, you could share decently kept apartments with 1-2 others (private bedroom, all else shared) for about $400 / month each. College debt service came in at $280 / month. Subway was transport.
For those like me whose parents couldn’t manage 3 more years of law school on top of private college, midtown law firms were hiring paralegals at $21,500.* You could double this on overtime, socking away money (~$15k per year) for law/grad school and still going out on movie dates or for beers on Friday night.
If you did go on to law school (I balked, and backpacked Asia instead), you’d double your loan service, but also start at $85k a year at those midtown firms, with 40% bonus expectation. Buy tiny condo, commence climbing ladder….
* Ad firms, retail, etc. might go as high as $26k; engineers got up to $32k but didn’t rise as fast. IBank recruits of course got 50k in the 2-years-to-Wharton analyst programs, or $37k if you did middle market etc.
During my college years in the early 1970s, a group of us found a townhouse in the Dupont Circle area of DC. (I found it myself, actually, when picked up hitchhiking by the son of a real estate agent.) The Circle itself was a mostly deserted area that we would not cross at night without looking over one shoulder. Abandoned or collapsing shells in the surrounding streets could be had for a few thousand as fixer-uppers. Our monthly rent for a beat-up, four-story row house was $225, divided by the 11 to 14 of us (it fluctuated month to month) who squeezed into the six makeshift bedrooms (i.e., one was a walk-in closet). During the antiwar rallies and marches of that era, the house population would grow to 30 or so with people sprawled out on the floor in sleeping bags. I did the books for a while and remember charging everyone $18.75 for one month’s rent, including utilities. My student debt from two years of college was $600.
I got my first post-college job in 1972 (I was 22). Salary was $6900. But since I had worked summers in the steel mills 1968 – 1971, I had only borrowed $2500 total for college (public).
I had just married and my wife and I rented a 3rd floor, furnished apartment for $125/month (utilities included).
No car, buses to work. My wife, also a college grad, got a minimum wage job ($1.90/hr.).
But we could live well. And we could support ourselves–our parents were in no position to give us money anyway. I see many young people today and I know they aren’t doing that well.
My in-laws bought a modest 3 bd ,1 1/2 bath ranch house in 1962 for $15,300. My MIL has the original ad from when they bought it. It is in a development where every house is the same. They still live there and it has never had a major renovation. My MIL HATES change. It’s like a time capsule.
That house in today’s market would fetch $350,000.
In 1969 I entered the University of Maryland. I worked two summer jobs and saved all of the money. With that money and my fathers bonus money we paid for my instate tuition room and board so that I was able to graduate with a very small student loan. Thirty years later when my son entered the same school he also worked two summer jobs. I also had an annual bonus. My sons jobs earned him just slightly more than I made 30 years earlier. He was able to pay for his books. My bonus paid room and board. We wound up paying over $100,000 out of savings to allow him to start life without debt.
We bougth our house (a 4 bdroom apt) in Madrid in 1992 for 16 million pesetas (about 96.000€) plus some undisclosed “black” amount that was paid by my wife’s father. -I think it could be like 12.000€- This was common practice in Spain those years. We paid mostly with saved money and we avoided a mortgage thanks to a small “family” loan. In 1993-1995 house prices stalled for a short time (crisis) until the long and big housing bubble came in with lower interest rates. “Relaxed” loaning conditions became the new normal. We still live there and its current asking price could be somewhere between 600.000-750.000€. Salaries didn’t keep pace of course.
When we bougth the house, we did not have cell phones and we bougth our first computer about 1995. Now we are four living here and we have four laptops, four cell phones (iphones forbidden!) and their corresponding monthly payments. I mean to say that now, there is an expanded consumption basket and this reduces the savings available to invest in a house. We had lots of savings when we bougth our house, now it is more difficult to save I believe.
Very good point about the changing nature of “basic” expenses. We only have the flip phone and a desktop computer. (I’m in the middle of refurbishing an old Dell laptop. Bigger capacity hard drive, more RAM, and, if I’m lucky, faster processor.) Our parents didn’t have iPhone data rates and Internet connection charges to deal with. If I remember corrctly, our home phone bill back in the seventies was around I’m thinking eight or ten dollars a month. I looked up the FCC take on it and they state that the national average for a home phone in 1995 was near twenty dollars a month. Today, our family pays fifty dollars a month for internet and thirty five dollars a month for flip phone service. Also of note is that back then the family had one telephone for everyone living there. If one wanted to interact socially, he or she had to either monopolize that one phone or go out and find actual real people to communicate with in person. Now, with Blue Tooth technology….
Of interest to technology ‘enthusiasts’: The FCC weighs in: https://transition.fcc.gov/Bureaus/Common_Carrier/Reports/FCC-State_Link/IAD/ref97.pdf
The day I got out of the Navy in 1994, I moved to a tiny little apartment of my own in the East Village to start an investment banking job. The salary was $33k plus the expectation of a substantial bonus, so quite a step up from junior officer’s pay. And we all worked most every evening, so the firm basically paid my grocery and long distance bills. My rent was $900 per month — about double that of the town where I had been posted. And the place was barely large enough for my fold-out futon and an Ikea dining table. But I had known going in that “Manhattan rents are exorbitant.” Like most acquaintances, I found the apartment through the classified ads in the Village Voice. It was about 100 yards from the B/D/F/Q (I’m dating myself with that) and 6 line stops; I actually walked the mile and a half to work in Tribeca.
Most weekends, if I wasn’t working, I would take runs up and down Hudson River Park, go on long strolls through the West Village, or take the train up to Grand Central to meet my girlfriend (now wife; we met on America Online) coming in from New Haven. There were plenty of places to get a bite to eat and bookstores to browse. You could navigate by looking for the World Trade Center to find south.
Those were happy days! I wonder what it’s like now. That old apartment probably fetches north of $2,000, for starters. And I hear half of the West Village is empty storefronts.
I’ll offer three examples:
1) Boston in the mid-70s–
My girlfriend graduated from college a year before me and moved to Boston for my senior year. A college roommate from Boston found a 1-bedroom, dumpy apartment just off Comm Ave in Brighton for $190/month. It was way overpriced. On the day we moved out, the bathtub faucet wouldn’t shut off at all, which paired nicely with the bathtub drain that hardly drained at all. Both had been raised repeatedly to the building super, whom we could not raise at all that day. I imagine things got pretty wet in there within an hour of our walking out for the last time.
2) DC in the late 70s–
I was in law school, married to that same girlfriend and had a summer clerkship in DC working in a union’s GC office. After I got permission from my law school to take classes for my third year at a DC law school, we found a nice house in Friendship Heights for $750/month, which we could swing with the clerkship salary and by renting out a bedroom/bath. Having an in-house renter was an experience. We went through two of them before we gave up.
3) Rust Belt city currently–
We bought a lot with two houses on it for $3,500 seven years ago. The buildings have been rehabbed by us to make pretty comfortable homes with 4,000 total sq. ft. for us (same girlfriend as above), a son and his girlfriend and a daughter and her boyfriend. Nothing is owed on the houses, so we’re able to take care of taxes and utilities for $150/person/month. Our kids and their significant others are able to bank some nice money.
I read a lot of lamentation about kids living with parents. In a typical 3-bedroom suburban ranch, it would be misery, but our situation, which combined a big two-family house with a 1 1/2-story cottage, it’s more of a village situation. Ma and Pa are here to take care of the dogs, occasionally prepare dinner for everybody and run a few errands for folks. If grandkids were added to the mix, there would really be some benefits. It sure makes life more interesting for us.
Nice problem solving and how very Victorian of you! But then when life hands you Dickensian conditions, the best you can do is solve for the conditions like a Victorian.
I think very big houses with good energy efficiency will do surprisingly well.
Our neighbor across the back fence is Korean. She was curious about who had moved in (our daughter and boyfriend), and when I explained, she said, “You’re living like a Korean.” My reply: “And like Americans used to when we were smarter.”
These houses were built in the 1880s, so they were not built with any energy efficiency. We’ve insulated the old house which was demo’d down to the studs. I’m spending today with my son blowing cellulose into the balloon-framed small house since we didn’t have to demo it that far. We’ve also been replacing windows as we can afford.
How about children? This may not be as helpful because it changes regions.
Our first child was born in 2004. We lived in rural Virginia while we both were going to grad school. The OB and midwife practice we used put us on a payment plan, which required us to pay an additional $80 every visit from the second month on. About $1100 total. When our first child was delivered, we discovered that formula cost between $12 and $20 per canister depending on the volume and the brand. We spent around $13 per canister. Daycare cost around $150 per week when we needed it. The cost of diapers vary by size of course, but the ones we could buy for our new born at the Kroger next door cost us about $20 per week. We had our own townhouse that we rented too. 2 bedrooms, 1.5 bathrooms, a little fenced in backyard, that cost about $700 per month. We paid for all that living as grad students on stipends and still had money left over to have fun and make payments on a car. We even saved money.
Our third child was born in 2010 in southwestern Pennsylvania. We could not have afforded the insurance, co-payments, and delivery fees without my wife’s generous benefit plan from her employer (Post-Doc thru UPitt). The charges on the bills we saw were thousands of dollars. Formula cost about $20 per canister and they stopped selling the large ones in the grocery stores. Daycare cost between $200 and $500 per week depending on many different factors, but the places where you could pay $200 a week and not fear for the life of your child had long waiting lists. The cost of diapers for our new born was about $25 per week. We owned a little house in the city, and made payments of roughly $1100 per month for what wasn’t too much bigger than what we had enjoyed in VA. We had 2 old cars at this point and were barely saving anything even with both of us working in two good jobs that used our advanced degrees.
That was when we decided we couldn’t afford to have more children. Money being just one factor in that decision. But it was an important one.
This is one of the best historical guides to retail prices, the Morris County Library yearly index, as taken from ads in the Daily Record in Morristown, NJ.
https://mclib.info/reference/local-history-genealogy/historic-prices/
Pick a year, and see what stuff sold for. Here’s the year of my birth:
https://mclib.info/reference/local-history-genealogy/historic-prices/1961-2/
Old fart here-Motown, early 70’s, graduated high school, got a job in an office downtown, made $124.00 every 2 weeks. Lived in a decent 2 bedroom flat with a roommate, we split the monthly rent of $135.00. I ate lunch out every day, I had a car, I had a savings account, my then girlfriend, later wife took 2 week paid vacations together. You won’t hear me telling stories about how hard we had it. Young people today have a much harder time just getting by.
When I got out of high school in Memphis in the late 60s, the state schools cost $65/semester at the Univ. of Memphis and about $75/semester at the Univ. of Tennessee. Minimum wage was $1.60/hr. One week of minimum wage work–net of c. $60–would come within a few dollars of earning a semester’s tuition at those public schools. When I moved to New Orleans min wage was $2.00/hr. and rent for our small house was $65/month which I split among 2 roommates. All of us were on min wage, yet one person could earn the entire rent in 4 working days. Gas of course was .30/gallon. In our early 20s, we all walked around with money in our pockets and had no debt and no financial concerns. Jobs were plentiful. You could get hired just about anywhere. When I ended up in law school later on, the tuition was $900/semester. I was able to earn much of that driving an ice cream truck, and graduated with no debt.
Yeah, I know. This sounds like gramps talking about the good old days.
I, too, got out of high school in Memphis in 1972. Mom and Dad paid the cheap tuition at University of Memphis, and I worked summer jobs at $1.50 per hour to fund a car, room and board on campus, and books. Upon graduation in ’76 I moved to Indianapolis and rented a brand new suburban one-bedroom apt. for $225. Two years later I returned to Memphis for an administrative Job at the U of M paying $14,000. That payed for a car note and an apartment as well as allowing me to accumulate enough to fund an MBA debt free.
Boy, have things changed. Tennessee has backed off on its funding of state higher education, so tuition has skyrocketed–to the school’s credit, however, there is no tuition increase for 2019. Nashville is in the midst of a housing bubble–my niece and her family can only afford Clarksville while her husband commutes to Nashville miles away. In Memphis housing prices are starting to climb with a building boom underway in the downtown riverfront, yet outlying older suburbs languish due to years of racism-fueled flight and blight. The rising housing prices are starting to frighten me in that I planned my retirement upon the modest housing prices in Memphis. However, if rents continue to climb (average rent for a newish two bedroom apartment is $1,000 or so) I will be forced to buy a fixer upper (under $100,000) in a neighborhood that prevents one from leaving the house during the day due to high property crimes. In Memphis, safety costs money.
Circular problem. No solution in sight. Government should be able to live within its means but doesn’t, and at the same time, taxes on those who can most afford to pay more are being cut. Yet if you were to tax 100% of the proceeds of the ‘rich’ there still wouldn’t be enough money.
Me? I think this is a problem of a failure of imagination. If we can drop black money on any damn thing we perceive we need, then let’s drop an extra $1000 in every American’s mailbox. Don’t tell anybody, don’t account for it otherwise. Take it away from those honest enough to report it, everybody else probably shuts their mouth and spends it. Heck, even my imagination is limited. Make it $5,000/month. It really doesn’t matter because it’s a fiction anyway. Tried exchanging it for more than the full faith and credit lately, something like gold? And yes, I’m perfectly aware of the limitations of gold as a currency sufficient for the needs of modern government. Anyway, since it’s fiat regardless, why should so many people suffer?
Yes, rub away enough of my camouflage and an anarchist is revealed. Or I haven’t had enough coffee this morning. First world problem.
“Government should be able to live within its means”
Governments are not households. Governments that control their own currency cannot run out of money and do not have to ‘live within their means’ as such.
Though yes, the problem IS still a failure of imagination either way.
RE: AOC Rental Woes a Reminder of Worsening Conditions for Workers,
All these stories are almost identical, How the plutocrats have given almost everybody else the SHAFT”, revolt is not just overdue, but essential, to avoid an even worse fate for the RICHIES.
I graduated from UC Berkeley in the mid-70s, a single mother, having lived on about $300 a month plus food stamps. I paid $185/mo for a 1 1/2 bedroom apt, was able to keep a VWBug, pay for childcare (subsidized) and books. I had a full tuition scholarship and a part time job. I graduated with $600 in student loan debt. Also with summer jobs, I had been able to save enough for a two week trip to Europe staying in hostels.
My first job paid 850/ mo. In one year with the same apt and car and child care expenses, I was able to save enough to move to another city for grad school and pay for all expenses, such as warm clothes for myself and my child, extensive car repairs, apt deposit, books, etc. I had to work part time through grad school but I graduated, in early 80s, with no debt.
I do not think that many Boston University graduates in 1975 would be tending bar. At that time, BU was a fairly elite school. However I do not think that the academic standing of BU took a plunge, rather its our standard of living that has tanked.
I grew up, a single child, in a single earner household in Kansas City, Missouri. My father was a Clinical Psychologist teaching at the University of Missouri at Kansas City and also on the staff of the VA hospital in KC. Before the VA appointment, his salary at UMKC was a whopping $6500 a year. On that, they owned a home, had two VW beetles and sent me to an exclusive private college preparatory academy from eighth grade through my senior year in 1971. My classmates were rolling in money, I could not dress, drive or vacation on par with them, but there was no financial distress in my home. I was not as privledged as the wealthy but by a long shot never needy.
What I do reflect upon a lot now is that my prep school colleagues had parents who actively helped underwrite the ‘Powell Memo’ that has led to the quandry that Ms Ocascio-Cortez finds herself.
My neighborhood was working class. I know my father was a little chapped that union steel workers, automobile factory workers and att linemen with overtime out earned him, but KC was a union town and blue collar jobs afforded a very comfortable life. Thanks to that ‘Powell Memo’ those days are long gone.
My wife and I both work. Together with no children we live with less security than our parents (with 4 children in my wife’s case) still shackled with a mortgage facing a rather grim retirement at the mercy of whoever has the hooks into our defined contribution benefits.
I do not think that my childhood exists anymore in this country or my wife’s in Canada.
Not all your classmates were wealthy. ;)
What are the chances, huh?
I’m guessing that david attended Pembroke or Rockhurst – the premier (boys only) prep schools in the KC area at the time.
My ex-in-laws sent both their kids to private schools in grades 7-12 (Pembroke & Barstow) They were by no means “rich”. Both parents had jobs though (draftsman & secretary). They managed it by scrimping & saving. (How utterly old fashioned).
My ex-wife & her brother did benefit later in life from the connections they made with the upper crust at the pricey schools.
To shinola, and Henry Moon Pie, Esquire: thank you for your comments. Pembroke Country Day was ages ago. But here is my point. In my youth if parents wanted to consider an elite school for their child it was not entirely out of bounds. High quality public and parochial schools put a very definite upper bound on the tariff Pembroke, Barstow and Sunset Hill could extract. And yes, a draftsman earns a bit less than the CEO of Hallmark, but again this was a real career that the five large civil engineering firms in KC would provide pretty good compensation for among others. The wealthy were well, wealthy, but the income distribution for the rest of us was far away more favorable. Caveats follow below…
Frankly, if my parents’ home had been on the west side of Holmes, Southwest High School would have had one more student. Unlike my friends on the same side of the street who had older siblings already enrolled at Southwest, I as an only child would have attended Paseo.
Racial red lines are an unfortunate feature of the Kansas City metropolitan area. One of my most bitter realizations of this was recalling the ‘History of Kansas City’ textbook of my fourth grade (William Rockhill Nelson elementary) that was a basically a tribute to dead racists. Not one mention of the Kansas City Monarchs, a Negro League team that may have been the world’s best baseball club, nor an invitation given to either Satchel Paige or Buck O’neil both of whom were an easy walk away to give a presentation to us kids.
I long for the more fair income distribution of my youth, but too, it needs to be even more fair. All must benefit, not just the melanin deprived like myself. A few weeks ago I attended a conference in Austin, Texas and went to Lyndon Baines Johnson Presidential Library at for a break. We should (us pale faces) be ashamed of our singular lack of persistence in extending his legacy.
This comment is so late in the day that neither shinola nor Henry Moon Pie may see the following: For shinola, at least your ex had the intelligence to milk the connections, I did not. I have a very good idea where you reside and it makes me homesick. Those old inner suburbs are nice places to live. For HMP, I lost all five of my yearbooks in a move. This does not aid me in thinking which of the 61 classmates you might be, or in those classes +/- 2 years of ’71.
I hope that both of you have an enjoyable holiday season and that we might possibly correspond at some future date.
Thanks again, david.
My yearbooks are long gone too, but I do remember trying in vain to keep up with someone doing 880 intervals in 9th grade. Also, that girlfriend I mentioned in the unrelated comment toward the top of the thread was called “Martha” according to our mutual friend, Tom.
No names, please.
You will always be a Henry to me!
As well, I will carry the knowledge of your lamentable class rank to my grave.
You keep well, david.
{David}
Good to make contact with you. I think of you and Flappan (“but he runs flat-footed”) every time my Morton’s Toe acts up, which is quite often these days. ;)
Drop me an email at imgoinsouth at gmail.com, and we can catch up in a less public forum.
I live in a close-in, “landlocked” suburban municipality in Kansas that is literally across the street from Kansas City, Mo.
Current home (3BR/1.5B/ 2 car gar. & full bsmt) purchased 1992 for $65k with 10% down & 20 yr mortgage. “Comparables” now asking $250-$275k. A former golf course is now being developed for residential; condo’s start @$400k, “attached” homes (1/2 duplex) @ $600k & detached single family houses @$800k(!) Again that’s starting at…
Even more astounding/disturbing has been a recent trend of purchasing existing homes for tear down/re-build. It’s become enough of a thing that the city has issued reg’s for new builds so that they don’t look too out of place among the neighboring mid 50’s ranches, tri-levels & cape cods.
Gentrification comes to the ‘burbs.
Boston U hasnt changed. Academic standards overall probably did need to decline because now a very large proportion of high school graduates are assumed to go on to BA programs. But there is a renewed emphasis on VFM in education which has benefited good state schools. So now UoM Amherst is surprisingly difficult to get into. Same will happen everywhere cos smart students wont pay full freight for private school. It doesnt make sense.
And this hurts BU. If BU means having 200k of debt or the parents blowing 200k when they could give you a deposit on a house, who will pick BU over UMass?
Started at my flagship state university in 1973. My first tuition check, paid by me, was $179.50 for fall quarter. Included in that was $10 for comprehensive health coverage (not including something catastrophic). The dorm was $135. Total cost for one year of college at a large research university: $943.50. My freshman general chemistry textbook cost $10.40 (I still have it, with the price stamped on the inside front cover) including a 5% discount from the university bookstore. Current prices for the equivalent are $140.00+. Didn’t do a meal plan, but food costs were about $3.50 a day, and I didn’t have to eat ramen noodles. In the summer after high school graduation, I made $3.56 an hour in a heavy chemical plant when minimum wage was $1.60. I was able to put away enough for the entire first year of college, albeit while working 20 hours a week at $2.00 an hour during the school year. But back then university system funding was 80:20/state+other support:tuition. The ratio is reversed now. No one sees that for the unaffordable tax increase that it is. Later my first apartment, walking distance to the university and work, in 1975 was $125 a month for a 1BR with kitchen and living room, utilities except phone included. By that time I was making $500 a month and was total rich! Apartment was filled with books ;-) Didn’t need or want a car…
A lot of these stories go pretty far back. I don’t think that much history is needed to make the point. I graduated college in 2001 and there’s been a marked deterioration even since then. Student loan balances from college are much higher. And, in the last 5-ish years, rental/housing costs have jumped rapidly.
The improved job market of the last few years is giving some people a fighting chance, but landlords are definitely eating up pay raises.
Also, immigration ties in here. Immigrants are willing to stuff more people in a smaller space and can squeeze out younger renters who won’t tolerate that kind of crowding.
yes, lifetime renter/hourly worker here, and it was doable until the 2000’s when it steadily became undoable up to 2007, when I thought a crash might help level things out a bit, but the chosen winners got in the way of the free market, and in the state we remain. Living costs are absurd. Oh and my pre cell phone bill was $30/mo. split by six people and somehow I was able to survive. Back then I was an avid mtn biker and used to spring with the ski bums in moab every year…not anymore. The student loans kids have today dwarf mine, and they’ll (GS of course) certainly be garnishing my social security (what little I will get) to put a bottom on that trade. #JTMjuststoppaying
Precarious.
20 years old, 1973, in a medium sized town in Upstate NY. I shared a small 2 bedroom apt with a co-worker for $85.00 a month. I worked as a bartender, almost full time, at a local tavern and attended a Community college about 25 miles away that cost about $300.00 a semester + books. The car I drove was a 1962 Ford Falcon I bought for $50.00 (it needed everything, brakes, tires, battery, tune-up – but it passed State Inspection).
This was all done on an hourly rate of $3.00 – “under the table” – which was good enough back then to pay for all of the above + local entertainment and other living expenses. I ended up with 2 Associate Degrees over the next few years.
Years later, 2000, after a stint with the Army and leaving employment with a local machine tool mfg (and lots of part-time upper level courses in Finance and History) I went back to school in Rochester NY for a year and picked up a Dual Major degree in History and Computer Science. My share of the cost was 40% of the tuition, $9000.00, a Fed Program for “displaced workers” picking up the balance, + living expenses, no entertainment expenses – no time for entertainment – which were a lot higher and included a 70 minute commute in an old diesel Mercedes with no heat (pretty much drained my 401K + a family loan).
Even though I was in (small) debt with no savings and no job in my late 40’s, I felt pretty lucky compared to my co-students that were paying $23,000/yr + expenses at the same college.
Today that tuition cost is $38,000/yr and total cost per year is estimated to be at least $52,000.00.
Frightening!
Went to high school in rochester, dad was a prof at a nearby SUNY, my first apartment was on Park Ave when Charlies Frog Pond was the place to get a frittata. Don’t recall the rent, but it wasn’t much. I think it was 1980 and since then(I haven’t been back for quite a while) I hear park ave got kinda tony.
I was in Rochester about the same time (1997-99).. was working at the big copier company watching it crumble. Rent was cheap I was sharing a three bedroom for $250 +, and my salary was $400/wk take home. After that moved to Boston where rents are in a whole different universe.. first place was $900 for a one bedroom in the college slums of BU, then I found a house share for $375 a month which was nice for the min 2000’s in Cambridge.
Since then housing a normal expense considering I pay ~$400/person in a three bedroom. What has changed is Health insurance. That beast will never stop eating into my budget, and what went from a blip on my budget in 2000 now takes up about 14%. For those of us with long term memory this is a big kick in the [family blog].
I went to Uni in 1967 after a gap year. Tuition was free in the UK at that time.
My hall of residence cost 12 pounds per month., board and 3 meals per day. I had a 38 pound per month scholarship. Beer cost under 2 shillings per pint.
My first job paid 100 pounds per month, and we worked 80 hours per week for National Westminster Bank (aka assholes). A flat in London cost 3,000 to 5,000.
I left the UK.
1988 got first job $3.50/hr (min wage was $3.35)
1990-1995 attended local commuter college for $2500/year while living at home
1991 quit first job at $4.25/hr for a further-away job @ $8/hr
1994 bought first (used) car for $2800
1996 moved out from folks, bought small condo in great neighborhood/location $60,000
2001 sold condo for $120,000, bought house for $237,000
This house is probably worth 5-10% less now
My birth family came over from England around 1960. While still waiting out the seven year latency period for citizenship, Mom and Dad, (he was a draftsman, then engineer, then City Inspector, then small business owner, she was a stay at home Mom,) bought a fixer upper in South Florida and two cars. (Mom didn’t learn how to drive until Dad bought the ’63 Lincoln, used.) The monthly mortgage payment on the three bedroom, one bath house was $85. The interest rate on that was 3.5%! When Mom’s dad died in the middle seventies, we could afford to fly Mom and my two sisters back to London for the funeral and a short ‘vacation.’ (Do airlines still fly people going to funerals for half price? They did back then.) Everyone could afford to have their teeth worked on!
I tell our children that there was indeed a “Golden Age.” They look at me funny.
Graduated in 2000, but started working full time about a year before that. Started at a software company making $42k / year, which was more than enough to pay for the rest of my tuition and even buy a new car. I was paying about $350 / month for a private room in a shared student apartment, so I felt like I was rolling in cash.
Decided as a single guy I needed a tax break so I signed a contract with a homebuilder to build a new house a few miles away from where I was working. Don’t recall the exact amount but it was around $150k for 3 beds, 2 baths, and a full basement on a quarter acre. Started dating my now wife and things got serious just in time for her to help pick the carpets and paint.
Looks like houses in that area are around $400k now.
Howz this one?
I moved out of my mother’s rent-controlled NYC apartment in 1977, after my third year at CCNY. My first two years there were (literally) tuition free, since the Banker’s Coup (typically called the 1975 Fiscal Crisis) had not yet imposed austerity and what we’ve come to know as neoliberalism on NYC.
I moved into a two-room, top-floor tenement walk-up in the East Village (in fact a realtor’s term dating from the first/failed wave of gentrification in the 1960’s; before that, the area was considered part of the Lower East Side), for which I paid $100.00 a month in rent. I was the first young person in a building inhabited mostly by old workng class Ukrainians and Italians, and the hallways often smelled of onions and sausages frying…
I was able to go to an excellent college full time, have a part-time job and live in my own apartment. Of course, in those days, the blocks just east of me (I lived between First and Avenue A, which was pretty much the border between typical LES blight and struggle, and the almost unbelievable squalor/destruction of Alphabet City) looked like Berlin after WWII, except for the “delis” and “bodegas” that had no merchandise on the shelves, but all the heroin or cocaine you might want.
I was never a bar person, but I occasionally hung out with friends at an old Ukrainian dive on 6th street between First and Second Aves, just as it was being taken over by the (now-disappearing) cheap Indian and Bangladeshi restaurants the block became famous for. The bar had been the opening setting in “Joe,” an early-70’s film with Peter Boyle, about class and inter-generational conflict in the Vietnam War/hippie era, right around the time Bill Graham closed the Fillmore East – the Allman Brothers played the last show – because of the neighborhood’s deterioration.
Anyway, in 1978, Spike, the bar’s owner, sold the business, liquor license and twenty-apartment building for $30,000.00. I have friends who to this day have never forgiven themselves for not becoming rich off the opportunities available at the time. I was just happy that my wife and I, through family and work connections, were able to get a rent-stabilized apartment on the West Side after returning to NYC from a stint in Seattle.
As the Gods of Coincidence would have it, forty years later my daughter and her boyfriend moved into an identical (though renovated, fwiw) apartment three doors down from my old place, and paid $3,000.00 per month.
To add to my previous comment.
I bought my first automobile, a 65 Ford Falcon van, for $500 back in ’75. It served us well.
Insurance was not totalitarian back then. You could get a cheap no frills policy. Or trust to the Gods and do without. Now the standard non cheap policy is still no frills.
Later I bought a ’64 Chevy II for $300 and drove it home and fixed it up.
Later, in the early eighties, we bought a ’75 International Scout for $3,500 and a 26 foot Airstream trailer for $4,500 and lived in it while we did some travelling around the South. We bought the truck and trailer with cash we had saved and a “loan” from both sets of parents. It could be done. We lived in that trailer for several years. Tight quarters, but Paid For. With the money we could save that way, we eventually bought a couple of acres of land and semi homesteaded.
The point of this is to show that people could get by, even get ahead, on non stellar pay back then.
Another factor is that parents had the resources available to help out when necessary. I fear for the grandchildren coming up when they need some financial help and Mom and Dad don’t have anything to give because of student loans and outrageous ‘basic fees.’ (Our local city water department has raised the water rates again. Our bill, comprised of water, sewer, and garbage pickup, which was $40 to $45 a month back in 2010 is now $60 to $70 per month for the same usage.)
Today is a different story. Really, a tragedy in the making.
@ambrit
November 12, 2018 at 11:24 am
——-
I’ve been thinking the same thing about parents helping children. I was very fortunate that my parents had the wherewithal to help me when I needed it. And, even more so, that my son-in-law is highly skilled and makes good money as a merchant mariner because I don’t have much in the way of resources to help them if they need it.
For years, I have been thankful that our local water utility is still government owned. I pay the minimum since I live alone and for water and sewer service that amounts to less than $32/month for about 2000 gal. Garbage and trash (yard waste, etc.) pickup is free within the city limits.
I hope y’all are doing okay considering your situation. I know it’s not easy.
Yeah. Our water department is City owned and run! That stated water bill is for about 4000 gallons a month, coming and going. The garbage part of the bill is $17.00. The water, and double that with sewer charge is $5.31 per thousand gallons.
Stay dry today!
Utilities are a huge financial burden here now. They’re all privatised and unstoppable rent seeking has resulted in what is a highly regressive tax that hits the poor, the sick and the old the hardest.
I pay £100 / mth (appx. $130) water and sewerage. Gas and electricity is £120 / mth (~ $160-170).
People on a fixed income have to make choices about whether to have heat and hot water or proper nutrition.
30 years ago these bills were less than $80 a month — combined.
Yes! The perfect teaching aids for Rent Seeking 101. Public Utilities to Private Services conversions.
The ‘basic’ utility increases do hit the poorest the hardest. The beauty of the system, from a Neo-Liberal perspective is that it takes little effort to set the poor against the middle classes and the fear of those poor in the hearts of the middle classes.
I vaguely remember back in the sixties when the Riot Season got under way that Adam Clayton Powell, a black politico from the North East of America gave a (in)famous speech where he called the rioters, mainly fellow colureds, stupid and misguided.
“Why are you burning your own neighbourhoods down? Head on Uptown and burn the rich mans buildings! He’s just laughing at you right now.”
No truer words….
’71 plymouth fury III much like this one, but totally rusted out (rochester ny) and less than 10 years old!
https://www.flickr.com/photos/carphotosbyrichard/4976042211
also covered with grateful dead stickers by the previous owner, which I did not particularly mind. Gave it away for a six pack of genesee whites and took a greyhound to denver when I woke up one morning, failing out of school, drinking smoking and otherwise carrying on, and could barely breathe from the cigarette smoking, literally took 5 or 6 breaths before I could take in a whole breath and accepted that without a drastic change I was going to follow in a family members footsteps and perish at a young age so I just threw it all away, smoked 5 packs of marlborough reds on the day and a half bus ride, quit when I got to denver, and bought a peugeot uo-8 in boulder and only looked back once or twice. Finished college in boulder without a student loan, but that other one will never go away and I could have claimed bankruptcy 10 times since. A true ball and chain that has had no positive effect ever.
Oh yes! Dad had a ’73 Fury III bought off of the City excess property auction. I believe that it had the 383 c.i. engine. It certainly was fast. Dad would get it out on the Tamiami Trail or the Turnpike and run it up to well over a hundred mph.
Dad’s last project car was a Citroen. It was running fine when he passed away. I think my Mom gave it to one of his poorer drinking buddies.
As for student loan debt, why not promote a Social Bankruptcy class in the tax code. There really should be a deduction on the tax form for “Trying to Keep Up With the Joneses.” Forget drugs, that’s the real ‘Jones’in.’
My very first apartment was a loft on Broome St in NYC that I shared with 2 other girls. This was in 1982 and we each paid $300 a month. In my mid 20’s I decided I wanted to live in CA so I got a second job in the evenings and saved up 2K so that I could move. It’s kind of astonishing to me now that I was able to move cross country, find housing, buy a used car and get a decent job on such a small budget. After a few years I moved back to NY, got married and decided to change careers. By 1993 I was selling real estate in NYC and people couldn’t give away their apartments. My husband & I bought our first 1 bedroom apartment in a doorman building with a terrace on 68th & Third Avenue (across from a Trump building) for 68K! Today it would be really hard to have that kind of mobility and make the kind of choices that I did in my youth. You would have to have a lot of help re $/support.
Yes, the classified sections (remember them?) of the NY Times had multiple columns of co-op foreclosure notices in those days. Small wood frame houses in the southern part of Park Slope, Brooklyn, were selling for $100,000., probably the last time a person of modest means could get property in NYC without a lot of help from the family…
The NY Times classified was pretty much how real estate was sold at that time. And yes, you could actually afford a home in the NYC area then. :)
I graduated college in early 2000s in a major blue US metro. The amazing thing has been watching the cost of rent and healthcare keep rising higher than inflation, so an apartment in a desirable neighborhood has been like a carrot just out of reach. Then, recent college graduates could not afford overpriced apartments, and now, most of those same people in their 30s still cannot afford them.
I deeply regret not buying an apartment in a then-marginal area during the low point of the market in 2011, but it didn’t fit with my life trajectory at that time. I could have moved to a cheaper metro, but that was my home.
And let’s not forget all the Boomers who somehow missed the housing gravy train and are now in 2018 even worse off than I am because of healthcare costs.
Random money markers burned into my brain, all years/prices approximate:
1972 New Ford Pinto, as seen in tv commercial: $2,000
1977 12 oz can of Coca Cola from vending machine at school: $.25
1982 First part-time job, in small town media: $3.50/hour (slightly above minimum wage)
1983 Gallon of gas in Delaware: $.99 (briefly, only one weekend, then it went back up)
1986 First salaried job in small town media: $14,500
1988 Rent for 2 bedroom in good neighborhood in rust-belt city: $370
Seems like cheapo new cars are about 50% more expensive now, allowing for inflation. Vending machines seem to sell only 16 oz bottles now, for $1.50. Those media jobs don’t exist anymore. The rent now on the same street — about 2.5 times what I paid. Money was always tight and I would not have survived without family support. And I was incredibly lucky to have no college debt.
My first job of any significance was as a “Summer Substitute Carrier” for the Post Office. I made $3.10 per hour when the minimum wage was $1.65. This was the summer of 1968 when I was between high school and college. Since I lived at home, I had few living expenses and was able to save enough to cover all my food and incidentals for my entire freshman year at Wharton. (Weekday dinners were included in room & board for freshmen and attendance was required.)
When I graduated in 1972, I went to work for a Penn psychology professor as a lab assistant doing pigeon learning experiments. (The professor was trying to falsify B.F. Skinner’s theories of learning.) I was paid $3.75 per hour and had more than enough to share a really nice apartment with my girlfriend; bedroom, large living room, kitchen, and bath. My GF made about $5.00/hr. working at the abortion clinic on the edge of campus as a counselor (MS, sociology). I don’t remember the rent, but I do remember that after my half of the expenses, I had money to save or use for entertainment (mostly entertainment).
I didn’t buy my first house until about 10 years later when I was married and living in New Orleans. I got a good deal from a guy looking to unload the house who didn’t care much about making a profit. Sold it 4 years later for a small profit and bought my current home in Mobile in 1986.
Prices were still modest then. I paid $74k for a 3 bedroom, 2 bath, 1800 sq. ft. home in an old neighborhood (1950’s) in the middle of one of the “high-status” areas of town (Spring Hill). Most of the neighborhoods around me had homes running well into six figures.
Although I have added about 1000 sq. ft., the original house would probably sell today for twice what I paid for it. Mortgage and expenses were affordable, but saving was difficult with 2 kids.
This is less about prices of things and more about how we are being brain washed into believing we need to pay these high prices. We all really do not need two supercomputers (iPhone and a Laptop).
I think Yuval Noah Harari is thinking this stuff is happening in the future but I believe it began years ago.
From “Why Technology Favors Tyranny”
====This is less about prices of things and more about how we are being brain washed into believing we need to pay these high prices.====
As I mention in my other comment on this post I agree with the above sentence. However while there are many people who pay exorbitant rents for apartments or prices for houses for the “privilege”, ego validation, etc it gives them, there are equally as many if not more that have no choice and are forced to pay extremely high housing costs due to a bubble market and for the necessity of needing to live in a particular city.
And I do not believe the housing bubble is confined just to big cities. As I mention in my comment on yesterday’s Links page the increasing demand for living in urban areas (even small cities) adds to the housing cost issue. However as other commenters have mentioned it is also land use regulations and lack of development of affordable housing that drives rents and house prices up.
An example is this link about the removing a staple of middle class Chicago housing, the two flat/three flat apartment building, to build large houses says a lot.
https://www.chicagotribune.com/news/columnists/schmich/ct-met-mary-schmich-two-flats-20180830-story.html
So for some yes they are making a choice to rent/buy expensive housing. But, for many there is no “free market” or invisible hand in the housing market but the complete absence of a market (an affordable one). The rug is being pulled out or the deck is stacked against affordable housing and it is extortion and not choice.
Then we should evolve our own decision making to rule out all “impulse” purchases and to block these bots access to us. I tell my wife I believe advertising is exploitative and is attempting to manipulate me. Of course, she sensibly points out that being cheap, I would say that. However thinking like this helped me quit fags. It helps me avoid buying candy at checkouts and it tells me not to pay for my kids college.
Similar Proustian prices from the early-mid-70s:
New station wagon: $3000
Tuition at Ivy-level private university: $3000/yr
Room&board at same: $2000/yr
Surgery and one week stay at Man’s Greatest Hospital: $2500 (including doc fees)
So, cars have gone up by a factor of 10-12, college costs similarly,
but health car costs far more – I shudder to think what that would cost now.
Thanks for this post Yves. Many people talk about income inequality and trying to bridge that gap through higher taxes on the wealthy/redistribution, higher minimum wages, etc. While those are commendable efforts we need to lower the costs of living as well as this post and the comments points out. In other words while free college tuition is a great goal, a concurrent goal is to LOWER the costs of college. If a person would time travel from even as early as 1990 to 2018 and see whats cars/trucks cost, what housing costs, what college costs, what healthcare costs, they would think we were all crazy.
My own experiences a few months shy of 60 and the comments seem to show that this high cost of living era we are in happened very fast in historical terms. As commenter JohnnyGL mentions it was only in 1995 that there was still some affordability.
It seems that throughout human history there was a slow steady rise in prices/costs and in over the last 25 years costs of living has exploded. Why? What is driving this current bubble of costs/prices? The time traveller I mention would think we were insane not just because the cost of living is high but the insanity of some of the prices. As one commenter gave an example of $3000 for renting an apartment. Or pro sports salaries. There is a high salary and there is absurdland just for playing a game. And those pro sports salaries are reflected in the costs of going to a game.
Economics and finance are not my area of expertise but IMO this current cost of living bubble we are in seems to be the result of deliberate actions on the part of business, finance, economic, and government elite. I hope Yves will write more posts on this issue and what she believes were/are the forces that caused this bubble economy to come to be. And I hope commenters will share their thoughts on the events, factors, etc. that led to our current absurdity of costs of living.
As other commenters have pointed out a concern is that many young people do not know of an alternate time period when things were different. Many see $3000 a month for an apartment as normal.
Lastly as much as I would like to put the responsibility for this extreme cost of living era on the neoliberal elite we as consumers can act by NOT paying $50,000 for an SUV, $30,000 for baseball season tickets, $1000 for an IPhone. Some of this is just simple human unchecked greed. As long as many people will continue to pay an exorbitant “exchange value” for things instead of advocating for “use value” prices then little will change.
I am not optimistic of getting the proverbial high cost of living horse back in the modest cost of living barn but in the not too distant future maybe the coming end of oil and the fossil fuel era will force humanity to live more modestly. I can dream.
As an “old fart” I am just disgusted by this issue. Thanks for reading and thanks again to Yves for giving attention to this topic.
Even as recently as 2 decades ago lots of weird things were dramatically cheaper. Example:
In 1999, at age 29, I decided to buy a new Steinway M medium grand and live without a car for 10 to 15 years or so until it was paid off, which I did. I should have bought a better piano for the price from another brand, but it was a nice instrument that both spoke to me and sounded bigger than its size – surprisingly close to the more expensive model L just a few feet away.
MSRP I don’t remember exactly, but it was in the order of $33,000 or thereabouts.
MSRP for the same piano now, not even 20 years later: $68,400.
So I completely lucked out in a sense, because that’s over 100% markup.
Frankly I would have gotten the Bosendorfer. But last I heard, they start around $50k, and that was a long time ago.
I wouldn’t. I’m no longer brand conscious at all about pianos at the mid to upper end of the brand spectrum. It’s much more about the individual piano, and even pianos of the same brand do not sound or play the same. It also depends on your repertoire if the more general things one can say about brands is even true about brightness vs warmth, fundamental tone vs overtone wash, scale design, etc., so there is no “best” brand even from that perspective, in my opinion. A piano for Bach is not the piano I would necessarily want for Debussy, etc.
I personally recommend any buyer of a piano to have an assistant place a piece of thick paper in front of the fallboard to cover the name while you play the pianos in a dealership, while you try your best to close your eyes before approaching any particular one. That way brand doesn’t figure into it at all and you are judging the instrument solely by its musical merits. You might find yourself surprised at which pianos you name as favorite.
My teacher was an internationally famous pianist and his home instrument was a very nice Kawai. Too bright for my tastes, but he of course sounded marvelous on it.
Millennial here. I did far better than most of my friends in that I work in tech so I can mostly afford my modest west coast lifestyle, but most of my friends who didn’t marry well or work in tech are in homeshare/roommate situations into their mid 30s. Multiple friends have been homeless, taken on massive student loan debt to avoid becoming homeless, or taken up sex work to avoid becoming homeless. I could probably afford to buy a condo but I think they’re massively overpriced so I found a rental that effectively pays my landlady’s retirement, which is about the least offensive situation I can handle.
There are no words to describe how reading all of this makes me feel. Like a mixture of profound grief and rage. The elite and lots of the older generations have literally no idea how bad off most of my generation is doing.
Dearest super extra,
Yes, we do. We do know how badly your generation is doing. I for one mourn for you. And we are all frightened.
There is no such thing as retirement for a lot of us baby boomers, and the politicians keep threatening what few safety nets we do have. It’s all of a piece.
Agreed PrairieRose. If the ‘Powers’ do get a ‘Grand Bargain’ through and the Social Security and or Medicare is cut; there will be blood in the streets. Old geezers may not be young and strong but we make up for it by being wily and ruthless.
As Uncle Fester on the ‘Addams Family’ television show used to say: “I’ll shoot him in the back!”
The right attitude: https://www.youtube.com/watch?v=1OnJt98B6Oc
But it’s not just your generation. Middle aged (white) people are committing suicide in large numbers as well.
They maybe had some good times in which they could sock away money. *Maybe*, it depends on their situation, but this is only a band aid if your job and your ability to get a job has gone away FOREVER, and your middle aged, too old to change directions and get a new career as it’s hard enough to get into entry level work when you were young and 100 times harder if over 40, too young to die of natural causes, decades away from retirement benefits.
I am one of the middle aged white people contemplating suicide. I started my work in IT, they burned me out and I got sick. They gave me a parting prize in 2000. Years of illness with no answers and no one cared to try to find one. Just shoved drugs in me to see what worked. I have abandoned the Pharm Care system (AKA Health Care) because they just made me sicker and had no answers. I am the lucky one with a higher disability payout but I had to wait till Trump came into office to get a cost of living increase and has left me a bit confused about politics. But the cost of me living is none the less out performing my worth. I can take a hint. No one likes to spend time with a highly intelligent poor middle aged man so I am lonely and both my station in life and my illness are highly stigmatized. I do not have much luck with continuing conversation after “what do you do for a living” so now I just tell them and watch them get uncomfortable. They never see it coming because my appearance does not match the story. But I am lucky since I managed to have a few friends who help me from time to time. I know I keep saying I am lucky but it does not even trigger a smile in my mind. My family just thought I was being greedy asking them for financial help. I thought it was cruel that they made me have to ask, but they have their selfs to protect. I tried to get part time jobs but they do not like seeing that big block of missing time in my resume. Amazes me that you need a resume to be a cashier.
But if people think inflation is hitting them hard you have no idea about those of us trying to get better while everyone is at best ignoring you and at worst making your life a living health so they can make an extra 1% profit.
If it was not for my spiritual knowledge I am sure I would have succeeded in the past where I have failed and would not be depressing you all here right now. I just figured that death is not the certainty we all think it is so better the devil i know than the devil I don’t, but sometimes I feel up for an adventure into the great mystery.
The poop will hit the fan and there will be chaos. I will be with all you kids if I can hold on, just know that. I keep trying but all of you are still trying to make the failed system work and have had too much fear pumped into your eyeballs by Mindbook and Instascam and the FOMO has made you obedient. But kids do not hang out wit old folk anymore. They don’t need too cause they get all their Wizdom from Goople. Vote? It won’t work. Politicians need to be afraid of you. But now you still love them and praise them and follow them like lemmings.
So super extra, that is my advice. stop trying to elect politicians that you like, and scare the poopy out of the ones already in office. Disobey the story you are being told about how you are individually strong and collectively weak, about how we need money to exist. The 60’s got close but they all have gotten corrupted., they were not ready for the mental battle and got hooked on drugs. Hey, do you think it is by chance weed is being legalized everywhere? If so you have already lost. Unplug, drop out, get clean, do nothing, live free.
Amen. “Do not go gentle into that good night.”
As read by the author, Dylan Thomas: https://www.youtube.com/watch?v=1mRec3VbH3w
Yves,
As you note, the issue is this: what is our labor worth?
The measure of this is not found in the CPI or growth in GDP. It is defined in reality by how well we can live. Unfortunately, the field of economics does seem to want to take on this real decline in this value of our labor across the board. It is not that wages are flat, it is that that what our wages purchase, in terms of hours worked to purchase price, has gone way down. Flat wages only exacerbate it. What was worth a dollar in 1978 has nothing to do with the price of milk and everything to do with how many hours you needed to work to pay for it.
In 1978 I could work minimum wage part-time, pay for full time tuition at a public university, share an apartment with a Buddy, and have a small amount of beer money left, off brand beer of course. Today, full time minimum wage won’t even cover tuition. Same for rent, health insurance, leisure, and savings, to name a few.
What has declined most precipitously in America is opportunity, the opportunity to be on your own, financially independent. The decline in these things tracks exactly with the declining purchasing value of our labor, how we can live, far more than it does any accepted cost of living index.
It does sound a much better life than has existed for a long time.
So what are the choices when young: be independent but low paid if you can somehow even manage to be independent on that (far from a guarantee there as it pays so little), go to college full time on the parents dime if lucky enough to have well off parents but it does tie one to the parental apron strings well into adulthood, be a debt slave and prostrate yourself for the loans (and even if school was entirely free you still couldn’t afford a shared apartment without either working full time or loans). Nothing proposed sounds as good as a minimum wage you could live off and pay tuition with, that’s so much better than anything even the idealists offer. The Rent Is Too Damn High.
AOC is now working class? Just like Obama was a poor black child.
AOC lived most of her life in Yorktown Heights, and area that has a high (around $90,000) median income. Her father was an architect; he moved from the Bronx to Yorktown when she was five, presumably to escape the Bronx.
She went to Boston College, interned with Ted Kennedy, and had a lot of exposure that should have led to a high-paying job. She also won various awards in school. She was well on her way straight up.
Instead of seeking a high paying job after college, she moved back in with her mother, inexplicitly working as a waitress and bartender, and fought foreclosure of the family home. Who knows how someone with a good education would make such a poor choice when money was needed. But, when you think about it, it sure makes a good story for political purposes to be a waitress and bartender, rather than someone who interned for Kennedy and attended a prestigious school (even if on scholarship).
It’s nothing short of amazing to see Yves and NK buy into AOC’s fairytale about her Bronx ‘roots.’
interesting, I appreciate how someone who seemed destined to be middle class can easily be precariat, ie graduate with a good degree from state U in the great recession and get caught in low paid retail permanently or worse. But with both a very fancy education and more importantly connections, I don’t know, can’t you just pull strings? If you wanted to I mean ..
Ocasio-Cortez has been quite honest about the specifics of her life history. Impressively so for a politician. Her full story more than refutes the insinuations that litter the comment above.
Her mother was on the verge of losing the family home after AOC’s father died of lung cancer in 2008, when she was a sophomore. She moved back in with her mother after graduating college in the depth of the Great Recession, when large numbers of recent grads could not find jobs. She obtained an unsexy job as a waitress and helped to pay for the fall out from the death of the family’s primary breadwinner, while her mother worked as a bus driver and cleaned houses on the side.
It is very unclear to me how this history can be described as a result of, or evidence of, “poor choices” on her part. You need to be Trumping the facts hard in order to do so.
Sneering about her family’s fall from middle to working class is a real classy move though. Real classy. Claiming she is magically still middle class because they were when her father yet lived is real classy too.
aren’t architects usually referred to as the top 20% rather than middle class around these parts?
Apparently not, now that it doesn’t quite fit in with AOC narrative.
Hey Kiwi –
I remember when Ocasio-Cortez was first being dragged in a rushed attempt to recast her narrative as one of privilege. Much like that first attempt, you have not let easily verifiable facts get in the way of your fantasy.
I guess it’s for other readers to decided how much your story is undermined when “prestigious” Boston College is replaced with the school where she actually earned her degree on scholarship; Boston University College of Arts and Sciences.
Facts are facts. Where she lived or didn’t live is a discernable fact. Fact – (from WIKI) – her family moved from the Bronx when she was five years old to a wealthier location. Fact – her father was an architect; architects are still considered part of the professional class. Fact – BU is considered a prestigious university. Thank you for clearing that up – that she attended BU and not ‘Boston College.’ I wasn’t sure if Boston College was just a lower tier college in MA. Fact – she worked as an intern for Ted Kennedy. Fact: she won multiple awards throughout her school career. Fact – she was able to get a business loan from some incubator.
IMO, AOC was very well connected by the time she left school. She is the sort of person who would have had multiple job offers, likely across different industries. Her move to work at a low paying jobs is highly unusual, regardless of her father’s death and foreclosure issues. IMO, her working as a waitress/bartender was just window dressing for her long planned run (for something).
And the window dressing has worked very well as evidenced by the posters here.
I guess I am being blocked somehow. My 1st response, which detailed fact versus fiction, did not post.
Thank you for clarifying that It was Boston University, and not ‘Boston College.’ I thought WIKI said “Boston College.” Is there something wrong with BU? Is it not prestigious?
I entered the workforce the day after I graduated from high school in 1986, in a small town in central British Columbia.
My Mom kicked me out of the house (“Son, you say you’re grown-up. Okay, now go make your living!”). However, she did help me find my an apartment and paid the first month’s rent for me. It was $195/month, partly furnished, including hot water and electricity. The plumbing and wiring were a bit dodgy, but there were no vermin.
Canada as a whole had double-digit unemployment during the 1980’s. Small resource industry towns were above the national average. Of course, the youth unemployment rate was always higher still. The only jobs advertised in the local paper were skilled positions such as millwright or heavy-duty diesel mechanic.
My job search was all pounding the pavement, door after door. Most places weren’t even taking any more applications, although some people went through the motions of adding me to a waiting list. All you could do was go round and round, hoping to walk in someplace on the day somebody else quit.
I found out what the labour market is like when you have no credentials, no experience, and no connections. The world tells you that you have no place in it. It can become hard to face people when you haven’t got a job, and I felt that I had to keep my fear and shame and loneliness to myself.
It took nearly two months for me to finally get a job washing dishes at a busy highwayside restaurant for $4 an hour.
I worked alongside some colourful personalities. The kitchen area was enclosed, so we could yell whichever foul, mocking, or spiteful words the occasion demanded. I pity restaurant workers whose kitchen area is visible to the public, since I can’t imagine doing the job without swearing and kicking things.
The whole business bore some resemblance to the life of a plongeur described in Orwell’s Down and Out in Paris and London.
I netted about $450 month, depending on my shifts and whether they needed me to do some overtime.
Rent was $195. My telephone bill was $10/month (local use was cheap, but long distance was unthinkably expensive–something like 27 cents/min even after 11 PM). Groceries were about $25/week. It being a small town, I had no transportation costs. Laundry was 50 cents per washer load and about 75 cents to dry. I didn’t smoke (cigarettes were about $2.50 a pack at the time).
While Canada has universal medical insurance, in BC one must still pay modest individual premiums. In 1986, I think it was about $140 a year. Still, for someone making $4/hr, it was an unwelcome expense.
I couldn’t afford anything in terms of dental care (not covered by Canadian medicare). My wisdom teeth came in, and while thank God I didn’t need them removed, it was still painful, and they pushed the rest of my teeth out of alignment.
Income taxes in Canada were higher in the 1980’s than today. Even at $4/hr, I paid some income tax, since the basic exemption was only about $3600.
Nevertheless, I could get drunk about once every week or two (a 26-er of bourbon cost about $14), and still have a bit of money left over at month’s end to buy a few books. My town had a couple of good bookstores with a lot of highbrow literature.
The next year, I remember that I was able to buy a 12-gauge. At that time, in the BC Interior, the life of a lower class young man revolved around automobiles, firearms, and alcohol. However, in my circle, we might have been talking about Sartre or Tacitus, while we were out drinking and shooting.
It reminds me of how free society was back then. To get a gun, all I had to do was walk into the RCMP station and fill in a form. A week or two later, the permit arrived in the mail.
It wasn’t a bad life, although there was no obvious way through to anything else.
In my case, since I had been good at school, I had some scholarships and bursaries that eventually ended up taking me down south to the university in the big city. But frankly, I had many more stimulating conversations in the staff room at the restaurant, than in most of the seminars of my undergrad years.
It was in the summer of 1996 that I remember seeing for the first time in my life a “Help Wanted” sign in a window in Vancouver. I stood there and stared at it for a couple of minutes.
Today, jobs here are plentiful, but housing and food costs have risen faster than the wages of unskilled labour. Moreover, the scheduling is less regular and the hours are more variable than was the case when I was at the bottom of the labour force. Finally, the low-rent apartments are more likely to be verminous nowadays. So comparing like to like, for a proletarian initiate, I would say that things probably suck more than they did 30-odd years ago.