I address the question from the standpoint of real (inflation adjusted) hourly earnings and assets, specifically home ownership.
Real Hourly Earnings Chart Notes
- Hourly wages are adjusted by the Consumer Price Index 1982-1984=100
- Private workers make 7 cents more per hour than a year ago, 4 cents more per hour than two years ago, 24 cents less per hour than three years ago, and 61 cents less per hour than in March of 2020 during the pandemic.
- Production and nonsupervisory workers make 7 cents more per hour than a year ago, 15 cents more per hour than two years ago, 6 cents less per hour than three years ago, and 37 cents less per hour than in March of 2020 during the pandemic.
Those are my calculation, but they match calculations from the BLS Real Hourly Earnings Report for March of 2024.
Quick Hourly Earning Synopsis
Private workers make 7 cents more per hour than a year ago, but 61 cents less per hour than four years ago.
Production and nonsupervisory workers make 7 cents more per hour than a year ago, but 37 cents less per hour than four years ago.
Four years ago you may not have had a job, especially is you worked in the restaurant or hotel industry. However, please recall that the government paid you more to not work than you made working.
Hourly Earnings and Real Hourly Earnings
Hourly Earnings and Real Hourly Earnings Synopsis
- Today, private workers make an average of $34.69 per hour, up $7.97 from four years ago. But inflation-adjusted wages are down $0.61 per hour from four years ago.
- Today, production and nonsupervisory workers make $29.79 per hour, up $4.80 from four years ago. But inflation adjusted wages are down $0.37 per hour from four years ago
The total private data series only dates to March of 2006 but the production and nonsupervisory data goes back all the way top 1947.
A relative high point was in February of 1973. Production workers made $4.05 but that is nearly the same as making $29.79 today.
Inflation-adjusted wages were $9.38 in 1973 and they are $9.72 today. That’s a total increase of $0.34 in 51 years!
Do You Own a House?
Things change greatly if you own a house or invested in the stock market or land.
Chart Notes
- National and 10-City Case-Shiller home prices hit new record highs in August.
- OER, CPI, and Rent are indexes measured by the Bureau of Labor Statistics (BLS).
- OER stands for Owners’ Equivalent Rent. It’s the price one would pay to rent one’s own house unfurnished and without utilities.
Case-Shiller measures repeat sales of the same home over time and the indexes attempt to weed out major home improvements.
Case-Shiller is a far better measure of home prices than median or average prices which do not factor in the number of rooms, location, lot size, or amenities.
Home Prices Hit New Record High
I discussed home prices on March 29, in Case-Shiller National Home Price Index Hits New Record High
The Case-Shiller national home price Index was 338.4 in March of 2020. As of January 2024 (the latest data), it is 493.0.
That’s an increase of 45.7 percent in just under for years. And you were able to refinance at or under 3.0 percent too.
Refinancing put extra money in your pocket every month since. That supports consumption and inflation.
The CPI Rose Sharply in March
The CPI rose 0.4 percent in March. Rent is up another 0.4 percent in March with gasoline up 1.7 percent. Together, the pair was about half of the total rise.
Earlier today I reported The CPI Rose Sharply in March Led by Shelter and Gasoline
Please click on that link for details and more charts.
Yet Another Groundhog Day for Rent
I repeat my core key theme for over two years now. People keep telling me rents are falling, I keep saying they aren’t.
Rent of primary residence, the cost that best equates to the rent people pay, jumped another 0.4 percent in March. Rent of primary residence has gone up at least 0.4 percent for 31 consecutive months!
The Economy is Election Issue #1
In the Wall Street Journal Poll, it was unanimous, and by large scores, the economy is doing not so good or poor (first horizontal yellow highlight).
Across the board, more respondents in every state said their economy was getting worse than better. In Arizona and Pennsylvania, the margin of getting worse than getting better was more than 2-1 for getting worse.
Other polls distinguish between the economy and inflation. Some people confuse the two, and they are closely related.
In those polls, I think you need to sum answers of “the economy” and “inflation” together to see what is on people’s minds. Then you need to check those answers to the 6 or 7 states that will decide the election.
If Biden Loses the Election, What Will Be the Top Reason?
I discussed the economic aspects in If Biden Loses the Election, What Will Be the Top Reason?
I keep returning to the economy, specifically housing, that will determine the election.
Blacks and those under the age of 35 have been priced out of buying a home. They may vote for Biden anyway, but not in the same percentages as in 2020.
People are upset about immigration nationally, but this is not an national election. What are voters in Pennsylvania, Wisconsin, Michigan, Nevada, North Carolina, and Arizona most concerned about.
In those states, Immigration is only a big issue in Arizona.
Trump Ahead in Swing States
For more on the recent WSJ poll, please see Trump Leads Biden in 6 of 7 Swings States, Pennsylvania is Key
There has not been a single poll suggesting housing specifically.
But call it housing, the economy, or inflation, it all boils sown to the same thing: The economy, in some sense (inflation, real wages, or housing), will decide the outcome, not immigration.
You might be better off than four years ago, and if you own a house you probably are (and then probably view immigration as the top issue).
But it’s the economy that will decide the election in the states that matter.
A little more pain at my dominant side, about belt level.
Note to self: Must find new CCW holster, maybe nylon.
#ConcealCarryEveyday
I suppose it all depends on the base years chosen—eg. BC or AD—and your sex and social location on the planet—eg.slave, serf, lord, warrior, chief, sultan, king, dictator, camp town lady, the Tenderloin, Senator Tee Pee Squaw etc.—and what’s measured over time—eg., prenatal baby killing, weapons of mass destruction, science, politics,ideologies, money or barter for funerals and grave diggers, etc..
Personally, I am doing better in real terms than 4 years ago. Quite a lot better.
However, the market I operate in is relatively niche, with high barriers to entry, and has suffered an exodus of people retiring in greater numbers than there are people able to replace them. There are huge shortages of people to even train new people. The amount of skills and certifications needed is a bit daunting, but the perquisites of the job are very real and still good – but less good than they were… Many become contractors but find that they are picking up dregs of jobs that others don’t want to do, and facing strong resistance from some companies to pay a day rate that matches rises in costs over recent years; or companies try to limit the number of days. Some companies have barely increased day rates for years, and moan constantly. So, despite the demand and shortages of people, in real terms, day rates have fallen, and many companies advertising staff jobs are really trying it on with low wages for such a niche job. I don’t think they can get anyone experienced at those salary levels, and they resist training people up. So it’s a boon for contractors. However many from cheaper countries in eastern Europe, and Southeast Asia (e.g.: Malaysia, Indonesia), India and Africa (e.g.: Egypt, Nigeria), even Latin America (e.g.: Mexico and Brazil) are being used to keep rates down as much as possible. It’s only the visa issues that keep them from flooding the market. One consequence of this is the impact on health and safety and productivity. The best training and trainers are from the UK, and the UK is not protectionist like USA, Canada, Australia, Brazil etc ..
I think there is a limit to how low you can go before things stop working, and expensive problems start happening, so I think the need for skilled and experienced people from countries with proper standards, like the UK, will continue. USA lacks the skillsbase and professionalism of the UK, in my field.
I’m better off since I live in East Asia. If I were still paying for obese hoochie mamas and their obese children, a pathetic armed forces, teachers who teach nothing, a justice system that doesn’t enforce laws, and so on, maybe life would involve worrying about violent criminals, high gas prices, funding Ukraine & Israel, etc. Instead, I get first-rate infrastructure, practically zero crime, very little obesity, no brood mares and their progeny to keep up, excellent public transportation, excellent internet, and just a really good life.
Mish, your assessment may be correct, but the midterm 2022 elections suggest that party affiliations trump even ‘it’s the economy stupid’ previous conventional wisdom. We’ll see.
“Are you better off than you were four years ago?”
Yep.
Here in the big city, crime is Spiking big-time. I aint been robbed yet, so yeah so far, I’m doing better than most.
Cool story bro.
In dollars I’m somewhat better-off now than 4 years ago. The pandemic set-off what had been a more subtle deterioration of functional entities that have to be dealt with as part of everyday life or from time to time. That’s made it hard to have a positive outlook. Paying more for bad service, shortages, etc. is what it is.
I’m doing much much better than 4 years ago. However, this has nothing to do with Biden or Trump but everything to do with the choices I have made.
Also, I think people commenting on a financial blog will skew the answers, since people who read a financial blog are largely investors, who are going to be actively looking for ways to get better financially.
Your average Joe on the street is definitely NOT doing better.
Youtuber German in Venice. Week ago he was in downtown Beverly Hills, pointing out a number of empty store fronts on streets off Rodeo Drive. Didn’t know things were that bad, there.
Story on KTLA last nite.
“qualifying income needed to afford an average home”
San Jose-Sunnyvale-Santa Clara: $425,614
San Francisco-Oakland-Berkeley: $310,029
Los Angeles-Long Beach-Anaheim: $256,286
It prices most people out of the market.
Also last nite “Water rates, taxes to increase, L.A. Times reports””The MWD will raise its water rates for cities and retail suppliers by 8.5% in 2025 and again by 8.5% in 2026.” Property tax is also supposed to increase, related to upgrading water system to capture or recycle water.
There is an effort underway to save the hundred some 99 Cent Only Stores in California, though.
Maybe the question should be “Is the government working for you or are you working for the government?” What are we getting for our tax dollars? Funding foreign wars that have more deleterious effects than beneficial; funding all manner of things for illegal invaders that government does not provide for its citizens; funding importation of mafia like operations dealing in drugs, human trafficking and all manner of crime; funding government functions detrimental to our wellbeing like education, medical (covid a prime example), environmental promulgating costly requirements with little or negative benefit; economic where statistical veracity is dubious at best rules and regulation are in support of failed policy and wealth is stolen from citizens via inflation fully controlled by government policy and enabled by the corrupt federal reserve operating to support their owner banks and not the citizens; and the list goes on and on. Will Rogers said it was a good thing we were not getting all the government we were paying for, maybe it is time to start jettisoning whole components of the government as most are no longer competent.
Four years ago I owned two single family homes and one boarding house in Maryland where I lived. Today I still own them but the rents have increased dramatically. I have also added one small apartment building and an estate in Brazil that I paid cash for. Im doing okay but I cry for the younger people, theirs is a world without a future.
This is unsustainable. Change is inevitable. Timing is the only unknown.
The sun is the same in a relative way
But I’m older
Shorter of breath, and 4 years closer to death.
Much better off. But I paid off my mortgage 10 years ago. When grocery prices went up at my local chain, I changed to different suppliers (Krogers and Aldis). I drive a Honda Civic which gets 35 mpg so gas prices really don’t affect me. I cut back on insurance so prices didn’t go up. On the other side, I’m heavily invested in the market and stocks are doing great. Wealth and income increasing much faster than costs. It’s the best of times for some of us. Of course it seems like renters, new car buyers, and those who can’t adjust where they they make their purchases are taking it on the chin.
It is, in part, a wealth effect question. Home owners benefit from inflatied home prices. Ditto equities holders. But these folks still have to pay inflated prices for goods and services. Those prices are real, while the former are notional. As long as the bubbble continues, no worries.
The folks who don’t own a home and have little in the way of investments are getting the shaft.
In which camp are/would have been the Biden voters?
Prop 13 came about in California due to rapidly rising property taxes, the result of rapidly rising home prices.
The WEF elites are talking of a Great Reset, so the real question is, what does the end result look like. Webb talks of a “Great Taking,” which implies MF Global on steroids. JP Morgan Chase laid legal claim on the segregated money in client accounts. The average tax payer owes some $333,000 to pay off the federal debt. What is the landscape going to look like when the dust settles? All bubbles burst.
Not even close….
No!
I am better off today then 4 years ago. But there is a reason for that.
After witnessing the insanity that came out of Washington DC aimed at derailing Trump presidency only thought in my head was wow these people are some really sick in the head bastards. That perception continues today. Biden getting installed in WH clinched it for me.
I have been proactive as consequence for past 7 years. Put in home orchard, Kitchen garden space for food, eliminated consumer debt, drastically reduced mortgage to where it does not feel like anything as of now. Put off building retirement home which was planned for many years.
Had thought when got to the golden years would be able to relax some. In a way have achieved that goal but not in manner that occurred.
Home orchard has been pure delight as Trees continue to put on amazing bloom in succession as various different fruits flower. Still eating frozen french beans, tomato sauce, greens from cold flats all winter plus other fruits and vegetables stored away.
Grow your own food better then 5 star restaurant quality.
None of this would have occurred if not for Coo Coo birds of Washington DC
Not such an expensive thing to do putting in Gardens. Local municipality generally gives away compost. Local supply yards take in leaves and wood that gets chipped turns field waste into mulch or compost.
Buy bare root trees in spring, semi dwarf root stock if you do not have much land.
1/4 acre garden and orchard can feed family of five if one puts in time.
Go fishing more, use the bones for fertilizer. Good excuse to tell your honey why you have to go fishing so often.
Be careful using the municipal compost. I did that and they made it from grass they collected.
Grass that is collected is full of herbicides which will destroy your garden. Unless you know that’s free of that, don’t use it. I did when I first started and nothing grew for like 4 years in my garden. Everything was yellow and sick until it finally bleached out of my garden through heavy rain. Took forever.
Got a good point there. I do my best to get leaf compost or old decomposed wood chips. Am friendly with a tree cutter so I get chips when need them delivered free. It costs the guy to dump so he is happy to unload at my place.
At this point mostly just sheet compost. This way top dressing keeps weeds down, captures rain, builds up soil microbiology. Orchards do best with a fungal rich soil.
Also started with planting trees on top of a Hugelkultur. Had to as very sloped hillside all rooted up so had to hand dig in everything. Found it easier to just build up on top rather then work ground. Takes a few years but old stumps rot away and this way soil does not wash out. Old roots hold until new growth gets going.
Trees doing quite well and it takes about 3 to 4 years for grafted variety stock to flower then set fruit. Better then waiting 7 to 8 years from seedlings. Plus can get heirloom varieties which have much disease and insect resistance built into their genes. Some cultivars as old as 400 years plus. This is how things were grown before modern chemical based farming came to be.
Since others read post figured it wouldn’t hurt to throw in some introductory info.
“Not such an expensive thing to do putting in Gardens.”
Rising cost of food going to ignite opposition to the pinheads in charge.
Why are we surprised by the inevitable?
ALIGNING EXPECTATION WITH POSSIBILITY
Why is the world at large so often “surprised” when the materially impossible doesn’t happen?
In economics, the consensus line – a narrative shared by government, business and, for the most part, the general public – is that the economy will carry on growing as we shift from climate-harming fossil fuels to cleaner alternatives such as wind and solar power. This process, boosted by advances in technology, will increase our leisure time, and give us more money to spend on discretionary (non-essential) products and services.
In reality, none of this can happen, yet we keep being “surprised” when it doesn’t.
Renewable energy cannot replicate all of the economic value hitherto sourced from oil, natural gas and coal, and the supposedly “green” credentials of renewables are, to put it mildly, highly debatable. EVs can’t replace all of the world’s ICE-powered vehicles on a like-for-like basis.
As top-line prosperity decreases, and the costs of energy-intensive necessities carry on rising, the affordability of discretionary products and services will decline. A string of sectors and activities widely regarded as highly growth-capable are, in reality, heading into relentless contraction.
This same process of affordability compression is going to undermine the ability of the household and corporate sectors to service, let alone honour, their enormous debt and quasi-debt obligations.
In short, the much-cherished consensus view of the economic future is founded on a series of material impossibilities.
link to surplusenergyeconomics.wordpress.com
I am better off but I have assets and debt-free. My taxes stabilized two years ago but I do pay more for electricity. I am, however, four years older and that really sucks.
The tragedy as far as inflating out of a debt crisis is in just that one chart showing real hourly wage at $11.11 compared to the wage 4 years ago at $11.72.
At least Walmart has some good deals now on computers and LCD televisions, if you want some distraction from this :-/
72 yearold Boomer retiree here. Own our own home and have fixed income from investments. health insurance costs plus medical costs for myself and wife plus state , local and federal taxes and levies, energy cost and utility costs, maintenenace on the house mean that our investments will pare down to our income is at poverty levels by the time we turn 84. That is, if we don’t need to renovate the house.
Lost 35 – 40% of our retirement nestegg 2007 – 2010. Didn’t recover to previous 2007 levels while we were still running own own business.
Fincial advisor has advised us to sell the house when we reach 80 – 82, then rent and live off the gains from the sale of the house.
Bought a new vehicle in 2018. Yearly insurance for it was $2,800 – due to complex technology, plastic and aluminium panels. Sold it – our second 2010 vehicle with only 50,000 miles – insurance is only a $600
What have you left your grandchildren?
Not asking about a financial inheritance. Asking about if you left the public roads, infrastructure, hospitals, transportation networks in the same condition as when the WW2 generation gave it to you?
Have you left your grandchildren viable and globally competitive industries (aka jobs), like the WW2 generation left to your boomer generation?
Have you left an affordable, world class education system – like the WW2 generation left to you?
Have to left an affordable health care system – like what the WW2 generation left to you?
Or have you left your grandchildren $200 trillion in debt that you took out, and left them no way to pay for it?
– Not asking about a financial inheritance. > Whew, I thought that was mandated now too, like College and Wedding expenses have become.
– Asking about if you left the public roads, infrastructure, hospitals, transportation networks in the same condition as when the WW2 generation gave it to you? > Wow, I had not realized we were personally responsible for all of that? I thought elected politicians were supposed to be on top of that? Man, my Family members, and I have a long string of them, left us a “Free Country” but thankfully with technology and due diligence of those literally centuries before them, we are not left with what they had. Thankfully the last few generations got smarter, wiser, and more advanced, so we move FORWARD every year and don’t stay in the past.
– Have you left your grandchildren viable and globally competitive industries (aka jobs), like the WW2 generation left to your boomer generation? > Hmm… and here I was given the credit to the people living and creating those differences. Globally was their job too? I don’t know, but war, after war, after war wasn’t, and isn’t doing it for me…
Enough…
lol, it’s someone else’s job. yeah, we have managed to elect many people just like you.
Mish, lets make your charts a little more meaningful, shall we?
You showed us the average CPI adjusted wages for Joe Average, and for Joe CEO … and how they changed over the last 20 years or so.
What about the CPI adjusted wages of government employees? They have much lower productivity, shorter working hours, and much higher benefits (both during and post employment). So lets see how our so-called “public servants” have fared over the same 20 year period?
Yep, almost every CEO gets stock options. So does Nancy Pelosi, and she gets insider trading info too. Every member of Congress magically gets appointed to a corporate board of directors upon “retirement”, complete with stock options and stock grants. Pentagon “officers” all end up on defense contractor boards, or getting very lucrative Pentagon consulting contracts. The political class takes care of their own.
But what about the wages of rank and file bureaucrats? They get COLA adjustments every year, always *up* (even in recessions). Joe and Jane Average sometimes get COLA adjustments (sometimes not), and they always get pay cuts during recessions.
Lets compare how Joe and Jane Average are doing, compared with the unelected bureaucrats who treat us like dirt on the bottom of their shoe.
The class warfare charts, between management and labor, is very deceptive unless you include the third group: the bureaucrats.
While the average Joe/Jane have seen cuts in pay (inflation adjusted), how have our public servants fared? That needs to be on your charts
Today’s public unions (local, state, federal) produce a very low quality “product” (service?) and its vastly overpriced relative to foreign governments. When taxpayers complain, the public unions whine about not getting another bump to their pensions. Elected officials always takes good care of themselves.
There is too much resemblance to 1970s Detroit. The entitled UAW whined about their pensions. Management gave themselves generous pay. The product was very low quality and overpriced.
At first, Americans were reluctant to buy Hondas and Toyotas and Volkswagons and so forth. But the constant neglect and abuse of Detroit (both management and UAW) eventually made imported cars the market leaders.
This will trigger many readers — but Trump is a Datsun (if I remember, the first Toyotas came under the brand name Datsun?). Right idea, not so great packaging. Americans are reluctant to give up their loyalty to “the gub-ment”, especially the welfare class (corporate and individual), but we can’t afford to keep this crap going.
Over the next decade or so… There will be a lot of inflation. Public unions will get decimated. Corporate welfare will go the way of Oldsmobile, individual welfare will get scaled way back. The Pentagon’s “market share” will be decimated.
I don’t know if this is what US voters necessarily want, but we haven’t left ourselves much choice.
Yeah, I’m great!
Hell NO!!
The Hidden Costs of Homeownership Are Skyrocketing
link to msn.com
Nice article. This is what makes me think eventually capitulation will hit in real estate.
I interrupt this discussion for an important news bulletin
Sales of Volkswagen electric cars have plunged by almost a quarter in Europe as demand for battery-powered vehicles stalls and buyers return to petrol.
link to finance.yahoo.com
Guess what this means for those who got played by the hype — and got suckered into paying Big Bucks for an EV….
It means… the already cratering resale value of your pathetic contraption … is gonna plunge further… cuz very clearly demand for EVs is imploding…
This will force manufacturers to further reduce the price of a new EV… which is gonna cause your resale value to fall even more!!!
But wait — there is still some demand for the contraptions … Volkswagen still did find some suckers to buy some EVs….
However Word of Mouth is powerful… and potential suckers are now finding out that the hype… was just that hype (kinda like how they found out that Safe and Effective was a lie…) …. so they will have zero interest in buying an EV…
The new hype will be — and it will be based on reality this time around – is that EVs are a boondoggle… they are an expensive hassle …
And then the real crash in prices will occur — cuz then buyers will be few and far between…
And that ultra expensive contraption the fools got suckered into buying …. will be worthless.
Unfortunately … the monthly payments will not vapourize… so the suckers will be forced to drive the contraption — with the battery that degrades every single day … till the range of their worthless junk… can barely get them to the supermarket and back.
MISH TOLD YOU SO…. LOOK BACK AT THE ARTICLES.
No
I’m better off, but if you’re a woman of childbearing age, maybe not. Don’t think women angry about the Supreme Court decision are going to sit this one out.
The blowback is going to be visceral when it happens. Hell hath no fury like a woman scorned.
Governor Pritzker welcomes out-of-state abortion tourism to Illinois. And if one goes to Chicago, maybe 2 dead instead of one.
I’m personally better off today.
Not if you took multiple covid vaccines… it’s a blood bath out there.
In memory of those who “died suddenly” in the United States, April 1, 2024 – April 8, 2024
Rockers Michael Ward (The Wallflowers), Keith LeBlanc (Grandmaster Flash), CJ Snare (Firehouse); “Creature Shop” head David Barrington Holt (C); Howard Stern personality Crazy Cabbie; & more
link to markcrispinmiller.substack.com
I’m sure none of these people were taking drugs or drank excessively and were in tip top condition. They were all such models of great health.
I’m sure you didn’t read it:
Vontae Davis, a former NFL cornerback who became famous for his decision to retire in the middle of a game, has died suddenly at the age of just 35.
Schnecksville, PA – Talia Patricia Shumway, 15, of Schnecksville, passed away unexpectedly on Wednesday, April 3, 2024, at her residence. Talia was a 10th grade student at Parkland High School and also enrolled in a nursing program at LCTI.
Watertown, New York – Kyla Justine Spencer, 18, of Academy Street, passed away unexpectedly in the Town of Pitcairn. Calling hours will be held from 12-1 pm on Friday, April 12, 2024 at Reed & Benoit Funeral Home. A memorial service will immediately follow at 1 pm.
A college community is reeling after a popular young senior was found dead on campus just hours after it was sent into lockdown by a bogus active shooter alert. Politics student Christian Samay, 22 [third from left], was pronounced dead on Saturday in his frat house at Bucknell University in Pennsylvania in what college authorities say was an unconnected incident. It remains unclear how the young student died.
Utica, NY – Lt. Sean Michael Dougherty, Ret. UPD, age 44, passed away unexpectedly on Tuesday, March 19, 2024, in the dignity of his home.
Obviously, the “average American” is much better off in April 2024 than in April 2020. The real hourly wage chart at the beginning of the post makes no sense because real hourly wages in April 2014 jumped by almost 10 percent relative to February 2020 because low-wage workers got laid off in droves in March and April 2020. All asset classes have soared since April 2020. But the point is you are only better off if your human capital was up to snuff, if you owned a house, and if you happened to be in the stock market. And that’s where the “American system” fails a large chunk of its population: the education system hasn’t worked for a lot of people in this country, and home and stock ownership depends on how much human capital you have. It’s education, stupid! And none of the present parties (and certainly not a dumb head like Trump) has any bright ideas on how to get the bottom half of America more educated.
Purely financially, I’m slightly better off than four years ago.
Otherwise no appreciable change.
50 years ago, one family member worked and the whole family lived comfortably
in a house and with a car. Today two family members have to work to survive.
House prices are out of reach of millennials.
? Inflation
Yes. But in the last 50 years, global competition and the demise of unions has made a one-earner family a much more difficult proposition.
50 years ago there were about 1/10th the health care choices and treatments there are today and houses were 1/2 the size of today.
Also, there were no computers, cell phones or computerized cars (which has tripled the cost of manufacturing one).
So yes, if you live a life like you did in 1950, one family member can live comfortably on a 1950’s definition of comfort.
It’s all the things that have been added to household expenses since then that make the greatest difference, even including for inflation recently.
I don’t buy that argument because it’s the big ticket items like housing and food and the break the bank, not computers and cel phones. I’d have to make at least 250k a year, if not more, to support my family 1950’s style. That’s with no cel phones or computers, btw.
Other factors: houses are 40% bigger now than in 1975, more restrictive zoning laws and cities/homebuilders want a more expensive product.
And the purchasing power of my dollar has dropped like a rock under Biden: link to ycharts.com
Wow, from 33 to 32 in one year.
My friendship circle is diverse economically. Overall my circle is a bit poorer and far less optimistic about living in the US than 4 years ago. Many are convinced that the Nation will fragment or become a overt military dictatorship. Few of my circle are confident that the Nation’s problems will be resolved without intense suffering. None believe that US foreign policy is in best interests of their children and grandchildren.
This statement is deeply flawed, even racist when made to sound like it applies toe very member of a class. Needs a bit less over-generalization… suggest adding “Disproportionate numbers of ” to the front end:
“Blacks and those under the age of 35 have been priced out of buying a home. They may vote for Biden anyway, but not in the same percentages as in 2020.”
Yes, I’m doing way better. Nice raise, stock grants, investment portfolio is up, cash keeps rolling in. Actually, with so much cash rolling in, it is getting harder and harder to find a place to invest it all in…no need to vote for any change now.
Do you want to invest in a condo? I got one that has a great rental return.
🙂
(I couldn’t resist)
I will give you $50k cash for the condo.
Burn it in a fireplace before the climate change laws prohibit that.
Mish: Can you work up a brief picture of how those on “fixed-incomes” are better off or worse off from 2020 through now? That is well known by those so situated but a “picture” and “story” around that would have some impact on older voters. It may energize some of their children who must now supplement their survival.
In general – asset holders are better off
non asset holders are worse off
Depends… if you’re in the ownership class, you’re living fantastic. Retired living off inflated investments, great. Own property, great. Live on rental properties, woo hoo. You’re in the top 10%
…and then the rest.
Median retirement savings is $87,000. a great stock market doesn’t move the needle enough in your monthly expenses to cover inflation.
Trying to save for retirement? The absolutely worst time to buy securities for your portfolio buying now.
Buy a home? with Berkshire buying up homes for rent, good luck.
I pay a lot more in taxes since Trump’s tax plan, so screw that.
Inflation? Look at raw material/pharm monopoly’s profits and their margins, and the corp world are CLEARLY fleecing the US.
I could go on with Biden’s progressive woke/BS waste, but that’s saved for elsewhere.
Payroll households have no chance.
I am happy following Mish and the ‘ol FOFOA rabbit hole I got in way back then when I bought gold at $700 and silver at $15 – just for insurance 🙂
I’m not ownership class. I’m working class who worked, saved, and invested. As Warren Buffett once said, “Someone is sitting in the shade today because he planted a tree long ago.”
Literally how some of us became ownership class. Delayed gratification and taking calculated career and life risks. I am ownership now, but that has only become a reality in my 40s. Agree this poll needs some additional granularity. Are you currently any of the following in your respective state:
Ownership (1-10%)Working (11-50%)Have Not (Bottom 40%)Once established, then ask how they feel about the past 4 years and if better off. Majority will still say no and align with the overall sentiment in these comments. The game of wealth accumulation cannot be “won” if you never even know the game is being played or get in it. Most I know don’t even know the game is being played in the stadium because they’re working the parking lots.
Compound interest is a junior high school subject. That is all you need to be taught. The rest you can learn on the internet.
Mixed bag here. Real estate investments have done well, stocks have done quite well, but with both … when you factor in inflation … much less so. And cap gains in inflationary times are a scam.
“Ah, you bought this stock for $20K 8 years ago and sold it for $32K now … so you owe is $3K in cap gains (and the state wants some too)”
“But wait, that $32K has less buying power than the $20K I bought it for?”
“We don’t care, cough up the money.”
On a different note … with the idea (not sure if it’s reality yet) to give people a $10K tax credit for selling their starter home and upgrading (a bad financial move but that’s for a different post) … if they want to turn renters into home-owners … might I propose: “If a person has been renting from you for 6 months or more and would like to buy the house they are renting … and if you are willing to sell the house for $5K LESS than its appraised value … you can make the sale and NOT pay capital gains. Seems like this could put MANY renters into home-ownership with relatively minimal gov’t involvement. Any thoughts?
It would be interesting to structure capital gains as the net of inflation over time. That would only seem fair, and would be decent tax policy. Kind of like the IRS increasing the mileage reimbursement rate each year, based on inflation. All other income is within the fiscal year, so inflation isn’t much of a factor. But capital gains is another thing.
As for the selling-to-renter scheme, I think you have good intentions, but I’m generally not for government policy distortions in markets. Let the market play out and people will figure it out.
No.
Hell YES. Gov Cost of living index Increase
As a group, public servants have neglected the public for decades. I don’t know if that applies to you specifically, but it definitely applies to your profession.
Keep in mind that what goes around, comes around.
The “product” of state DMV, DPW, or federal agency is very low quality, and overpriced even if it delivered what was promised (it often does not).
Keep in mind the UAW thought the 1970s American car buyer “owed” Detroit unlimited pensions for low quality overpriced cars. Detroit of the 1970s treated the American car buyer about as well as public unions treat American taxpayers today.
What if the Fed made an unpected move to kill inflation. It is a possible black swan move to keep the orange man out of the white house and closer to the jail house.
Given inflation is not going down (gas was $4.27 this afternoon) I think another quarter point interest rate hike is in order. And maybe one in June too.
Peak retirement is here, there is no need to fear a slack labor market.
Interest rate hike is a black swan event. I think that pulls the S&P down about 300 immediately, maybe 400 to 500 over a couple weeks. The Fed knows this so I don’t see it as likely unless inflation pops back to over 5%.
Honestly, I think the only thing that will improve things is big time pulling back fiscal policy and the Fed increasing the rate of runoff of their balance sheet, not decreasing.
I think even a quarter point would dramatically shift the economy, and that’s why it’s a 5% scenario for the Fed.
I think a hike won’t do it. They would actually have to remove money from the money supply. It would be a bold move and wipe out a lot of speculators who never thought.Powell would wipe out inflation.
I thunk Powell is the Volcker of this era.
The only thing that will kill inflation is Tsar Bomba.
I’m not concerned for myself at 58 years old, Health is good. finances are better than in 2019; big deal.
It’s not about me, I am concerned for the next generations.
$35,000,000,000,000 in national debt overhanging future generations. And there’s another estimated $250,000,000,000,000 in unfunded future liabilities for “off-budget” programs such as Social Security, Medicare, Medicaid, Military pension, on and on.
All of this government money spent just to turn us into a Mexican Country.
Better off despite depleting savings. Why ? We had more savings bc of covid because we generally didn’t go out. Better is not just a financial view on things. I enjoy that we are able to go out, travel more and spend more. Life is better this way than it was in 2020.
Worse Off.
Kind of funny to see how many of these yes I’m better off posts have nothing to do with the economy and everything to do with a nascent housing bubble….and before you cry sour grapes I bought my house in 2011 but I sure as hell think affordability being the worst ever is not some reason to beat your chest as an owner. Quite the opposite
Much better off – retired, own my home and have benefited from the stock market rally. My children also doing better, in part they all own thanks to me giving them a substantial part of the downpayments – one is in a job that now offers health insurance so is actually insured for the first time in 5 years, one is currently selling and looking at a substantial gain. Moving to a cheaper area so may be able to move into a nicer place. All have modest condos but have been saved from the rent trap. But we are all living well.
In answer to another question. Are they living as well as I did at their age and the answer is no.
Inflation has far exceeded wage gains for me and no question quality of life is lower in general for most I know.
Inflation is up, taxes are up, the national debt is up. the size and scope of the federal government is up, illegal immigration is up, the threat of terrorism is up… Yup, the tag team of Joey and Kammy have done their job.
Thank you! Its unbelievable, my husband says you bought a lot. Yikes bread, milk, lots of veggies, and one piece of meat. Toilet paper was $12, up from $9 at Walmart! I tried to remind him the carts around me that must be $300 or more. Mine was $180. Unbelievable! TWO Amazon bags (which are big) were $180. Yes TP has doubled, I buy bird seed, that’s more than $200. I don’t know how people can afford it. We are retired, but we have multiple IRA and retirement accounts, but we have frozen our income. Energy has doubled, and so has water in the last 2 years. My sister believes Trump is dangerous, his big mouth, but dangerous is an internet scam. How do you explain this? People believe global warming caused the solar eclipse, I feel like I’m living in the 1500s when scientist went to prison for stating the Sun is the center of the universe? This is the mindset we are up against.