This analysis also ignores actual purchasing power (non-core inflation). Wages may have stagnated, but purchasing power for non-core goods has soared.
Free trade is a powerful cause of both wage stagnation and purchasing power. Sure, eliminate free trade and the working class will see wages go up; but they'll spend those wages on $4000 plasma TVs and $50,000 economy cars.
I'll give up 100% of my silicon-based technology if in exchange I can afford to own some land. Easy choice.
You can't possibly be serious. Why aren't you already in Nebraska, then? There's plenty of land in the United States, most of it dirt cheap (being dirt). If you're not already from the country, you probably don't know why we all left the country. (Myself included.)
I'm not talking about any crappy dirt pile anywhere, I'm talking about owning my own place to live in a community where there are jobs and 1960s technology.
I could move to Nebraska but it is unlikely I could find a job that would afford me a residence.
This isn't about social norms, this is about whether the computer revolution has been worth it for the great majority of Americans.
A lot of Americans would kill right now for a job in steel or coal. And in 1960s America you didn't even need a high school diploma to own a house.
No, I'm pointing out that just owning land isn't enough. If you want to idealize the 1960's, no skin off my nose, although you're probably white and male. And you weren't alive in the 60's.
The only reason to put "owning land" on a pedestal is because you can grow food on it. There's no other reason to care about land ownership. But you don't want to be a caveman and actually grub in the dirt - no, you want to be an industrial worker, apparently. One without silicon technology - just steel and coal. Because that world was just fantastic.
I want land. I want to build my domain. I want to be master of my kingdom. I want to landscape it how I want. I want to pick which trees grow and which get cut. I want to slowly aquire/make the appliances I want. I want to build storage to house my wares. I want to have a machine shop. Honestly, for me, owning land gives me just another creative outlet. It's one more thing to 'Hack'. Do I line the driveway with sugar maples or cypress tress? Do I build a deck with a pergola, or screened in porch. And don't take this the wrong way, I mean actually build with my own hands. Dig holes with my own spades. mix my own mortar and lay my own foundation. A lot of the desire to own land stems from the (perhaps instinctual?) urge to build a HOME, not just a place to stay.
Well, OK, granted - I own my own home for exactly these reasons as well. But I bought my foreclosed home - bricks and mortar and 14 rooms and a carriage house - for $8000, in Richmond, Indiana, two years ago. I make my own freaking job online, which anybody here ought to be able to do.
The only reason to complain about the high cost of home ownership is if you think you must, must, must live right next to everybody else. Well, you can't. Not until you've gotten rich. But the rest of the planet is right here waiting for you to make it your own, and anybody who hangs out on this site should be more than capable of doing good deeds without hand-holding by all the cool kids.
In fact, if you want bricks and mortar in your cheap, cheap house, I heartily encourage you to adopt one of our antiques here in Richmond, Indiana. I'll help you pick one out and I'll even teach you how to mix mortar.
No one is worried about well educated, literate, healthy, young software engineers. And no one should be.
I don't post here about poverty for my own sake. Anyone here can handle themself.
I'm posting for all the people who are in trouble right now and facing homelessness because software engineers made their job obsolete and they have no money to re-educate, no job, and no government help. It's not right to just say these people deserve what they get and should find their own way out or die or become homeless. Our society is wealthy enough that no one should ever be without the basics.
Anyone who can afford $8000 is not in trouble. A huge portion of the population today cannot. (Also, most people don't have the tremendous unprecedented luxury of being able to make money online.)
If you honestly want to live in the 60s, you can pick up 1960s era farm equipment for the price of a song. The job is right there on your land. Commodity prices are strong right now and with no real machinery capital outlay, you'll have no trouble making a living as a farmer.
The items you mention have not increased in price due to trade.
1/2. Rent/land: Remain cheap in the midwest. Very nice 3 bedroom houses in suburban Texas can be had for $125,000; you can easily buy one on a software dev's salary (in other words, 1950s style where the husband as only worker). Insist on living on the West Coast? Well, you can blame the obscene housing prices on a combination of population increase and zoning laws.
3 food. Ok, we're looking at maybe 50% increase over raw inflation from the 1950s. Aside from this being a small increase, most of this increase can be attributed to additional food safety and even more importantly surging price in oil due to larger world population.
4. Education: Sure, it's surged, but again this is due to lower taxes and more social programs, not trade. Besides, education ($60k tuition for 4 years in public school) isn't that bad compared to the the savings on cars alone over a lifetime.
5. Has this gone up? Assuming your spouse was working in the 1960s that is.
6. In all fairness, life expectancy is significantly higher now than 50 years ago.
There are lots of third-world countries that will offer you what you want, but you'll give up (exactly) the LCD TV, your car, and the technology.
If you are good in English, you can teach it in some third-world country, while making some money in the side with the Internet. That will afford what you want.
Repost of something I wrote the other day that I think is relevant:
My very average house today is a huge luxury compared to the very average house my grandparents bought in the 60s.
I have a cable bill, an iPhone bill, an internet bill, a netflix bill, and too many various SaaS subscriptions. My grandparents had none of those.
I also have a much higher power bill to pay for all my consumer electronics and air conditioning, a higher health insurance bill to pay for drastically better health care, an extra car insurance policy.
That's in addition to all the extra stuff I have lying around. 2 cars, not one, both of which are vastly superior and more expensive than what my grandparents had. Superior home appliances. And 1 metric tonne of electronics.
I have so much more material wealth than all but the very richest did just 50 years ago. How could I complain that I'm not better off?
You wrongly equate material possessions with happiness.
I'd easily go back to a 60s quality lifestyle if my wife didn't have to work and I only had to work 40 hours a week to own a nice house.
In the 60s they had most of the same electric appliances that we have today, save the microwave oven, personal computer, and the cellphone.
I'd bet that eating food that can't be heated in a microwave is probably more healthy for you. Losing the PC would be a real loss, especially the Internet. Losing the cellphone is probably worth it, since we'd have landlines and can still call anyone we need to.
You say we have all of these great things, but most of them are not important to living a quality life. Having time to spend with your family without having to have two wage earners working 60-70 hour weeks is worth more than a flat screen TV and a second car will ever be.
Why don't you go back to a 60s lifestyle? It is definitely possible; plenty of people live low impact non material focussed lives.
My point is that there is a reason that it takes 2 incomes to support a household now--All the extra stuff we have. I was refuting the people who keep asking why we have to work so hard just to have a normal life.
I don't share grandparent's views of the 1960s, but the cost of additional material goods are trivial.
The main reason you need 2 incomes to support a household is because you assume you have 2 incomes when building the household. In other words, (if 1 income was desirable), a couple lives in way too nice of a house. They also end up with two nice cars instead of one average one and probably eat out more than they could afford on one income. That's pretty much it; all other costs are trivial.
(Practical example: I'm paying $12,000 a year for a room in San Francisco. Car probably runs around $3,500. In comparison, the price of all my aggregate post-1960 technology -- cell phones, computers, internet, etc. is well below $3,500 -- the price of the car.)
It's not extra stuff, it's the price of housing and education. You might be perfectly fine living in a single room in SF, but what if you have a family and actually care about what school your kids go to? Maybe you don't want to live in a neighborhood where there is crime right out in front of your house all day long.
Totally agree with your point. Look for the stay-at-home dads with working wives and you'll find the people who have more time to spend preparing food and eating together, than money to go to restaurants, or live on take-outs.
It's rent, food, childcare, healthcare, and education. These are not luxuries. Cellphones cost nothing compared to these real costs, which can't be reduced by a "low impact" life.
Food - I read a report recently that said the amount of hours the average person has to work to feed himself has dropped dramatically over the last 100 years.
Rent - accept 60s level housing and you can easily afford it, 1 bathroom each kid doesn't get his own bedroom etc..
Childcare - not applicable if you are living a 60s lifestyle you're wife won't work.
Education - Expensive b/c the govt subsidizes it.
Healthcare - problematic, but only b/c healthcare now is so much better than healthcare then.
Rent -- I've lived in multiple places built in the 1960s and all had enough bedrooms for 2 kids and a separate bathroom for parents and kids. These places were built for middle class families.
This comparison also matters where you are. At least in the SF Bay Area, housing prices have doubled in real terms since the mid 1980s (for the same house!). You aren't getting better housing now.. just more expensive housing. (Note: Such price rises are not the case in areas w/ plenty of land, e.g. outside major coastal metro areas)
> Rent -- I've lived in multiple places built in the 1960s and all had enough bedrooms for 2 kids and a separate bathroom for parents and kids. These places were built for middle class families.
Survivorship bias. The average house has increased in size steadily, just as families have become smaller. People really did have a lot less room then. Houses that end up too small for current tastes tend to get expanded or torn down and replaced.
"...purchasing power for non-core goods has soared."
I've heard this argument quite a bit. I'm not convinced it's true. Is it the case that purchasing power for "non-core goods" has gone up, or that the cost of producing such goods has gone down? More likely the latter, IMO.
Look at the cost of home computers, for example. Most PCs cost a mere fraction of what they did back in the '80s and '90s. That has nothing to do with purchasing power increases, and everything to do with the decreasing cost of manufacturing PCs. Same thing with plasma TVs. Or with any new technology as it moves along the curve from state-of-the-art toward commoditization.
Do the limits in the chart (both parents working and household debt maxed) and your observation mean that increases in consumer demand in the near-to-medium term can only come from increases in purchasing power?
Free trade is a powerful cause of both wage stagnation and purchasing power. Sure, eliminate free trade and the working class will see wages go up; but they'll spend those wages on $4000 plasma TVs and $50,000 economy cars.