I thought I did well for myself, finding myself among the middle class, the end is on the horizon.
Yes there always are.
To Downvoters: This statement is obvious. I'll tell you why then:
In 2008, most of you remember the 2008 crash Don't you? There were opportunities then.
We had the 2020 crash in the Covid era, there were opportunities as well back then.
There will obviously be another crash in this AI hype cycle and the moment the crash arrives, there will certainly be more opportunities from that.
I'll give you a massive head start: crypto, x402 / tempo, energy, and robotics.
Yes, assuming they grew up in a household in the 70th percentile or above [0] income bracket and/or are on good terms with your parents and siblings.
At the end of the day, the family unit matters because intergenerational wealth has always been important.
> I thought I did well for myself, finding myself among the middle class, the end is on the horizon
Are you maxing out your Roth 401K (and if possible) your Roth IRA as well while also keeping fixed costs like rent or mortgage at around 40% of post 401K+IRA disbursement?
If so, you have a shot of climbing up into the upper middle class.
Most HNers and their social peers are in the 70th percentile and above.
Which isn't to say that you're wrong about wealth inequality increasing. The share of wealth controlled by the ultra wealthy IS increasing, but the specifics of how that is playing out are nuanced and, at times, counter-intuitive.
How do you figure that? Do we have any data that backs that up?
Obviously if the poor got richer too that would be even better (that's a whole other discussion), but that they didn't in this case doesn't make this bad news unless you're the kind of jealous person who hates hearing about other people's success.
If the size of the pie is growing then it might be ok for the 'poor'. They get a smaller share of the bigger pie that is still bigger than what they had before.
However if the pie hasn't grown as fast as the inequality has grown, then their share has been on a continuous decline.
The US is not a high pie growth economy.
Rich getting richer can very much better a serious problem when the pie does not grow to keep up.
Many measure it in terms of money and not the sum total of goods and services that they can claim. Infact in lay person literature it is usually measured in terms money (+ liquid assets), at best inflation adjusted if they are comparing different times.
This why one needs to think in terms of the 'pie'.
> if the poor are getting less wealthy in absolute terms that's bad regardless of whether inequality is increasing or decreasing.
In complete agreement with that. I did not realise that my comment conveyed the opposite.
Asset inflation disagrees with you. You end up in a situation where you make more money, and you can buy more stuff, except stuff in a few particular but important categories. For example physical properties.
I think I liked it better when the elites mainly conspired while playing mega golf - having that as the social attractor made for a naturally limiting effect on the imaginations of the people poised to do damage. If you would have gone to most coaches of distance-pissing teams (eg Gold Mansacks) in the 90's and asked for trillions of dollars to buy up all the RAM chips, you would have gotten answers on the order of "Kernel who?!". Now they're like "this guy looks like a serious nerd, we better not get left behind!"
US median real wages, for reference: https://fred.stlouisfed.org/series/LES1252881600Q
If you want to refute the argument, you have to find a graph of wages normalized in terms of the cost of a starter home in areas with active economies. But I suspect that is going to be hard.
Say a typical cost of living is $50,000 per year. If you make $100,000 per year after tax, you can spend that extra $50,000 per year on political efforts - Lobbying, propaganda, political campaigns, soft power, hard power, land-grabs, etc.
If you have a billion dollars, you make about 30 million per year in returns. Cost of living is a rounding error.
Every billionaire is capable of outspending 600 six-figure software engineers, while sitting on their ass all day every day, or networking, or playing tennis. I think they realize this.
Do you think it is dangerous for a civilization when someone can dedicate all their waking hours to amassing power through any means possible, while they have more financial power than 600 middle-class people?
This is in addition there are effects on the civics and reduction in welfare of people. Like many things in economics, inequality is a hard thing to do good experiments on but the data suggest that inequality itself has a host of effects that you're ignoring.
This article is a decent primer on the effect of inequality and what we know and don't know (and also some of the difficulties studying it): https://en.wikipedia.org/wiki/Effects_of_economic_inequality
Edit: there's a lot of literature on this. If you use Google scholar you can find tons of articles talking about the various effects of inequality (though as always with economics, the papers struggle to get good data). Modern economics definitely doesn't view it as an isolated and benign thing.
Post 2020, and now especially with the economy being propped up by AI that appears to be on the verge of killing (or at least significantly wounding) one of the last viable career paths that would allow for homeownership, I've accepted that it probably just won't happen. Same with having children. Somehow having both feels like a pipe dream.
It's also why I'm not shocked that a significant number of startups lately are just young people doing whatever they can to grab some wealth before things get even worse. Overall, there's an expectation that things will simply keep getting worse with little chance of turning around. It'll be interesting (in a morbid way) to see how this affects the kids currently growing up today.
Every company accounts for those things and takes a bite off the paychecks of their employees to cover those expenses.
In america a lot of companies offer those without being mandated and those that don't have to offer higher salaries to stay competitive. End result is that employees that want can user those higher salaries to pay for the vacations or take some time off. And those that don't get to keep the extra money, of course.
The growth is not dramatic, but steady over time:
https://institute.bankofamerica.com/content/dam/economic-ins...
In American mice, perhaps.
[1]https://www.elikarealestate.com/blog/tracing-buying-real-est...
Driven by NIMBYism and some other things, those areas stopped building anything like enough housing, with the obvious result that demand outstripped supply and prices rose, putting them out of reach of many.
That's kind of the origin story of the YIMBY movement, which started forming to fight that trend.
Comparing NYC in the 1970s to today isn't a "big apple to big apple" comparison.
NYC in 1970s was on the verge of bankruptcy [0] and federal receivership, saw 1,000 industrial firms leave annually leading to 500K jobs lost from 1969-76 [1], and saw around 880K residents [2] leave for suburbs or other states. NYC didn't recover until the 2000s [3].
For your discussion, a better comparison should be cities+towns that were rich in the 1970s that remained rich in the 2020s, and cities+towns that were poor in the 1970s and remained poor in the 2020s. Similarly, a better contemporary comparison for NYC in the 1970s would be Detroit or potentially even Los Angeles.
[0] - https://scholarship.law.duke.edu/cgi/viewcontent.cgi?article...
[1] - https://www.polyarchives.hosting.nyu.edu/exhibits/show/strug...
[2] - https://www.pbs.org/wgbh/americanexperience/features/blackou...
[3] - https://www.osc.ny.gov/files/local-government/publications/p...
If the poverty line were to be adjusted to reflect the share that food takes up of income today, from ~30% in 1963 to ~6% today, the threshold for a family of four would go from ~30k a year to ~150k.
More in-depth explanation here: https://www.yesigiveafig.com/p/part-1-my-life-is-a-lie
Should "upper-middle class income" refer to your income regardless of COL, or should it refer to an arbitrary measure of what you can buy with it?
Few people had air conditioning. Cars might last 100,000 miles, if you got a good one. They performed poorly, got awful mileage, and crushed the passenger compartment if you got into an accident.
Many people smoked, and people died younger. Medicine wasn’t as good.
Rich kids might have a giant set of books called an ‘encyclopedia’. It was about the only way to learn things that were outside your circle, there was no internet.
TV came in 3 channels, and you had to be sitting in front of it when your show came on. There was no way to record a show for later viewing.
Of course race relations were much worse then. So were things for women and others. Job advancement wasn’t the same as it is today.
I wouldn’t go back for anything. The poorest people today ( even the homeless, who seem to often have really nice tents and weather gear, relatively ) have it better than in 1970.
I don’t care what things cost. Practically everybody is richer today.
More winners, but even more losers.
But hey, you only ever hear about the winners, so it's great for the image. America is doing great!
On a time scale of centuries, sure. On a time scale of decades, absolutely not.
Yes, perhaps because they are now in the class below that?
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