I feel like software has been an outlier here for a decade; the only place where traditional economic intuitions still apply (semi-smart people can work hard, learn a technical skill, find a job in their field, pay off their loans, make more than their parents, afford a house, and have a comfortable personal life and relatively fulfilling work life)
Everything I've heard from the rest of the economy is that this model is dead
Fair question, it’s a mix: IT admin, manufacturing project manager, primary school teacher, tree surgeon, mortgage advisor, doctor, something in finance, secondary school teacher, plumber, software developer, power electronics engineer, charity sector project lead
Okay, so a lot of ~£40k a year salaries (outside of medicine and finance) to afford a £400k house when your parents might have had a £20k salary to afford an £80k house? There's a real disparity when you consider what they did too. If your parents are anything like mine, they were in the pub 4 days a week, drinking and eating with friends. I can managed that just a few times a month. Wealth compared to income from my experience is significantly lower by .lost metrics.
Maybe you have an exceptional friend group because .. outside of your anecdata .. the statistically average salaries for many of those professions over large sample sets is below the median in the us and they are definitely not seeing their purchasing power increasing yearly
>they are definitely not seeing their purchasing power increasing yearly
In the US? Real Disposable Personal Income has been growing very consistently over time [1]. The rate of growth did stagnate between 2000 and 2013 but the trend has been remarkably consistent.
it claims that the average person has 50k usd in disposable yearly income - there's no way that's after housing and other non optional expenses have been accounted for.
using this measurement, if wages go up 5% but rent goes up 50%, it would still look as if people have more money to spend than before.
Certain industries now are at a point where they are paid a ton. Jobs like the trades, piloting boats or planes, that sort of thing. Your schedule might look a bit irregular, but the path to say a quarter a million a year is far more realistic today for someone who is a pilot vs someone who takes a white collar job.
That phenomenon was not always apparent. Growing up, I was told specifically to avoid those sorts of jobs and go for white collar, informed by a generation where those sorts of jobs were a lot more dangerous and less compensated. In some companies over the last century we went from say building floors of modestly paid draftsmen and a few highly paid white collar classes managing them to floors of modestly paid white collar people fiddling with excel and a few highly paid certified engineers doing the actual technical work. The dynamic has changed.
It also depends on who your parents are. My parents at my age were poor working class. We had a much smaller house (800 sq ft), used cheap cars, cheaper clothing, etc... My dad spent a lot of time fixing our cars (I don't even try), fixing plumbing issues, and we rarely ate out (and never DoorDash'ed!). I was lucky to get some quarters to go to the local arcade to play Pac Man.
My point -- even being slightly lower middle class now would feel like a good jump over my parents. That's just pointing out that comparisons to parental income is very relative.
"the only place where traditional economic intuitions still apply"
Which economy? In the US, healthcare, public schools in some states, and B2B sales come to mind as decent jobs. But I agree with the general sentiment - there do not seem to be great choices that support a nice life. Quite a few of my friend have to work multiple jobs or double shifts to make it work.
Most healthcare jobs don’t pay particularly well. The inefficiency is going to pay the salaries of medical transcriptionists, people handling billing inside insurance and in healthcare facilities etc. Things that aren’t improving outcomes are ultimately why healthcare is expensive in the US.
Just for comparison the minimum wage nationwide in Feb 1, 1968 was 1.60$/hour that’s ~14.61$/hour when adjusted for inflation. Median household income in 1968 was 8,600$ or ~$78,504.90 inflation adjusted and that was mostly single income.
That’s the higher end of medicine, orderlies are making 16$/h. People on ambulances are often making 17$/h. Some nurses make ok money, but starting salary for a school nurse is 20$/h and median school nurse is making 30$/h...
Granted I understand what you mean, but it’s kind of like saying managers make good money while ignoring all the shift managers at fast food joints.
Can we summarize it that 'easy' or 'low skilled' jobs aren't payed better today comparing with the past? Not surprising taking into account demand and population. More worrying is that high-skilled jobs aren't rewording. As for equality.. welcome to USSR, you see how it ended. Now only a few Arabs states have greater inequality.
I wouldn’t call working an ambulance as easy by any metric.
As to inequality, we’ve made this much worse intentionally via things like a tax code that massively favors high income earners. It’s not even that this tradeoff has increased GDP growth or anything the country was growing faster with higher tax rates on corporations and dividends.
Even just theoretically it’s suboptimal because jobs catering to or trying to extract money from high income people don’t lend themselves to automation. Long term everyone rich or poor has been worse off.
> You have no clue about the collapse of the USSR.
I lived through it. We can talk a lot about, but the fact is equality doesn't work. Maximum it gets to is everyone equally poor. And as a result of it there are no startups. You need middle class for this and motivation. Government controlled and own monopolies is also the result of equality. Nobody else has the resources. So commies had to create the economy, few bigger things are easier to manage. Managers aren't interested in risk taking, it's not worth it. Finally everything stalled and fell far behind the rest of the world. There were bright spots, but that's it. Like North Korea today can build missiles and not much else.
Just look around. Probably only Cuba and North Korea are still in true socialism. In both there is a small super-rich class and the rest is, yes, equally poor. Super-rich are pretending to be poor too and invent theories to keep the rest under control. BTW, I'm not sure Cuba still has strong ideology today.
Just as a factual matter I think everyone can agree with these three statements:
The USSR didn’t actually have economic equality.
The US has drastically lower tax rates for capital gains.
Finally, arguing for equal taxation isn’t arguing for equal pay.
As to my actual argument, I’m saying economic growth is slowed through the economic inefficiency resulting from unequal taxation. The point of economics is to make goods and services people want and capitalism achieves this through investments and exchanges of money. But distorting that feedback loop through taxes unequal taxes on individuals or companies is a distortion. Invest in the wrong things and economic growth stalls.
> The USSR didn’t actually have economic equality.
More or less it had. Except for privileged commie bosses everyone poor. "Rich" had cars (!) Having noticeable business was prohibited. Selling own potatoes on flea market, or growing chicken and pigs was fine.
> The US has drastically lower tax rates for capital gains.
In Mass. it's 10% to begin with.
> I’m saying economic growth is slowed through the economic inefficiency resulting from unequal taxation.
Not sure about this. Do you have examples when equal taxation helps?
> Except for privileged commie bosses everyone poor.
By modern standards dirt poor, but by historic standards it becomes more nuanced economically if not socially. Most of the world was just shockingly poor until very recently.
As to equality the economy isn’t just the legal economy. A cop accepts a bribe is making more than a clean cop and greasing the wheels of bureaucracy was really common as was a rather extensive black market fed by production being diverted etc. It’s quite consistent how effectively people learn to leverage what they have to get what they want.
> Do you have examples where equal taxation helps.
You can look at tax rates vs long term GDP growth and see trends but economic growth isn’t clear cut. The best example is cases where tax breaks for the wealthy has been harmful is the UK which is still doing alright but had massive advantages from it’s early industrialization and colonies that it quite effectively squandered.
Why wouldn't the required skill level increase though? I think it's expected that as a society specializes it becomes more and more difficult to get ahead if you're producing goods or services at the lowest level of specialization. With education getting better and technology improving, it's impossible to make rote jobs be economically feasible for anything other than robots.
I feel like software has been an outlier here for a decade; the only place where traditional economic intuitions still apply (semi-smart people can work hard, learn a technical skill, find a job in their field, pay off their loans, make more than their parents, afford a house, and have a comfortable personal life and relatively fulfilling work life)
Everything I've heard from the rest of the economy is that this model is dead