S/O....what do you think would happen...living wage

[SKL]

As for college costs, yes, it costs more now, but access was limited historically by a lot of factors.  More people attend post-high-school (or even complete high school for that matter) than when I was young, and certainly way more than when my parents were young.  Yes, I know this is partly because employers are requiring college for certain positions.

[Reefgazer]

We dispute our taxes every time we see a neighbor with a similar house and lower taxes; you have to get your butt down to the clerk's office and check every year, but we usually get a reduction in the years we dispute.

Many homes are appraised at incorrect values. One can dispute the appraisal and frequently one can win. There is an "Extra" about that (we see "Extras" when viewers in the USA are shown commercials).  The process varies, from state to state and possibly from county to county, but as I recall, a large percentage of properties are  appraised incorrectly.   That may account for the differential in 2 houses you mentioned, where the tax bill is double.

 

[DawnM]

...1700 sq ft house? That's bigger than we have currently! DId you mean 700 sq ft? I know the house my mother grew up in was about 1100 sq ft, 1 bathroom, and had 6 people in it. (She shared a bedroom with her sister and her grandmother her entire life)

 

I corrected myself in a later post.  Apparently the average size back then was 1000, not 1700.  

 

Of course, this depends on location, etc....

[DawnM]

We're paying 2.9% of our home's value in property taxes.  So $3500 in property taxes would equate to a home value of $121K

 

Yeah, it really varies.  AND this effects how much house you can afford, etc....

 

People moving to NC from places like NJ and NY, where taxes are significantly higher, are buying larger homes down here because they can spend what they used to pay in taxes and put it into mortgage.

Edited March 28, 2016 by DawnM

[Lang Syne Boardie]

 

 

I do know my 38 yo stepson and 18 yo son have it harder in many ways than dh and I did. Growing up they had it easier, but as adults it's harder financially on them. However, I don't like being told that my generation doesn't give two sh1ts about their children and grandchildren. That is simply untrue.

 

I'm not seeing these selfish grandparents, either. In my mother's peer group (same as yours, she's in her early 60s), just among people whom I personally know, I am seeing...

 

- a widow who is giving up her retirement savings to take care of her elderly mother who is recently widowed, who did everything right and had paid-for house, pension, and healthcare, but all of that could NOT keep up with rising healthcare costs. So she needs prescription assistance and home health care, which only her daughter will do for free.

 

- a wife with a disabled husband who is foregoing work to care for him full-time, and while she's at it, she's also caring for a quadriplegic friend in her community who has exhausted his (extensive!) wealth, trying to stay alive, and now relies on friends to care for him and take him to appointments. Both of these men would be dead if not for this highly educated, highly driven and capable woman who has taken responsibility for both of them. She and her husband live on husband's veteran disability and contributions from their (struggling) children.

 

- another wife of a disabled worker who is having a hard time keeping up in his field, decreasing the profit of her home daycare by watching her grandchildren for free so their parents can get on their feet.

 

- an elderly neighbor who is helping to pay for her grandson to go to college.

 

- people from church who pay their grandchildren's sports and activity fees (which, as everyone knows, are now HUGE expenses), and who have college funds established for the grandchildren.

 

- people from church who have allowed their adult children to move home with THEIR children after job losses, career setbacks, marriage failures.

 

My church, which is not in my neighborhood but in the next suburban town ever, does have its share of crazy rich people. But as I get to know them, I am learning that they are not vacationing in Florida, etc. without having taken care of their own people and contributing very generously to the church's charitable programs.

 

In my experience, my parents' generation is pretty freaked out at what their children and their very elderly parents are facing. They're trying to see what they can do while still keeping their own ship afloat (and they have no idea what their health situation will be in the next 10 years) because their children are going to have a hard time bailing THEM out.

[Reefgazer]

We have these tax breaks for seniors in the town where we have a home in NY.  The problem isn't that people with hardship use them, it's that they are not income-tested or have quite high income limits.  I will argue that if you can pay for a grandchild's college and sports, tithe 10% to your church, or support your adult children, you are not poor and can afford to pay the taxes so the entire tax burden of the town does not fall on a few families.

I'm not seeing these selfish grandparents, either. In my mother's peer group (same as yours, she's in her early 60s), just among people whom I personally know, I am seeing...

 

- a widow who is giving up her retirement savings to take care of her elderly mother who is recently widowed, who did everything right and had paid-for house, pension, and healthcare, but all of that could NOT keep up with rising healthcare costs. So she needs prescription assistance and home health care, which only her daughter will do for free.

 

- a wife with a disabled husband who is foregoing work to care for him full-time, and while she's at it, she's also caring for a quadriplegic friend in her community who has exhausted his (extensive!) wealth, trying to stay alive, and now relies on friends to care for him and take him to appointments. Both of these men would be dead if not for this highly educated, highly driven and capable woman who has taken responsibility for both of them. She and her husband live on husband's veteran disability and contributions from their (struggling) children.

 

- another wife of a disabled worker who is having a hard time keeping up in his field, decreasing the profit of her home daycare by watching her grandchildren for free so their parents can get on their feet.

 

- an elderly neighbor who is helping to pay for her grandson to go to college.

 

- people from church who pay their grandchildren's sports and activity fees (which, as everyone knows, are now HUGE expenses), and who have college funds established for the grandchildren.

 

- people from church who have allowed their adult children to move home with THEIR children after job losses, career setbacks, marriage failures.

 

My church, which is not in my neighborhood but in the next suburban town ever, does have its share of crazy rich people. But as I get to know them, I am learning that they are not vacationing in Florida, etc. without having taken care of their own people and contributing very generously to the church's charitable programs.

 

In my experience, my parents' generation is pretty freaked out at what their children and their very elderly parents are facing. They're trying to see what they can do while still keeping their own ship afloat (and they have no idea what their health situation will be in the next 10 years) because their children are going to have a hard time bailing THEM out.

 

Edited March 28, 2016 by reefgazer

[Lady Florida.]

I'm not seeing these selfish grandparents, either. In my mother's peer group (same as yours, she's in her early 60s), just among people whom I personally know, I am seeing...

 

 

 

In my experience, my parents' generation is pretty freaked out at what their children and their very elderly parents are facing. They're trying to see what they can do while still keeping their own ship afloat (and they have no idea what their health situation will be in the next 10 years) because their children are going to have a hard time bailing THEM out.

 

Yes. Thank you! 

 

The seniors I know define the sol as 2 homes, pension plus SS, and excellent medical thru the former or current employer, with retirement after 25 years. they obviously arent interested in providing that for the children or granchildren, as they have done away with those opportunities. Now a kid is on his parents medical to age 25 while not making high enough wages to rent on his own, no pension, no medical in retirement if they didnt win the musical chairs game for a good govt job.

 

I don't know where you live, but I don't know anyone of any age like this. Most of my friends are comfortable enough financially so it's not because they're poor. No one is rich and we all still have to watch our budgets, but fortunately none are struggling to put food on the table. My friends range in age from mid-30s to late 50s (Dh and I are the oldest in our social circle but a few aren't far behind us) and all are concerned with the future for not only their own children and grandchildren but for future generations in general.

 

No one I know has two homes. Most are worried about insurance once they retire. In fact, the people I know who struggle the most financially are elderly. The young people (under 30) I know who are struggling are being helped by parents and grandparents. Often the elderly are not helped. That is an area where I think the U.S. (and possibly some other Western countries) is lacking. The elderly were respected and cared for and in many countries they still are. Here they're shoved away in retirement/nursing homes and often aren't even visited by "too busy" family members. 

 

Two homes? Excellent medical? Retiring after 25 years? Not interested in providing for the younger generations?

 

Let's see:

Two homes: We downsized our one house when ds was not quite 3 (he's 18-1/2 now). We will downsize even more (still only one home) when dh retires. We'd do it now but the area where we want to be (closer to the grandchildren) is too far from dh's work so we'll wait another 2-1/2 years until he retires. Even with downsizing we'll make sure there's room for ds because he'll still be in college and likely still living at home (he plans to attend a local state university). 

 

Retire after 25 years: I retired to stay home with ds. Initially I planned to go back to work when he started school, but then we decided to homeschool. We're done homeschooling now. I'm 60. I'm not going back to my old career or starting a new one at my age. Nor do I want to go back to work just as dh is getting ready to retire. Dh has been where he is since 1981. He's not in the same position or even with the same company but he's in the same field (civilian employer, government contracts - the company that gets the contract changes periodically). A year ago when the new company took over the contract we were thrilled that he only got a pay cut. We were happy that he got a pay cut. The alternative was forced early retirement. If they don't push him to retire before he turns 65 he will have worked in his field for 37 years. And he worked for 10 years before that. Total working years in his lifetime: 47 - Almost twice as long as your example. Dh is the rule not the exception.

 

Excellent medical? We do have decent insurance. Better than many, not as good as some. Our concern now is what happens to ds when dh retires. He'll be 20 so even though adult children can stay on their parents insurance until 25, they can't have your Medicare. So we worry about how he'll get insurance, about how we can help him with that. Oh wait. We don't to care. We're selfish.

 

Not interested in providing for their children and grandchildren? Providing what? First, the idea that you're supposed to leave something is from a time when more people had property/farms. And it was only property owners or those with expendable money who could and did leave something behind. For most people this was not even in the picture. There was no "Someday all of this will be yours" for average working folks. Second, many elderly are trying to survive on what they have left. Third, those who can leave something usually do, unless there is some type of family animosity at play.

Edited March 28, 2016 by Lady Florida

[SKL]

I'm not clear which generations we're talking about at this point.  I am 49 and I think my generation is the one that is often overspending.  Yes, maybe 10 years older and 10 years younger, roughly.

 

Anecdotally, my parents were also in this situation, because they had a lot of kids at a time when interest rates went crazy.  I put a lot of money into paying off their debts (and I don't even want to know if they have run the credit cards up again).  I don't resent it, it just is what it is.  They were probably too willing to help undisciplined adult children.  That said, I'm not sure I won't do the same things when my kids are that age.  It will be less of a burden for me since I only have 2 kids.

[Lady Florida.]

I'm not clear which generations we're talking about at this point.  I am 49 and I think my generation is the one that is often overspending.  Yes, maybe 10 years older and 10 years younger, roughly.

 

 

 

When I see the term Boomers being used, I know I'm in that generation. It does cover a range of years, so who knows. 

[Lang Syne Boardie]

We have these tax breaks for seniors in the town where we have a home in NY.  The problem isn't that people with hardship use them, it's that they are not income-tested or have quite high income limits.  I will argue that if you can pay for a grandchild's college and sports, tithe 10% to your church, or support your adult children, you are not poor and can afford to pay the taxes so the entire tax burden of the town does not fall on a few families.

 

Here we have a $500 exemption for seniors with an income of less than $40,000, on properties with a very small footprint. When our city township was reassessed for property taxes lately, the seniors saw their taxes tripled along with everyone else -- most of us have increases greater than that $500 so even the seniors who get a break will still be paying far more in property taxes than they've ever paid in their lives.

 

In my area, whether the town or state gets the property tax or whether the person spends their wealth on their descendants and charities of choice, they're still not taking it with them. There's nothing left after the funeral.

[Laura Corin]

 

Some people, like BIL, were forced into early retirement when they weren't financially prepared for the surprise. SIL is still working so they can have insurance, and he has had an extremely difficult time starting over at 58 (his age at the time of forced retirement). 

 

 

Yes.  Husband was laid off in his mid-fifties and makes (free lance, intermittently) about a third of what he did.  We are lucky to have a cushion because we have a rental property, and I have gone back to work full time, but it's not been pretty.

[Carol in Cal.]

I think that the biggest difference between now and 30 years ago is a general pessimism.

30 years ago times could be hard but people thought they were getting better.

Not true anymore.

Now even people who are doing very well are afraid of the future.

Edited March 28, 2016 by Carol in Cal.

[LucyStoner]

 

I am one of those seniors being disparaged in this thread. I'm 60, dh is 62. Yes, we had the benefit of lower college costs. Some of us but not all, had decent health care coverage and pensions. My brother who is 5 years younger (so still a boomer) worked in a field that offered no benefits and no pension. Some people, like BIL, were forced into early retirement when they weren't financially prepared for the surprise. SIL is still working so they can have insurance, and he has had an extremely difficult time starting over at 58 (his age at the time of forced retirement). Some boomers lost their pensions in the 2008 crash and had to work longer because of that. Some who should have been able to retire because they did work hard for 30, 40, or 50 years, are still working because their retirement funds went up in smoke.

 

I do know my 38 yo stepson and 18 yo son have it harder in many ways than dh and I did. Growing up they had it easier, but as adults it's harder financially on them. However, I don't like being told that my generation doesn't give two sh1ts about their children and grandchildren. That is simply untrue.

 

 

I would like to apologize and clarify that I am talking about in general/in the aggregate. I also definitely don't think parents don't can about their kids. But some folks do say things like "well we did fine so your struggles are all your fault"  Obviously there are baby boomers who struggled mightily and there are millennials who have done very well money wise, very quickly.  My parents for example never got ahead financially at any point in their lives.  My standard of living is way higher now than as a child.  But that's not the case for most people I know in my age bracket.  I talk to so many who worry so much, and more than I do, because they've never struggled financially and they don't know how one gets by with a low income or very high expenses relative to income so they are making it up as they go along and are scared shitless about falling further down the ladder. 

 

In the aggregate, college is more, pensions aren't even a thing for most younger workers, health insurance is more, housing is a larger percentage of income, working hours are longer, wages are lower, the average age of first time home buyers is older.   These aren't just opinions.  The data is strong.  There are just a lot more barriers now to launching a successful middle class life now.  Assets that some boomers lost in the recession are assets that many millennials are projected to simply never see or have to lose.  Is all of that because of economic forces beyond control?  No.  But a lot of it is. 

 

I totally agree that many boomers are struggling more now- age discrimination, asset loss to the financial crisis, more costly medicare related costs, higher college costs for their kids. 

 

Still, I just tire of the narrative that young people are struggling because they are supposedly more greedy/reckless than their predecessors, all want McMansions or because they have 2 TVs and smartphones.  I hear it all the darn time but it just doesn't breakdown that way.  I know you know that but it's brought up so much, here and elsewhere. 

Edited March 28, 2016 by LucyStoner

[LucyStoner]

I think that the biggest difference between now and 30 years ago is a general pessimism.

30 years ago times could be hard but people thought they were getting better.

Not true anymore.

Now even people who are doing very well are afraid of the future.

It's a little easier to be optimistic when you think you can afford college for your kids and you think you have a pension coming. Not all did, but more did.

 

Economic optimism actually climbed to a near peak in 2002 in the US and there are low points at different times throughout the 20th century. The relatively recent nosedive is totally understandable though and it has climbed a lot in 2015. There's a few indexes of it you can see online.

Edited March 29, 2016 by LucyStoner

[Ausmumof3]

Oh, we had a big discussion about that too. People who are making low wages already don't do a lot of shopping or they shop second hand. Meanwhile, my son and his coworkers who are highly skilled and highly educated, are already making more than dh and I made when we were both working full time and more than dh has ever made after 30 years in a professional field. It may be a long time before companies miss the workers who are being replaced by machines. Of course I realize that economics is much more complicated and taxes, social services,and other factors come into play, but the effects may be put off long enough that they don't affect those who are making the decisions now.

This only works to a certain point though. Mechanisation seems to mostly be beneficial for mass production which requires a mass population to consume. If one wealthy person has an extra $1000 eventually they are going to spend it on premium products not on 500 $2 shirts. The same $1000 distributed over a low income population will likely be spent on at least some mass produced items. Ironically the more premium produce that very wealthy people buy is more likely to have some level of handcrafting.

[Ausmumof3]

But MY anecdotes are completely opposite of what you are saying and we know many who live just fine, one income, educated, white collar jobs, have saved for retirement, and live in comfortable homes. So, if we are comparing anecdotes, mine is quite different than most have quoted.

 

And I have read parts of the two income "trap." I think a lot of it is bunk. Of course you should do the math, but for those of us who can earn a decent income, there is no "trap." I made enough to support our family completely for a few years, and we lived with 2 cars, childcare, and healthcare.

 

The book says that between childcare, extra clothing, and eating out, you will spend all of your 2nd income and wont' have any leftover. This just isn't true for many, many people. We still did cook, and I was able to wear business casual and didn't spend a lot on clothing. Childcare was expensive, but not astronomical compared to my income. Healthcare was included in my job and was very good.

 

During those years, my DH went to grad school. We were NOT living on student loans. We were living on my income. Once DH went back to work, we did quite well. I only stayed home because I have a special needs child who needed me.

 

Once we went to one income, that is when we really had to cut back. Although we were never hurting.

 

Now we are in a situation where I am trying to get back into the workforce after an 11 year hiatus and it is tough with no work experience for 11 years. I don't regret staying home with my son who needed me, but there are twinges of "I wish I hadn't had to stop working." I don't know if I will get a job or not, but if I do, it will open up the options for my kids' college choices as I plan to use the money for their college for the next 8-10 years. It will also add to our retirement account.

 

Now, I KNOW my situation is ONE story, one anecdote, but since you said they count.......

 

Dawn

 

PS: And it is irresponsible to spend more than you make.....on anything.

To the last statement...

 

Even if that means food for the kids? Heat for survival? Life saving medical care?

[Carol in Cal.]

It's a little easier to be optimistic when you think you can afford college for your kids and you think you have a pension coming.  Not all did, but more did. 

 

Economic optimism actually climbed to a near peak in 2002 in the US and there are low points at different times throughout the 20th century.  The relatively recent nosedive is totally understandable though and it is climbed a lot in 2015. There's a few indexes of it you can see online. 

What are you saying here?

 

It's been amply documented in this thread that not everyone in the 'good old days' was well off.

 

However, there was clear progress being made.  Generations were doing better than their forebears.  There were clear paths to success.  If you got a college degree, you would get a decent job.  Period.  If you belonged to a union and had a trade, you could support a family.  Period.  And either way, it appeared that you would be able to stay in your job for life, however illusory that assumption turned out to be.  New factories were being built.  We were rebuilding the world.  The phrase 'made in Japan' meant cheap, easily broken, poor quality stuff.  Wars that we fought were for ethical reasons, and it was widely viewed that we prevailed because of that as much as because of anything else.  Non white males were making economic and legal progress, because it was the right thing for our country to do.  So there was a clear path to getting by, and things were viewed as getting better, so even if you personally were not doing well, there was hope--for you or at least for your kids--to do better.

 

Now we have more wealth than we did then, but there are no clear paths to security.  Even reasonably well to do people are not nearly as optimistic as they used to be.  The center is not holding.  It's bad.   We could have the decline of the middle class and still be optimistic if it looked like things would be getting better or if we had overarching goals or aspirations that we were working toward together, or if we thought that at least our kids would do better than we did.  But that is not what is going on right now.  

 

That's, to me, the biggest difference

[Ausmumof3]

Just wanted to clarify that I certainly don't think the financial behaviour of any generation can be generalised as good or bad. I know seniors who have been very frugal, have plenty of wealth, still live frugally and are generous to those who are in need. I also know seniors who had two generous incomes, spent a lot (but often in generosity to others) and are now needing to cut back a lot. Some our age are living in small houses with no debt, others have mortgages, others will probably always rent.

 

I think the overall economy and options available are the bigger influence than individual behaviour

[DawnM]

To the last statement...

 

Even if that means food for the kids? Heat for survival? Life saving medical care?

 

 

I am speaking specifically to a aforementioned book.  Have you read it?

Edited March 28, 2016 by DawnM

[SKL]

Why the requirement that our kids do better than their parents?

 

I hope my kids will always be able to meet their needs.

 

I guess I'm not into comparing - between individuals, classes, generations, countries ....  Comparing tends to chip away at contentment.

[LucyStoner]

What are you saying here?

 

It's been amply documented in this thread that not everyone in the 'good old days' was well off.

 

However, there was clear progress being made.  Generations were doing better than their forebears.  There were clear paths to success.  If you got a college degree, you would get a decent job.  Period.  If you belonged to a union and had a trade, you could support a family.  Period.  And either way, it appeared that you would be able to stay in your job for life, however illusory that assumption turned out to be.  New factories were being built.  We were rebuilding the world.  The phrase 'made in Japan' meant cheap, easily broken, poor quality stuff.  Wars that we fought were for ethical reasons, and it was widely viewed that we prevailed because of that as much as because of anything else.  Non white males were making economic and legal progress, because it was the right thing for our country to do.  So there was a clear path to getting by, and things were viewed as getting better, so even if you personally were not doing well, there was hope--for you or at least for your kids--to do better.

 

Now we have more wealth than we did then, but there are no clear paths to security.  Even reasonably well to do people are not nearly as optimistic as they used to be.  The center is not holding.  It's bad.   We could have the decline of the middle class and still be optimistic if it looked like things would be getting better or if we had overarching goals or aspirations that we were working toward together, or if we thought that at least our kids would do better than we did.  But that is not what is going on right now.  

 

That's, to me, the biggest difference

 

 

I'm saying that economic optimism is a metric that is measured and correlates to the economy and things like pay, benefits, job security and anticipation of being able to afford big life changes.  So there have been highs and lows throughout the last 30 years (the time period you referenced) and back to the time they started measuring it.  It would trend higher when people feel like they aren't worrying as much about retirement or college, among other things.  

 

I don't believe in the good old days but there have been substantially better days for the American worker and for the American middle class than the last dozen years.  And there have been similar low periods before.  I don't think people are more or less optimistic for no reason or that people today are just less optimistic than all prior decades.  The line goes up and down and up and down.  Not just straight down.  I'd link to a good graphic but on mobile and have to dash.  

[Lady Florida.]

I would like to apologize and clarify that I am talking about in general/in the aggregate. I also definitely don't think parents don't can about their kids. 

I totally agree that many boomers are struggling more now- age discrimination, asset loss to the financial crisis, more costly medicare related costs, higher college costs for their kids.

 

Thank you for that apology. I don't think you believe parents don't care or that Boomers don't understand what younger generations have to deal with.

 

 

 

Still, I just tire of the narrative that young people are struggling because they are supposedly more greedy/reckless than their predecessors, all want McMansions or because they have 2 TVs and smartphones.  I hear it all the darn time but it just doesn't breakdown that way.  I know you know that but it's brought up so much, here and elsewhere.

 

I absolutely agree with you there. It's similar to the welfare mom myth, which goes back 35+ years. I also get really irritated over the "they don't need smartphones, computers, internet, etc." Yes, they do. That's the world they live in and if they want to have a chance at succeeding they need to stay up to date on the technology that rules their world. As has been mentioned on other threads there are companies that won't even consider talking to about hiring unless you fill out an application online.

[LucyStoner]

I am speaking specifically to a aforementioned book.  Have you read it?

 

The book doesn't advocate for spending more than you earn though.  It explains how people sometimes do spend more than they earn and that it is often due to things not fully in their control.  For things like food and healthcare costs and trying to hold it together during a long layoff.  It also discusses how reliance on 2 earners makes people more vulnerable to economic hardships like a layoff or someone becoming disabled.  If you need the full output of two people's labor to survive you are more screwed when one worker can't work than if the primary breadwinner can't work but the other adult can go to work and add new dollars to the household budget.  That's not all of the book but it's the highlights.  The meat is in reading up on her sources of data and checking them.  Very illuminating and it changed my opinion on this issue a lot.  

 

You acknowledged not reading the whole book so making conclusive statements as to the contents is jumping the gun.  

 

As for anyone who is like "what the heck is this book they are talking about?" it is the Two Income Trap.  

Edited March 28, 2016 by LucyStoner

[MaeFlowers]

And again, this is anecdotal. I don't know where you live and I am not asking you to reveal your location, but I can assure you that many, many people younger than 50 are indeed buying homes they can't really afford. According to the banks they can, but in reality, it is beyond their budget. Banks used to approve you for roughly 2 to 2.5 times your income for a loan. Now they approve you for 4-5 times your income. I know because the last 3 times we have purchased homes, we have been told we qualify for 4-5 times our income. We are currently getting pre-approval for a loan and we have been told yet again that we can pay a HUGE amount. We can't, don't want to, and won't.

 

Now, in Southern California, where we moved from, people were indeed spending $400K on a 1200-1500 sq. ft. house, and in some areas, more. But I think the is different than most of the USA. Many of these people's incomes were not even 100K. And yes, they did tell me. This was 10 years ago. I don't know what their current incomes are, but I am hoping they have gone up and they have been able to do better than they did 10-20 years ago.

 

I am not trashing an entire generation, but I will tell you that many, many Americans spend more than they should. Statistics show that savings for retirement is at an all time low. Now, part of this is because companies don't provide retirement benefits like they used to, but part of it is because people haven't saved.

 

There are many articles on this. This is one: http://www.reuters.com/article/us-usa-economy-retirement-idUSKBN0OC23O20150527 But I am sure it isn't conclusive.

 

I feel like you completely threw me under the bus by quoting me and saying I am so naive to think that the 50s and 60s were idillic and I am so dumb to think that everyone is like House Hunters. I couldn't be further from that scenario. I am a realist and I do follow statistics, not anecdotal information.

 

People DID live on less in the 50s. http://yesiamcheap.com/cost-of-living-1950-compared-to-2011/

 

People had one TV, not 4 or 5. Closets were smaller because people had fewer clothes. People just didn't buy as much stuff.

 

And I said to go back to 1700 sq. ft. Apparently, I was wrong. The average size house was under 1000 sq. ft. compared to today's average of 2300 sq. ft.

Not disagreeing with you but the reason they say 4-5 times instead of 2-3 times right now is because interest rates have gone down. With interest rates at half of what they used to be, you can afford to spend much more. (In theory. Your payment may still be more than what you want to or are willing to pay.)

[LucyStoner]

Thank you for that apology. I don't think you believe parents don't care or that Boomers don't understand what younger generations have to deal with.

 

I absolutely agree with you there. It's similar to the welfare mom myth, which goes back 35+ years. I also get really irritated over the "they don't need smartphones, computers, internet, etc." Yes, they do. That's the world they live in and if they want to have a chance at succeeding they need to stay up to date on the technology that rules their world. As has been mentioned on other threads there are companies that won't even consider talking to about hiring unless you fill out an application online.

 

Yeah, we held off on Smartphones until 2011 I think?  Anyways now my smartphone is my main access to my only source of personal income...I don't have a lot of clients but when they call me, they need to get me and when they email me, I make sure to respond within an hour if the email is between 8 and 6.  After that, they get their answer first thing in the morning.  I am on the move most of the day. I set it to ping when it's a client (others can wait!).  After I do whatever little bit of work, I log it in the phone ASAP.  Because I was shorting myself billable hours by forgetting time I was working when not at my desk. I need that function in my pocket.  And since we don't have cable or a home line, it's hardly an extravagant sum for telecommunications.  There are non-work benefits but fast response is the standard that I need to meet.  

Edited March 28, 2016 by LucyStoner

[Bluegoat]

Anecdotes aside, I dont see why the idea that incomes are worse now is at all controversial.  No, not everyone in the 50s lived well, who the heck ever claimed that?  But we know that wages and benefits have gone down, and workers now are less secure.  We don't need anecdotes to see that we can look at the numbers and it's well established.

 

What would happen if we paid all people a living wage?  We would pay more proportionally for the work of people and less, presumably, for consumer goods.  This is what seems to happen in places with living wages.  I don't see it as a bad thing since our consumption is too high to be sustainable anyway.  We should, really, be paying more for our food grown in a more sustainable way, which tends to mean more labour and less mechanization.  We really don't need more tvs and ipods. 

[Reefgazer]

Yes, but everyone there is paying the increased tax burden, and if it's anything like my hometown, it's because so many businesses and individuals are getting tax breaks or a percentage off their taxes that *someone* has to pay up to keep the town afloat.  STAR, elderly credit, combat veteran credit...it never ends.  To me, it does matter where a family is spending their money - if it's a low income that, by necessity, must go to food, housing, insurance, then that would be low-income for that area.  Spending that takes the kids to Disney (yeah, I've seen that), buys the grandkids' basketball uniforms - I'm not inclined to favor a tax break for that.  I am in favor of a credit for people (not just seniors) below a certain threshold, but the majority of homeowners in a town really need to contribute to the tax base or the town financially fails.

Here we have a $500 exemption for seniors with an income of less than $40,000, on properties with a very small footprint. When our city township was reassessed for property taxes lately, the seniors saw their taxes tripled along with everyone else -- most of us have increases greater than that $500 so even the seniors who get a break will still be paying far more in property taxes than they've ever paid in their lives.

 

In my area, whether the town or state gets the property tax or whether the person spends their wealth on their descendants and charities of choice, they're still not taking it with them. There's nothing left after the funeral.

 

[ChocolateReignRemix]

Not disagreeing with you but the reason they say 4-5 times instead of 2-3 times right now is because interest rates have gone down. With interest rates at half of what they used to be, you can afford to spend much more. (In theory. Your payment may still be more than what you want to or are willing to pay.)

 

I was coming in to make this same point.  And actually, interest rates are sometimes only 25% of what peak mortgage rates were at various times.

[MaeFlowers]

I was coming in to make this same point. And actually, interest rates are sometimes only 25% of what peak mortgage rates were at various times.

True. I think my parents had an interest rate of 10 or 11% on their first house. I really hope we don't go back to that!

[8circles]

I think in the short-term there would be some adjustment and it might feel worse to some people.

 

In the long-term I think this would be a good first-step in changing the culture to value humanity and build up the community. 

Edited March 29, 2016 by 8circles

[LucyStoner]

True. I think my parents had an interest rate of 10 or 11% on their first house. I really hope we don't go back to that!

At some points in the early 80s interest rates for a well qualified borrower were ~18%.

 

We may not earn much on savings accounts but we do pay a lot less for now for long term borrowing.

[pinkmint]

Like someone said upthread, there are actually laws these days that prevent families from living in the same small size of home as they did in generations past even when it's a desired thing.

 

Most landlords/ property managers have a maximum number of people per room. So that is one real life example of how different it was and possibly easier to save money in the 1950's etc. And who hasn't heard about being so poor that the baby slept in a laundry basket etc? These days people would fear the wrath of CPS doing something like that.

 

So it's not always that people are so greedy for space and large homes and fancy things. Modern life literally demands it even when you don't want it and can't afford it.

[ChocolateReignRemix]

At some points in the early 80s interest rates for a well qualified borrower were ~18%.

 

We may not earn much on savings accounts but we do pay a lot less for now for long term borrowing.

Correct. In theory, interest rates = inflation + real interest/rate of return. The inflation rate in the 70s/80s was the culprit behind those high rates.

 

My grandparents weren't particularly wealthy, but locked in some long term CDs at 16%. When inflation dropped they were making money well above the market rates for some time.

[LucyStoner]

Correct. In theory, interest rates = inflation + real interest/rate of return. The inflation rate in the 70s/80s was the culprit behind those high rates.

 

My grandparents weren't particularly wealthy, but locked in some long term CDs at 16%. When inflation dropped they were making money well above the market rates for some time.

Stagflation, everyone's favorite economic portmanteau, comes to mind. Though I can't think of that word without hearing in the voice of a 1970s TV announcer whose clip was included in a weird video all Sophmore Econ students were assigned at my college. It sounded like ZOMBIES ARE COMING! STAGFLATION!

[LucyStoner]

Like someone said upthread, there are actually laws these days that prevent families from living in the same small size of home as they did in generations past even when it's a desired thing.

 

Most landlords/ property managers have a maximum number of people per room. So that is one real life example of how different it was and possibly easier to save money in the 1950's etc. And who hasn't heard about being so poor that the baby slept in a laundry basket etc? These days people would fear the wrath of CPS doing something like that.

 

So it's not always that people are so greedy for space and large homes and fancy things. Modern life literally demands it even when you don't want it and can't afford it.

My son slept in a lined laundry basket for a time. It was our cheapie bassinet. Later his bedroom was a tiny walk in closet. We weren't especially poor but, yeah, HCOL, small living space, young parents. We also lived in a 1 bdrm rental house for a time which was like around 600sf at most. That house, with a second bedroom bump out and a few nice finishes was listed, and sold, for just a tad more than $400k not that long ago. Edited March 29, 2016 by LucyStoner

[Lady Florida.]

True. I think my parents had an interest rate of 10 or 11% on their first house. I really hope we don't go back to that!

 

 

At some points in the early 80s interest rates for a well qualified borrower were ~18%.

 

We may not earn much on savings accounts but we do pay a lot less for now for long term borrowing.

 

I bought my townhouse in 1988 and was thrilled to get 10.5%. As a first time homebuyer (I did get some benefits for that) with not much of a credit history, that was an excellent rate at the time. 

[scoutingmom]

Nm

Edited March 29, 2016 by scoutingmom

[Ausmumof3]

I am speaking specifically to a aforementioned book. Have you read it?

Sorry I read it as a generalised statement on life. Have read summaries but not the whole book so I'm not really sure where you come from.

[Bluegoat]

Like someone said upthread, there are actually laws these days that prevent families from living in the same small size of home as they did in generations past even when it's a desired thing.

 

Most landlords/ property managers have a maximum number of people per room. So that is one real life example of how different it was and possibly easier to save money in the 1950's etc. And who hasn't heard about being so poor that the baby slept in a laundry basket etc? These days people would fear the wrath of CPS doing something like that.

 

So it's not always that people are so greedy for space and large homes and fancy things. Modern life literally demands it even when you don't want it and can't afford it.

 

The expectations around carseats make a difference as well.  You can't just shove four kids in the back seat or put a baby in a bassinet between the driver and front seat passenger.  Even three car seats across the back seat can be tricky, and people end up having to get a van.

[DawnM]

The book doesn't advocate for spending more than you earn though.  It explains how people sometimes do spend more than they earn and that it is often due to things not fully in their control.  For things like food and healthcare costs and trying to hold it together during a long layoff.  It also discusses how reliance on 2 earners makes people more vulnerable to economic hardships like a layoff or someone becoming disabled.  If you need the full output of two people's labor to survive you are more screwed when one worker can't work than if the primary breadwinner can't work but the other adult can go to work and add new dollars to the household budget.  That's not all of the book but it's the highlights.  The meat is in reading up on her sources of data and checking them.  Very illuminating and it changed my opinion on this issue a lot.  

 

You acknowledged not reading the whole book so making conclusive statements as to the contents is jumping the gun.  

 

As for anyone who is like "what the heck is this book they are talking about?" it is the Two Income Trap.  

 

Yes, I know that.  I was commenting on the woman who said that if your kids are hungry or cold or sick, you need to spend more than you make if necessary.  She wasn't referring to the book or a 2nd income at all.  It was my comment that people shouldn't spend more than they make.

 

The book's premise I disagree with.  Of COURSE your situation may differ, but the notion that it is a trap for the 2nd person to work because your in-laws may need a person to cart them back and forth to the doctor, or that childcare will eat up your savings, and on and on, is just not true for everyone.    You absolutely need to sit down and do the math and have discussions about who will stay home with a sick kid, talk about who is available for ailing elderly, what costs you will incur because of a 2nd job, etc......

Here is an interview with the author for those interested.

 

http://www.motherjones.com/politics/2004/11/two-income-trap

 

Me going back to work is primarily for one purpose.......to allow more college choices for my kids.  I miss working too, and am looking forward to getting back to it.  If I can put in 20 years I can get health benefits as well.  I will see if I can stick it out.

 

So, my income will not be something we will depend on to live.  I could quit if I needed to.  I think that is more in line with what the book is trying to say......if you are dependent on both incomes, you may have a problem should something happen.  Although ultimately, anything could happen at any time, to anyone, so you can't live completely in the "what ifs"  If my DH couldn't work anymore and we were dependent on my income, we would have some trouble as I can't make as much as he does.  

[DawnM]

As to the OP, I am hesitant to comment.  I think if companies were forced to pay more in wages, some companies would either fold or lay off people.

 

Was working at McDonald's ever a living wage place?

 

I think some places, like fast food joints, retail sales stores, etc...can hire people who don't need it as a primary income.  

 

What bothers me more is the loss of benefits to many workers who do things like work in a factory, or have some sort of skilled labor.  My FIL was a unionized electrician for a factory.  He made a living wage and double time working overtime and triple time if he worked holidays.  He got health benefits, retirement benefits, etc.....those benefits have diminished considerably for the younger employees working now.

[LucyStoner]

Yes, I know that. I was commenting on the woman who said that if your kids are hungry or cold or sick, you need to spend more than you make if necessary. She wasn't referring to the book or a 2nd income at all. It was my comment that people shouldn't spend more than they make.

 

The book's premise I disagree with. Of COURSE your situation may differ, but the notion that it is a trap for the 2nd person to work because your in-laws may need a person to cart them back and forth to the doctor, or that childcare will eat up your savings, and on and on, is just not true for everyone. You absolutely need to sit down and do the math and have discussions about who will stay home with a sick kid, talk about who is available for ailing elderly, what costs you will incur because of a 2nd job, etc......

Here is an interview with the author for those interested.

 

http://www.motherjones.com/politics/2004/11/two-income-trap

 

Me going back to work is primarily for one purpose.......to allow more college choices for my kids. I miss working too, and am looking forward to getting back to it. If I can put in 20 years I can get health benefits as well. I will see if I can stick it out.

 

So, my income will not be something we will depend on to live. I could quit if I needed to. I think that is more in line with what the book is trying to say......if you are dependent on both incomes, you may have a problem should something happen. Although ultimately, anything could happen at any time, to anyone, so you can't live completely in the "what ifs" If my DH couldn't work anymore and we were dependent on my income, we would have some trouble as I can't make as much as he does.

A second income that you don't fully rely on or need for basic living expenses is one of the things she discusses in the book- base your ordinary necessary living expenses to the fullest extent possible on one income.

 

You and I both have special needs kids. So I think we both know that sometimes people forgo a second income out of sheer necessity rather than any desire not to work or not to save. We would be in much better financial shape were I not prevented from working FT by family needs. More savings, larger retirement contributions these last four years etc. Still, because we could structure our budget for one of us to be home (largely because we didn't spend everything we both made when I was working FT until 2012) we were able to do that with a downsized living space and a much tighter grocery budget. Had we *needed both* incomes to maintain basic living expenses, we might have had to make a worse choice for our family. I know a lot of kids with my son's needs getting sub par support at school or forgoing evidence based therapies because quitting either job just isn't feasible and there's no one to drive the child to the appointments.

Edited March 30, 2016 by LucyStoner

[LucyStoner]

As to the OP, I am hesitant to comment. I think if companies were forced to pay more in wages, some companies would either fold or lay off people.

 

Was working at McDonald's ever a living wage place?

 

I think some places, like fast food joints, retail sales stores, etc...can hire people who don't need it as a primary income.

 

What bothers me more is the loss of benefits to many workers who do things like work in a factory, or have some sort of skilled labor. My FIL was a unionized electrician for a factory. He made a living wage and double time working overtime and triple time if he worked holidays. He got health benefits, retirement benefits, etc.....those benefits have diminished considerably for the younger employees working now.

There's a very popular local hamburger chain here who has always paid more than minimum wage and raises are given out quickly. The food is cheaper than a lot of other fact food places and the company:

 

Starts people at $13/hr (and not because of our minimum wage law).

employer paid health for the employee.

After a 6 month period of employment, you can choose between a childcare subsidy or tuition reimbursement.

Offers paid time off.

 

For graduating high school seniors, they willl give the tuition reimbursement that fall (so three month after hire) if you work 40 hrs a week over the summer and then work 20 hours a week during the school year. The tuition reimbursement is approximately enough to cover 2 years community college and 2 years at the university.

 

I know the family who owns this place and they aren't losing money doing this. They do very well.

 

So yes, I do think fast food jobs can offer benefits. It's largely a question of if they want to or not.

 

I'm not sure why service workers should be expected to work for low pay and minimal if any benefits but when similarly skilled factory workers are facing the same lower pay and minimal if any benefits, that's unfair. Lots of retail and food service workers are parents and that is their family's main or only sourch of income. Most of the people at the McDonalds here look to be 25+. Very few teens. Nor do I buy that such jobs are necessarily less skilled than a lot of jobs with benefits. I think we all feel a difference between a skilled grocery cashier and the ones standing there looking up the code for potato.

Edited March 30, 2016 by LucyStoner

[Bluegoat]

There's a very popular local hamburger chain here who has always paid more than minimum wage and raises are given out quickly. The food is cheaper than a lot of other fact food places and the company:

 

Starts people at $13/hr (and not because of our minimum wage law).

employer paid health for the employee.

After a 6 month period of employment, you can choose between a childcare subsidy or tuition reimbursement.

Offers paid time off.

 

For graduating high school seniors, they willl give the tuition reimbursement that fall (so three month after hire) if you work 40 hrs a week over the summer and then work 20 hours a week during the school year. The tuition reimbursement is approximately enough to cover 2 years community college and 2 years at the university.

 

I know the family who owns this place and they aren't losing money doing this. They do very well.

 

So yes, I do think fast food jobs can offer benefits. It's largely a question of if they want to or not.

 

I'm not sure why service workers should be expected to work for low pay and minimal if any benefits but when similarly skilled factory workers are facing the same lower pay and minimal if any benefits, that's unfair. Lots of retail and food service workers are parents and that is their family's main or only sourch of income. Most of the people at the McDonalds here look to be 25+. Very few teens. Nor do I buy that such jobs less skilled than a lot of jobs with benefits. I think we all feel a difference between a skilled grocery cashier and the ones standing there looking up the code for potato.

 

I've seen quite a few articles recently profiling companies that choose to pay better wages or benefits, and see a tangible benefit to the company.  I think maybe more people are questioning the idea that cheap labour is a real savings in many cases.

[LucyStoner]

I've seen quite a few articles recently profiling companies that choose to pay better wages or benefits, and see a tangible benefit to the company. I think maybe more people are questioning the idea that cheap labour is a real savings in many cases.

Lower turnover leads to lots of savings on training. Paying more means you can hire people who are more reliable. Good benefits lead to positive employee satisfaction and that has positive benefits for productivity.

 

This isn't some new experiment either. It place has been around since 1954. The founder was a good business man and while he thought this was a morally sound policy, it was also a sound business decision for them. He passed away recently but his family still holds the company and I don't think his older son would ever want to compromise what his father started.

Edited March 31, 2016 by LucyStoner

[Bluegoat]

Lower turnover leads to lots of savings on training. Paying more means you can hire people who are more reliable. Good benefits lead to positive employee satisfaction and that has positive benefits for productivity.

 

This isn't some new experiment either. It place has been around since 1954. The founder was a good business man and while he thought this was a morally sound policy, it was also a sound business decsion for them. He passed away recently but his family still holds the company and I don't think his older son would ever want to compromise what his father started.

 

One of the ones I read was about a small independently owned bakery.  Interestingly their good results went beyond things like less sick time and turnover.  They actually saw sales go up. 

[LucyStoner]

One of the ones I read was about a small independently owned bakery. Interestingly their good results went beyond things like less sick time and turnover. They actually saw sales go up.

Productivity for service worker also includes customer service. Easier to be sunny and nice to customers when you aren't pissed off about your wages or health care. Customers like to go where they are treated well.

[SKL]

More likely those businesses are attracting the best workers because they pay better, not making employees better by paying more.  Though, when you put a lot of positive people together in a company, that's going to rub off on new employees too.

[Laura Corin]

Relevant article:

 

http://www.bbc.co.uk/news/business-35837712

[Tsuga]

Our city's minimum wage is on its way up to $15/hour.

Guess who takes your order at Panera now? An iPad.

 

A "living wage" would price people out of the work force who don't provide that level of value while increasing the cost of goods. It would mean teens couldn't get part time jobs and develop their employable skills. It would mean much more mechanization.

 

Emily

I live in Seattle.

 

I work near a Panera.

 

An iPad does not take my order.

 

Our teens tend to have jobs.