Living paycheck to paycheck (article)

[DawnM]

https://www.cnbc.com/2023/12/11/why-even-americans-making-more-than-100000-live-paycheck-to-paycheck.html?utm_campaign=trueanthem&utm_medium=social&utm_source=facebook|main

 

This was posted on another forum I am on and people got vicious about it, but I dont' expect that conversation here, although I guess we will see.  🤪

Thoughts on the article?

And the first comments I expect have to do with cost of living in the area you live in, but maybe assume if you live in San Fran that it is adjusted for cost of living and go from there.

ETA

Use this calculator to compare areas:

https://www.nerdwallet.com/cost-of-living-calculator/compare/indianapolis-in-vs-san-francisco-ca

Edited January 12 by DawnM

[prairiewindmomma]

$100k in my metro area is a stretch to make ends meet if you have kids or medical expenses. West coast living isn’t cheap at all, and all of the subsidies for housing, medical, school lunch, etc. do not apply unless you are in a family of 6 or more. 
 

100k is just under $5900/month take home pay for my state, not counting health insurance. 
 

The average rent for a 3 br apartment—small and old—is about $2400/month here. Add in  $400 for basic utilities assuming (utility fees are high here even if usage is low with re: to water, gas, and electric) and it’s $2800 to be alive. The USDA thrifty plan for a family of four (with young children) puts food at $968/month. For tidy math, let’s put that at $1000. $3800 gets you housed and fed. That gives you $2100 for transportation, clothing, health insurance, non-food needed items, medical out of pocket costs, childcare (day care or afterschool care) or school fees…. Yeah, that’s paycheck to paycheck living. 

[DawnM]

12 minutes ago, prairiewindmomma said:

$100k in my metro area is a stretch to make ends meet if you have kids or medical expenses. West coast living isn’t cheap at all, and all of the subsidies for housing, medical, school lunch, etc. do not apply unless you are in a family of 6 or more. 
 

100k is just under $5900/month take home pay for my state, not counting health insurance. 
 

The average rent for a 3 br apartment—small and old—is about $2400/month here. Add in  $400 for basic utilities assuming (utility fees are high here even if usage is low with re: to water, gas, and electric) and it’s $2800 to be alive. The USDA thrifty plan for a family of four (with young children) puts food at $968/month. For tidy math, let’s put that at $1000. $3800 gets you housed and fed. That gives you $2100 for transportation, clothing, health insurance, non-food needed items, medical out of pocket costs, childcare (day care or afterschool care) or school fees…. Yeah, that’s paycheck to paycheck living. 

I think you missed the part about how I knew the first comment would be about where you live and cost of living, so just adjust if you live in a high COL area.

You can use this calculator, which showed me that 100k in Indianapolis is the same as 205k in San Francisco.

https://www.nerdwallet.com/cost-of-living-calculator/compare/indianapolis-in-vs-san-francisco-ca

[fraidycat]

Mostly my thoughts on the article are that it seems ... light? Incomplete, maybe. Like, it's a space filler. There are a lot of words, but they really don't say anything of substance.

[regentrude]

11 minutes ago, fraidycat said:

Mostly my thoughts on the article are that it seems ... light? Incomplete, maybe. Like, it's a space filler. There are a lot of words, but they really don't say anything of substance.

This. There was no actual information,  just platitudes and obvious stuff.

[prairiewindmomma]

12 minutes ago, DawnM said:

I think you missed the part about how I knew the first comment would be about where you live and cost of living, so just adjust if you live in a high COL area.

You can use this calculator, which showed me that 100k in Indianapolis is the same as 205k in San Francisco.

https://www.nerdwallet.com/cost-of-living-calculator/compare/indianapolis-in-vs-san-francisco-ca

Thanks. So I adjusted the number per your recommendation, which the article did not suggest or do….the number would be ok if you did not have childcare or high medical expenses and you had a paid off car and employer matching for retirement. You’d still be close to paycheck to paycheck.

 

Just now, regentrude said:

This. There was no actual information,  just platitudes and obvious stuff.

Yes, with a side of “it’s all lifestyle creep, so if you’re struggling it’s because you want things you shouldn’t”.

Obviously some people can and do have lifestyles that do not match their reasonable incomes, but I think it is very difficult for the average family right now to take on the big stuff: childcare, medical, education costs, and saving for retirement. Those costs have all had outsized increases over the last twenty years….  I found in this article and many others (like WSJ’s “to save money, skip breakfast article) to be tone deaf. Why? If basic breakfast foods are so expensive now that they warrant an article, why should the suggestion be to skip breakfast rather than addressing price collusion among the major egg companies or the environmental issues factoring into coffee production dropping or the like? 
 

I was shopping in Carrefour Express recently—there was a sign that the store chain was dropping all pepsico products because of price gouging. This was true across their French, Spanish, and Italian stores. It is a very different take than things here in the US.
 

[HomeAgain]

Lifestyle creep is a thing.

A few years ago we lived in a low COL area and the household income was half as much as now.  We managed, and were comfortable, but there were a lot more free/low cost entertainment options we exercised and our living expenses (house, utilities) were kept in check.

Fast forward to now. We moved to a high COL area.  DS plays an expensive sport (hockey) and works with former NHL players weekly ($$$).  Our house is bigger, we eat out slightly more, and we impulse buy a little more.  We are still comfortable, but it's in a different way.  I'm not relieved that we have the necessary funds to do something like replace the tires on my car, because they are there regardless. I'm grateful, but I'm not stressed that we are depleting the emergency fund.  We've tried not to let the income define what we spend each month but keep our old habits for the most part.

[SKL]

I remember my days before kids when I'd hear "it costs over 200K to raise a child," and I'd say "phht."  Not the way I was raised.  But I don't even want to do the math when it comes to my own kids' costs.  Before high school, the daycare, tuition, therapies, tutoring, activities, and summer camps to give them "quality experiences" so I could work without guilt.  And then in high school (public), well, they have to have the $100+ shoes etc. or they simply can't show their faces at school.  😕  Also just buying basic gear for JV soccer is ... wow.  But the real cost of the sports is the injuries.  ...  And do we even want to talk about college costs?

Sure, I could say no to all of it.  But in my mind, this is a short window of time that might make a big difference in the kids' whole lives.  Theoretically.  I may have bought into bunk.  It felt right at the time.

To be honest, I don't know how much I spend per year.  I know I was living on less than $10K/year before I had kids (if you don't count taxes).  Pretty sure I spend more now.  😛

[Katy]

IDK why it's surprising... The price of almost everything not imported has quadrupled or more, incomes have not kept up.  One of my siblings lived in San Francisco more than 20 years ago now, on well over $100k as a couple then, with a one bedroom apartment and no kids. They were barely making ends meet, and had to ask our parents for help when they had more than one emergency per month. And it's not like most people live simply anymore. I'm not even sure most people know how.

I was watching this video the other day... I was only a little surprised by the comment that if you're eating out or buying chips or soda you're not trying to get out of debt. And I guess that's true, but I don't think most people younger than 40 have ever thought about it being an option to NOT buy fast or convenience foods.  Even if they don't drink soda, they drink coffee. And probably not black Foldger's.

 

[fraidycat]

Ok, so I have what is possibly an unpopular opinion:

Lifestyle creep SHOULD be a thing.

Life should not be hard all the time. People should be able to ENJOY the fruits of their labour.

It should be illegal for CEOs to make 7+ figures. Corporations should have to pay wages based on a percentage of profits and stockholder dividends, billionaires assets should be taxed just like every other property is. 

[Clarita]

3 minutes ago, fraidycat said:

It should be illegal for CEOs to make 7+ figures. Corporations should have to pay wages based on a percentage of profits and stockholder dividends, billionaires assets should be taxed just like every other property is. 

Not necessarily a fixed amount but at the very least a CEO's compensation package should not exceed a certain ratio of the lowest paid employee's compensation package at a company. So if you want to give the CEO 7+figures fine but then you also have to up all your other employee's compensation accordingly. 

[mum]

2 minutes ago, Clarita said:

Not necessarily a fixed amount but at the very least a CEO's compensation package should not exceed a certain ratio of the lowest paid employee's compensation package at a company. So if you want to give the CEO 7+figures fine but then you also have to up all your other employee's compensation accordingly. 

I like this!

 

[Carrie12345]

Sociologically speaking, the economy would crash if lifestyle creep wasn’t a thing. “They” make all this stuff with the intention of convincing “us” to buy it all. Remember blaming certain generations for killing certain industries with their lack of interest/participation/capability?

But, yeah, money is tight overall, regardless of creep or rice and beans.  
No worker should have to live off rice and beans. (Unless that’s what they’re really into!)

[City Mouse]

Lifestyle creep is a real thing. It used to be called Keeping Up with the Jones’s. 

I will admit that my DH and I were part of this for many, many years. While we didn’t think we were trying to keep up with anyone, we wanted all the shiny new things, and we bought them all on payments, and we lived in a relatively low cost of living area. A big part of it is lack of financial education when we were young. We just didn’t understand at first. Later when my DH would listen to Dave Ramsey on the radio, we started to understand but thought we were so far in the hole that we would never get out. It took us moving to a different state, and an extremely different environment (from urban/surburban to rural ranch country) for us to make the dramatic changes that we needed in order to change. I am embarrassed to say just how far in debt we were, and none of it was student loans, but I am proud to say that in less than one year we will have all our debt paid off except for the house. It has taken us 13 years to get out of that hole we built, but it is almost done.

I think that lifestyle creep could be a different issue than people who live in super high cost of living areas like California and NYC, but I don’t know enough about that to really comment. 

I do live close to popular tourist/vacation areas where there is a huge lack of affordable housing for all the lower and moderate income service workers. The workers then have to live 45-60 min from their jobs and/or the business just can’t find enough workers to support the amount of tourists that want to utilize the business. New businesses can’t grow because they can’t get enough employees so the economy can’t grow. 

[Heartstrings]

I saw a thing the other day talking about how comfortable you are really depend on housing and childcare.  

Basically if you have a low interest rate mortgage with no kids, your monthly expenses are much, much less than someone with a 6%-8% interest rate and 2 kids in daycare. Childcare being $2500 a month plus is not at all uncommon.  
 

It’s not really fair for the first group to look down their nose at the second group.  Daycare costs aren’t fixable by skipping a monthly Starbucks.  
 

Here is a screen grab.  
 

https://www.tiktok.com/t/ZT8quuo3q/

 

 

Edited January 12 by Heartstrings

[mum]

I was listening to a podcast this week and one comment was that there's so much more available to buy now than there was 50 years ago. The amount that is considered 'normal' for middle class life is greater in terms of choice and therefore cost. I liked this perspective, rather than the usual, 'people are wrong for wanting things '. 

The way we raised our kids, we could still get away with having very little, but even in the 24 years since our youngest was born what is considered very basic middle class necessities has increased. 

I fully agree with all of the above. And yet, I see my kids buying things in their early 20's that we would have never aspired to even in our 40's - not extravagant things, just things like a matching couch and loveseat 🤣. 

We purposefully did not put our kids in sports that were expensive, we simply could not afford it. We had one do expensive academic camps but on scholarships. But many around us were in the same position, so we didn't feel left behind, our kids didn't stand out. It is much harder when there are Jones around to keep up with. 

If we take a VERY honest look at what we NEED to be comfortable, I think it would be different than how many of us are living, me included. I have observed several people who have spent time in the military and particularly those who have been deployed, have quite low needs for happiness. A hot shower, a clean bed

[Heartstrings]

53 minutes ago, mum said:

there's so much more available to buy now than there was 50 years ago

The “things” are also much cheaper now.  I found this 

In the early 1970s a good, 21-inch console color television might cost you $500. In today's money that would be around $3300. A good tabletop set might be $350, or about $2200 today.

I can buy a 22 inch on Amazon for less than $100, which means that same $500 in the 70s lets me put a tv in every room of my house including the kitchen if I want.   That TV can also double as a computer monitor. 
 

My iPhone was $200 and $15 a month, I know the briefcase phones of the 90s were much much higher. 
 

My couch and loveseat match but they were $1500 for the set.  
 

ETA: 

the trivial things like TVs have gone down to practically nothing while the necessities like health care and child care have gone up tremendously.   Not to even mention college which has sky rocketed astronomically.   

 

 

Edited January 12 by Heartstrings

[Bootsie]

2 hours ago, fraidycat said:

Ok, so I have what is possibly an unpopular opinion:

Lifestyle creep SHOULD be a thing.

Life should not be hard all the time. People should be able to ENJOY the fruits of their labour.

It should be illegal for CEOs to make 7+ figures. Corporations should have to pay wages based on a percentage of profits and stockholder dividends, billionaires assets should be taxed just like every other property is. 

So, in years that a corporation has negative profits should wages be based on the percent of a negative number, and workers receive negative wages?  

[DawnM]

9 hours ago, Heartstrings said:

I saw a thing the other day talking about how comfortable you are really depend on housing and childcare.  

Basically if you have a low interest rate mortgage with no kids, your monthly expenses are much, much less than someone with a 6%-8% interest rate and 2 kids in daycare. Childcare being $2500 a month plus is not at all uncommon.  
 

It’s not really fair for the first group to look down their nose at the second group.  Daycare costs aren’t fixable by skipping a monthly Starbucks.  
 

Here is a screen grab.  
 

https://www.tiktok.com/t/ZT8quuo3q/

 

 

I saw an intellectual piece from TikTok (dripping sarcasm there!) The woman was saying that her childcare is almost $2500 in a. major city (I can't remember but I think maybe Boston?) anyway, Dave Ramsey was saying that paying childcare over $1200/mo was just indulging and no one should pay more than that.   She was saying how out of touch he is because she couldn't find that price nor would she want to pay it as it would most likely reflect in quality of care.

I agree with you on interest rates and child care, and will add was a couple of others have said, health.   

We did pay for childcare when our oldest two were little.   I think I paid almost $2500 but it was for two kids in full time care.   It was the early 2000s.

[DawnM]

9 hours ago, Heartstrings said:

The “things” are also much cheaper now.  I found this 

In the early 1970s a good, 21-inch console color television might cost you $500. In today's money that would be around $3300. A good tabletop set might be $350, or about $2200 today.

I can buy a 22 inch on Amazon for less than $100, which means that same $500 in the 70s lets me put a tv in every room of my house including the kitchen if I want.   That TV can also double as a computer monitor. 
 

My iPhone was $200 and $15 a month, I know the briefcase phones of the 90s were much much higher. 
 

My couch and loveseat match but they were $1500 for the set.  
 

ETA: 

the trivial things like TVs have gone down to practically nothing while the necessities like health care and child care have gone up tremendously.   Not to even mention college which has sky rocketed astronomically.   

 

 

Interesting you should say that, I was just telling someone that we paid almost $1000 for a VCR back when they were brand new.   It was a huge clunky thing and there were piano looking buttons on it.   It was a tank!

The other thing that is interesting to me is that America has gotten cheaper and cheaper food until recently when cost has started rising.   But I think that is a big reason the quality of food has gotten so bad.   Americans want cheaper food and in order to get it, you have to lower the quality.   I was looking at a comparison of grocery costs vs. income from 1960 to today and people spent more of their income on food back then.   

Oh, and airfare.   I found an old airline ticket stub from 1988 from Seattle to Nairobi and back.   The cost was $1600.   I am now buying tickets for travel from NC to Nairobi and back and they are less than $1600 in 2024 in peak season.

Edited January 12 by DawnM

[DawnM]

10 hours ago, prairiewindmomma said:

Thanks. So I adjusted the number per your recommendation, which the article did not suggest or do….the number would be ok if you did not have childcare or high medical expenses and you had a paid off car and employer matching for retirement. You’d still be close to paycheck to paycheck.

 

Yes, with a side of “it’s all lifestyle creep, so if you’re struggling it’s because you want things you shouldn’t”.

Obviously some people can and do have lifestyles that do not match their reasonable incomes, but I think it is very difficult for the average family right now to take on the big stuff: childcare, medical, education costs, and saving for retirement. Those costs have all had outsized increases over the last twenty years….  I found in this article and many others (like WSJ’s “to save money, skip breakfast article) to be tone deaf. Why? If basic breakfast foods are so expensive now that they warrant an article, why should the suggestion be to skip breakfast rather than addressing price collusion among the major egg companies or the environmental issues factoring into coffee production dropping or the like? 
 

I was shopping in Carrefour Express recently—there was a sign that the store chain was dropping all pepsico products because of price gouging. This was true across their French, Spanish, and Italian stores. It is a very different take than things here in the US.
 

Yeah, sorry, that is why I added it, because I have lived in a HCOL and a LCOL and there is definitely a difference when it comes to charts of affordability and income.   I still dont' understand why the federal government doesn't change the poverty lines for varying areas, it does make a difference!

[Katy]

Daycare costs are a very good point. I honestly think we should follow other developed nations and provide free daycare or at least nursery school from 3-5. 

For that matter, if we did medicare for all, I think a lot more people would start businesses. It seems more than 10% of people I know have mentioned dreams of starting a particular business but don’t dare because they have good health benefits and someone in their family needs it. Not trying to get political, but the choice of tying healthcare to jobs is a limiting factor in the economy. 

[Carrie12345]

10 hours ago, Heartstrings said:

The “things” are also much cheaper now.  I found this 

In the early 1970s a good, 21-inch console color television might cost you $500. In today's money that would be around $3300. A good tabletop set might be $350, or about $2200 today.

I can buy a 22 inch on Amazon for less than $100, which means that same $500 in the 70s lets me put a tv in every room of my house including the kitchen if I want.   That TV can also double as a computer monitor. 
 

My iPhone was $200 and $15 a month, I know the briefcase phones of the 90s were much much higher. 
 

My couch and loveseat match but they were $1500 for the set.  
 

ETA: 

the trivial things like TVs have gone down to practically nothing while the necessities like health care and child care have gone up tremendously.   Not to even mention college which has sky rocketed astronomically.   

 

 

Quality is different, too.  
Even with “disposable income” (and I hate that term), I bought relatively cheap furniture for this house. I can already tell that it isn’t going to hold up like my parents’ or grandparents’, but I couldn’t stomach multiple thousands for multiple solid pieces!

[cintinative]

Just now, Carrie12345 said:

Quality is different, too.  

As I was reading this thread I was thinking of that also. Our refrigerators and washers and dryers growing up lasted waaay longer than the ones they make today. It was nothing for them to be still working 17-20 years in. Now most of them don't last more than 10, if that.  [insert side tangent rant about the environmental impact here]  

 

[Carrie12345]

9 hours ago, Bootsie said:

So, in years that a corporation has negative profits should wages be based on the percent of a negative number, and workers receive negative wages?  

The proposed formula needs tweaking because, no, that would be just as wrong. But a business isn’t *entitled* to profit (or “profit”) and its owners and head honchos aren’t gods.
If dh goes out on his own, employee pay comes first. If that isn’t profitable, that’s on him and comes out of his pocket as a business owner, and may mean closing the business if he doesn’t have another way to generate more revenue.

[Happy2BaMom]

11 hours ago, mum said:

If we take a VERY honest look at what we NEED to be comfortable, I think it would be different than how many of us are living, me included. I have observed several people who have spent time in the military and particularly those who have been deployed, have quite low needs for happiness. A hot shower, a clean bed

Very true. Yet no amount of cutting back on "wants" will change the fact that the increasing cost of the BASICS - housing, automobile, health care, child care, any form of higher education or training (necessary to attain almost any decent job) - has far outpaced wages for so very many Americans.

And a lot of young people now are doing the minimalist lifestyle, including not having children (for which, of course, they face a lot of judgment).

 

[Happy2BaMom]

10 hours ago, Bootsie said:

So, in years that a corporation has negative profits should wages be based on the percent of a negative number, and workers receive negative wages? 

There's a lot wrapped up in this statement.

For a small business, business owners usually do *not* take home income when their businesses lose money. Contrast this with modern-day CEOs, who continue to take home millions of dollars per year EVEN WHEN their business loses money.

In good years, a small business owner will often take home more money (sometimes much more) than the workers for whom he/she has paid. That's one of the main perks of owning one's business (besides hopefully building equity in the business itself). Most workers do not have the same opportunity to gain by a business doing well, nor are they usually rewarded through equity, which is why 'wages' are a business expense. A salary or hourly wage is what is necessary to keep people working for a company. Different levels of risk. How many multiples more than the average wage a CEO should get for heading a large company vs a small one is something people can argue, but what is obviously clear is that our economic inequality is becoming not dissimilar to many other less developed countries.

The top 1% in this country now own more than the entire middle class. As recently as 1990, the middle class owned *twice as much* wealth as the top 1%. In the past thirty years, that has been completely erased and is now rapidly reversing. And it is now becoming increasingly common for private & public equity (including a recent fund being started by Jeff Bezos) to buy up housing. This is Monopoly (does no one remember how it ends?) for future generations. 

My point is that you can pick at the hyperbole in a small statement about CEO compensation, but if you're not applying that same focus to the overall system that is - yes - deliberately & systematically removing financial stability and well-being from tens of millions of people (all to further enrich the already rich), you're missing the point.

 

 

Edited January 12 by Happy2BaMom

[Scarlett]

11 hours ago, mum said:

 

If we take a VERY honest look at what we NEED to be comfortable, I think it would be different than how many of us are living, me included. I have observed several people who have spent time in the military and particularly those who have been deployed, have quite low needs for happiness. A hot shower, a clean bed

Agree.  I think about our first apartment doing how a lot of people, not just young ones would not live there. But we were happy.  My best friend and I lugged our laundry down to a big public laundry mat every week and spent a couple of hours there. 
 

Even now I find myself dissatisfied with cosmetic aspects of  my home. I live in a nice safe neighborhood and I am warm and safe and dry. I try to keep perspective but materialism is a real thing.

 

 

 

[lovinmyboys]

I don’t actually know how to avoid lifestyle creep? We have four close in age kids and when they were young they mostly did homeschool activities for free or cheap, played with toys from garage sales, read library books, and wore hand me downs. Now, those same four are all 12-17 and it just is a lot more expensive. I feel like we make plenty of money so we should be able to not live paycheck to paycheck.

I think teens are expensive. We just recently went down from three kids in braces to two, but I’m sure my youngest will eventually need orthodontics. They eat much more now and their clothes are much more expensive. My oldest wears tall pants and a large shirt, so basically we never find anything on sale. Even cheap activities cost money. Plus, the cost of car insurance if they start driving. It all stresses me out and I never used to worry about money. 
 

Im planning to sit down with the budget today and see what can be cut.

Edited January 12 by lovinmyboys

[Scarlett]

I do agree childcare and high housing is a huge impact on young people. Seems like families choosing to have one parent at home are coming out just as well…..not easier financially but not much harder. 

[Scarlett]

There is a huge disparity of life style for sure.  I see it reflected on this board every day. 

Sometimes it is as a result of bad past choices and sometimes it is just the way life happens. I do hate to see basic needs (housing, food, heat, healthcare) not met. 

[Faith-manor]

I did some checking on the cost of living locally. I took the median average on several items:  rent for one bedroom apartment, car insurance for full coverage but not optimal coverage, cell phone plan that works in this county (very few options, not much competition), internet (a requirement of nearly all employers now because they post so much online), non-smart, base model phone (built into the monthly cell phone plan payment schedule), health insurance for one person, electric and assuming the apartment is heated with electric (houses here are heated on propane because we do not have natural gas, so $350-700 a month depending on size of place and quality of insulation and windows, efficiency of furnace), and came up with $2400 a month. Average medical  insurance premium was $497 per person.

Not included in that $2400 was food, clothing, car maintenance, fuel (we have no public transportation here), personal care items, etc. The average deductible was $5000 but with many plans sitting at $10,000 for one person. (My brother's company policy is $10,000 per person, $15,000 per family, and $20,000 out of pocket before it kicks in 100% and then only if every single provider is in-network so don't even thing of having a medical emergency outside the network.) $55,000 a year is $3600 roughly in take home pay. One would not be able to eat and still maintain a car, meet the medical deductible, and buy fuel for that car for the work commute. A lot of people in my county go without health care even if they have medical insurance. They simply don't have the cash. My husband's last annual physical in which the nurse practitioner was in the room less than five minutes was billed out at $350 for the office call, and routine bloodwork was $593 at the in network lab. The insurance covered not one cent of that.

Now add for young folks $30,000 in federal student loans which is less than half the actual cost to attend most public universities here for four years, and that is another $319 a month payment.

Setting aside money for the deductible and out of pocket non covered expenses, that is another $1000, annual average cost of routine maintenance $123 a month, and upwards of $500 a month for fuel since jobs that pay $55,000 in this county are few and far between making commute normal, and $100,000 is literally doctors and dentists only, this means that one cannot eat on $55,000 IF they also pay the average in medical costs. And on a rough estimate take home of $6100 on $100,000 salary, $5300 or so in expenses leaving $800 leftover for food and maybe making a 401K contribution. Note the lack of car payment.

The median salary in my county is less than $55,000 a year. Dh works remote for his IT company which is why we can live here and take care of our mothers whose retirement funds would not allow them to live closer to the city. He is in the top 1% of earners for our county. We are very comfortable for sure, and know how lucky we are! Most folks in the area belong to dual income households and still rationing healthcare down to a game of russian roulette with their well being, duct taping their cars together. Average salary is $43,000 ish. A single person on $43,000 has to have two roommates, and eat ramen noodles while praying to never have any kind of medical emergency. It has been noted by police and EMS that often the young folks refuse medical evaluation after car accidents because they are terrified of a huge medical bill they cannot pay. But hey, ya...let's have MORE capitalism where robber barons get even richer while the masses suffer, and definitely more healthcare dictated by a for-profit insurance industry! (Dripping with sarcasm, I hope you caught that!)

Read up on the Guilded Age. Vanderbilts, Astors, Livingstons, Roosevelts, Van Dusens, Van Burens, Stuyvesants, Rockefellers... We are having our second Guilded Age now, just different names. Musk, Bezos, Waltons, Koch, Mars, Hearst, Duncan...There is enough "stuff", enough technology and glitter to make it look more palatable than the last one, and yet, in terms of wages vs. robber baron income, about the same. Exhibit A: railroad workers for a start.

[Katy]

48 minutes ago, Happy2BaMom said:

Very true. Yet no amount of cutting back on "wants" will change the fact that the increasing cost of the BASICS - housing, automobile, health care, child care, any form of higher education or training (necessary to attain almost any decent job) - has far outpaced wages for so very many Americans.

And a lot of young people now are doing the minimalist lifestyle, including not having children (for which, of course, they face a lot of judgment).

 

If the government wants to reverse that, drastically lowering the costs of education, healthcare, and childcare would go a long way.  

For that matter, multiple studies have shown rates of abortion would be drastically lower if being a young single mom wouldn’t doom someone into decades of poverty. The same is true for adoption- moms who went all the way through pregnancy have shown in multiple studies that they would keep their baby if they could possibly afford to do so. 

For that matter, there would probably be far less kids in foster care for domestic violence issues if those measures were in place. Frequently the reasons women feel trapped in domestic violence are economic. Yes, the man himself is a threat too, but money is usually a limiting factor. 

[Faith-manor]

Oh, also none of the local apartments come with a washer and dryer, many of them not even having hook ups. The laundromat (of which there are only two for the entire county) is $6.50 to wash and dry a single load.

[Wheres Toto]

14 hours ago, DawnM said:

I think you missed the part about how I knew the first comment would be about where you live and cost of living, so just adjust if you live in a high COL area.

You can use this calculator, which showed me that 100k in Indianapolis is the same as 205k in San Francisco.

https://www.nerdwallet.com/cost-of-living-calculator/compare/indianapolis-in-vs-san-francisco-ca

The numbers it that are off for my area.  It says you can get a two bedroom apartment for $1800 and that's not possible.   

I think the creep can be a factor especially if someone has been saving up for something or putting off plans until they were affordable, like fixing up a house or buying a better car (although I'd argue those fall more under putting off things that are important), but I think the increase in the cost of pretty much everything is more of a factor.  

[SKL]

A lot of the inflation is due to the cost of meeting goals society has set, such as environmental sustainability, safety, and minimum wage increases.

It is a given that when you increase the cost of things, you have to either earn more, or cut back.

Cutting back to that extent would still leave most of us materially ahead of what the typical working-class person needed / had in the mid-1900s, which was not poverty level.  But people don't want to accept that.  For that matter, a lot of people seem to think "working class lifestyle" is absolutely beneath them to even consider.

I'm guilty of spoiling my kids and probably leaving them too ignorant of what they actually need to survive.  Not sure how to remedy it now, other than throwing them out on their own, which I don't plan to do any time soon.

[SKL]

As far as the top 1% owning as much as the entire middle class ... I don't know, but let's assume that's true.

Why would that be?  How much of the bottom 99% are making choices that do not enhance their ability to own valuable assets?

99% of Americans are not too poor to put wages into investments (real estate or otherwise).

When we count things owned, are we counting the vehicles middle class people drive?  Because I see a lot of people spending more on their vehicles than I spent on my house over a period of time ... many times over.  This is a choice.  That said, if you don't want to own longer-term property, fine, but don't blame that on those who do.

[Heartstrings]

1 hour ago, Scarlett said:

Agree.  I think about our first apartment doing how a lot of people, not just young ones would not live there. But we were happy.  My best friend and I lugged our laundry down to a big public laundry mat every week and spent a couple of hours there. 
 

 

 

 

 

I can almost guarantee you that if that building still exists someone lives there though, probably paying a ton more and it may not have been updated much since you were there.  I think we have a bit of a distorted view about “kids these days” and people not being  willing to sacrifice the same way we did. Maybe it’s because once we move up the income ladder we tend not to maintain connections with those still in that beginning stage, maybe it’s just rose colored glasses about our own past. I see plenty of people using the laundry mat every day, for example, so some one is still living that lifestyle.  

[Heartstrings]

nm

Edited January 12 by Heartstrings

[Heartstrings]

4 hours ago, DawnM said:

We did pay for childcare when our oldest two were little.   I think I paid almost $2500 but it was for two kids in full time care.   It was the early 2000s

In 2008 I was paying for 1 infant and after school care only for 1 child and it was significantly more than my mortgage on a $100k house.  That place has pretty much doubled in priced and halved in quality. 

(that mortgage was the same as rent on my very cheap 2 bed apartment.)

[SKL]

Profit sharing is a nice idea, but making it law would be incredibly complicated if not impossible.  I think it would also put a lot of folks out of business (and their employees out of a job).

I am a big advocate for profit sharing done voluntarily when it makes sense.  It makes sense when the business can run properly in the long term without holding back that cash.

I don't think anyone needs to earn 7+ figures per year, but there are so few people in that category, I don't think we should waste our mental energy trying to solve that issue.  When that excess money is spread around the rest of us worldwide, it won't even be noticeable.  It won't fix anything at all, and I'm not gonna waste my time trying to theorize what problems it may cause.

I do think people should educate themselves and vote with their pocketbooks.  Don't give to charities that pay an individual a ridiculous amount of money.  Buy from companies that are responsible.  Pay those who help us (employees and otherwise) what they deserve.

[prairiewindmomma]

Statistics on wealth distribution in the US: https://www.statista.com/statistics/203961/wealth-distribution-for-the-us/

[prairiewindmomma]

1 minute ago, SKL said:

Profit sharing is a nice idea, but making it law would be incredibly complicated if not impossible.  I think it would also put a lot of folks out of business (and their employees out of a job).

I am a big advocate for profit sharing done voluntarily when it makes sense.  It makes sense when the business can run properly in the long term without holding back that cash.

I don't think anyone needs to earn 7+ figures per year, but there are so few people in that category, I don't think we should waste our mental energy trying to solve that issue.  When that excess money is spread around the rest of us worldwide, it won't even be noticeable.  It won't fix anything at all, and I'm not gonna waste my time trying to theorize what problems it may cause.

I do think people should educate themselves and vote with their pocketbooks.  Don't give to charities that pay an individual a ridiculous amount of money.  Buy from companies that are responsible.  Pay those who help us (employees and otherwise) what they deserve.

I think you are misunderstanding what others are trying to say: the very high wealth individuals in the US control most of the wealth. Watching this quick newspiece from CBS: 

 

[SKL]

10 minutes ago, prairiewindmomma said:

I think you are misunderstanding what others are trying to say: the very high wealth individuals in the US control most of the wealth. Watching this quick newspiece from CBS: 

 

People seem to be using "income" and "wealth" interchangeably.

The fact is that lots of people have enough income to grow their wealth.  Some choose to do that, and some don't.

I also would like to know what definition of "wealth" they are using.  Wealth is not something you can easily asses.

Edited January 12 by SKL

[Heartstrings]

4 minutes ago, SKL said:

People seem to be using "income" and "wealth" interchangeably.

The fact is that lots of people have enough income to grow their wealth.  Some choose to do that, and some don't.

I also would like to know what definition of "wealth" they are using.  Wealth is not something you can easily asses.

I think you are thinking “comfortable retirement with a 2nd house in Florida, several overseas trips a year” wealth, but we’re talking “rocket ships to Mars” wealth.  The first category is top 5-10%, the second category is the 1%.   Top 5%-10% is wealthiest doctor in town money, top 1% is JP Morgan bailing out the government *twice* wealth.  These are vastly different levels of wealth.  

[Carrie12345]

41 minutes ago, SKL said:

99% of Americans are not too poor to put wages into investments (real estate or otherwise).

Not 99%, but definitely a large proportion!

And question - where do people think the profit on investment is coming from? 

[SKL]

11 minutes ago, Heartstrings said:

I think you are thinking “comfortable retirement with a 2nd house in Florida, several overseas trips a year” wealth, but we’re talking “rocket ships to Mars” wealth.  The first category is top 5-10%, the second category is the 1%.   Top 5%-10% is wealthiest doctor in town money, top 1% is JP Morgan bailing out the government *twice* wealth.  These are vastly different levels of wealth.  

You are not reading my mind, LOL. 

To use wealth as a national statistic, there has to be a definition that applies nationally, not just to those who own 2+ houses.  Wealth includes what's owned by my friends who (a) own a simple house and car with a mortgage but some equity in their house; (b) bought a duplex fixer-upper to eventually rent out one side, (c) have a pension from their past manufacturing job, or even (d) own a car but are still saving for a down payment on a house.  Wealth is reduced by credit card debt among other things.

I was negative wealth beginning in 1983 when I took out my first student loan, and continuing well past the time when I was making more than 2x poverty line.

According to my personal balance sheet (which I have to provide annually for business loan purposes), I have wealth, but most of it is in the form of real estate that we bought when it was abandoned and rotting away.  We put a lot of our income (from non-real estate work), and many hours of unpaid labor, into rehabbing RE and building businesses.  These businesses are still not generating tons of cash flow, and there's no guarantee that they ever will.  You would not know that from looking at either my tax return or my balance sheet.

FTR I have never owned even one whole residential house.

Edited January 12 by SKL

[SKL]

Based on that news clip, realize that they are reducing everyone's gross wealth by credit card debt as well as mortgages, student loans, etc.

If a person has run up their credit card bill on frivolous purchases, thereby reducing their "net wealth," isn't that their own choice, usually?

[Bootsie]

26 minutes ago, Heartstrings said:

I think you are thinking “comfortable retirement with a 2nd house in Florida, several overseas trips a year” wealth, but we’re talking “rocket ships to Mars” wealth.  The first category is top 5-10%, the second category is the 1%.   Top 5%-10% is wealthiest doctor in town money, top 1% is JP Morgan bailing out the government *twice* wealth.  These are vastly different levels of wealth.  

If you look at the list of the top wealth-holders in the US, they did not make their money working as CEO at JP Morgan, or in similar positions.  Zuckerberg, Bezos, Gates, Waltons built their wealth from starting businesses or inventing products.

[Carrie12345]

13 minutes ago, SKL said:

Based on that news clip, realize that they are reducing everyone's gross wealth by credit card debt as well as mortgages, student loans, etc.

If a person has run up their credit card bill on frivolous purchases, thereby reducing their "net wealth," isn't that their own choice, usually?

My gross wealth is kinda eh with zero credit card or car debt. “Eh” being more than many, much more than globally. But we’re comfortable enough to continue growing it averagely.

Isn’t the statistic that a high proportion of debt is medical, compared to, say, video game systems and shoes?