Why Rent Is So High and Pay So Low • Hacker News Board

Re: Why Rent Is So High and Pay So Low

#131

Post by rubyn00bie » Sat, Aug 08, 2015, 12:59 AM UTC

A couple of corrections as this article is sort of making assumptions based on falsehoods:

Real wages stopped going up in 1972, not the 1980s, and real wage are what matter.

http://www.pewresearch.org/fact-tank/2014/10/09/for-most-wor...

Unemployment also hit some record highs in the 70s:

http://data.bls.gov/timeseries/LNU04000000?years_option=all_...

So, I think to say that it was bad only for rich people is a very unusual... I think it was probably worse for poor people since they don't have safety nets. It was also the beginning of the end for real wages which have never reached their 1972 peak.

Those are some pretty large assumptions to be wrong on, for the rest of the article, so I'm not really sure how to take it...? Maybe the author can clarify for me?

Edit: better source for real wage data, and clarity.

Re: Why Rent Is So High and Pay So Low

#132

Post by keepkalm » Sat, Aug 08, 2015, 1:08 AM UTC

sytelus wrote: post #62

TL;DR We vote and so politicians listen to our desires. Falling house prices would be a boon for renters and first-time buyers (and probably for society at large), but their political clout is less than that of middle-aged, middle-class property owners. Link baity article with no real "answer". Rents and house prices follow simple supply and demand over long term. Cities are either already saturated or don't allow ne…

Not to mention that declining home values weren't good for the economy as a whole.

Transportation is a huge factor in available land that is currently dedicated to parking that could be used for housing. Uber and Lyft could change some land use policies but it is going to take a change in policy overall because I believe that it is largely tied to job growth which is essentially desirability. Seattle is expensive to rent or own in and yet Tacoma and Everett seem very affordable by comparison.

Re: Why Rent Is So High and Pay So Low

#133

Post by meric » Sat, Aug 08, 2015, 1:13 AM UTC

Jacqued wrote: post #127

meric wrote: post #120

Earlier quoted context omitted.

I rented a 3 room apartment. Sublet out 2.5 rooms. (I'm sharing one room.) Reduced my rental expense to 0%. Paying bills only. Only 15 minutes train to the second most expensive city by property prices relative to income in the world. (Sydney)

Unfortunately you have to find a landlord that lets you rent a 3-bedroom AND sublet parts of it, which where I live is completely unheard of (unless you're high net worth and pay premium rent, but then why have flatmates ?). Plus, you'd pay income taxes on the subletting rents and that builds up really quickly.

Yes, I used some salesmanship I gleaned from working in a startup and paid 5% premium rent. The landlord isn't worried about subletting. They want the place taken care of and to be assured you can make rent payments regularly and on time and don't trouble them too much. Convince them you're a better option than a family of 5 who also applied for the property and you too can sublet the place. The rent I pay is tax deductible from rent I receive. I chose to have flatmates and pay premium rent (paid for by flatmates) to live free in a renovated apartment close to the city. My office doesn't come with a space I can park a camper van.

Re: Why Rent Is So High and Pay So Low

#134

Post by ori_b » Sat, Aug 08, 2015, 1:22 AM UTC

WalterBright wrote: post #122

dragonwriter wrote: post #95

Earlier quoted context omitted.

The data you point to shows government spending as a share of GDP peaking in FY 2009, dropping through FY 2014, rising slighting to FY 2016, and with a projected sharp bend upward beginning in FY 2018. The only recent period of a significant runup in government spending (federal or overall) as a percent of GDP was approximately the second term of the most recent Bush Administration, and the only periods with any sust…

The growth from 30 to 35% 1970 to present is enormous. People often point to the 1950's as the good old economic days, and the percentage was much lower then, as well.

More important than that, though, is that the USA was one of the few highly industrialized nations in the world which did not have its factories bombed out less than a decade before.

Re: Why Rent Is So High and Pay So Low

#135

Post by danieltillett » Sat, Aug 08, 2015, 1:31 AM UTC

habitue wrote: post #33

danieltillett wrote: post #10

Earlier quoted context omitted.

This is not a bug it is a feature. The rich are a lot smarter today than when they were the descendants of feudal landlords - 100 years of meritocracy combined with assortative mating makes for a very clever ruling class. Edit. Spelling.

Holy shit. I hope this is sarcastic

I am curious to know why you think this?

Re: Why Rent Is So High and Pay So Low

#136

Post by andreasklinger » Sat, Aug 08, 2015, 1:53 AM UTC

adam419 wrote: post #48

nostromo wrote: post #6

This article doesn't answer the question and seems primary based on nostalgia. My theory: the Fed's zero interest rate policy is very good at inflating asset values: S&P500, housing, you name it. Rising income is a second-order effect: we hope that rising asset values will lead to increased wages. That used to be the case, but no longer is. Why? Because of automation and globalization probably. So, the Fed has the pe…

Here's another solution: Respect the wisdom of markets. Allow corrections to take place and don't bury malinvestment under the rug only for it rear it's ugly head worse later on by acting as if you have a better intuition on what the price of money should be. Most people accept the virtue of free markets. Yet many don't see that the actions the Fed has been taking destroys the concept of a market by artificially supp…

markets dont self-regulate to normal distributions they seek monopols

Re: Why Rent Is So High and Pay So Low

#137

Post by [deleted] » Sat, Aug 08, 2015, 1:55 AM UTC

WalterBright wrote: post #122

dragonwriter wrote: post #95

Earlier quoted context omitted.

The data you point to shows government spending as a share of GDP peaking in FY 2009, dropping through FY 2014, rising slighting to FY 2016, and with a projected sharp bend upward beginning in FY 2018. The only recent period of a significant runup in government spending (federal or overall) as a percent of GDP was approximately the second term of the most recent Bush Administration, and the only periods with any sust…

The growth from 30 to 35% 1970 to present is enormous. People often point to the 1950's as the good old economic days, and the percentage was much lower then, as well.

[deleted]

Re: Why Rent Is So High and Pay So Low

#138

Post by Retric » Sat, Aug 08, 2015, 2:01 AM UTC

WalterBright wrote: post #122

dragonwriter wrote: post #95

Earlier quoted context omitted.

The data you point to shows government spending as a share of GDP peaking in FY 2009, dropping through FY 2014, rising slighting to FY 2016, and with a projected sharp bend upward beginning in FY 2018. The only recent period of a significant runup in government spending (federal or overall) as a percent of GDP was approximately the second term of the most recent Bush Administration, and the only periods with any sust…

The growth from 30 to 35% 1970 to present is enormous. People often point to the 1950's as the good old economic days, and the percentage was much lower then, as well.

Umm US Gov spending was 30% GDP in 2000, bushes wars and a recession bumped it to 35% but that's hardly a run up.

Re: Why Rent Is So High and Pay So Low

#139

Post by ilaksh » Sat, Aug 08, 2015, 2:07 AM UTC

The economic systems are over-simplified, poorly automated, and disconnected from real physical and social science and measurements.

Money is a very useful technology but the 'economy' really encompasses everything, and expecting some interest rate changes to save a sick economy is like a doctor who is only aware of the existence of the cardiovascular system and has one move -- rapid chest thrusts to get more blood pumping.

By harnessing technology we can make our systems much more sophisticated than that.

Re: Why Rent Is So High and Pay So Low

#140

Post by tcbawo » Sat, Aug 08, 2015, 2:15 AM UTC

dragonwriter wrote: post #109

tcbawo wrote: post #74

Earlier quoted context omitted.

This is a gray area. If we allowed a large automaker to go bankrupt, we probably would have lost the supply chain and many supporting industries which would be gone (from the US) forever. Same with banks. As much as we detest bailing out bankers, allowing the US to economy to be cut off from credit would create lasting collateral damage.

> If we allowed a large automaker to go bankrupt The 2009 "bailouts" of GM and Chrysler involved each company entering bankruptcy, and having the desirable assets of those firms purchased in bankruptcy by new entities in which the US and Canadian governments were (together) major (in GM's case) or minor (in Chrysler's case) investors. So, any sentence that starts with "if we allowed a large automaker to go bankrupt..…

In my previous comment, I was referring to liquidation. This would have happened without government intervention, because it takes money to keep a company operating under bankruptcy restructuring. The money required for this was not forthcoming from the private market, which was paralyzed with fear. Counter-party risk alone was a huge concern.