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Gen Z have 86% less purchasing power compared to baby boomers in their twenties

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Re: Gen Z have 86% less purchasing power compared to baby boomers in their twenties

#151

Post by haroldp »

ekianjo wrote: post #102
telchior wrote: post #59

One of the items this article doesn't cover is healthcare spending, which has increased between 2 and 8 times since 1980 (depending on whether you're looking at individual spending or share of GDP). Here's a decent collection of charts: https://www.healthsystemtracker.org/chart-collection/u-s-spe... It has been shocking to me to see how cheap and effective healthcare can be in other countries, from an emergency visit…

> In the US, healthcare is effectively a collection of cartels Not just in the US. For example there's a huge glasses cartel in France with specialists that are protected by the government and make pairs of glasses cost 500~1000 USD with very little reimbursement, while in Japan private companies (that actually compete against each other's) let you have glasses for 60~70 USD all included. You are literally better off…

I paid $97 in the US for my last optometrist visit to get a prescription at Costco, and about $50 for (ehem) "transition" lens glasses from zenni.com.

Re: Gen Z have 86% less purchasing power compared to baby boomers in their twenties

#152

Post by NovemberWhiskey »

88913527 wrote: post #138
phonon wrote: post #105

The author apparently has no idea how to do CPI calculations. She somehow seems to be calculating inflation adjusted wage increases to CPI changes. Rather-- Median Family income in 1970 was $9,870 [0] Median Family income in 2021 was $79,900 [1] CPI in 1970 was 38.8 [2] CPI in 2021 was 271.0 Ratio of incomes = 8.1 Ratio of CPI = 6.98 So household income has increased more than inflation. Median household income might…

There have been methodology changes between 1970 and today.

That doesn't make any difference; any methodological differences are just swamped by the erroneous double application of the price deflator in the comparison.

Re: Gen Z have 86% less purchasing power compared to baby boomers in their twenties

#153

Post by curo »

telchior wrote: post #59

One of the items this article doesn't cover is healthcare spending, which has increased between 2 and 8 times since 1980 (depending on whether you're looking at individual spending or share of GDP). Here's a decent collection of charts: https://www.healthsystemtracker.org/chart-collection/u-s-spe... It has been shocking to me to see how cheap and effective healthcare can be in other countries, from an emergency visit…

I've heard this so often yet we left the UK for no other reason than the healthcare. My wife was pregnant and the experience from 0-7 months was so terrible, we flew to the US to have the child.

Post-operative outcomes and survival rates in the US are far better than in the UK and many European countries. Statistics about better birth outcomes or higher longevity is best attributed to healthier lifestyles in Europe/UK and to lower stress (shorter work weeks, etc).

While healthcare in the US can be very expensive, we paid 8k GBP for our NHS immigration surcharge and an additional 5k GBP in NHS-specific taxes (for 2 people, 1 year). A 1k/m health plan in the US (for two of us at the time) gave us 10x better health care.

Yet Americans and Brits alike sing the praises of the NHS vs US healthcare. I chalk it up to shoddy journalism and folklore.

Re: Gen Z have 86% less purchasing power compared to baby boomers in their twenties

#154

Post by QuarterReptile »

rhexs wrote: post #140
ekianjo wrote: post #102

Earlier quoted context omitted.

> In the US, healthcare is effectively a collection of cartels Not just in the US. For example there's a huge glasses cartel in France with specialists that are protected by the government and make pairs of glasses cost 500~1000 USD with very little reimbursement, while in Japan private companies (that actually compete against each other's) let you have glasses for 60~70 USD all included. You are literally better off…

Might be tricky if you don’t speak Japanese though. Do they have multilingual optometrists that cater to tourists? I suppose Tokyo is big enough you can probably find one of anything.

French people are rich enough to be proficient English speakers, as are people in Tokyo. Seems like it'll probably work out.

I spent about a week in Japan, split between Tokyo and Nagasaki, and had no problem, having not even tried to learn any Japanese, except that I couldn't get the right train stop because I couldn't even recognize the characters, much less read them.

Re: Gen Z have 86% less purchasing power compared to baby boomers in their twenties

#155

Post by falcolas »

elzbardico wrote: post #98
shrubble wrote: post #12

I really feel for the younger than Gen X (which I am) groups. My older brothers who are boomers did have it easier (than me) and I had it easier than the younger groups. Purchasing power and a general decline in society's support along multiple axes for what most would call a 'normal' life really does make me think that some form of strife or revolution is coming.

You're probably an early cohort of Gen X. Late Xers, that started their professional lives in the late 90s or early 2000s already got a bad deal.

As someone who was saddled with around $150k in college loans in a major I couldn't use (flying; that career was aborted in September of 2001), yeah... Bad deal sums it up nicely.

Took me into my 40's to buy a house, and for my area I got a steal at under $200k. At which point my dad (born '38) chewed me out for not saving money and building it myself like he did for only $10k (~$100 in today's dollars for 5 acres of land and 3,000 sqft).

Re: Gen Z have 86% less purchasing power compared to baby boomers in their twenties

#156

Post by gruez »

88913527 wrote: post #138
phonon wrote: post #105

The author apparently has no idea how to do CPI calculations. She somehow seems to be calculating inflation adjusted wage increases to CPI changes. Rather-- Median Family income in 1970 was $9,870 [0] Median Family income in 2021 was $79,900 [1] CPI in 1970 was 38.8 [2] CPI in 2021 was 271.0 Ratio of incomes = 8.1 Ratio of CPI = 6.98 So household income has increased more than inflation. Median household income might…

There have been methodology changes between 1970 and today.

Okay but two wrongs don't make a right. If there were actually methodology changes that caused CPI to be not representative of purchasing power then accounting for CPI twice doesn't really fix anything, it just adds more noise into the result. To do it properly you need to explain what the methodology changes were, estimate their impact on the "real" CPI, and use your revised CPI to account for inflation. The author hasn't done that, so it's far more likely she has no idea what she's doing.

Re: Gen Z have 86% less purchasing power compared to baby boomers in their twenties

#157

Post by hedora »

phonon wrote: post #105

The author apparently has no idea how to do CPI calculations. She somehow seems to be calculating inflation adjusted wage increases to CPI changes. Rather-- Median Family income in 1970 was $9,870 [0] Median Family income in 2021 was $79,900 [1] CPI in 1970 was 38.8 [2] CPI in 2021 was 271.0 Ratio of incomes = 8.1 Ratio of CPI = 6.98 So household income has increased more than inflation. Median household income might…

Your numbers don't take into the age bands (you include older, wealthier families).

However, the comparing CPI to inflation adjusted incomes (as the article does) doesn't work either. Clearer explanation of the error I think the article made (and that I think you're pointing out):

For the sake of argument, say CPI is always proportional to income (which it would be if purchasing power was constant). To make arithmetic easy, say the CPI and median nominal income were both 1 in 1970, and are now both 8.

The inflation adjusted income in 1970 would be 8. (If we assume CPI moves with inflation, we multiply the 1970 median income by the ratio of 2022 CPI / 1970 CPI.)

So, by the author's calculations, a median family would have had 8 units of purchasing power in 1970, but only 1 unit of purchasing power in 2022, even though, by construction, CPI and nominal income went up in lockstep, and real purchasing power should be the same.

Re: Gen Z have 86% less purchasing power compared to baby boomers in their twenties

#158

Post by jscipione »

It seems obvious that the cost of living is much higher today than it was in the 1970s when a family could be supported by a single income while today given the cost of house, car, and commodities even two incomes does not compare to the buying power of a single income then.

The dollar has inflated to the point that it will soon be worthless. I wondered how the fed planned to pay its massive multi-trillion dollar debt once the dollar crashes but the Inflation Reduction Act has answered that question. Democrats are planning to extract the wealth of the American people at gunpoint held by 87k new militarized IRS agents.

Re: Gen Z have 86% less purchasing power compared to baby boomers in their twenties

#159

Post by phonon »

falcolas wrote: post #141
phonon wrote: post #105

The author apparently has no idea how to do CPI calculations. She somehow seems to be calculating inflation adjusted wage increases to CPI changes. Rather-- Median Family income in 1970 was $9,870 [0] Median Family income in 2021 was $79,900 [1] CPI in 1970 was 38.8 [2] CPI in 2021 was 271.0 Ratio of incomes = 8.1 Ratio of CPI = 6.98 So household income has increased more than inflation. Median household income might…

Something to remember - the median family in the '70's had one income. A median family today has two. So the margins (single income households) are in more dire straits today than they were in the past. Measuring in households and not individuals hides a large number of changes in how people are paid. It also doesn't account for things like pensions, which were common in the '70's and earlier.

There are also more single person households now[0], and the average household size has decreased by about 15%.[1]

[0] https://www.statista.com/statistics/242189/disitribution-of-...

[1] https://www.statista.com/statistics/183657/average-size-of-a...

Re: Gen Z have 86% less purchasing power compared to baby boomers in their twenties

#160

Post by bawolff »

curo wrote: post #153
telchior wrote: post #59

One of the items this article doesn't cover is healthcare spending, which has increased between 2 and 8 times since 1980 (depending on whether you're looking at individual spending or share of GDP). Here's a decent collection of charts: https://www.healthsystemtracker.org/chart-collection/u-s-spe... It has been shocking to me to see how cheap and effective healthcare can be in other countries, from an emergency visit…

I've heard this so often yet we left the UK for no other reason than the healthcare. My wife was pregnant and the experience from 0-7 months was so terrible, we flew to the US to have the child. Post-operative outcomes and survival rates in the US are far better than in the UK and many European countries. Statistics about better birth outcomes or higher longevity is best attributed to healthier lifestyles in Europe/U…

I don't think anyone disputes that us healthcare is better if you have the money.
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