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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

#191

Earlier quoted context omitted.

Sorry for nitpicking, but 48 is not a boomer. She is a Gen X. Boomers are the folks born after WWII and before the oil crisis.

1948 is actually roughly within the OG "baby boomer" group, since it represents babies born to WWII veterans when they returned home to their wives. WWII ended in September 1945. And while there are variations on the years per generation, here's the breakdown per Wikipedia. The baby boomer generation runs from 1946 to 1964, X from 1965 to 1980, Millenials 1981 to 1996. https://en.wikipedia.org/wiki/Generation As an a…

I misunderstood. I thought you were saying she was 48 years old, but she was born in 48.

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

#192
post #27

Earlier quoted context omitted.

What good is cheaper tech if we just use that to add more features and keep the same price? You could get a TV for less than $50 if it had the same features and processing power as it did in 2002. Same for computers. Imagine how cheap we could make a car that only has the features we had in the 90’s? Even if you include the mandatory passive safety upgrades.

TVs became cheaper because now companies have recurring revenue by selling ads. Same with other stuff, it got "cheaper" because the sellers found alternative monetization channels, which often are more anti-consumer.

TVs have been continuously better and cheaper in real terms since their invention - any cross-subsidy from smart TV ads is very much a "last five years" phenomenon I think.

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

#193

Earlier quoted context omitted.

I would take straight up communism health care or ancap pay-or-die unregulated over our current bastardized system that combines the worst aspects of both.

Really? I remember a thread on reddit about the HBO series Chernobyl. A lot of posters who lived through it commented. One I recall said that root canals were free in the USSR, but you didn't get any anesthetic. Another commented that the hospital stay was free, but you had to bribe the nurses to take care of you. Having had a root canal myself, it's "no thanks" to free communist health care.

Order of preference [not an exhaustive list]

1) Unregulated ancap pay-or-die (or charity)

2) USSR style salute Lenin on the way into the doctor's office

3) Our system

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

#194

Earlier quoted context omitted.

> Housing is another red herring, of course, because the average new American home is 2x bigger now than it was in the 70s. Roughly speaking 1 square foot of the average home costs exactly the same as it used to in the 1970s. [1] And the average family has become smaller. So yes, housing is more expensive in big cities but that's because of zoning as Mr. Andreessen will tell you. Just because houses have gotten bigge…

I have long advocated for Japanese-style federal zoning rules which would stop local municipalities from playing these games. I agree that housing is more expensive, but of course, housing is priced into inflation numbers - and wages have kept pace. Housing is a major driver of inflation. Part of the discrepancy here - and housing needs its own entire article - is how low interest rates factor into affordability. In…

The down payment is probably more significant than what your comment lets on. While I haven’t experienced this, it’s not uncommon to hear young people complain that their rent is more expensive than a lease and there’s nothing to be done about it because they can’t afford the down payment.

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

#195
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.

I don’t know if you’re thinking of it but there’s this site called shadowstats which claims to calculate CPI/inflation with the old method and shows totally wild inflation numbers but the way it actually works is that the guy who runs the site takes regular CPI and adds in adjustments to his liking to get inflation numbers that he thinks look right.

My understanding is that you get pretty similar numbers with either methodology.

See more here for example: https://fullstackeconomics.com/no-the-real-inflation-rate-is...

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

#196
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…

The consumer price index (CPI) is untrustworthy. It incorporates adjustments into things like technology that don't actually reflect utility. For example, if you look at the section on "Computers, peripherals, and smart home assistants" you'll note a nearly 300-fold decrease in the consumer price of computers from 1997 to 2022. How the heck does that work? Computers today are cheaper than in 1997 but surely not 300 times cheaper.

It turns out that they use a "quality adjustment" that takes into account the relative performance of a modern computer compared to previous years. The bulk of the 300-fold decrease in price is due to the fact that modern computers are many times faster than those made in the 1990's. But there's a problem with that: a consumer doesn't get hundreds of times more utility out of a computer. You can't have a hundred people in your house sit there and work on the same computer and achieve the productivity scaling which would warrant this adjustment.

In reality, you're paying for one computer an amount which is nominally within an order of magnitude of what you would have paid in 1997. So this adjustment has the effect of drastically skewing the CPI statistic in this sector. Furthermore, computers have only grown in importance. What was a luxury in 1997 has become a necessity today. Families often have multiple computers. Parents may work from home and use their personal computer for paying bills, applying for jobs, doing taxes, budgeting, or applying for government services, while children may use their computers for doing schoolwork, research, playing games. Everyone uses their computers and devices for communications. However, none of these tasks (besides playing games) has markedly improved or been made more efficient by the technological advances in the computers themselves.

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

#197
post #16

At least they can buy cheap TVs, right? I wonder if we can finally accept that just because things like phones and TVs got better faster than purchasing power got worse, doesn't mean that it hasn't been getting worse for a while. I'd even go so far to say that technical progress in a couple areas has hidden some pretty stark declines. Or at least allowed some people to point at shiny things getting better when compla…

As usual, there's a few chart crimes in here. Chart 1 shows CPI and inflation adjusted wages on the same graph? Why? Inflation adjusted wages already take into account CPI. There's no sensible reason to plot these two on the same graph. The caption is "wages are up 80% but that didn't keep up with living costs" - you cannot draw that inference from this graph. This graph actually shows that in fact wages grew faster…

There's literally nothing more recent than something built in the early 70s without going 1h30 outside the city that I can currently afford, and we're a two-income household with a single child. My parents could afford their - much bigger than I'll ever own - house on a single income (in the same ballpark as my current individual salary, adjusted for inflation) in their early 20s, 30min from downtown. My current freaking rent for a 1200sqft flat is higher than the mortgage they paid on the 2200ft house they bought in the mid-90s after selling the first one. The latest inflation, especially on food and transportation, has been eating in my savings/investing budget so less opportunites to make that money work for me.

I guess the numbers you're pointing at do seem to point towards that I'm supposedly faced with provided with opportunities as they were, but I can't help but feel like I'm getting shafted somewhere along the way cause I'm pretty damn far from feeling like it does.

Maybe my timing is just horrible, I don't know - I did get out of school right after 2008, and wasn't financially ready to buy a home before mid-2020... But I just cannot subjectively recognize my situation in those numbers.

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

#198
post #75
post #27

Earlier quoted context omitted.

What good is cheaper tech if we just use that to add more features and keep the same price? You could get a TV for less than $50 if it had the same features and processing power as it did in 2002. Same for computers. Imagine how cheap we could make a car that only has the features we had in the 90’s? Even if you include the mandatory passive safety upgrades.

I was going to say "and how light we could make a car", but then i actually looked up some stats, and this was news to me: http://web.mit.edu/sloan-auto-lab/research/beforeh2/files/Ma... Car weight declined sharply from 1976 to 1982, then started creeping up again, but cars in 2010 were only about as heavy as cars in ~1979.

I don't think this takes into account that something like 50% of vehicles sold are now light trucks (pickups and SUVs) rather than passenger cars.

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

#199

Earlier quoted context omitted.

Gimme something with '20's safety and fuel economy, and '90's features otherwise. Or, even better, an electric car without the computer screen on the inside. I remember 90's cars safety and gas mileage, and I emphatically don't want that.

Yeah that’s the expensive stuff. The touchscreens and other tech crap is cheap

> Yeah that’s the expensive stuff.

In today's world of subscription heated seats, $9k to unlock pre-installed range extensions, and $10k FSD capability (though without the actual FSD)... I feel reasonably justified in disagreeing with you.

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

#200

Earlier quoted context omitted.

My mother, a baby boomer ('48), worked as a waitress part time to pay her way through college in her 20's. My dad worked for ma'bell, and earned somewhere around $150k in today's dollars as an high-school-educated lineman when he retired (and was then hired back on to train). And that's with a fully funded pension plan. So, even if they were in the workforce earlier (they weren't, I (as a genX) was working part time…

Sorry for nitpicking, but 48 is not a boomer. She is a Gen X. Boomers are the folks born after WWII and before the oil crisis.

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