Can the West’s perplexing employment miracle continue? • Hacker News Board

Re: Can the West’s perplexing employment miracle continue?

#191

Post by mym1990 » Mon, Mar 06, 2023, 10:18 AM UTC

roflyear wrote: post #38

almog wrote: post #31

Earlier quoted context omitted.

Not only it's not high compared to historical rates but worse I think is that Fed's real interest rate is still in the negative territory: January CPI report headline came at 6.3% YoY and core at 5.3% YoY (it's negative with current rates even if you use the PCE index as a baseline, which is the Fed's favorite index to measure inflation).

seems the consensus is "a little more inflation" is better than "a bigger recession" which is probably true. People are still trying to get on their feet, and inflation is "felt" a lot less than losing your job (and not being able to find a new one for a long time).

It depends on a person's financial situation, from my understanding: if you have a lot of debt(which the average USA household does), you benefit greatly the more inflation goes up. If you have money sitting in the bank, you're basically getting eaten alive. If you have assets, they typically should be tracking inflation somewhat(real estate, some stock categories, TIPS, etc...).

People will be in between any of the above situation simultaneously, but between having to get fired and seeing costs go up a little at a time, I imagine most people will defer the gut punch and take the erosion of spending power.

Re: Can the West’s perplexing employment miracle continue?

#192

Post by mym1990 » Mon, Mar 06, 2023, 10:33 AM UTC

IAmGraydon wrote: post #171

metadat wrote: post #105

Earlier quoted context omitted.

Is the norm really that home loans are unaffordable even to first-time-buyer DINKs with good-to-decent six figure jobs who just want a place to live? (not an investment property) Currently the mortgage rates are the highest ever since 1989. Have you personally already purchased your first home? Without family assistance, it would be absolutely brutal and untenable for my children to enter into in this domain at prese…

Upper middle class starts at $156,000. They can’t afford a home at that income level?

Source for this?

Re: Can the West’s perplexing employment miracle continue?

#193

Post by paganel » Mon, Mar 06, 2023, 10:34 AM UTC

bluGill wrote: post #20

mkl95 wrote: post #9

We have gone from a zero interest rate economy to a high interest one within months. Whoever claims to accurately predict what's going to happen in the next few years is talking out of their ass. We know inflation should start decreasing within a year or so, but you cannot predict how millions of people will react to suddenly not being able to afford stuff.

This isn't a high interest rate ecconomy, this is normal interest rates. Rates have been absurdily low for a while so you may not remember it, but history provides a record.

> This isn't a high interest rate ecconomy,

Unfortunately it is for the people who have gotten their mortgages at those lower rates. It's a ticking bomb for many of them.

Re: Can the West’s perplexing employment miracle continue?

#194

Post by ssss11 » Mon, Mar 06, 2023, 10:34 AM UTC

JenrHywy wrote: post #143

ssss11 wrote: post #141

Earlier quoted context omitted.

But are the publicised rates correct - theyre based on a basket of goods, of which my understanding is, many standard items are not included. I think petrol might have been one? I’ve seen online estimates recently 3 or 4x what you’ve stated and it wouldn’t surprise me if those were correct but we’ll never know.

You're confusing interest rates and inflation.

Oops, thank you

Re: Can the West’s perplexing employment miracle continue?

#195

Post by rayiner » Mon, Mar 06, 2023, 10:36 AM UTC

astrange wrote: post #169

rayiner wrote: post #120

Nobody wants to admit it but Trump’s immigration policies, which Biden continued, actually had the intended effect. Inflation was a predictable consequence of ramping down on the influx of cheap workers, but that’s fine. Americans don’t need cheap stuff as much as they need workers to have bargaining power.

That's Trump's interest rate policies, not his immigration policies. (Biden is continuing both of them by keeping JPowell on the job.) Immigrants are good for the economy and good for workers. They are your customers! Don't be a Malthusian.

No, because we had low interest rates before Trump and didn’t have the same low end job growth. “Good for the economy” isn’t the relevant concept. Immigration can grow the economy overall, while putting lower end workers in a relatively worse position.

Re: Can the West’s perplexing employment miracle continue?

#196

Post by c-fe » Mon, Mar 06, 2023, 10:47 AM UTC

epolanski wrote: post #178

happyjack wrote: post #165

I think the honest reality is that the game is rigged and dependent on a perpetual 7% growth type cycle. We have indebted future generations so much that it's going to crumble or the next 200 years of western civilization will be held to debt service. Millennials in western countries aren't having kids, and are stuck paying student loans (and other debt) while a 2 bedroom home in some suburbs that doesn't have a rott…

Student loans are an American thing. I paid 500€s/year to graduate in chemistry in Italy and have not incurred any debt.

Anecdotal, I also thought they were just an american thing, but they are also common otherplaces such as UK and even the Netherlands

Re: Can the West’s perplexing employment miracle continue?

#197

Post by m000 » Mon, Mar 06, 2023, 10:50 AM UTC

epolanski wrote: post #178

happyjack wrote: post #165

I think the honest reality is that the game is rigged and dependent on a perpetual 7% growth type cycle. We have indebted future generations so much that it's going to crumble or the next 200 years of western civilization will be held to debt service. Millennials in western countries aren't having kids, and are stuck paying student loans (and other debt) while a 2 bedroom home in some suburbs that doesn't have a rott…

Student loans are an American thing. I paid 500€s/year to graduate in chemistry in Italy and have not incurred any debt.

> Student loans are an American thing.

Unfortunately, they're also becoming an "American export". E.g. Netherlands granted a study grant to all students up until 2015, when it was converted to a student loan [1]. The required amount is still lower and the terms are better than US, but the ball has started rolling. We are now waiting for the next wave of neoliberal policies to see average student debt surging.

[1] https://www.wittenborg.eu/new-dutch-student-loans-system-sta...

Re: Can the West’s perplexing employment miracle continue?

#198

Post by csomar » Mon, Mar 06, 2023, 11:00 AM UTC

patrickk wrote: post #185

jackcosgrove wrote: post #96

Earlier quoted context omitted.

Turns out there is a factor of production in short supply that's even more vital than microchips: human labor.

I wonder when rich countries (excluding Japan due to their culture) will start to agressively complete with each other for middle or high skilled foreign labour to plug vital gaps. Offering not only green cards or EU blue cards, but eventual citizenship, university tenureship, guarantee minimum salaries and more goodies, without caps on the numbers per year. Kind of like how Dubai or Australia does for nurses today,…

They already are (and are in trouble for that). The problem is not their refusal to accept foreigners but rather they are not fixing the real problem (low birth rates). You can fix the problem by increasing supply, creating new cities or satellite cities, etc… and they are not having superb growth either. The solution can be easily fixed.

Most of Western cities are in a “failed state”. The US is a prime example of that. Japan, while quite functional, is also quite expensive to have kids in. I think Japan will be the Western state that fared the best out of all the Western countries. The US is definitively the worst: Being quite expensive while also quite dysfunctional, and with a bonus: high crime rate.

Re: Can the West’s perplexing employment miracle continue?

#199

Post by pbhjpbhj » Mon, Mar 06, 2023, 11:02 AM UTC

mym1990 wrote: post #189

teekert wrote: post #175

Earlier quoted context omitted.

For reference, my mortgage from 13 years ago was 4.85%, the one I got 6 months ago was 4.25%, about 1.5 years ago we got 2%. When I was born in the early 80's, my parents were doing 12%. Of course, housing prices adapt so that banks always extract a nice, steady amount from the people. Even more nowadays, when there's more to extract because more women started working. More to the daycare, more to the banks, the Amer…

Maybe a hot take but I feel like high(er) interest rates for homes should be the standard. This allows for demand to be modulated, and puts up a barrier to rent seekers from flooding the market. The problem is that over the past 5-10 years a lot of property has already been snapped up by investors at minimal interest rates, so as long as rents stay somewhat stable, they investors will be raking in the returns. I gues…

How does it put up a barrier to rent seekers, it makes homes less affordable, which impacts the poorer people more. The rich can but the homes. The poor still need somewhere to live and so tent the homes, they're paying more just they're helping wealth move to the bankers more as well as the property owners.

Allowing ownership of houses as an investment is just wrong. (The usual response to this is that you need investors or housing won't be built. The idea no-one would pay for a house to be built is silly, but we also have not-for profit housing associations.)

Re: Can the West’s perplexing employment miracle continue?

#200

Post by csomar » Mon, Mar 06, 2023, 11:04 AM UTC

epolanski wrote: post #178

happyjack wrote: post #165

I think the honest reality is that the game is rigged and dependent on a perpetual 7% growth type cycle. We have indebted future generations so much that it's going to crumble or the next 200 years of western civilization will be held to debt service. Millennials in western countries aren't having kids, and are stuck paying student loans (and other debt) while a 2 bedroom home in some suburbs that doesn't have a rott…

Student loans are an American thing. I paid 500€s/year to graduate in chemistry in Italy and have not incurred any debt.

I think this is worse… because the price is being hidden and also the real cost/payment for such an education.

Your country, during that time, has incurred debt which you’ll have to pay as a form of extra taxes. The path of least resistance in this case is to not pay as individual and leave it to the rest of community (or country).

Does this explain to you why young people are leaving Italy? It’s a form of arbitrage that’s being played on a global scale.