Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Terrifying Reality of Long-Term Unemployment

theatlantic.com

Post reply on HN
Print view View original

161–170 of 349 posts

Re: The Terrifying Reality of Long-Term Unemployment

#161

Post by nostrademons »

kens wrote: post #142
enraged_camel wrote: post #127

Earlier quoted context omitted.

>>There is another side of this that the article doesn't touch on: home ownership. Oh boy. There's so much I can say about this topic, and none of it is positive. Basically, the way our culture mindlessly promotes home ownership is insane. Absolutely insane! Every time I hear people complaining about "throwing away money" by renting, and how they would rather put that money into a house, I want to hold them by the sh…

One thing that puzzles me is that rising house prices are treated as inherently good, and falling house prices are seen as inherently bad. But for most things, it's the exact opposite - rising prices are bad. Is this just because newspaper articles are biased towards the perspective of real estate agents and homeowners? Or are high house prices good because houses are investments? Would cheap 3-d printed houses (hypo…

It's because 2/3 of Americans are homeowners, so for a majority of Americans, falling house prices are bad.

It's the same thing for most goods - the price mechanism is inherently value-neutral, and then whether it's better if prices go up or down depends upon how many people are potentially on each side of the transaction. Falling wages are seen as a bad thing, because most Americans identify with labor and not capital. The social security crisis is seen as a bad thing, because senior citizens (who get the payouts) vote in much larger numbers than young adults (who pay the taxes). Falling stock prices are seen as a bad thing because most Americans own stocks, even if indirectly. Falling CDO prices are seen as a good thing because most Americans do not own CDOs.

Re: The Terrifying Reality of Long-Term Unemployment

#162

Post by gte910h »

mgkimsal wrote: post #98
sukuriant wrote: post #67

Earlier quoted context omitted.

There's an interesting amount of money you can make as a person living in the United States where you're not making enough money to both survive and save on your own; and, you're making too much money for the government to go out of its way to help you. I've had friends in those situations over the course of my life. I believe I've even heard of situations where people would turn down raises or even turn down jobs be…

Yeah, we talk about "means testing" social security payments in this country, but little talk of "means testing" welfare recipients. I worked with people 20 years ago (at a burger king) who would turn down shifts because that extra $15 for a 5 hour shift would put them over a limit and they'd lose all their food stamp money. We're very keen on progressive taxation, but apparently progressive welfare is too far out of…

It seems like we should just give everyone food stamps. Then this artificial benefit cliff doesn't occur.

Re: The Terrifying Reality of Long-Term Unemployment

#163

Post by benjiweber »

[deleted] wrote: post #158
enraged_camel wrote: post #127

Earlier quoted context omitted.

>>There is another side of this that the article doesn't touch on: home ownership. Oh boy. There's so much I can say about this topic, and none of it is positive. Basically, the way our culture mindlessly promotes home ownership is insane. Absolutely insane! Every time I hear people complaining about "throwing away money" by renting, and how they would rather put that money into a house, I want to hold them by the sh…

[deleted]

I guess it depends on the rental vs purchase market where you are.

Here in outer London, rental prices are pretty much in line with the interest payments on a mortgage. So you're "throwing away" the same amount whether you're renting or not. I'd have thought this would become a natural equilibrium in most places. If rental prices are significantly more than the interest payments on a mortgage then owning will seem more attractive.

Mortgage still has value in that it gives you the opportunity to invest that in a house if that's something you want to do.

Re: The Terrifying Reality of Long-Term Unemployment

#164

Post by hexedpackets »

[deleted] wrote: post #158
enraged_camel wrote: post #127

Earlier quoted context omitted.

>>There is another side of this that the article doesn't touch on: home ownership. Oh boy. There's so much I can say about this topic, and none of it is positive. Basically, the way our culture mindlessly promotes home ownership is insane. Absolutely insane! Every time I hear people complaining about "throwing away money" by renting, and how they would rather put that money into a house, I want to hold them by the sh…

[deleted]

You wouldn't get $1k a month in equity. First of all, you can't ignore interest as its a huge part of what you pay on a mortgage. Depending on your down payment and rates, you could end up being over half the cost of the actual property in interest and property tax. Then there's maintenance, insurance (much more costly than renter's insurance), and so on.

Re: The Terrifying Reality of Long-Term Unemployment

#165

Post by riggins »

[deleted] wrote: post #158
enraged_camel wrote: post #127

Earlier quoted context omitted.

>>There is another side of this that the article doesn't touch on: home ownership. Oh boy. There's so much I can say about this topic, and none of it is positive. Basically, the way our culture mindlessly promotes home ownership is insane. Absolutely insane! Every time I hear people complaining about "throwing away money" by renting, and how they would rather put that money into a house, I want to hold them by the sh…

[deleted]

"at worst, it depreciates by 50%, you still get $1k back from every month you paid off the mortgage"

Not sure what you mean by 'get $1k back from every month you paid off mortgage'

Here's rough justice. $300K, 6%, 30 yr fixed mortgage.

Annual payment is $22K(about your 2K/month) for the life of the mortgage.

Avg int over the first 5 years is $17.5K.

So after the first five years you've accumulated $22K in equity.

If your house goes down 50% you own a $150K house with a $278K mortgage.

Re: The Terrifying Reality of Long-Term Unemployment

#166

Post by jacoblyles »

marknutter wrote: post #41
rayiner wrote: post #35

Earlier quoted context omitted.

Eh, there is something to what he's saying. The idea that the labor market behaves rationally is a childish fantasy. Employers are not rational. They do all sorts of irrational things, and discriminating against the long-term unemployed (and also women returning to the work force from motherhood) is one of those irrational things. It's almost a dating mentality. They jump to the conclusion: "well if nobody else wants…

Well if they act irrationally they will be sufficiently punished by the market (no childish fantasy required). There aren't enough jobs? Then create more jobs. Starting a company, at my last check, is incredibly simple to do. Of course, turning a profit is hard, which is why people turn to the government to provide them with work rather than take the risk of starting a company. The government doesn't need to turn a p…

Starting a company is easy. Hiring people is hard. There is a ton of regulatory paperwork and costs that kick in when you start hiring people.

Re: The Terrifying Reality of Long-Term Unemployment

#167

Post by crpatino »

AznHisoka wrote: post #100

I wonder if the same effect applies if you took a couple of years off to do a Masters or PhD full-time?

Short answer, yes.

Long answer, I happened to teach at undergraduate level during my days ad grad school (not really a T.A. but a sort of associate professor position that in the US is normally filled by PosDocs). At the time it seemed like a great idea and I was proud to "not having a single day of unemployment in my record".

The problem was when I decided to go back to work in industry instead of pursuing an academic career. Most employers would see me not as a fresh graduate from a prestigious graduate program, but as "just a teacher" trying to "switch careers".

It took 4 and a half months of eroded expectations, biter exchanges with H.R. folks and learning the ropes of the hiring game to find someone to actually give me a chance to prove myself in a support position that required no advanced degree and minimal technical skills (basically: speaks English, knows ksh and SQL). Then came the appalling realization that after 9 years of post K12 education I was apparently not qualified to answer the phone properly.

Of course, your mileage may vary. Much of my experience not necessarily comes from being in grad school, but from lack of soft skills and the ability to manage perception of potential employers.

Re: The Terrifying Reality of Long-Term Unemployment

#168

Post by lutorm »

mcherm wrote: post #119
michaelochurch wrote: post #92

Earlier quoted context omitted.

Here's a solution that doesn't require the government to hire long-term unemployed: lying on a resume or in an interview to conceal unemployment is now legal . (Well, technically, it was never illegal; just considered unethical.) You may: * Expand dates of any job by up to two months or 10% on each side, whichever is larger. * Bump an educational degree forward by up to 5 years if under 40, and 10 years if older. * M…

I think it sounds like a terrible idea. As an applicant, I would never take advantage of it. As an employer I would never WANT to hire anyone who took advantage of it. A side effect would be that I would begin to distrust resumes and would therefore hire more by word-of-mouth instead, which would reduce opportunities for minorities and those less well-connected.

I would begin to distrust resumes

You mean you now trust resumes?

Re: The Terrifying Reality of Long-Term Unemployment

#169

Post by nilkn »

enraged_camel wrote: post #127
cletus wrote: post #84

This doesn't surprise me at all. One thing I've come to learn in life is the importance of social proof. Social proof takes many form. It's why MIT and Stanford CS grads have tech companies come to their campuses and throw money at them (these institutions don't have a monopoly on good engineers). It's why if you have Google/Facebook/Twitter on your CV you are pretty much guaranteed a job. It's why academic staff who…

>>There is another side of this that the article doesn't touch on: home ownership. Oh boy. There's so much I can say about this topic, and none of it is positive. Basically, the way our culture mindlessly promotes home ownership is insane. Absolutely insane! Every time I hear people complaining about "throwing away money" by renting, and how they would rather put that money into a house, I want to hold them by the sh…

> Instead of having that money tied down on a house, people are much better investing in the stock market, which has, over the past 100 years, gone up by 7% annually.

Just to be clear, that 7% is after inflation. The historical performance of the stock market is closer to 10-11% pre-inflation.

> The only time a house makes sense is when raising kids.

Retirement is of course another scenario where it makes sense. Mobility won't be nearly as important (indeed it may be totally irrelevant), and you won't have any rent or mortgage payments if you own your house.

The thing is that I don't plan to retire in San Francisco or NYC. I plan on retiring in the south or midwest. Housing is so "cheap" there compared to salaries in tech hubs that as long as you're saving a reasonable amount of cash (say $1k minimum) every month (on top of retirement accounts and investments in stocks and bonds), you'll easily be able to just go buy a decent house in a cheap area for cash when you're ready to settle down in retirement.

Is it absolutely the most efficient path, financially? I don't know, but it sure does make everything simple, as you'll have maximum mobility during your career. I can't tell you how many people I know who have basically stunted their careers due to buying homes. Money is certainly not the end goal in life, not even close, but lots of people I know could double their earnings if they weren't locked down to one location.

Re: The Terrifying Reality of Long-Term Unemployment

#170

Post by pchivers »

jdietrich wrote: post #157
enraged_camel wrote: post #127

Earlier quoted context omitted.

>>There is another side of this that the article doesn't touch on: home ownership. Oh boy. There's so much I can say about this topic, and none of it is positive. Basically, the way our culture mindlessly promotes home ownership is insane. Absolutely insane! Every time I hear people complaining about "throwing away money" by renting, and how they would rather put that money into a house, I want to hold them by the sh…

It's a very simple mathematical error - people compare the cost of a mortgage payment with the cost of a month's rent, failing to take into account that only a tiny fraction of the mortgage payment actually becomes equity. If they actually sit down and work it out, most people are astonished at how much flexibility they sacrifice for that small slice of equity.

>failing to take into account that only a tiny fraction of the mortgage payment actually becomes equity.

What percentage of a mortgage payment actually gets converted into equity?

(coming from a genuinely curious person who has never owned a house)

Post reply on HN