Ask HN: What is really wrong with the US economy, really?

Unless you live in NY, SF (/me waves!), or DC, that number is grossly out of touch with the actual costs of rent in the United States.

The biggest problem with the us economy currently is the erosion of middle class jobs for unskilled and semi-skilled labor. My grandparents lived comfortably on union jobs. Most of those jobs are gone now, and those that exist are paying less all the time. I know a man who is 60 working in a lumber mill making less then he ever has in his life (40+ years of factory work).

Yes sure consumption has increased with affluence but Many people don't realize how hard it is for an unskilled and unconnected person to find any kind of work. I know some Iraqi refugees who could not even get agriculture work because the Hispanic population always filled any open jobs through network effects.

The only jobs that exist for unskilled labor are service sector, fast food &tc. These may pay enough to survive in many places but it will not be comfortable or secure.

Second biggest problem is the rising cost of healthcare. 15% of GDP and growing, more than half of that is government paid (medicare / medicaid / etc). My father is self-employed so purchases his own healthcare, but there is no out-of-pocket maximum for him so when my mother was diagnosed with cancer there was a massive financial cost despite 80% being paid by the insurance company.

There are other problems as well, but those are the biggest cause of financial insecurity and lower lifestyle quality among the bottom quintile of US citizens.

Edit:

Fewer hippies after I had composed my rant. Re: rents. yeah they are bad but really only outrageous on the coasts. So depending on your location the rent can kill you, but in my hometown it was never a big deal.

This is from 2013. It hasn't gotten better. Their median for the city I live in is $2395 (and for reference, I'm an hour+ drive from San Francisco; ~2 hours by train).

Rents around me have definitely been going up, even if they're not at $2400. And that's for studios/1 bedrooms. If I were to move into the exact apartment I have now, the rent on the lease would be a few hundred dollars more than what I'm already paying (despite the fact that they've been bumping my rent up as much as they can).

Yes, there are low-rent areas. But a lot of people don't have the option to live in them.

Convert your rent to a mortgage payment, and lock in $1,500 a month payments (probably around what you are paying in rent right now). The housing prices are only going to go up in Seattle as it becomes more of a tech city (Amazon is building an entire new office in Belltown, for example).

Here's a nice (affordable on 110k) house in Seattle: http://www.zillow.com/homedetails/2809-S-Columbian-Way-Seatt...

And you still have money leftover for a nice German car that depreciates half its value in a few years...

Perhaps you don't want to take on debt. Solid? I'd imagine your grandparents did so to build their house though as well. Also, you can even look outside of the city for cheaper real estate.

Unfortunately, $110k is becoming the new normalized "market value" for highly-qualified software engineers in America, and so the tech neighborhoods are becoming more gentrified and recalibrating their costs of living such that a six-figure salary now makes you a middle class "technocrat". I maintain that living in Seattle, SF, NYC is a "luxury" though. If you aren't happy with your standard of living in one of these luxury cities, there's nothing wrong with a place like Pittsburgh, Houston, or Cleveland where a $400k house is a mansion.

Other than that, there's a luck component to this as well. The waterfront home-owners with garaged Porsche 911s by Burke-Gillman trail in Seattle got in on the Microsoft ship early (i.e. early 90s), the company grew tremendously and they had a stake in revolutionizing the industry, and became millionaires off of their equity. The corporate life treated these Microsoft millionaires well (and chances are they had the same qualifications, skill sets, and risk aversions that you have now), but the opportunity of working at 1990 Microsoft pales in comparison to working at 2010 Microsoft. Nowadays, an entry-level job at Microsoft means having nine managers, living in an outrageously expensive area, and coding C# unit tests all day for a relative pittance. That's not to say Seattle has devolved into a SF or NYC in terms of living cost though.

How to reap the same standard of living today? Give up the cozy big corporate job (six-figures isn't as impressive in 2014 as it was in 1998), take a risk. For instance, join or found a startup that ends up becoming the next FB, invest in something like TSLA or Bitcoin a year ago. I can't say what the path to success looks like now, but I can say that it involves luck, savviness, networking, and risk-taking. Who knows? You MIGHT join the right early-stage company that grows into the next Microsoft empire (I certainly can't tell you which one), and become one of those paragons of success through following the safe corporate job route. However, you can't become complacent doing your 9-5 ASP.NET programming, or you'll never have that waterfront house.

The solution for the Microsoft millionaires of the 90s was to keep their heads to the grindstone and work up the corporate ladder, maybe even hand off to Microsoft some groundbreaking IP from their brains (for instance, the inventors of COM+, PowerShell, FAT32, PE, .NET, etc. probably own those houses). Unfortunately, this safe path no longer has nearly the same results as it did 20 years ago, and readily handing over your million-dollar brain children to a large corporation might give you a 15% raise next year in return.