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Each New Gen Finds It More Difficult to Surpass the Wealth of Their Parents

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Re: Each New Gen Finds It More Difficult to Surpass the Wealth of Their Parents

#11

Post by scotty79 »

donatj wrote: post #2

Let’s say for argument sake alone as this obviously isn’t true, say we’d reached the point that everyone was paid according to their ability, and every student received about the same education as their parents, wouldn’t the number be right around 50%? Half of kids more adept than parents, half less? I’m just making the argument here that 50% seems like the ultimate goal. You can’t go up forever.

Maybe for median income and static economy.

You should see regression to mean away from the median.

And in growing economy you should see kids surpass their parents because their lifespans cover more prosperous times than their parents.

Re: Each New Gen Finds It More Difficult to Surpass the Wealth of Their Parents

#12

Post by mil22 »

donatj wrote: post #2

Let’s say for argument sake alone as this obviously isn’t true, say we’d reached the point that everyone was paid according to their ability, and every student received about the same education as their parents, wouldn’t the number be right around 50%? Half of kids more adept than parents, half less? I’m just making the argument here that 50% seems like the ultimate goal. You can’t go up forever.

Yes, unless inflation-adjusted incomes increase each decade, as they did for much of the 20th century: in that scenario a child's peak earning years will tend to happen when incomes are higher than the peak earning years of the parents. Whether incomes should increase forever, and why they did for so long and no longer do, is a separate question.

Re: Each New Gen Finds It More Difficult to Surpass the Wealth of Their Parents

#13

Post by xnx »

And yet everyone now has access to products and services not available to the richest people on earth 50 years ago: all of human knowledge, university classes, movies, music, and entertainment accessible from a small device that fits in our pocket.

Re: Each New Gen Finds It More Difficult to Surpass the Wealth of Their Parents

#14

Post by freitzkriesler2 »

incomingpain wrote: post #10

This is a huge deal. The silent generation got very wealthy rebuilding after wars. But all generations must do better than the last, otherwise pyramid schemes like 'retirement' are not viable. The boomers however never quite built the world as much. They needed to do much more. They left us holding tremendous debt and high taxes as they enter 'retirement' but they objectively never saved enough money to make retireme…

> generational warfare

The first politician to pit retirees vs everyone else is going to cause the biggest voting block crack in history.

Especially as the country becomes more diverse. It's coming and I don't think boomers are ready for it.

Re: Each New Gen Finds It More Difficult to Surpass the Wealth of Their Parents

#15

Post by FooBarBizBazz »

ethbr1 wrote: post #5

In order for new generations to surpass the wealth of their parents, wouldn't a few unlikely things all have to be true? - Country GDP per capita would need to grow (relative to inflation) - Income would need to be evenly distributed throughout age ranges (i.e. avoiding an increasing share over time skewing older) Those are conditions we could create... but they'd take a lot of big, unpopular changes.

Re. your second bullet, these analyses tend to compare wealth at the same age. So that one variable should be eliminated.

Then it all comes down to your first bullet, about GDP.

There are two frames I can adopt.

One is to take GDP for granted as a proxy for quality of life and focus on technology and social organization. Maybe we're too focused on computation and not enough on energy production or something else. Maybe there are inefficiencies in social organization -- e.g., monopolies that kill off alternatives, or rent-seekers whose demands distract people from more productive or creative pursuits, or laws that paralyze activity in a sector (e.g. building codes' role in the housing crisis).

Another is to take a step back and question GDP -- which I mean not in some hippy "we need to measure happiness" sense (though maybe that's what it does come down to), but rather in true confusion about how it could measure real wealth. What it seems to measure is roughly aggregate price (which is some kind of monetary artifact), multiplied by the number of transactions that a person engaged in, in a year. How does that measure the value of what they've been able to accumulate?

I get your real point though, which is not really to insist on GDP per-se, but to say that somehow society needs to produce more real wealth, however that would be appropriately measured.

Re: Each New Gen Finds It More Difficult to Surpass the Wealth of Their Parents

#16

Post by incomingpain »

freitzkriesler2 wrote: post #14
incomingpain wrote: post #10

This is a huge deal. The silent generation got very wealthy rebuilding after wars. But all generations must do better than the last, otherwise pyramid schemes like 'retirement' are not viable. The boomers however never quite built the world as much. They needed to do much more. They left us holding tremendous debt and high taxes as they enter 'retirement' but they objectively never saved enough money to make retireme…

> generational warfare The first politician to pit retirees vs everyone else is going to cause the biggest voting block crack in history. Especially as the country becomes more diverse. It's coming and I don't think boomers are ready for it.

Already happened in Canada. We have a shockingly divisive government at the moment.

What happened was that the previous government increased retirement age by 2 years and like Obama made it such that retirement funds can reduce benefits if they arent financially solvent.

But you can look at other countries where younger generations cant afford to buy homes, certainly not on credit.

Or other countries where there's no more family. The older generation have to resort to silver crime or choose a new part time job.

That's the thing of why generational warfare literally never works out. The younger generation decides on how much engagement there is. The older generation always needs the younger generation. there can never be a forced enslavement of the younger generations.

But another reality, the people who vote are typically those who are old.

Some countries have alreadydecided, for example japan. They wont cut retirement, they've cut everything else. Thus their politicians have basically said their country will not fundamentally function in the near future.

Re: Each New Gen Finds It More Difficult to Surpass the Wealth of Their Parents

#17

Post by ethbr1 »

FooBarBizBazz wrote: post #15
ethbr1 wrote: post #5

In order for new generations to surpass the wealth of their parents, wouldn't a few unlikely things all have to be true? - Country GDP per capita would need to grow (relative to inflation) - Income would need to be evenly distributed throughout age ranges (i.e. avoiding an increasing share over time skewing older) Those are conditions we could create... but they'd take a lot of big, unpopular changes.

Re. your second bullet, these analyses tend to compare wealth at the same age . So that one variable should be eliminated. Then it all comes down to your first bullet, about GDP. There are two frames I can adopt. One is to take GDP for granted as a proxy for quality of life and focus on technology and social organization. Maybe we're too focused on computation and not enough on energy production or something else. Ma…

To me, it's two components: (1) amount of real wealth produced (in your encompassing sense, whether that's GDP-proportional or not) & (2) allocation across ages.

No amount of real wealth growth can solve the "better off future generations" problem if allocation is too badly broken. And no amount of allocation changes can solve it absent sufficient real wealth growth.

To use a current example: We decide that large-scale firms compete better globally (real wealth growth), and therefore support their existence. However, we recognize their scale distorts internal competitive markets (allocation), and so put in place a system that prevents them from acquiring SMBs and instead encourages a healthy, vigorously competitive, and profitable marketplace of independent SMB suppliers underneath them, that provides younger entrants with opportunity.

PS: In the US, if younger people were as organized as AARP and participated in elections at similar rates, allocation would be more favorable to them... https://www.statista.com/statistics/1096299/voter-turnout-pr...

Re: Each New Gen Finds It More Difficult to Surpass the Wealth of Their Parents

#18

Post by seanmcdirmid »

ethbr1 wrote: post #17
FooBarBizBazz wrote: post #15

Earlier quoted context omitted.

Re. your second bullet, these analyses tend to compare wealth at the same age . So that one variable should be eliminated. Then it all comes down to your first bullet, about GDP. There are two frames I can adopt. One is to take GDP for granted as a proxy for quality of life and focus on technology and social organization. Maybe we're too focused on computation and not enough on energy production or something else. Ma…

To me, it's two components: (1) amount of real wealth produced (in your encompassing sense, whether that's GDP-proportional or not) & (2) allocation across ages. No amount of real wealth growth can solve the "better off future generations" problem if allocation is too badly broken. And no amount of allocation changes can solve it absent sufficient real wealth growth. To use a current example: We decide that large-sca…

> PS: In the US, if younger people were as organized as AARP and participated in elections at similar rates, things would be better for them...

Why limit that just to the US? Voter participation, unless mandatory like in Australia, is always skewed to the old.

Re: Each New Gen Finds It More Difficult to Surpass the Wealth of Their Parents

#19

Post by ethbr1 »

seanmcdirmid wrote: post #18
ethbr1 wrote: post #17

Earlier quoted context omitted.

To me, it's two components: (1) amount of real wealth produced (in your encompassing sense, whether that's GDP-proportional or not) & (2) allocation across ages. No amount of real wealth growth can solve the "better off future generations" problem if allocation is too badly broken. And no amount of allocation changes can solve it absent sufficient real wealth growth. To use a current example: We decide that large-sca…

> PS: In the US, if younger people were as organized as AARP and participated in elections at similar rates, things would be better for them... Why limit that just to the US? Voter participation, unless mandatory like in Australia, is always skewed to the old.

I wasn't familiar with trends in other countries, so didn't want to speak to them. (Also, made some small edits to clarify)

Re: Each New Gen Finds It More Difficult to Surpass the Wealth of Their Parents

#20

Post by hotpotamus »

xnx wrote: post #13

And yet everyone now has access to products and services not available to the richest people on earth 50 years ago: all of human knowledge, university classes, movies, music, and entertainment accessible from a small device that fits in our pocket.

As someone who needs housing and medicine, that's minuscule comfort.
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