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

consumeraffairs.com

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

#141

Post by falcolas »

phonon wrote: 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…

Something to remember - the median family in the '70's had one income. A median family today has two. So the margins (single income households) are in more dire straits today than they were in the past.

Measuring in households and not individuals hides a large number of changes in how people are paid. It also doesn't account for things like pensions, which were common in the '70's and earlier.

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

#143

Post by thewebcount »

arcticbull wrote: post #54
ctoth wrote: 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…

> Housing is another red herring, of course, because the average new American home is 2x bigger now than it was in the 70s

My spouse and I ran into this when we were looking for our current home 5 years ago in Los Angeles. Even though we're older, it's just the 2 of us, so we didn't need something huge. It was really hard to find a reasonably-sized house for 2 people (plus a little room to have a guest stay over). It was really hard to find something because people who want huge houses kept buying small ones for more than asking price, then tearing them down and building a much bigger house on the same lot. The one we did eventually buy had even been enlarged sometime between the 50s when it was built and today.

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

#144

Post by slg »

telchior wrote: post #59

One of the items this article doesn't cover is healthcare spending, which has increased between 2 and 8 times since 1980 (depending on whether you're looking at individual spending or share of GDP). Here's a decent collection of charts: https://www.healthsystemtracker.org/chart-collection/u-s-spe... It has been shocking to me to see how cheap and effective healthcare can be in other countries, from an emergency visit…

This is all true, but I am guessing the article skipped it because rising healthcare costs likely impact Gen Z much less than the population overall.

Obamacare has allowed children to stay on their parent's insurance for much longer. All of Gen Z is still young enough to qualify for that, so as a generation they haven't felt the full cost of seeking insurance independently. Plus the overturning of the personal mandate means young people are once again free to simply not get insurance which is often a bad decision overall, but can end up saving a healthy young adult some money.

There is still something very wrong with the healthcare system in the US, it just isn't a problem that has hit Gen Z particularly hard yet.

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

#145

Post by acdha »

nightski wrote: post #116
buildartefact wrote: post #81

Earlier quoted context omitted.

The US federal government also spends more per capita on healthcare than almost every other nation.

Median after tax income per capita in the U.S. is really high as well, almost at the top.

Less so after you correct for all of the things which we have to pay for out of pocket: health insurance, copays, drugs, etc. but also things like education, childcare, retirement, transportation, and often housing. I’ve known a number of people from Europe or Asia and all of them commented on how they thought they’d be making more here based on the raw income numbers, and how much more stressful it was here because you had to do more work yourself to get the same or lesser quality.

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

#146

Post by tstrimple »

ekianjo wrote: post #107
willcipriano wrote: post #80

Earlier quoted context omitted.

The US government spends more on healthcare per capita than any other OECD nation. We are just being robbed.

> healthcare per capita than any other OECD nation. You also need to mention that the US is not like any other OECD nation. It also happens to he the nation with the largest innovation in Healthcare, and not just by a little. By Far.

Is your theory that medical research and innovation is why it's so outrageously expensive to get stitches to close a wound?

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

#148

Post by [deleted] »

phonon wrote: 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…

[deleted]

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

#149

Post by cactus2093 »

Swizec wrote: post #27
ctoth wrote: 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…

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.

> 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.

Well have I ever got good news for you. Here's a random article about TV tech from 2002 that I just found on google [0] talking about the top of the line in display tech being a new 30 inch LCD TV that cost $8,000 (that would be $13,200 in today's dollars). Now twenty years later you can buy a 32 inch 720p LCD TV on Amazon for $99.

Same for computers, ever heard of a raspberry pi?

[0] https://www.nytimes.com/2002/04/18/technology/state-of-the-a...

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

#150

Post by jfim »

arcticbull wrote: post #93
wbsss4412 wrote: post #86

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…

Isn't the down payment delta pretty significant? Having to save 160k instead of 40k for a 20% down payment significantly delays the point at which a millennial household could start accruing home equity, feel confident about starting a family, etc.
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