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Americans are 40% poorer than before the recession

marketwatch.com

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Re: Americans are 40% poorer than before the recession

#81

Post by ahomescu1 »

nodata wrote: post #49
sz4kerto wrote: post #22

Earlier quoted context omitted.

"Being poor is the new norm" -- you're talking about America, a country that has extremely high living standards compared to most other large (>25M) countries.

What high living standards? I'd say medium living standards. Take Scandinavia if you want to claim high.

GP: compared to most other large (>25M) countries.

Scandinavian countries aren't >25M, neither are they "most [...] countries".

EDIT: I started thinking there's more to this argument. Scandinavian countries are more the size of the average US state, than the size of the US itself. Comparing Sweden to Michigan makes more sense to me than comparing Sweden to the US (also makes sense from a GDP perspective: Sweden had a 2012 GDP of $523 billion, while Michigan had a GDP of $408 billion; they're close in both population and wealth).

The GP's point was that the US is rich for its size, which IMHO is testament to the effectiveness of good federalization (the US being a federation of 50 semi-self-governing states). IMHO size does matter, and it's really hard to govern huge countries.

Re: Americans are 40% poorer than before the recession

#82

Post by kyllo »

pc86 wrote: post #80
kyllo wrote: post #77

Earlier quoted context omitted.

Do nothing jobs like HR pay six figures Not to fresh college graduates, they don't. Six figures in HR is seniority pay. The vast majority of entry-level office jobs available today pay very poorly compared to junior SDE. An entry-level HR coordinator is typically making ~$20/hour.

Six figures is seniority pay in almost any field outside of medicine, particularly if you exclude the Standford PhD folks going straight to Google, Microsoft, or Amazon. $20/hr is about $40k a year. I don't live in in a city, so my first job as a developer was $42k a year. I think it's safe the say the developers I worked with provided more value than the HRC.

If you did live in a city, and you were seeking your first job as a developer today, you could expect your first job to pay at least double that, with just a bachelor's in CS. I live in Seattle and entry-level SDE jobs here typically pay $80k+. I hear that Microsoft, Google, Facebook and Amazon start in the low six figures.

Meanwhile other entry-level office jobs are still around that ~$20/hr or ~$40k/year (depending on whether they're overtime exempt or not) level.

Re: Americans are 40% poorer than before the recession

#83

Post by thaumaturgy »

nostromo wrote: post #31

I'm really worried about our economic future. I think job creation has been decoupled from economic growth. That's terrifying for the lower class today, and will eventually be terrifying to nearly everyone. I also think central banking has lost its effectiveness. We've had 6 years of 0% interest and money printing -- the pedal is to the metal -- but labor participation for working-aged citizens is stuck at a low not…

I'm not so sure.

Most of what I read suggests that American workers are as productive as ever; the generated wealth just seems to be getting concentrated into the hands of a smaller number of people. It's not really employment or even industry that's broken, it's the exploitation of workers (and not just in the U.S., although it's pretty bad here right now), and since it is politically incorrect to suggest anything that smells even a little like wealth redistribution, the problem will continue for a while until there is sufficient public unrest.

The situation looks to me a lot like the one in the late 19th century (e.g. http://en.wikipedia.org/wiki/File:The_Bosses_of_the_Senate_b...), except now the political fat cats and monopolists are in the news and communications industries.

Re: Americans are 40% poorer than before the recession

#84

Post by russelluresti »

So, everyone's already pointed out that it's dumb to compare the amount of money you have now to the amount of money you had at the height of a bubble (where that money was unsustainable and over-inflated).

One thing that's missing here, though, is the idea of amount of money to cost ratio.

For example, say you had $1000 in 2007. Now say that, in 2007, a loaf of bread cost $1000. In that year, you had enough money to buy 1 loaf of bread. Now, in 2014, you have $600 (40% less than 2007). But now, instead of $1000, a loaf of bread is $100. Now you have enough money to buy 6 loaves of bread. You technically have less money, but the value of each dollar you have is significantly more. So, are you really "poorer" now?

The issue with just looking at a single number when analyzing economic health is that it will never tell you the whole story. I can have a million dollars and still be in poverty if a gallon of milk costs 2 million.

Re: Americans are 40% poorer than before the recession

#85

Post by Negitivefrags »

russelluresti wrote: post #84

So, everyone's already pointed out that it's dumb to compare the amount of money you have now to the amount of money you had at the height of a bubble (where that money was unsustainable and over-inflated). One thing that's missing here, though, is the idea of amount of money to cost ratio. For example, say you had $1000 in 2007. Now say that, in 2007, a loaf of bread cost $1000. In that year, you had enough money to…

> One thing that's missing here, though, is the idea of amount of money to cost ratio.

That isn't missing at all. It's specifically accounted for. See how the graph says "in 2013 dollars". That indicates that they are using inflation adjusted values.

Re: Americans are 40% poorer than before the recession

#86

Post by TheCoelacanth »

pc86 wrote: post #80
kyllo wrote: post #77

Earlier quoted context omitted.

Do nothing jobs like HR pay six figures Not to fresh college graduates, they don't. Six figures in HR is seniority pay. The vast majority of entry-level office jobs available today pay very poorly compared to junior SDE. An entry-level HR coordinator is typically making ~$20/hour.

Six figures is seniority pay in almost any field outside of medicine, particularly if you exclude the Standford PhD folks going straight to Google, Microsoft, or Amazon. $20/hr is about $40k a year. I don't live in in a city, so my first job as a developer was $42k a year. I think it's safe the say the developers I worked with provided more value than the HRC.

It's not like developers are unique in having lower wages outside of cities. Entry-level HR people in your location probably made significantly less than you.

Re: Americans are 40% poorer than before the recession

#87

Post by eyeareque »

mynewwork wrote: post #75
eyeareque wrote: post #51

This makes me want to ask: Where did all of the money go? It had to go somewhere, right?

It didn't have to go anywhere, and in many cases it didn't. Imagine you have a house (500k) and a car(20k) in 2007. Today you still have the same house (now valued at 400k) the same car (now valued at 10k). Your net worth has dropped substantially but the money didn't go anywhere, nobody else gained by the depreciation of your car or the market price correction of your house.

I'm assuming that people who lost their homes lost their equity. I'd assume there was a transfer of wealth in those situations.

Re: Americans are 40% poorer than before the recession

#88

Post by dang »

forrestthewoods wrote: post #69
wavefunction wrote: post #13

Earlier quoted context omitted.

I downvoted you for your trash analysis. I will be back this evening (1:45PM here at the moment) and I will cite sources until you scream for mercy. The loss of wealth for the average American (note I didn't say MEDIAN lol) is well-established at this point.

I failed reading comprehension 101 so I don't think this is required. But I'm always interested in reading interesting links if you have anything you'd still like to share.

Thanks for exemplifying HN's values by responding so civilly.

Re: Americans are 40% poorer than before the recession

#89

Post by jpetersonmn »

glesica wrote: post #29
jpetersonmn wrote: post #15

Earlier quoted context omitted.

How do you figure we haven't left the recession? Since June 09 we've been growing and not shrinking, which means the recession was over. It may not be the boom we all want, however the recession is over by any reasonable measure.

It takes about 10 minutes on Google to conclude that, regardless of any technical definition of a "recession", the economy is terrible unless you you're in a handful of industries or happen to make your money by owning the means of production (shocking that the group for whom the system is named always seem to do just fine...) Here's a good example: http://www.pewresearch.org/fact-tank/2014/10/09/for-most-wor... Some…

I guess we'll have to agree to disagree. I'd agree that the economy is not doing great for many people, but I don't agree that we should change the meaning of words like that, otherwise they don't mean anything.

Re: Americans are 40% poorer than before the recession

#90

Post by matthewdgreen »

aliston wrote: post #34
jpetersonmn wrote: post #15

Earlier quoted context omitted.

How do you figure we haven't left the recession? Since June 09 we've been growing and not shrinking, which means the recession was over. It may not be the boom we all want, however the recession is over by any reasonable measure.

You have to also factor in that the G component of GDP (C+I+X+G) has increased dramatically under president Obama [1]. The government can temporarily pull the economy out of a recession by paying people to dig holes and fill them up again. A bigger question is whether all of the government spending has created sustainable economic growth. [1] http://research.stlouisfed.org/fred2/series/FGEXPND

Does that include overall government spending, or only Federal spending?
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