The American middle class is falling deeper into debt to maintain a middle-class lifestyle.
Cars, college, houses and medical care have become steadily more costly, but incomes have been largely stagnant for two decades, despite a recent uptick. Filling the gap between earning and spending is an explosion of finance into nearly every corner of the consumer economy.
Consumer debt, not counting mortgages, has climbed to $4 trillion—higher than it has ever been even after adjusting for inflation. Mortgage debt slid after the financial crisis a decade ago but is rebounding.
Student debt totaled about $1.5 trillion last year, exceeding all other forms of consumer debt except mortgages.
Auto debt is up nearly 40% adjusting for inflation in the last decade to $1.3 trillion. And the average loan for new cars is up an inflation-adjusted 11% in a decade, to $32,187, according to an analysis of data from credit-reporting firm Experian.
Unsecured personal loans are back in vogue, the result of competition between technology-savvy lenders and big banks for borrowers and loan volume.
The debt surge is partly by design, a byproduct of low borrowing costs the Federal Reserve engineered after the financial crisis to get the economy moving. It has reshaped both borrowers and lenders. Consumers increasingly need it, companies increasingly can’t sell their goods without it, and the economy, which counts on consumer spending for more than two-thirds of GDP, would struggle without a plentiful supply of credit.
In one sense, the growing consumer debt is a vote of confidence in the future. People borrowing money today expect to have the income tomorrow to pay it back. Consumer debt tends to rise when borrowers feel secure in their jobs.
But the debt pile is also an accumulated ledger of economic risk. It should be manageable so long as unemployment remains low. If job losses begin to rise, it would become unsustainable for some share of borrowers, raising chances of an increase in missed payments and lenders writing off unpaid balances. The Fed lowered interest rates on Wednesday because it sees rising risks of a slowdown that could boost unemployment.
Median household income in the U.S. was $61,372 at the end of 2017, according to the Census Bureau. When inflation is taken into account, that is just above the 1999 level. Without adjusting for inflation, over the three decades through 2017, incomes are up 135%.
Average tuition at public four-year colleges, however, went up 549%, not adjusted for inflation, according to data from the College Board. On the same basis, average per capita personal health-care expenditures rose about 276% over a slightly shorter period, 1990 to 2017, according to data from the Centers for Medicare and Medicaid Services.
And average housing prices swelled 188% over those three decades, according to the S&P CoreLogic Case-Shiller National Home Price Index.
“The costs of staying in the middle class are going up,” said Adam Levitin, a Georgetown Law professor who studies bankruptcy, financial regulation and consumer finance.
Jonathan Guzman and Mayra Finol earn about $130,000 a year, combined, in technology jobs. Though that is more than double the median, debt from their years at St. John’s University in New York has been hard to overcome.
The two 28-year-olds in West Hartford, Conn., have about $51,000 in student debt, plus $18,000 in auto loans and $50,000 across eight credit cards. Adding financial pressure are a baby daughter and a mortgage of around $270,000.
“I’m normally a worrier, but this is next-level stuff. I’ve never been more stressed,” Mr. Guzman said. “Never would I have thought with the amount we make I would have these problems.”
They no longer dine out several times a week. Other hits to their budget were hard to avoid, such as a wrecked car that forced them to borrow more.
Ms. Finol hasn’t used her T.J. Maxx credit card in more than a year. She makes the minimum monthly payment on its balance of approximately $7,500. Her monthly statement says if she continues at this pace, she will need about 23 years to pay it off.
Earlier this year, Mr. Guzman put his credit cards in a Ziploc bag with water and placed it in the freezer. In May, however, they went to two weddings, and needed a card to cover the cost of a gift and a rental car.
Mr. Guzman removed one of the credit cards from the freezer. “A lot of things came at once,” he said. Since then, he’s taken the rest of them out, too.
U.S. households that have credit-card debt owed an average of $8,390 in the first quarter 2019, up 9% from 2015 when adjusted for inflation, according to an analysis of Federal Reserve data by research firm WalletHub.com.
Taking on a mortgage to buy a house that could appreciate, or borrowing for a college degree that should boost earning power, can be wise decisions. Borrowing for everyday consumption or for assets such as cars that lose value makes it harder to save and invest in stocks and real estate that tend to create wealth. So the rise in consumer borrowing exacerbates the wealth gap.
The U.S. economy roughly doubled in size from 1989 through 2016, data from the U.S. Bureau of Economic Analysis show. Counted together, everyone got wealthier. But gains in assets owned were heavily skewed toward the highest earners, according to a Journal analysis of the Fed’s Survey of Consumer Finances.
The median net worth of households in the middle 20% of income rose 4% in inflation-adjusted terms to $81,900 between 1989 and 2016, the latest available data. For households in the top 20%, median net worth more than doubled to $811,860. And for the top 1%, the increase was 178% to $11,206,000.
Put differently, the value of assets for all U.S. households increased from 1989 through 2016 by an inflation-adjusted $58 trillion. A third of the gain—$19 trillion—went to the wealthiest 1%, according to a Journal analysis of Fed data.
“On the surface things look pretty good, but if you dig a little deeper you see different subpopulations are not performing as well,” said Cris deRitis, deputy chief economist at Moody’s Analytics.
Counting all kinds of debt, including mortgages, consumers aren’t nearly as debt-burdened as they once were. In the fourth quarter of 2007, the last year before the financial crisis struck, households devoted 13.2% of their disposable income to debt service. In the first quarter of 2019, that number was 9.9%, largely due to low interest rates.
Partly because of widespread refinancing, mortgage payments since the start of 2017 have claimed the smallest slice of disposable personal income in decades, in the low 4% range, according to Fed data.
Other debt, such as auto and student loans and credit-card borrowing, consumed about 5.7% of disposable personal income in the first quarter. That was up from a low of 4.9% at the end of 2012 and back to 2009 levels. In contrast to a mortgage, most of this borrowing went to fund consumption.
Elizabeth and Andy Bauerle have been trying to buy a house for seven years without success, despite having combined income of about $155,000—in the top 20% of households, according to census data.
The two 34-year-olds face a common conundrum. Their jobs are in the Seattle metro area. In cities with strong job and wage growth, such as theirs, rising real-estate prices can put homeownership out of reach even for families that rate as well-off by overall national standards.
The Bauerles have $30,000 in their down-payment fund, but the kind of house they want—a two-bedroom, two-bath with a yard—starts at around $600,000 in and around Seattle.
They figure they would need to make a down payment of $70,000 to keep the mortgage payment manageable, given their other obligations. These include student-loan debt of about $88,000 that consumes around $1,000 of income every month.
Ms. Bauerle said about half of their take-home pay goes out the door for that plus $1,750 in rent and $1,200 in child care for their son. “Four thousand dollars of our income is immediately spoken for,” she said.
Like many families, they have stretched out the monthly payments on an auto loan. They have a 2013 Subaru, bought used three years ago. They won’t write the last $240 monthly check on the car until it is about nine years old.
Families such as the Bauerles who want to live in solid middle-class neighborhoods with good schools and reasonable commutes are increasingly renting single-family homes. Taking advantage of this trend, the private-equity firm Blackstone Group Inc., with other investors, launched a business that is now the nation’s largest renter of single-family houses.
The number of households that have inflation-adjusted annual incomes of $100,000 or greater but are renters nearly doubled from 2006 to 2016, according to the Joint Center for Housing Studies of Harvard University.
Domonic Purviance, a senior financial specialist at the Federal Reserve Bank of Atlanta, said people earning the median income can no longer afford the median-priced new home, costing $323,000 last year, and barely have the means to buy the median existing home, which now about $278,000.
“That’s a radical shift in the structure of the market,” Mr. Purviance said. “What we may have to prepare for in the future is that buying a new home, and in some markets even buying an existing home, may become a luxury.”
The squeeze is likely even tighter because his affordability calculation doesn’t take into account buyers’ other debts and it assumes a 20% down payment. Home buyers’ median down payment in the third quarter last year was only 7.6%, according to Attom Data Solutions.
Nowhere is the struggle to maintain a middle-class lifestyle more apparent than in cars. The average new-car price in the U.S. was $37,285 in June, according to Kelley Blue Book. It didn’t deter buyers. The industry sold or leased at least 17 million cars each year from 2015 to 2018, its best four-year stretch ever. Partly because of demand satisfied by that run, sales are projected to be off modestly this year.
How households earning $61,000 can acquire cars costing half their gross income is a story of the financialization of the economy. Some 85% of new cars in the first quarter of this year were financed, including leases, according to Experian. That is up from 76% in the first quarter of 2009.
Car trouble
And 32% of new-car loans were for six to seven years. A decade ago, only 12% were that long. The shorter-term loans of the past gave many owners several years of driving without car payments.
Now, a third of new car buyers roll debt from their old loans into a new one. That’s up from roughly 25% in the years before the financial crisis. The average amount rolled into the new loan is just over $5,000, according to Edmunds, an auto-industry research firm.
Leasing, which often entails lower payments than purchase loans, accounted for 34% of financed new vehicles in the first quarter, up from 20% a decade earlier, according to Experian. Drivers of used cars also finance them—more than half did last year.
One of the last stops for strapped consumers is personal loans, which often offer lower interest rates than credit cards and usually offer fixed monthly payments with a set end date. Banks pulled out of the sector after losses during the financial crisis, but solid recent returns have drawn in financial-technology startups. And many big banks, including Goldman Sachs Group Inc., Citigroup Inc., and SunTrust Banks Inc., are in the business.
The unsecured loans are often pitched to consolidate credit-card debt as well as for home renovations, vacations and unexpected expenses. Personal-loan balances totaled a record $138 billion at the end of last year, vs. $46 billion at the end of 2011, according to credit-reporting firm TransUnion .
The partial federal-government shutdown that ended in January exposed the vulnerability of many consumers. Discover Financial Services said thousands of government workers told it they were unable to make the minimum payments on their credit cards and the monthly payments they owed on personal loans and private student loans.
Discover waived fees, allowed customers to skip a payment and held off on reporting missed payments to credit-reporting firms.
In case of a broad economic downturn, these people’s debt levels could weigh on the economy for an extended period, because people who carry a lot of debt into a downturn tend to rein in their spending for years afterward.
Angelo and Noelle Young of Laveen, Ariz., are going through their own economic downturn. The two-child couple earned just over $100,000 until 2017. They had a roughly $106,000 mortgage, about $97,000 in student-loan debt and $24,000 in car loans.
Then Ms. Young, 33, moved from a full-time to a part-time faculty position at a university because of its budget cuts. With income reduced to around $70,000, they still felt confident enough in their earning power to borrow $48,000 to finance two cars in 2017.
They rolled $13,000 of loan balances after trade-ins into loans for two modestly priced vehicles: a 2014 Hyundai Santa Fe and a new Chevrolet Cruze. The $1,070 monthly car payments were manageable until Mr. Young, 40, left his job working for the city after incurring several pay cuts.
“We both had solid situations,” Ms. Young said. Then “mine became the dicey one and then we both got into dicey situations.”
After another job didn’t work out, Mr. Young switched to selling real estate and driving for Uber and Lyft. The family’s income slipped to $58,000.
Mr. Young cashed out $8,000 from a pension to pay off a credit-card balance racked up last year. The two have been able to postpone student-loan payments, citing financial hardship and Ms. Young’s Ph.D. studies.The Youngs have cut back on gym memberships, stopped buying organic groceries and canceled cable TV. Ms. Young was recently hired as an adjunct professor at another university beginning this fall.
Growing up, Mr. Young says, he was taught to work hard to get a nice house and a reliable vehicle. Now he realizes how easily borrowing too much can undermine this plan.
“Things we were taught could be assets aren’t really assets,” he said. “They’re liabilities.”
Corrections & Amplifications
Unadjusted for inflation, home prices rose 188% from 1987 to 2017, average tuition at public four-year colleges rose 549% and health-care expenditures rose 276% from 1990 to 2017. An earlier version of this article and an accompanying chart, based on incorrect inflation-adjusted data provided by Adam Levitin, a Georgetown Law professor, said home prices rose 290%, tuition rose 311% and health-care expenses rose 51%. The corrected data is in nominal terms, to avoid statistical issues tied to inflation adjustment. Meanwhile, household income from 1987 to 2017, not adjusted for inflation, rose 135%. The earlier article mentioned only the number adjusted for inflation. (Aug. 2, 2019)
Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com and Ken Brown at ken.brown@wsj.com|
I'm your huckleberry. The two 28-year-olds in West Hartford, Conn., have about $51,000 in student debt, plus $18,000 in auto loans and $50,000 across eight credit cards. Adding financial pressure are a baby daughter and a mortgage of around $270,000. So they're 28. They bought two cars when they were 26. They probably graduated at 22, 23. So after three-four years of trying to get by, they got jobs of $65k each. And of course, they both need to drive because I'll betcha they work at opposite ends of town. Let's say they dropped $6k each on two $30k cars - that's $48k worth of financing. That's a pair of Priuses. Now - my wife and I bought a new Honda Fit in 2009 because the price difference between a new 2009 fit and a used 2007 fit with 40,000 miles on it was $875. And that was a $16k car. We wanted an Insight but there was no way we could afford one. But the stretch between "yay! We've arrived! Let's buy the cheapest Honda there is!" and "yay! We've arrived! Let's buy a pair of Priuses!" isn't "this is horrible" territory. It isn't "let's scold the spendthrifts" territory. It isn't you deserve to be poor because you're a failure" territory. It's - wait for it - Families Go Deep in Debt to Stay in the Middle Class Territory. So. You've got two college graduates in their late '20s who have late-model cars and a starter home below the median income in a nowhere suburb of Hartford, CT. And they're a third of a million dollars in debt. Pretend they got out of college at 24 with no credit card debt. They're running up about $6k a year in credit card debt, the majority of which is probably interest. You? You're making living wage for Alabama. You're a buck under in Connecticut and should you have a kid, you're fucked - for a living wage, your $12.50 an hour had best become $28 an hour or forget about it. I'm glad life is good for you and I mean no disparagement whatsoever but It costs $116k a year for two adults and one kid to not be poor in Los Angeles County. This is a big reason why nobody young is having kids anymore - if you have to more than double your income to be able to afford children, you're getting a cat. The whole problem here is that being "middle class" costs substantially more than "middle class wages." Let's go with the median wage of West Hartford: $106k per family. Let's go with the median home of West Hartford: $285k. You're supposed to spend a max of 30% of your income on housing so your mortgage payment, PMI and all had best be $2650 a month or under. Let's assume our peeps can scrape together the $60k downpayment. Their mortgage is gonna be $1100 a month. The cars? The cars are $900 a month. Daycare is probably $800 a month and the average employee health plan is now $20k a year of which employees pay about 35% so we're at $600 a month. If they're paying an average of 19% on their credit cards, and they've got $6k on each, it's costing them $800 a month to keep those cards flat. Let's be honest. They didn't scrape together $60k for a downpayment on the house. That came from their parents, or they got a 3.5% loan in which case their payment is more like $1500 with PMI etc. But whatever let's roll with it. Just paying the cars, the house, the health insurance, the daycare and keeping the credit cards flat is costing them $4400 a month. They've got $1100 a week for food, clothing, gas, car insurance, Netflix, heat, cell phones, cat food, ...student loans... Yeah. You can thread that needle. The good ones do. Here's the thing, though - you don't want just the good ones to be successfully middle class. You want the guys who can't figure out how to post on Facebook to be successfully middle class. You want the ones who can't fix their own leaky faucet. You want the ones who go to H&R Block for their 1040EZs. You want the dead-enders, the remainders, the clueless who dream of five days at a Sandals resort all year to be able to be comfortably middle class. You don't want people who went in debt to their eyeballs getting a bachelor's degree who are rolling six figures between them to go "holy shit we can't afford a kid and a Honda Prelude." You want things to be better for them than it was for their parents. You want things to be better for their kids than it was for them. You want the social contract to be upheld by both sides: put in the time and you'll get a life. And that social contract is in breach.Jonathan Guzman and Mayra Finol earn about $130,000 a year, combined, in technology jobs. Though that is more than double the median, debt from their years at St. John’s University in New York has been hard to overcome.
A man tells the world who he is four ways: His house, his wife, his car, and his shoes. - Warren Adler, War of the Roses I agree with you unreservedly: the Postwar Economic Expansion was an anomaly, not the fundamental basis for economic theory. "Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist." (Ken Boulding) But the Greatest Generation fought for it, the Silent Generation came of age in it, the Baby Boomers grew up entitled to it and it wasn't until Generation X came along that maybe, just maybe, we'd hit peak oil. Maybe, just maybe, the climate wouldn't hold. Maybe, just maybe, we'd run out of stuff. And then the Millennials came along and their parents want to know why the fuck they're so shiftless, lazy and fond of avocado toast. You've found your private Idaho. Good on ya. I myself work 4 months a year and recognize that Adler's saying is deliberately materialist and superficial. But fuckin' hell man it's true. We've got these social markers and just because we opt out doesn't mean the world opts us out in return. Your parents' friends judge you. Your neighbors judge you. Everyone at the grocery store judges you. And they judge you because our sense of well-being is relative. And that judgement affects everyone within the relative sphere, which is everyone who reads the Wall Street Journal, or knows someone who has read the Wall Street Journal, or has heard of the Wall Street Journal, or speaks the same language as the Wall Street Journal. What you're missing is that the article isn't about people going broke seeking success or happiness or Pokemons or a brighter shade of pale. It's about people going broke seeking status. And the difficulty we have, as a society, is that it isn't our quest for status that drives the engine of creation. It's everyone else's quest for status. There was a time when sensible people could have said "look, y'all, it's been fun but there's no way in fukkn hell we can afford to fly to London at Mach 2.5. Every kid you squeeze out is generating a semi-trailer full of non-biodegradable disposable diapers. Just getting you to work every morning is burning more energy than a team of oxen use to plow a 40-acre spread. We can slow this gradually or we can come to a crashing halt, which is it going to be?" but no one would have listened to them. There's nobody in a position to say that. They did what they were told, they were promised moonwalks. Here's a fast plane. Little boys love that plane. Big boys love that plane. That plane is a paean to American ingenuity and know-how. It has two engines and each one of them produces as much power as every engine on this boat. But we don't think about that. You've never heard it before. The idea that something that flings two spies across the sky uses twice as much power as something that hauled 3,000 people on twelve decks. It's a fact so removed from the normal experience of everyday humans as to cause cognitive dissonance. What they know is that they were promised a house, a wife, a car and some shoes in exchange for giving up their dreams and what they have is a third of a million in debt. In Los Angeles I spend two hours riding my bike instead of $20 riding Lyft. I eat frozen burritos and the cheapest peanuts I can find. My coffee costs $4 a pound. My daughter goes to private school and sucks down about $500 a quarter in afterschool activities. You'll suffer through a bunch of bullshit. I sure do. But the minute your kids have to suffer through a bunch of bullshit you will take to the fucking streets.
So I can pillory them for buying the house when they're already in a mountain of debt but I mean fuck, would I? $26k a year is not fun. Give me another four or five years and who knows.
"What do you want to be when you grow up?" usually has several answers. Not a one of them is ever "whatever." Life experience tends to narrow your focus and pare your reach until "I wanna be an astronaut" becomes "I wanna work on tiny subassemblies of satellites" becomes "I'll settle for coding human resources macros for an aerospace subcontractor." We start kids off by telling them they can be whatever they want to be not because we know it's true but because there's no way to predict what limitations will stop them and you always hope for the best. But those limitations come on relentlessly.
If you force a kid to pick, they'll just pick something that they know. I agree with you, but I don' think you and klein are all that far apart: most kids don't have dream careers, and the rest only know what they want because they have no worldly context to understand the impracticalities of "Being whatever you want!". As a kid, I felt aware of the fact that I had no fucking idea how the world worked. I just didn't have a mind that could understand the concept of a career. I liked construction vehicles because they're big, yellow, and Bob the Builder seems like a swell guy. Maybe six-year-old mudsy was destined for a construction job? Most adults know that their dream job doesn't exist, isn't hiring, pays for shit, or is a null answer. Most people won't ever have a calling towards a specific career, because at the end of the day, your job will never love you.
This, and a few other points you make, may be true for a lot of people but you seem to assume it’s true for everyone and I just want to point out that that’s not the case. Life is what you make of it, and that’s also true of work life. I like my colleagues and treat them like friends and you know what? It makes things a lot easier and a lot more fun too. Hell, I even started a board game club that has grown to fifteen people, of which three work somewhere else now but still join in from time to time. Cynicism, which I am reading between the lines, is easy because you don’t have to do anything if the world’s fucked anyway. It’s boring as hell, too. You can spend a life dulled by it for sure, if you let it. Pushing back against the dark, reaching out to people, treating them like complex humans of their own? That’s more like what I would call being alive is about.And jobs can't love you because you're being paid to be around these people. They ain't your friends. It has to be that way otherwise society and capitalism would collapse. The way I have always dealt with it is to take care of my responsibilities and then ngaf. It helps you out psychologically to you know, have a life.
You're living my point. Here, it's a pyramid: - You can be anything you want, baby! - You can be anything you want, child, so long as you want it enough! - You can be anything you want, kid, so long as you want it hard enough and apply yourself! - You can be anything you want, teen, so long as you work hard, get the right grades and line up the correct afterschool activities! - You can be anything you want, young man, so long as you do nothing else, are in the top 1% of your class, know all the right people and have a rich uncle to pay your bills until you make it! - You can be anything you want, graduate, so long as you have the education to back it up, the connections to get you the job, the lack of obligations that might distract you from the path and the time to wait until you get your chance! - You can be anything you want, man, so long as you have a pile of cash from your previous successful career, a bunch of friends who can smooth your path, a family that can take care of itself while also taking care of you and an unlimited amount of time for lightning to strike twice! The argument of the article, to bring things back to where we started, is that American culture is predicated on the idea that if you do everything right, everything right will happen to you. Mary Roach has a great book called Packing for Mars in which she points out that the average American astronaut spends 20-30 years prepping for a 1% chance of working in space for 20 minutes. Look at it like the Olympics - your entire childhood is spent in preparation for a single footrace. I have a friend who spends maybe $25k a year so that his daughter can do a single 2-minute routine at the nationals. As we age, we calibrate our goals to our efforts. I am not a Navy SEAL because I didn't want to put in the back-breaking amount of physical labor necessary so that I could exchange my freedom for the right to shoot strangers in the dark. Where you're at is the acknowledgement that the effort you put in didn't accomplish the change you'd hoped. And I'm sorry. Thanks for trying. Thanks for not studying computer science and going to Google. But please - do me a favor. Look in the mirror. We're neck-deep in a philosophical discussion about the meaning of life here because the Wall Street Journal found some normies who didn't want much but didn't get it anyway. You? You're arguing that they didn't deserve it in the first place because they didn't dream richly enough. That's a different discussion and one that we can certainly have but it doesn't change the fact that all these schlubs with their West Hartford split levels are experiencing the exact same jaded disillusionment you are... they just didn't ever intend to change the world. It's hard to change the world. It's admirable, but it's hard, and many are called and few are chosen, and don't fucking give up on that. Jack Nicholson used to say "it took me 20 years to become an overnight success" because while Chinatown made him a household name, Little Shop of Horrors did not. George Clooney starred in two series called E.R. and in between, he was the lead in Return of the Killer Tomatoes. The bigger you dream the more setbacks you can expect. Period. But we're here talking about people with truly minuscule dreams. They've settled. Their biggest goal is New Car Smell at some point in their lives. And they're not getting that. You are expressing big dreams. This is good. This is vital. This is something that took you a while to get to. And you are expressing big frustration that there's sympathy in the world for people whose dreams were curtailed long before they got their diplomas. I get that, too. I bailed on the world of TPS reports about fifteen years ago, but I did it kicking and screaming, and I did it with no safety net, and it was fucking terrifying. I am an accidental success. I know exactly how much fear and caution keeps you in your cubicle. What you're missing is that in order for you to dream big, a whole nation has to dream small. You are the tip of the spear. You are the NGO mutherfucker venturing forth and making something for everyone else to donate to so they feel like they're contributing a little. You are the adventurer beyond the wall whose tales of daring-do inspire the Walter Mittys of the world. but without a healthy and satiated populace of Walter Mittys, Free the Children Equador has no budget. Not everybody wants to build schools in Afghanistan and that's okay. The guys building schools in Afghanistan are either (A) independently wealthy or (B) dependent on the fundraising abilities of an army of nebbishes arrayed at their backs. The issue at hand is that you can't even dream of being a nebbish anymore. Your boring-ass computer science gig now includes a third of a million dollars in debt. In short, those guys who didn't even dream as big as you are facing equal disappointment. And that is bad for society.
...Did you read my article? It's from an old post I made years ago: The point of the article isn't, "Don't be friends with your coworkers!" or "Don't treat your job like a friend!", it's a reminder. To quote _refugee_: "I think we buy into this whole "you have to go above and beyond and commit and be amazing all the time" idea that really benefits our employers and no one else. Your company won't be loyal to you. Don't be loyal to it." I'm not my job. I'm not trying to be my job, or really feel satisfied by my job. My satisfaction with life needs to be portable because my 8-5 doesn't love me and it never will. It isn't my friend, it isn't my family, it's something I do so that my life outside the office can be what I want. I'm not slavishly devoted to work, and I'm sorry to learn that it means I'm not, "Actually alive on this planet."
Super thankful my parents never bought into the "We could do it in our day, why can't you?" shtick. They've just bought their first house this year, they've been renters all their life as we shifted a great deal up and down the island. I could buy a house now, at 29, though what's stopping me is the absolute cut-throat nature of real estate in our country now. I'm sure it always has been, but now it's glaringly obvious how fucked you are if you don't time it right. My two flatmates just bought their house last week, a really exciting time for them but I watched them bounce from open to open home, all absolutely packed with families of 4/5 wanting to buy a two bedroom home because it's all they could afford. Then come auction day a 2 bedroom house with an RV of 190k going for 450k - seeing them return home each day entirely outclassed in the finance realm by people just wanting to add to their investment portfolio. I don't have anything against making wise investments, but the way we treat housing as a source of income scares the shit out of me. My flatties wound up buying a place by strategically attending the first open home on a weekday so families would find it harder to attend, getting alone time with the vendor, writing a soppy letter about making milestones in the house and the sound of kids running down the hallway and making an unconditional offer knowing that's pretty much what you have to do these days. The worst part? They're never going to have kids. They don't want them, they just knew they had to present themselves in a certain light or they'd never get a look in. So the letter was fabricated and it worked, the vendor is an English teacher who loves kids and wanted the house going to a similar minded couple. She said the letter was a huge factor in the decision and they got the offer accepted last week. Shits fucked man.
I graduated with no debt from a program that paid an average of $65k a year. My wife graduated with no debt from a program that paid an average of $50k a year but she's really fucking good at her job and she was making $80k a year within six months of graduating. Within another year she had bought a house for $175k. Fast forward 20 years. My program now averages $72k a year and it costs five times as much. Her program now averages $50k a year and it costs five times as much. Meanwhile the house is currently worth half a mil. Me, 20 years later, is epically fucked. It's the timing. Purely. But wait, there's more - we happened to have not great credit on paper while also never missing a payment on the house so TARP funds got us out of a 30 and into a 15 at a lower payment. My mortgage payment is less than my neighbor's HELOC. I looked at paying it off last year but it would literally save me about $3500. Fate and circumstance has been kind to my family but if I had less clarity about the situation, I'd assume that kids these days can't afford a house because they're too busy eating avocado toast.
I was absolutely stoked to see I now only have 19k left on my 42k student loan for a Bachelors degree in Psychology (which hung on my wall as I started working in retail the day after graduation). Thank goodness our government made it interest free. Over half way baby! The interesting thing is, I don't feel particularly hard done by on a day to day basis. I earn bang on 60k a year and my living expenses mean I can quite comfortably save for fun, a house, and enjoy things every week. If I didn't get paid for a month or two I'd be comfortable living on my savings until things got sorted. Plenty don't have that luxury and I am appreciative of that. But as soon as I look at buying a house, it suddenly looks impossible. Aside from the stress, I need my partner on board with her income otherwise we can't afford the repayments as the average house in our city has shot to an average of $460k, up from $306k in just 2016, and we're the lucky area that's experiencing relatively slow growth! I'm telling the young lads at my local gym to seriously consider trades and not to be put off by people who look down on Polytech courses - if they want to get into building or plumbing, we sorely need skilled people in those realms. They get told they need a University degree to be employable and to avoid working with your hands - same message I got in high school in 2007. Trades are for labourers and unintelligent people, apparently. Turns out they're plenty bright, earning well and quite often doing something they genuinely enjoy.
Hey man, your thoughts are valid. I don't want you to feel bad about them just because I reacted to them with frustration. Let's not pretend my indignation is any more or less 'correct' than your wavefront of broke-student anger, it's just where we were when we wrote those comments! Sorry for being uncharitable to you, I know you better than to think you'd actually be insulting me. I think the 'point' got away from me, and the conversation went awry. But at its core, I agree with you - these people can't afford the small dreams that they want. This is, fundamentally, something that they're doing to themselves - their debt is an irresponsible, irrational thing that they're subjecting themselves to. At the same time, I get where Klein is coming from. People have relatively quaint dreams and it feels bad that they can't even have that. Maybe I'm being too sympathetic, though, because there's nothing wrong with waiting until middle age for New Car Smell? But their household income is twice the natural average, and it feels like I've been fed a line about how New Car Smell (tm) should be possible for People Who Did It Right (tm) at 28. And I guess there's some dissonance between that image and reality. Ah well. I've got some thinking to do. Thanks for giving me the opportunity to do so :)...what I meant to say in some kind of bad way that ended up just coming out as a wavefront of improperly expressed broke-student anger...
- HL Mencken I'm thankful my wife didn't die in childbirth, like 1 in 5 women used to. I'm thankful my daughter didn't die before reaching the age of 6, like 1 in 4 children used to. But I'm not really thankful for this most of the time. I take it for fucking granted. You see, my social contract is not with Victorian England, it's with modern America. Cholera is off the table. Nobody risks la migra and coyotes in order to live better than their buddies in Honduras. They stake it all to live like Americans. Sure - 99.8% of the planet would kill to be up to their eyeballs in debt in a 1700 sqft house with two Priuses they can't afford in the driveway. Shit - I'll bet a block away there's a guy arguing with the voices in his head about what he'd do if he could afford a tent and a sandwich. You're making the "kids are starving in China" argument - sure they are, but we're not in China and I don't want to eat my fucking peas. Yer goddamn right that if I'd been living under a tarp and licking the insides of c-ration cans for two weeks I'd chow the fuck down on your freezer-burned, mealy-ass Birds Eye TV dinner but I'm not. And neither are you. And neither are those poor fuckers in West Hartford. They sat down at this gaming table, not the Honduras table, not the Yemen table, not the Lesotho table. Hey let's grab those guys from the Norway table and let 'em know that they'd earned the right to spend their lives servicing debt and hoping against major medical bills in exchange for 16 years of schooling. How do you think they'd feel about that? Who is middle class at 25? Fuckin' three quintiles, bitch. Who can buy a house at 26 or 28? Fuckin' everybody 20 years ago. That's the point. You're making the Brexit argument - sure it might be hard but we survived The Blitz. Yeah ya did. But there are no Nazis in the skies. Freedom does not face an existential crisis from totalitarian populists with a hankering for genocide. It's not about winning - nobody with a fuckin' Prius thinks they won. They just think they aren't falling behind. 3-0 is a great soccer score, a terrible football score and an unbelievably bad basketball score. Surviving to ten was a masterful accomplishment once but here in the place where we used to celebrate our constant upward mobility, it's a fucking given.“Wealth - any income that is at least $100 more a year than the income of one's wife's sister's husband.”
|"I think we buy into this whole "you have to go above and beyond and commit and be amazing all the time" idea that really benefits our employers and no one else. Took me a good while to A) understand and then B) accept this. My current role is great, I work with good people, I work under good people, I feel valued and I've had two pay rises and one nice bonus in 18 months with another two increases scheduled. However, this is the immediate realm I work within. I now understand the organization as a whole, does not care about me. My immediate boss would be gutted if I left, and she takes steps to make sure I am supported. But anyone higher than her doesn't know who I am and I am genuinely a number on a spreadsheet. A spreadsheet with a total cost they are desperately trying to cull. So I've had to find the sweet spot between making myself very useful and difficult to replace, while also allowing myself to exist outside of it. I could go hard and gain a tiny bit of extra credibility amongst my immediate group, but it would net me nothing in the higher ups estimation. So I do my job, I am efficient and personable and plan for the future to maintain that efficiency, but when it's time to go, I am gone. I am enjoying all the things I can afford with the time and money.
I wasn't sure if I read your comment correctly, but now I'm definitely sure I didn't. Text is not the best medium for this kind of semi-toungue-in-cheekery. To me you flip-flop between 'baduhh' and sarcasm and tbh I find that hard to parse. (English is not my first language as you may already know.) All I wanted to say is that I was worried you'd be despondent. You've done some awesome stuff that you should be proud of. 
Do not, for one minute, give up on the magical adventures. There is a drive within you. It's really obvious. It's equally obvious that it's frustrated right now. Aggressively so. You are not going to be happy sitting idly by and truncating your designs on the universe. Regroup. Turn that frustration into fuel. I do what I can to make the world a better place in the tiny corner I occupy but I wouldn't have coined the phrase "if you have to live in a gilded age, best be a goldsmith" if I hadn't fundamentally given up on stemming the tide. I stared at the tsunami and knew the only thing I could do is throw on some waterwings and hope for the best. But I'm old and jaded. You aren't.
E. Fuller Torrey is an MD - not a psychiatrist - who wrote one of the more popular support books on schizophrenia. In it he recommends against assuming that a psychiatrist is the best type of doctor to care for your schizophrenia (or that of your loved ones) because schizophrenia is not a mental disorder, it's a mental disease characterized by a panoply of well-known and well-diagnosed organic maladies. He further argues that, well, psychiatrists are kind of off as a breed. The phrase he uses, which I wrote down, was "not all of the strangest birds in the menagerie are in cages." I put a psychiatrist's daughter through social work school. Like everyone else in the family she was a laundry list of psychological disorders and past mental trauma. It meant hanging out with a bunch of social workers. As a tribe, they are a broken people. Nobody pays $80k to spend two years in school to earn $16 an hour snatching babies out of labor&delivery. There's a drive there, and it's not one that fits well in ordinary culture. The normies tend to wash out and go into human resources. Which doesn't mean that psychiatry is a profession purely for crazy weirdos or that social workers are universally codependent wounded warriors. I've known plenty of sane, sensible people who are making the world better one client at a time. The trick is to figure out how to give without giving everything. You're going to figure that trick out. You might even get a house out of the deal. Jeffrey Sachs seems to do okay.
I realize I'm returning late to this conversation between two other people - though I am learning that Hubski operates like this, the concept of "necro-posting" isn't an issue. Which I am thankful for. But reading your comment got me thinking. Is exactly why I stopped my Psych studies at the standard Bachelors level. I was acutely aware I wouldn't be able to not give everything. I'd never be able to avoid bringing my work home with me. It would eventually consume me. My plan was to focus on Child Psychology and do what I could to help young people in awful situations - my parents, bless them, warned me I was a very sensitive individual who would/could connect with anyone and everything, and that this could be used or abused in equal measure by my future profession. In the end I decided they were right - I wouldn't have found the off switch without some serious work and part of what drove me in that direction was not having the switch in the first place. Not that I've given up wanting to help people, I just now operate within the realms I can handle. Took a while to figure that out though.The trick is to figure out how to give without giving everything.
We all want to help, I think. The healthy among us do, anyway. The trick is knowing how you can help forever. My wife's profession is intense. She delivers babies out of hospital. It is a profession that draws people with a semi-religious zeal for female empowerment and the advocacy of mother-centered motherhood. And most people who practice as midwives in the United States make it 4-5 years and flame out, never to practice again.
Uh, it's "Lil Pump". C'mon man, show some resp- lol nahhhh. Please don't. Not to him. There is still great grassroots rap out there! I know Sage, I think he's super talented, and about to capitalize on an untapped local market. That's not him in the vidja, he's the producer.
The graphs are sumpin' else. Unfortunately I don't know any good way to get 'em in. My overarching takeaway has been the insight that our models and metrics for success and economic health are woefully outdated and that the stereotypes that drive our conversations about wealth and poverty have become harmful, not helpful. The platitudes we have about employment and debt and all the rest presuppose a world that has long since vanished and the policies we use to manage American civilization are tailored for a world that is no more.