I am an economist. I now straight up laugh when I hear this claim when people try to act like this county is poor.
Americans consume a lot. If people were living paycheck to paycheck and destitute then why is the median car sold in the US 2x the price of one sold in Europe? Why do 60%+ of Americans own their own homes? Why do people eat out more than ever?
I've spent the past decade-plus living in Vietnam and whenever I see online people from rich first world countries -- not just the US but I also see it in Australia, Sweden, and so on -- that try to pretend their life is a daily struggle for existence and I can't help but wonder what's gone wrong with society.
I don't want to discount their experiences entirely but it's hard for me to get past that there's a reason Vietnamese smuggle themselves to the US and Americans aren't smuggling themselves to Vietnam. So what has gone wrong with Western society that everyone is so miserable? Or at least acts that way online? I don't think it is quite right to say it is "all in their head". I often wonder if it is more a problem of expectations than reality? They've been trained to expect the top of Maslow's pyramid of self-actualisation for 99% of society -- thanks to a steady diet of "do what you love and you'll never work a day in your life" and "chase your passion" and "what color is your parachute" and so on -- but that kind of Star Trek utopia is still decades (or more away) from being reality. And modern media (not JUST social media; you'd be amazed how many parents feel threatened and discouraged by Bluey's perfect-parenting) also often paints the picture that life should be cruise street for basically everyone, adding to the problem.
expectations vs reality is a big part of it - this is the "elite overproduction" theory, to a degree.
there's also social capital to be gained on the left by purporting that the US is awful, because if that's the case then we need leftist policies to fix it.
Mondaire Jones, a D congressional candidate, said America has a "broken economy" on the Bulwark pod last week. He's a Stanford, Harvard and Davis Polk alum. When someone that accomplished, running as a D candidate under a D President, speaks like that, it's kinda inevitable that more everyday folks will use similar language.
This makes sense to me as a Republican. The historian Michael Kazin argues the central thread of the Democratic party for 200 years has been moralizing capitalism, or finding ways to rally a working class to morally reform it. It makes sense Democrats have no way to enjoy a bustling economic status quo the way a center-right party of mid-sized business and middle class voters does. It is at odds with how their party looks at politics.
The people writing click bait articles in CNBC or WSJ about how if you live in NYC or SF and make $500K you can’t survive and live “paycheck to paycheck” are not Democrats. Or at the very least not writing from a Democratic perspective.
It’s like the NIMBY debate. Matt focuses his ire on left of center NIMBYs because he’s left of center, lived in a blue city and as a left of center writer might actually have some sway with this slice of the population. But if you look at polling, more self identified republicans than democrats are NIMBY.
And yes where I live, it’s the right of center of people who use “paycheck to paycheck” language and are more NIMBY
Most CNBC and WSJ news reporters are moderate Democrats. The finance men who read them are generally in either party. Most journalists, with the exception of explicitly right-wing media, are Democrats. This has been true for a while; journalism is a creative job, and it's challenging across history to name any truly talented artists who have normie Republican politics. (There are a few with eccentric reactionary politics, which isn't really the same type of person or voter as one happily voting for Bob Dole.) Michael Kazin's scholarship corroborates the latter occupation's bipartisanship; he has a great chapter on late 19th century Democratic party financing from an eccentric man in Manhattan that might be of interest. Chuck Schumer is the Senate majority leader for a reason. If Democrats were socialists, this would be a problem. But they aren't and never have been. They are center-left populists.
I agree NIMBY is pretty bipartisan. The difference is sitting on decades of property value accumulation and environmentalism is central to how the upper-middle class functions in California politics compared to Texas politics. The progressive gentry is important to why Democrats run their states the way they do. It's also why as Silicon Valley's crypto and AI sectors began consuming energy per customer a little more in the direction of car factories (very high) and a little less in the direction of server farms (very low), their votes began changing too. Turns out if you wants lots of energy, you have to accept tearing up land for more transmission lines and being open to a variety of low cost options like natural gas. So abundance liberalism people are going to run into the problem, regardless of if Trump or Harris wins, that Democrats just aren't really a supply-side party. They never have been.
Finally, I'm sure you know Republicans who are unhappy with inflation, like Republican politicians, and might exaggerate the precarity it has caused for many planning their finances and large purchases like cars and houses. But it's neither here or there with my point about the parties and how they generally view the economy. The big reason economic sentiment is lower than in 2019 is Democrats just aren't as hyped about the economic status quo as Republicans. Both will happily exaggerate the problems with an opposing leader in the White House. Democrats said the economy sucked in 2019. But the difference is Democrats can't really convince themselves the economy is automatically great when team blue is in charge. They're more like the types to insist on loan forgiveness of various indebted artisans and aspiring middle class voters, whether under Andrew Jackson or Joe Biden. Populism, in other words.
In my red state I'm subjected to constant uninvited whining from Archie Bunker-like strangers about how Biden is "killing them" because eggs are 25 cents more expensive this week.
The last few years have featured several people who soiled Stanford's name, but I definitely cringe every time I hear about him. What an embarrassment.
I do think that most of the critics on the left don't think the country is poor. They believe that its rich, but all the wealth is concentrated so that the average person is poor. Wealth is pretty concentrated, but the average person isn't poor.
Even the 20th percentile person isn't poor. We should do better at redistribution, but we're making progress even at low incomes and we're doing okay compared to other rich countries on the whole
What's the full context of the 60% home ownership rate? That number has never made any sense to me. Is it "60% of adult US citizens live in households who jointly own their own home", or some such? How do eg children figure into this equation? What about owning a house on a mortgage? How about multi generation families who all live in the same house? What about someone who rents an apartment? And so on.
Okay, but if that's what it's supposed to mean, is that really accurately characterized as "60%+ of Americans own their own homes"? For instance, if an adult lives with their parents in a house owned by the household, and then the parents kick their adult child out, then suddenly this home ownership rate has decreased, even though no actual property has changed hands, right?
I believe that’s just a new household creation. The adult child would have been counted under their parents’ household, so they aren’t inflating the household homeownership rate. They just get counted as a new household when they get kicked out.
Fair enough, but then quoting that 60% home ownership figure without including the word "household" (as often happens, incl. at the beginning of this comment thread) does indeed reduce the statistic to meaninglessness.
My guess is that homeowner households are on average larger than non-homeowner households, so if 60% of households are homeowner households, then well over 60% of people live in homeowner households.
Just for clarification - now we've got two "60%" figures. One is the fallacious claim which is the topic of Ben's essay about living paycheck-to-paycheck, and the other one is about home ownership (also pertinent to this discussion.)
I find the home ownership figure interesting and maybe distressingly low. Outside of New York City, most people are unhappy if they have to rent. Part of this is justified by what I perceive is a cultural inability on one hand of many Americans to be considerate of their neighbors and on the other hand of many Americans to figure out how to shrewdly deal with their current life circumstances. As a lifelong renter-by-choice, I also know that effort and resources on the part of owners and managers also has a major impact on the liveability of rental properties.
Absolutely - Europeans live much closer together. As a mere traveler to Europe, I'm not privy to how they all manage to get along with each other in those apartments (we know that the cultural diversity of the incomers from their former colonies causes enough stress to lead to nationalist movements.)
Growing up in spacious suburbs in the late 20th and early 21st centuries can be terribly misleading for our social media addicted progeny.
Apartments are better constructed. You don’t hear your neighbors much. Cross-ventilation and family-sized and -friendly floor plans are the norm, possible because single-stair access is legal, and fire safety doesn’t suffer. Building codes in the U.S. mostly mandate shitty apartment buildings.
Single-stair access isn't perfect - it makes me a bit uncomfortable unless there are extra fire escapes (like those scary tunnel-ladders set into balconies in Japan.) I stayed in an apartment building in Brussels that had been converted into short-stay units. I could see a fire escape from the hall window for another unit, but my unit didn't have one--only the stairs. I assumed that those two units had formerly been one apartment. My unit was on the street so theoretically the fire department could have reached my window, but who knew. So I'd have to know more about fire safety redundancies in Europe.
As for double stairs, our five-over-ones, often made of wood and particle board, are 100% reliant on sprinkler systems which require maintenance, testing and ongoing code enforcement. Stairs are always just there. (I would love to have cross-ventilation - the stove and bathroom vents help a little though.)
This is correct. It is much lower than that in Austria and Germany, but higher in other places. It seems to vary significantly by country. In Germany the majority rent.
I'd love to know more about the exact wording. I have had a pet theory for a long time that a significant percent of people just hear "paycheck to paycheck" as a kind of banal aphorism like "live one day at a time" or "workin' for the weekend" or something like that.
It's because Americans love to complain about how hard they have it, even when they don't.
While it's certainly true that the inflation of the last few years has hit my personal budget kind of hard, its not been bad enough to actually make me stop eating out all the time, buying Starbucks frequently, or spend less on clothes. I have been putting off a car purchase lately, but that is more about personal discipline than "I can't afford the payment".
I don't tend to whine and complain about prices like other people, but that might be because I'm a Democrat. If Trump were president now, I'd probably be joining in on the complaning.
One thing I've noticed online recently is that there is a hostility to the idea that individual financial decision making should matter at all. When people complain about the price of DoorDash or travel or some other luxury, the implication is that no one should ever be forced to consider a budget and make a more prudent decision (I say this as someone who probably eats out more than I should).
I wonder if this is partially due to the influence of social media, particularly Instagram - if you regularly see other people your own age enjoying these things, you feel in some sense entitled to them even if they're really not in your price range.
This seems particularly true of UMC types in high CoL cities who think their high paychecks should be going further than they do.
Yeah--like, the $18 avocado toast obviously isn't why the median American can't afford a 20% down payment on a house in San Jose, but if you're feeling strapped, you might want to take a minute thinking about your spending choices.
And further, so much of the app-based food delivery stuff feels like people are just on autopilot. I like junk as much as the next person, but you're paying $25 to have soggy, lukewarm McDonald's delivered on the regular? Why are you doing that? Does that even feel good?
"you're paying $25 to have soggy, lukewarm McDonald's delivered on the regular? Why are you doing that?"
This is what kills me about the use of food delivery services for things outside of pizza and a handful of other types of cuisine -- you are manifestly getting a substantially inferior food product at a dramatically higher price! If you have to eat at home and don't want to make the effort to cook, it's still surely better to just eat a sub-$1 Cup o' Noodles and some chips rather than blowing the equivalent of an hour or more's after-tax-wages to get food in a condition that you would refuse to accept if a server brought it to you in a restaurant.
I have sat in a coffee shop and seen delivery app people come in for one fancy coffee drink! The delivery likely costs more than the drink. I hope they give a high percentage tip at least. Maybe someone is home with a sick kid or has agoraphobia or whatever, but I doubt that is most of it.
My son's roommate was going to order wings from a place IN THEIR SAME BUILDING to be delivered until the other guys in the apartment shamed him out of it. Granted, you have to go outside and walk a quarter of a block and it was winter in Chicago, but even so it was close enough to go out without a jacket or gloves and not be in danger of frostbite.
Idk last time I went to McDonald's I saw several doordash delivery people there. I agree that it's absolutely wild to order delivery McDonalds, since it is easy to take kids there or drive-thru. I say that as someone who thinks food delivery is really incredibly luxurious, both in that I feel so fancy when I do it and I really really enjoy it.
It is pretty grim to sit in a mostly empty restaurant watching the Doordash people come and go. Why pay downtown rents if you're not even going to go outside!
I do not know how common they are in the general population. I do know that other attorneys I work with sometimes will offhandedly mention getting non-traditional delivery food via some delivery service, so I presume it's not totally made up.
I'm sure they *do it*--I see my boss do the same sometimes--but does it reflect actual economic stress? My boss is a company founder and he's rich, he can do whatever he wants.
For us fancy restaurant DoorDash was partially a habit developed during COVID ("Yes it's an insane price and not as good, but we can't go out, so might as well order this") and now as a parent you're saving $35 an hour for a babysitter. It's definitely a worse product, but it's generally better than the alternative given limited time to cook.
I occasionally do fact finding with clients and whenever I get to the "what do you spend a month" question, it's always "I have no idea."
Ok, what's your monthly income from all sources? Are you saving any? No? Ok, are you going further in to debt? No? Ok, your spending is equal to your income then.
When people complain about the price of DoorDash, I think it’s less about the tradeoff between DoorDash and preparing your own food and more about how much more expensive DoorDash is than takeout.
Which is fair - when you account for increased menu prices, service fees, delivery fees, and tips, it’s a massive markup for a service that really doesn’t provide that much value other than avoiding the need to get off the couch and walk/bike/drive for 15 mins or so.
Of course why these people don’t just order takeout is unclear.
On the contrary, DoorDash provides a massive benefit. It is pretty to see that.
None of those restaurants offered delivery before DoorDash came along. Now people talk about having hundreds of options.
That's pretty clear indication that DoorDash is providing tons of value.
Not to mention they provide discovery of restaurants, online menus, online ordering, card payments.
Do people really not remember the old days when you'd call the pizza place and they'd answer but immediately put you on hold because there were four other customers also calling in? Then you ordered over the phone and had to repeat everything three three times to make sure they didn't mess up the order? And then they only took cash and god forbid you didn't have small enough bills for the driver to easily make change.
If you’re in an urban place, actually moving your car is a big barrier, and doing it on foot, bike, or public transit is a big chore, unless it’s on your block.
Yeah I wouldn’t usually do delivery or takeout from a place that close by - but during the pandemic I did, and I think some people might if they have some reason someone needs to eat at home (maybe a kid or a pressing work call or an injury or an important TV show to watch).
For what it’s worth I use it when I forgot my lunch. Doesn’t happen that often but I get 30 minutes for lunch and it has to also be the one time I get to go to the bathroom.
I mean at this point I usually am not really price sensitive. Just get me a burrito bowl and I’ll pay whatever you want but it’s pretty annoying that the vc subsidy for this went away and the price of making a small morning rush mistake went up 10 bucks. Not that any of this makes me feel poor that I sometimes have to overpay to get something vegan brought to my workplace.
We never, and I mean literally never, got delivery food when I was growing up. Zero times in eighteen years. You want a pizza, you make it or you go pick it up. What's ten or fifteen minutes of your time?
Now pushing the age of 40, I think I've increased this lofty total to twice--I got a couple of delivery pizzas left on the front porch when I had late-2021 covid.
I mean, I think we never did as well (I'm early 40s), but literally the only place that delivered to us was Domino's Pizza. If you wanted anything else, you had to go pick it up from the restaurant. We never ate Domino's, so it's not really much of an achievement to have never had delivery.
Nowadays, I'm richer than my parents were at my age, and Deliveroo says that there are literally 433 pizza restaurants that will deliver to me.
Same experience. And I have only ordered delivery maybe 2-3x in the last 5-6 years when UberEats offered me a huge coupon but required delivery (and I still did the math to make sure I came out ahead).
Agreed. I think there is a broader trend of absolute disbelief in agency, combined with what I feel confident calling entitlement and a curse of comfort. Right and left, there is outright disbelief that we should be held responsible for our actions. The right blames adverse outcomes at the individual level on this mythical notion of 'elites' and whatever conspiracy theory is popular at the moment, and the left blames it on nebulous and specious notions of 'social structures' and the tenuous application of tenuously defined mental disorders. I frankly feel that we are collectively undeserving of the system our ancestors sacrificed to build. We are fragile, self indulgent, criminally comfortable, and profoundly unserious.
It has started to occur to me that the closer we get to utopia (the more easily we can see it), the farther we realize it is. Which is why I think there is such agitation over economic philosophy in a country as comfortable as ours.
That said, I may fit into the last part of your comment somewhat. I make $150-165k/yr and live in Manhattan. I pay a little under $4k for a 350 square foot apartment on the third floor of a building with no elevator or washer/dryer (and I get absolutely fucked on taxes). While I'm not living paycheck to paycheck, I certainly don't have a ton left over after I pay my expenses, and I think it would be a difficult to characterize my lifestyle as lavish. And for what it's worth I do not use social media or know/give a shit how my friends are living.
This seems somewhat relevant to my recent post, which I will shamelessly plug.
Yeah, I do think there are unique situations like yours (and those situations are probably overrepresented in those who control The Discourse. That said, I'm guessing that living in Manhattan is a choice, made because of the substantial QoL it provides? Taking the tradeoff of a small apartment to live there is an example of the kind of lifestyle prioritization a lot of the biggest complainers argue shouldn't have to be made.
I think it’s very reasonable to expect to be able to afford to rent a small apartment in a good part of Manhattan and still save a solid amount per month on a 150k salary. And the fact that that is not the case is definitely indicative of a problem, although more one with Manhattan.
Yeah, absolutely, we need to build more housing and no city should be completely out of reach. But areas in demand will always have some element of scarcity that requires tradeoffs.
Oh for sure. Housing will always be expensive in New York. What you're saying applies, I think, to cities like DC or perhaps Boston where housing is very expensive but supply has more been able to keep up with demand. But New York, Manhattan in particular, is an example of extreme and deliberate supply suppression. If you walk through the most in demand neighborhoods here, so probably the most in demand and densely populated parts of the US, you will rarely find residential buildings that are above 5 stories (and they were usually built in the pre WWII era). It's to the point that unless you make 150, and probably even more, you have to make extreme tradeoffs that would be considered unreasonable anywhere else.
I don't recall right wingers in the 80s saying people were "rich," per se. The issue, which certainly goes back to at least the 1980s, maybe earlier, are surveys that show fairly large percentages of people who report being below the poverty line also owning things that were unequivocally considered "luxuries" (or completely unavailable) not that many years earlier -- color TVs, microwaves, and air conditioning are the big three that I can think of.
(People today really don't appreciate the point that color TVs continued to be sold at a substantial premium for a long time after color broadcasting became common. This is a subtle point made in "Wonder Woman 1984" of all places. Watch the teaser trailer from 33 to 43 seconds: https://www.youtube.com/watch?v=sfM7_JLk-84&t=32s If you pay close attention, you'll notice that the wall of TVs showing Maxwell Lord's ad are framed with signage saying, "Watch in Vivid Color!" and TVs in the shop window with patriotic bunting are 27" color TVs being advertised for $749.95 -- that's the inflation-adjusted equivalent of about $2300 today according to the BLS CPI calculator.)
To some extent this goes back to my theory of everything regarding inflation--general electronics stuff (TVs, laptops, whatever) generally becomes cheaper per unit "goodness", and the population is generally used to this.
Unless somebody comes up with a more efficient chicken egg delivery and collection system, eggs *cannot* become quote-unquote "cheaper" (whatever their dollar amount).
Well, the answer is that people did come up with more efficient chicken/egg delivery and collection systems ("factory farming"), but we've hit the limits of that. To put it another way, William Baumol won't stop ****ing that chicken.
Of course, absolutely. But the SV-minded "the world is our oyster, and once we demonstrate a single improvement one time, it will reliably be a permanent improvement forever" viewpoint is wrong.
Yeah, we get pizza or Indian delivered on occaision (two of the foods that actually hold up) but always scour the options available for discounts - you can easily find deals that essentially wipe out the cost of delivery if you're not picky.
Cutting your other spending to the bone would not actually solve the problem that the mortgage on an entry-level family home is 90% of your take-home pay. Even when the other 10% supports an excessive lifestyle by MCOL standards!
For one thing, you're a 10% pay cut away from default. You wanna bet that'll never happen over the life of a 30-year loan?
Right, this supposedly elite cohort is constrained by financial circumstances such that it would be unreasonable to hit normal middle class milestones, like buying an entry-level home for your young family. Which is exactly their point.
Yes. That’s one way you get “I spend $3000/mo on DoorDash and I can’t afford to buy a house.” Thats a stupid amount of money for DoorDash, but it’s also irrelevant.
Yeah, but the specific scenario you're describing is really only applicable to a few superstar cities. We should build way more housing in those places (this is Slow Boring, after all) but if a mortgage would be 90% of your take home in Palo Alto, you can probably find a similar paying job in Pittsburgh or Milwaukee.
“The biggest problem with perpetuating this economic myth is that it can push people towards some wacky policy ideas, like dismantling capitalism or imposing blanket tariffs to restore some rose colored-vision of manufacturing in mid 20th century America.”
I really don’t think hardcore leftists and identitarians realize how much they’re helping to perpetuate the status quo by siphoning political attention and energy from more plausible reformist politics that focuses on improving material conditions for those who are genuinely deprived.
For people like that, their ideological identity would be threatened if they didn't project the belief that radical change is always necessary onto circumstances where it doesn't fit. (Damn you, Karl!) You saw that during the Obamacare debate; there was no shortage of "progressives" who'd rather let people die than see a CORPORATION make a PROFIT off their health care.
Ehh I’m not so sure. People generally don’t like programs that only help a small sliver of the population. If you convince people that 60% of the population needs help, and so you need broad as opposed to targeted change, and therefore they will get some benefit out of whatever the solution is, you’re more likely to get them on side. Indeed I’m fairly certain that’s the only reason this stat exists at all.
Perhaps I'm a bit cynical but I think they are perfectly fine with reform policies failing to be enacted. Better to have the whole system fail then rebuild.
There are some like that online I suppose and they’re loud, but I think they’re very few and far between irl. I’m friends with a pretty lefty bunch, and I don’t know anyone in my circle or social media feed that’s actually like that - though FB algorithms keep trying to plug that kind of content for me.
1) My wife and I bought our first house this past summer. Throughout the process, I was amazed that lenders were very willing to lend us more than double what we were willing to spend based on how much we saved for a 20% down payment. Like, the monthly payments for the top end of the loans banks were throwing at us would have been 50% or more of our monthly take-home pay. How many people actually take out mortgages with payments that eat up large portions of their income? Probably more than I would prefer.
2) If America is the "land of opportunity" for immigrants from all over the world, doesn't that put a high floor on our poverty rate compared to other wealthy countries that don't take in a lot of immigrants? (Because immigrants tend to have less money when they arrive).
Yeah, this is one of the problems with the related narrative of generational poverty statistics. We're constantly refilling the bottom 10-20% or so with low-income immigrants who usually rise up the ladder.
Are we tho? I’d like to know what the actual differential is between the native born and immigrant “climb rate”, and what their respective proportions of the bottom 10-20%% population actually are.
I think most of us would expect a higher climb rate for immigrants, but a higher proportion of native born. Which is its own genuine mobility problem! The existence of high-climb-rate immigrants doesn’t mean we shouldn’t help the native born increase their own climb rate.
Drawing from CDC natality data, immigrant mothers are disproportionately likely to have not finished high school and less likely to have finished college. They are also more likely to have an advanced degree, but that group is a very small one overall, so average education level, overall, is lower than for native-born americans.
But, overall they are more likely to be married or at least have acknowledged paternity, which I would believe is probably a strong predictor of upward mobility from whatever level the parents are at.
The lowest SES native-born populations, Black and Native Americans, both have low college ed levels and very high incidences of single motherhood, which implies to me lower levels of upwardly mobility and might be the single biggest factor preventing upward mobility (or maybe it's the higher birth rates starting from younger ages).
I'm definitely not saying we shouldn't help anyone get ahead. And I think we agree that there are major pockets of intergenerational poverty, it's just that the overall intergenerational poverty figures are often inflated well beyond reality by not acknowledging that most native-born Americans are actually doing better than their parents.
No shade on you, not to be a buzzkill, but it’s a real sad statement of affairs that buying a house has become seen as a real big achievement we should be congratulating each other for.
Yeah. I mean it used to just be assumed. My grandparents moved to the country back in the late 50s and my grandfather started a small town auto body shop that he basically ran into the ground doing favors for people, according to my grandmother’s stories. My grandmother said, as evidence of their facing penury, that they moved back to Memphis “with barely enough for a down payment on a house” as if that was like escaping with only the shirts on their backs.
At the time she didn’t work outside the home and they had 4 kids.
The paycheck to paycheck conversations are almost always about how people feel, particularly relative to their peers or their parents. This is why the comparisons to the 1950s (or any other good old days era) are both bad and illustrative. That lifestyle is available, and it’s pretty cheap, but that’s not what people want - they want to feel like they’re keeping up with everyone and able to buy what they want to buy.
How much of this is due to social media? In anytime prior to the last ten years, you wouldn't know that a casual aquaintance took his family on a two week vacation to Italy. Now you do, and some people will immediately assume that they're not keeping up if they're not able to do the same.
Juliet Schor's 1998-ish "The Overspent American" made a similar point about aspirational spending before social media, but in the context of what we saw portayed on TV and in movies. Specifically, the fact that almost everyone depicted on TV was someone living a lifestyle of the top ~10% or so. With "Friends" being the most enduring example, although there are many others.
I think social media have basically extended this phenomenon, making it worse by making it more personal.
(One of Schor's point was that 1950's-style "keeping up with the Joneses" may have led to some excess spending...but it at least had a sort of cap because the "Joneses" were your neighbors and so probably had a generally comparable income to yours. )
Not personally at you, but at your comment. People could avoid that feeling of missing out from other people's social media posts if they stayed off social media.
How is that lifestyle available? You largely simply can’t buy as cheap of a basket of goods, especially in real estate, healthcare, and education, as was the norm in the ‘50s.
Kevin D. Williamson at The Dispatch has written some compelling essays (in service of debunking Trump/Vance industrial policy) about how people "could live in the 50s" if they wanted to, but that would mean a living standard most of us would find at poverty level. Examples include a much smaller home, one landline (no smart phones), one TV with whatever you can catch via antenna, one car for the family, maybe one vacation a year and it's a road trip, etc. Our prosperity over the past 70-plus years has created a lot of lifestyle creep we take for granted.
The entertainment is a rounding error. (Which is great!) The problem is that there basically don’t exist cheap small houses in places that have reliable good jobs, most certainly not for those who aren’t investing in today’s far more expensive and time-consuming education process. One literally cannot finish high school and then spend my life in a solid union job while owning one of the small inexpensive houses that by all means still exist in Detroit. It’s true that there are some interesting modern options like working remotely from a cheap area, but systemically I just really don’t agree at all that you could downgrade to the 50s in any real sense.
Buying 1950s healthcare would mostly mean forgoing the larger chunk of the medications, treatments and surgeries we now have. It would be hard to get as much 1-on-1 time with a physician, but that's the tradeoff.
Real estate is tougher to summarize because it's very location dependent. It was certainly easier to move to a modest house in California. But in large swathes of the countries houses built prior to 1950 are just as affordable as they ever were.
Sure, education is much more expensive. But fewer people took advantage of it back then and basic literacy scores were lower. When I've heard my older relatives talk about what Catholic school education was like it's frankly appalling.
And these 3 categories ignore so many other important expenses. No one wants to maintain a 1950s car as their primary transportation now, or pick from CBS, ABC and NBC and that's it. Airplane destination vacations and visiting relatives by air is a fully middle class thing nowadays. Those were only for the rich back then.
Yes, now we have no polio and cheap flights. The problem is that the *basics* - a roof, going to doctor when sick, somebody to watch the kids, a college degree (or even a technical degree) are all much more expensive. I agree a car today is better and much safer and I can buy new clothes every day if I wanted to. The issue is that it’s harder to “buckle down” if I lose my job or otherwise face economic misfortune.
Thing is, I define no polio and a male life expectancy of 78, rather than 66 as it was in 1955, as part of the basics.
In the 1950s there was no medicare or medicaid, and it may be harder to put a roof over your head for some people, but the vast majority live in more spacious dwellings under much larger roofs.
All in all, being a healthy, single car family in a small modest house outside of the biggest coastal cities is actually not that difficult for most Americans. Defined this way, more probably fell through the cracks in the 1950s. There were still people living in actual log cabins or houses without indoor plumbing. I spend of lot of time in my lower middle-class grandparents houses when I grew up. Today's equivalent strata of society lives much nicer, and very low income people live in those houses now, affordably, I would guess.
I spent a lot of time with my grandmother while my parents were working, or in some cases, cousins, etc. While I moved away from my hometown, some of my extended family didn't and rely on grandparents and assorted aunts and uncles for childcare. It's still possible.
I think part of this is that we expect to spend more on healthcare and education than the median household did in the 50s. People just didn’t expect to have nearly as much of either as we do today.
For housing, there are 1,000 square foot houses people can buy, just not the ones people want today and not in the areas people want - we aspire to more, and we now spend more than we did then. If we simply didn’t spend on those things, it would naturally be more affordable.
Additionally I think there are specifically the working-class families whose grandparents worked in factories in the U.S. In Oregon it was the families of loggers who simply couldn't believe that maybe they should not count on those lucrative forest jobs. The jobs go away and we end up with poverty-stricken towns populated by alcoholics.
I don't blame them too much for expecting that they would be able to grow up and get family-supporting jobs (although "Allentown" should have provided a clue.) In this case, cultural expectations and habits led to less-educated perspectives on the world, which results literally in fewer choices (if you don't know it's out there or can't understand why it's gonna happen, you can't pursue it.) A common instinctively human response is to blame someone else rather than figure out how you personally are going to find another path. This cohort is important because I think they're the ones making up the Trump supporters. Doesn't matter if it's 10% or 60% - if they and their families perceive there's a reason to be mad and blame (us) then statistical truth will only convince marginal voters.
I’m not so sure. A 3bd/2ba bungalow is much more expensive, plus healthcare, childcare (because now mom has to work). Yes, we could eat tuna casserole, but remember mom’s not home and food is only 10% of the average American’s budget even with all the eating out.
Yeah, those cute craftsman homes that are always cited as the "starter" homes that are out of reach for young families were homes for the wealthy in the 1950s. The actual 50s starter homes were pre-fab trash.
I think this gets at the point - mom (or dad) could stay home today. They often don’t because we want more money to buy more things that we didn’t 70 years ago. Your point about food illustrates this - we spend money on so many things that we didn’t buy before, so much so that the food share has dropped despite buying more expensive and higher quality food.
I don’t think that’s true at all outside of completely depressed economies. The houses in my neighborhood are mostly shitty postwar houses of about 1000 sf, you could be a one car family - there is decent bus service, but the schools I’m zoned for aren’t very good these days and the house prices are all 600k these days. These were mostly all built to support Boeing working class employees (according to Wikipedia). But house prices were much cheaper relative to a working class wage at Boeing in the 50s-60s. (The machinists striking make 76k on average.)
To live in a good school district in just a reasonably sized house is pretty cost-prohibitive for a blue collar worker raising a family with one breadwinner, unless by blue collar you mean master plumber or master electrician. But yeah we have refrigerators now (shittier than in the 50s though), high-speed internet and cell phones (which are bads rather than goods anyhow)
I’d also like to see the death of the related posting genre “I make a six-figure income, but I am financially struggling because of the mortgage and property taxes on my luxurious/prime location home, the payments on my new high-end car, and the cost of sending my kids to an expensive private school.”
These people very plausibly could just… live in a less expensive home, drive a used Honda Accord, and send their kids to public school, and then reinvest their extra income.
I don’t think those posts are claiming financial destitution - they’re claiming their authors are undervalued by society. “I’ve worked so hard, I contribute so much, policy should really reward people as wonderful as I am more”.
That’s why you see them pretty much across the income scale, from people who are clearly fiscal net recipients all the way up to billionaires losing their minds over the carried interest loophole.
It’s such a foolish and self-owning mindset relative to recognizing your good fortune, understanding that it’s usually the product of both your own efforts and a context created by the labors of others, and being grateful.
You can’t really just live in a less expensive home if your six figure jobs are, say, in the Bay. Private school, sure, although I don’t think it’s *that* much cheaper to move into a top school district than to live in a mediocre one and pay for private school.
If you’re capable of making six figures, your kids will in fact do fine in life even if they went to a mediocre public school. And every area of the country has a range of housing options, many of which are usually cheaper than the homes the people who post this sort of stuff inhabit.
"I make boatloads of money and I have to [commute 3 hours a day | live in a trailer | spend it all on this shitty little home]" are all the same statement, which is that an apparently large amount of money is not what it seems given the regional housing market.
Sure, you don’t actually need to go to a good school district and it is possible to raise kids in a $1M condo rather than in a $3M single family home. But it’s pretty easy to sympathize with people who find having to make those sorts of sacrifices even while being objectively exceptionally successful rather galling.
Only if you believe all that nonsense that schools don’t matter. I sure wouldn’t want to send my kids to public school in SF or Seattle so long as they’re on the “math is racist” kick and not tracking. Shit, I’ve been subbing at elementary schools where multiple grades are in the same classrooms (talk about lol nothing matters) and where the teacher still reads books to the students in 5th grade to accommodate the illiterate.
I certainly do think that schools matter generally, but that they matter much less for children whose parents are near the top of the IQ and income distribution. If you’re very smart and have some resources, what your kids learn from you and from following their curiosity will likely outstrip what they learn in the classroom for most of K-12.
Parents who are smart and have resources pretty much always send their kids to good schools unless they’re pretty neglectful, and I think this effect is difficult to decouple. But yeah enrichment at home is great, and parents that smart and dedicated often home school if they can. I would want to home school if I had kids, especially if I could find a pod of similar minded parents.
None of that's really evidence of anything. My model is pretty much that nobody learns anything from the concrete curriculum at virtually any K-12 school in the US today, and if you want your kids educated you'll have to either do it yourself or hope they eventually get interested for themselves. I had a "top-notch" public school education that was good for literally nothing except skipping me past the 100-level courses in college, which is not obviously even a benefit. Much better to have been at a school with less distracting extracurriculars so my parents would've had to look for some serious enrichment; in math, any student can sign up for Art of Problem Solving and one year of that is worth two whole K-12 educations of any level I've ever seen.
Ben Krauss wrote a thorough, clearly researched article debunking the myth that "60% of Americans are living paycheck to paycheck." Ben proves his argument by quoting Matt Darling and his statistics and other specialists' data. Ben ends his article with the strong statement "that claiming that 60% of Americans are financially destitute ...only reinforces a needless sense of collective economic doom."
Ben, contrary to what a certain dipshit troll had to say earlier, I thought this was one of your best pieces yet - great topic, well written. Well done
Nice article. But when you write, "And if this is true, then the median American household would be in pretty dire financial straights", the expression you're looking for is "dire straits", like the '80s rock group. It's partly because of things like this that I really wish online publications/blogs took copy editing as seriously as professional print publications do (or used to).
Yeah, the loss of even very good writers reliably writing correctly is an underappreciated tragedy of the commons. It’s probably not directly “worth it” for most of these guys to hire a copywriter but it would sure as hell be worth it for me for everybody I read to do so.
I abhor the "lived experience" trope, being a fancy-sounding groups-laundered version of anecdata, but you'd think people would just recognize that this myth is absurd on its face.
Think about all of the people you know and the people you interact with day to day. You know how they live their lives; you know what they talk about in the break room or whatever. If one of them were really, seriously in dire enough straits that they would face true ruin if they were out of work for a month, they would probably bring it up, or at least inadvertently let hints slip.
SB is by no means a representative sample of the US population, but be real--how many people in your life does this describe? Is it *more than half*?
I know this is “me-search” but to answer the question: I have 7 close friend-households that I see on a regular basis. Including me, 4 of us are economically well off (a couple very well off). One is okay now but watching their career of the last 30 years (document translation) vanish to AI and is trying to figure out a career change in their 50s with no savings to speak of since it all went to a big house repair; they very realistically could reach the point in the next 5-7 years where property taxes and income crunch could push them out of their house. The other 3 are 2 renters and a homeowner. The homeowner is okay but only by working 2x full time jobs. The other two are operating in the red and could not weather a $400 expense. All are college educated some with multiple degrees. All are 40+. So while it’s not as dire as 60%, struggling people are out there. And as someone said above, I do think SB readers may skew to certain more comfortable demographics.
Document translation is one of the areas where I really do perceive an existential professional threat from the LLMs that we now term "AI"--my most recent hire had been providing translation and general language assistance to non-native-speaking researchers who wanted to publish their work in English-language journals. That job got kneecapped by ShitGPT and the like, in a rare application where they seem (IMHO) to make sense.
Real as this is (it sucks and I'm glad I hired them), this doesn't neatly map onto "wah wah end-stage-capitalism" dialog.
My understanding of this figure has always been the one Ben mentions. I’ve got a six figure income and a housing payment of around $3,000 and do enough fun things that my bank account never grows (though my retirement savings do). I can’t pay off my credit card until the next paycheck comes in, so if someone asked “are you living paycheck-to-paycheck?” I would say “yes”. My lived experience tells me this is a very comfortable life, so I don’t think of “paycheck-to-paycheck” as a meaningful sign of financial stress.
I actually know a number of people like that. Not in my workplace, but in my neighborhood and through PTA. I didn't think the number was 60%, but I thought it was much higher than indicated in this persuasive column. This makes me think that the "lived experience" thing is completely subjective since we all move within our bubbles.
Lived experience is a great thing to keep in mind—the experiences that other people have in their lives may not be what you project on them or expect. Used more collectively, it can tell you things that less anecdotal data might not capture, such as how people adjust to the specific circumstances in their communities, such as avoiding going out in the streets to play because of gun violence, or driving their kids everywhere because they're afraid it's dangerous for their kids to walk or bike in a place with too many fast, large vehicles. You can add some more objective data on top of that, but the lived experience information will help guide you to what kind of data you want to collect.
You need chicken stock. Chicken thighs (you got to debone them). Celery, carrots, onions, butter, flour, and egg noodles. That's like $12 for a weeks worth of soup.
In lieu of a link, here's my very half-assed and rambling recollection (if you read her, Kat Rosenfield referenced it in what I feel was one of her rare bad takes, so she would have better details in the relevant post):
A woman with some measure of name recognition and some vague affiliation with right-ish networks (edit: it was Megan McArdle as pointed out by ATX Jake. I feel vindicated in my half-assed description as you could have replaced her in this episode with a dozen performatively heterodox, too-online clones) posted either her grocery receipt (or just wrote it out - remember, this is half-assed recollection) on Twitter in which the ingredients for homemade chicken soup for 4 - 6 somehow added up to well over $100 (edit - $50), citing ruinious inflation, etc (this came at around the same time that some dude with, again, some measure of name recognition and some vague affiliation with right-ish networks complained in the same idiom about a Doordash receipt for things that are genuinely expensive; I seem to recall turf and surf).
When people pointed out that this was literally inconceivable, the "it's condescending / elitist to scrutinize this woman's grocery bill / lived experience / etc." trap was sprung, the tedious discourse merry-go-round did its thing and we all edged a little bit closer to civilizational collapse. The end.
And yeah - as someone who cooks stuff from scratch, like, a lot, I was in the "that is literally impossible, you are making shit up for transparently partisan purposes" camp. Admittedly, I do live in the UK, where even taking the currency difference into account groceries are dirt cheap by American standards* (when I was visiting home this past summer, I was genuinely surprised by how much some things in grocery stores cost), but still.
* This is partially on the back of cartel-like behavior on the part of the big chains, who screw UK farmers, so I do make an effort to support them (the farmers, not the chains) directly through CSA-type programs.
Do you have a link to this? I'd really love to see what she put in $100 chicken soup. Like was it a hen hand fed truffles? Some Japanese vegetables that have been grown to weird shapes?
Maybe she didn’t have thyme, bay leaves, saffron, or oregano, so she “needed” to buy a whole jar of each spice for $6-10 each? (Whereas if you make this regularly, you’ve done that once and have enough for 100 soups.)
I sort of get that - dried herbs / spices are stupid expensive in the US for some reason (most are £1 - 2 for Tesco brand here). But it’s still bad faith-o-rama to do a “let’s go Brandon” on the basis of expensive dried herbs.
Someone posted the original tweet below. It’s deeply stupid.
We have a company here called Riverford, which is basically a farmers’ market that delivers. It’s great - they work with a lot of small organic farmers and pay them a fair price - which means the prices are significantly higher than the artificially low grocery store ones. I use it when I can both to support them, and because the quality tends to be really good. Also, these small farmers have unusual but good stuff (ever try salsify?) and the UK’s mild climate means that things are actually being grown year-round; eating seasonally is not as much of a bummer here as you might think.
Anyway, if I bought the ingredients, including a top-notch organic chicken to the tune of £25 ($30) from them, *maybe* I could get to the equivalent of $100 by buying enough to feed 10-12 people and adding lots of vegetables.
Oh yeah, right. I knew it was some too-online "kiss me, I'm heterodox" type. What a crappy, predictable, paint-by-numbers episode. What really got me whas how quickly things ended up at "any criticism of this is sexist."
And, point of order (someone found the tweet and linked it down below), she said $50, not $100. She's silly, but only about half that silly. :-)
(Full disclosure: I have a soft spot for McArdle from her Atlantic blogging days, fifteen+ years ago - mainly for her exhaustive kitchen-gadget reviews. Not read her in years, though, and won't defend anything she may or may not have got up to since!)
Thanks for pointing that out! Though in my defence it was, as advertisedf Half-assed Recollection (TM).
Good kitchen gadget reviews are worth their weight in gold, so if she did good ones then it's a good reason to have a soft spot!
What annoys me most about the whole episode is not necessarily what she tweeted - it's the whole discourse that evolved around the tweet. In retrospect, what I probably should have referenced was "Doordash is too expensive and it's Joe Biden's fault" discourse, but being an amateur chef I was drawn to chicken soup discourse.
Just for some color: In my host family in Moldova, which was mostly goose stock, you'd have to add up the cost of two dozen goslings in the spring, any seeds needed for their feed (corn and giant zucchini; they also liked crabgrass and who-knows-what-else in the local weed plot), whatever they paid the two babushkas who helped out with plucking in November, the cost of the cabbage, potatoes, sunflower oil maybe onions that my family bought at the weekly market, the cost of electricity to freeze the bones and meat and the cost of the gas to make the soup. The chickens pretty much took care of themselves, plus they gave us eggs every morning.
The Moldovans worked really hard. The young ones mostly wanted to move to the city where they could just buy the ingredients for their borș and not have all those morning, evening and harvest-time chores in addition to work. (By the way, we ate the cute little guy you can see next to my name.)
When were you in Moldova? My son was there this summer, and he befriended a young woman (30-ish) who had moved there from Italy to open a cafe becasue it was easier than in Italy. This surprised me at first, but not so much after I thougth about it. One of her parents was Italian and one was Moldovan, thus the ease of her moving between the cultures.
Intrepid traveling - it's not an easy country to get around, but beautiful and interesting. I was there in the Peace Corps 2013-2015 (after I retired, btw)
One of my fellow volunteers still lives there and has his own Substack. He opened a restaurant while I was there, and blogged about the bureaucratic barriers that seem set up for bribes. Maybe things are getting better.
A lot of Moldovans go to Italy to work and send remittances back home. They find it easy to learn Italian and Spanish based on their knowledge of Romanian.
That is fascinating, especially given the reverse immigration of the woman my son met. He spent 8 weeks in Kazakhstan in a Russian course then decided to spend about 10 days in Moldova, traveling by himself, on his way home. He enjoyed both countries. He was a complete homebody, until he started college in 2021. We encouraged him to go to a college other than the one on the same street as his high school, and now this!
And his Russian probably served him well in Moldova - Moldovans are bilingual in Russian and Romanian (even the youngsters, I believe, since so much TV is in Russian.) FWIW he's got a head start for any of the post-Soviet Peace Corps countries, if he's interested (although he'd also have to learn the "real" language of the country as well.)
Gentile amateur chef here. A roux wouldn't be my first move for chicken soup either, but if you were making something more along the lines of a stew you could go that route.
I volunteer for a small non-profit that helps people who are struggling to pay their rent and/or utilities. We can only help with a small amount ($75) but there are also other non-profits in the community who can help with a small amount. Often times, our small amount + other small amounts can help individuals avoid eviction or having their utilities cut.
Even these people are more resilient than economic data might reveal. When push comes to shove, they are able to raise money through family and friends to help them cover their deficits. Or, they sell their TVs or other valuables on online marketplaces to raise money.
That doesn't mean that no one gets evicted or has their utilities cut. However, even those people who have very low incomes often manage to get by.
I'm surprised no one in the comments has asked who LendingClub even is. One of my pet peeves is media coding dubious studies from organizations no one has ever heard of. It's one thing to cite Brookings or other organizations that are well-known, but media citations of relatively unknown organizations don't provide enough context to evaluate who is behind the organization. Half the time they turn out to be an industry group citing in dubious proprietary data or a corporate astroturf org, while the other half of the time the think tank turns out to be a couple of guys running it out of their apartment who don't necessarily have good credentials.
Lending club is a personal loan matching site. I used them to consolidate and pay off some credit card debt. You put in some information and they go and see who will offer you a loan and what the basic terms of it are. So they do have a stake in things here but they also have a lot of data from both sides of the loan market.
But do they have a widely known and independently verified reputation for quality information? When a lot of their data is proprietary, is there a way for people outside the org to know it's good? I've worked on research projects with major industry groups for which my questions on data quality just met a wall of "proprietary information" where we couldn't verify the data quality. A lot of media pieces on such studies basically read like a press release since the journalists can't necessarily dive into the data (or have the quant skills to do so).
Voted early today. Simple and easy in person at the local library. Very professional volunteers. I love democracy! I have my I voted sticker on right now.
I voted last week from my kitchen table. And then took it to a library dropbox (or could have mailed it for free). Then I got a text notification that my ballot was received and couhted.
God bless California for allowing me to participate in democracy without even the friction of dealing with a fellow citizen.
One economic indicator I follow is household savings, grouped by income quartiles. In the wake of the pandemic and government stimulus, savings accounts were full and people paid off debt and spent. Since the peak, savings have been depleted, particularly in the lower quartiles.
So the wealthy keep on spending and the lower income households cut back on things and/or increase their debt load. So regardless of what percentage of Americans are living paycheck to paycheck, there is a large economic divide.
Well argued all the way around and I agree with both the premise of the article and the conclusions. But one minor bone to pick: a lot of Americans have a good portion of their net worth tied up in their home, which is very much illiquid (Ben sort of acknowledges this but mostly glosses over it). I don't have the statistics for what percentage of Americans and what percentage of their net worth, but suffice it to say, people wouldn't be such NIMBYs if they didn't have to worry about their home values depreciating.
I am an economist. I now straight up laugh when I hear this claim when people try to act like this county is poor.
Americans consume a lot. If people were living paycheck to paycheck and destitute then why is the median car sold in the US 2x the price of one sold in Europe? Why do 60%+ of Americans own their own homes? Why do people eat out more than ever?
I've spent the past decade-plus living in Vietnam and whenever I see online people from rich first world countries -- not just the US but I also see it in Australia, Sweden, and so on -- that try to pretend their life is a daily struggle for existence and I can't help but wonder what's gone wrong with society.
I don't want to discount their experiences entirely but it's hard for me to get past that there's a reason Vietnamese smuggle themselves to the US and Americans aren't smuggling themselves to Vietnam. So what has gone wrong with Western society that everyone is so miserable? Or at least acts that way online? I don't think it is quite right to say it is "all in their head". I often wonder if it is more a problem of expectations than reality? They've been trained to expect the top of Maslow's pyramid of self-actualisation for 99% of society -- thanks to a steady diet of "do what you love and you'll never work a day in your life" and "chase your passion" and "what color is your parachute" and so on -- but that kind of Star Trek utopia is still decades (or more away) from being reality. And modern media (not JUST social media; you'd be amazed how many parents feel threatened and discouraged by Bluey's perfect-parenting) also often paints the picture that life should be cruise street for basically everyone, adding to the problem.
expectations vs reality is a big part of it - this is the "elite overproduction" theory, to a degree.
there's also social capital to be gained on the left by purporting that the US is awful, because if that's the case then we need leftist policies to fix it.
Mondaire Jones, a D congressional candidate, said America has a "broken economy" on the Bulwark pod last week. He's a Stanford, Harvard and Davis Polk alum. When someone that accomplished, running as a D candidate under a D President, speaks like that, it's kinda inevitable that more everyday folks will use similar language.
It's ~47m in here
https://podcasts.apple.com/us/podcast/susan-rice-and-mondaire-jones-the-dictator-hugger/id1447684472?i=1000673342593
Not to be trite, but lots of people say stupid shit.
You should hear my rants calling the harbor ducks lazy communists living on hand outs.
This sparked my imagination in some truly spectacular ways. Thanks!
Freeloaders living on the dole!
Yes, but this is ridiculous. I think some people just mean housing costs when they talk like this, which are a real problem.
This makes sense to me as a Republican. The historian Michael Kazin argues the central thread of the Democratic party for 200 years has been moralizing capitalism, or finding ways to rally a working class to morally reform it. It makes sense Democrats have no way to enjoy a bustling economic status quo the way a center-right party of mid-sized business and middle class voters does. It is at odds with how their party looks at politics.
The people writing click bait articles in CNBC or WSJ about how if you live in NYC or SF and make $500K you can’t survive and live “paycheck to paycheck” are not Democrats. Or at the very least not writing from a Democratic perspective.
It’s like the NIMBY debate. Matt focuses his ire on left of center NIMBYs because he’s left of center, lived in a blue city and as a left of center writer might actually have some sway with this slice of the population. But if you look at polling, more self identified republicans than democrats are NIMBY.
And yes where I live, it’s the right of center of people who use “paycheck to paycheck” language and are more NIMBY
Most CNBC and WSJ news reporters are moderate Democrats. The finance men who read them are generally in either party. Most journalists, with the exception of explicitly right-wing media, are Democrats. This has been true for a while; journalism is a creative job, and it's challenging across history to name any truly talented artists who have normie Republican politics. (There are a few with eccentric reactionary politics, which isn't really the same type of person or voter as one happily voting for Bob Dole.) Michael Kazin's scholarship corroborates the latter occupation's bipartisanship; he has a great chapter on late 19th century Democratic party financing from an eccentric man in Manhattan that might be of interest. Chuck Schumer is the Senate majority leader for a reason. If Democrats were socialists, this would be a problem. But they aren't and never have been. They are center-left populists.
I agree NIMBY is pretty bipartisan. The difference is sitting on decades of property value accumulation and environmentalism is central to how the upper-middle class functions in California politics compared to Texas politics. The progressive gentry is important to why Democrats run their states the way they do. It's also why as Silicon Valley's crypto and AI sectors began consuming energy per customer a little more in the direction of car factories (very high) and a little less in the direction of server farms (very low), their votes began changing too. Turns out if you wants lots of energy, you have to accept tearing up land for more transmission lines and being open to a variety of low cost options like natural gas. So abundance liberalism people are going to run into the problem, regardless of if Trump or Harris wins, that Democrats just aren't really a supply-side party. They never have been.
Finally, I'm sure you know Republicans who are unhappy with inflation, like Republican politicians, and might exaggerate the precarity it has caused for many planning their finances and large purchases like cars and houses. But it's neither here or there with my point about the parties and how they generally view the economy. The big reason economic sentiment is lower than in 2019 is Democrats just aren't as hyped about the economic status quo as Republicans. Both will happily exaggerate the problems with an opposing leader in the White House. Democrats said the economy sucked in 2019. But the difference is Democrats can't really convince themselves the economy is automatically great when team blue is in charge. They're more like the types to insist on loan forgiveness of various indebted artisans and aspiring middle class voters, whether under Andrew Jackson or Joe Biden. Populism, in other words.
In my red state I'm subjected to constant uninvited whining from Archie Bunker-like strangers about how Biden is "killing them" because eggs are 25 cents more expensive this week.
The last few years have featured several people who soiled Stanford's name, but I definitely cringe every time I hear about him. What an embarrassment.
By the way, do you mean Davis Polk the white shoe firm?
Yes
I do think that most of the critics on the left don't think the country is poor. They believe that its rich, but all the wealth is concentrated so that the average person is poor. Wealth is pretty concentrated, but the average person isn't poor.
Even the 20th percentile person isn't poor. We should do better at redistribution, but we're making progress even at low incomes and we're doing okay compared to other rich countries on the whole
What's the full context of the 60% home ownership rate? That number has never made any sense to me. Is it "60% of adult US citizens live in households who jointly own their own home", or some such? How do eg children figure into this equation? What about owning a house on a mortgage? How about multi generation families who all live in the same house? What about someone who rents an apartment? And so on.
I believe it is ~60% of American households live in the dwelling for which they own the deed to.
Okay, but if that's what it's supposed to mean, is that really accurately characterized as "60%+ of Americans own their own homes"? For instance, if an adult lives with their parents in a house owned by the household, and then the parents kick their adult child out, then suddenly this home ownership rate has decreased, even though no actual property has changed hands, right?
I believe that’s just a new household creation. The adult child would have been counted under their parents’ household, so they aren’t inflating the household homeownership rate. They just get counted as a new household when they get kicked out.
Right, so then that does decrease the home ownership rate because that new household doesn’t own its dwelling.
Yes.
Fair enough, but then quoting that 60% home ownership figure without including the word "household" (as often happens, incl. at the beginning of this comment thread) does indeed reduce the statistic to meaninglessness.
My guess is that homeowner households are on average larger than non-homeowner households, so if 60% of households are homeowner households, then well over 60% of people live in homeowner households.
Just for clarification - now we've got two "60%" figures. One is the fallacious claim which is the topic of Ben's essay about living paycheck-to-paycheck, and the other one is about home ownership (also pertinent to this discussion.)
I find the home ownership figure interesting and maybe distressingly low. Outside of New York City, most people are unhappy if they have to rent. Part of this is justified by what I perceive is a cultural inability on one hand of many Americans to be considerate of their neighbors and on the other hand of many Americans to figure out how to shrewdly deal with their current life circumstances. As a lifelong renter-by-choice, I also know that effort and resources on the part of owners and managers also has a major impact on the liveability of rental properties.
It’s a lot lower in much of Europe, by the way.
Absolutely - Europeans live much closer together. As a mere traveler to Europe, I'm not privy to how they all manage to get along with each other in those apartments (we know that the cultural diversity of the incomers from their former colonies causes enough stress to lead to nationalist movements.)
Growing up in spacious suburbs in the late 20th and early 21st centuries can be terribly misleading for our social media addicted progeny.
Apartments are better constructed. You don’t hear your neighbors much. Cross-ventilation and family-sized and -friendly floor plans are the norm, possible because single-stair access is legal, and fire safety doesn’t suffer. Building codes in the U.S. mostly mandate shitty apartment buildings.
Single-stair access isn't perfect - it makes me a bit uncomfortable unless there are extra fire escapes (like those scary tunnel-ladders set into balconies in Japan.) I stayed in an apartment building in Brussels that had been converted into short-stay units. I could see a fire escape from the hall window for another unit, but my unit didn't have one--only the stairs. I assumed that those two units had formerly been one apartment. My unit was on the street so theoretically the fire department could have reached my window, but who knew. So I'd have to know more about fire safety redundancies in Europe.
As for double stairs, our five-over-ones, often made of wood and particle board, are 100% reliant on sprinkler systems which require maintenance, testing and ongoing code enforcement. Stairs are always just there. (I would love to have cross-ventilation - the stove and bathroom vents help a little though.)
That’s false. Home ownership rates in EU is 70%. US is also 65%, not 60%.
This is correct. It is much lower than that in Austria and Germany, but higher in other places. It seems to vary significantly by country. In Germany the majority rent.
I'd love to know more about the exact wording. I have had a pet theory for a long time that a significant percent of people just hear "paycheck to paycheck" as a kind of banal aphorism like "live one day at a time" or "workin' for the weekend" or something like that.
It's because Americans love to complain about how hard they have it, even when they don't.
While it's certainly true that the inflation of the last few years has hit my personal budget kind of hard, its not been bad enough to actually make me stop eating out all the time, buying Starbucks frequently, or spend less on clothes. I have been putting off a car purchase lately, but that is more about personal discipline than "I can't afford the payment".
I don't tend to whine and complain about prices like other people, but that might be because I'm a Democrat. If Trump were president now, I'd probably be joining in on the complaning.
One thing I've noticed online recently is that there is a hostility to the idea that individual financial decision making should matter at all. When people complain about the price of DoorDash or travel or some other luxury, the implication is that no one should ever be forced to consider a budget and make a more prudent decision (I say this as someone who probably eats out more than I should).
I wonder if this is partially due to the influence of social media, particularly Instagram - if you regularly see other people your own age enjoying these things, you feel in some sense entitled to them even if they're really not in your price range.
This seems particularly true of UMC types in high CoL cities who think their high paychecks should be going further than they do.
Yeah--like, the $18 avocado toast obviously isn't why the median American can't afford a 20% down payment on a house in San Jose, but if you're feeling strapped, you might want to take a minute thinking about your spending choices.
And further, so much of the app-based food delivery stuff feels like people are just on autopilot. I like junk as much as the next person, but you're paying $25 to have soggy, lukewarm McDonald's delivered on the regular? Why are you doing that? Does that even feel good?
"you're paying $25 to have soggy, lukewarm McDonald's delivered on the regular? Why are you doing that?"
This is what kills me about the use of food delivery services for things outside of pizza and a handful of other types of cuisine -- you are manifestly getting a substantially inferior food product at a dramatically higher price! If you have to eat at home and don't want to make the effort to cook, it's still surely better to just eat a sub-$1 Cup o' Noodles and some chips rather than blowing the equivalent of an hour or more's after-tax-wages to get food in a condition that you would refuse to accept if a server brought it to you in a restaurant.
I flat-out do not know these people. I think they must exist almost exclusively on Twitter.
Spend an hour in a medium- to large-sized apartment building lobby some time!
(full disclosure: I haven't *never* ordered something stupid for delivery, but there are clearly people doing it four days a week)
I have sat in a coffee shop and seen delivery app people come in for one fancy coffee drink! The delivery likely costs more than the drink. I hope they give a high percentage tip at least. Maybe someone is home with a sick kid or has agoraphobia or whatever, but I doubt that is most of it.
My son's roommate was going to order wings from a place IN THEIR SAME BUILDING to be delivered until the other guys in the apartment shamed him out of it. Granted, you have to go outside and walk a quarter of a block and it was winter in Chicago, but even so it was close enough to go out without a jacket or gloves and not be in danger of frostbite.
Huh. Well, they can go broke and die, I don't give a shit about them. <-- spicy viewpoint that the party should endorse!
For me the whole point in going out for lunch is to go OUT for lunch.
I want out of the damn office. I want to smell fresh air.
I have never ordered personal lunch delivery. Why???
Idk last time I went to McDonald's I saw several doordash delivery people there. I agree that it's absolutely wild to order delivery McDonalds, since it is easy to take kids there or drive-thru. I say that as someone who thinks food delivery is really incredibly luxurious, both in that I feel so fancy when I do it and I really really enjoy it.
It is pretty grim to sit in a mostly empty restaurant watching the Doordash people come and go. Why pay downtown rents if you're not even going to go outside!
uffda, this comment. 100% agreed
I do not know how common they are in the general population. I do know that other attorneys I work with sometimes will offhandedly mention getting non-traditional delivery food via some delivery service, so I presume it's not totally made up.
I'm sure they *do it*--I see my boss do the same sometimes--but does it reflect actual economic stress? My boss is a company founder and he's rich, he can do whatever he wants.
I have met them. They have no taste in food.
For us fancy restaurant DoorDash was partially a habit developed during COVID ("Yes it's an insane price and not as good, but we can't go out, so might as well order this") and now as a parent you're saving $35 an hour for a babysitter. It's definitely a worse product, but it's generally better than the alternative given limited time to cook.
Dave Ramsey became a multi-millionaire by telling people they need to make a budget.
I occasionally do fact finding with clients and whenever I get to the "what do you spend a month" question, it's always "I have no idea."
Ok, what's your monthly income from all sources? Are you saving any? No? Ok, are you going further in to debt? No? Ok, your spending is equal to your income then.
When people complain about the price of DoorDash, I think it’s less about the tradeoff between DoorDash and preparing your own food and more about how much more expensive DoorDash is than takeout.
Which is fair - when you account for increased menu prices, service fees, delivery fees, and tips, it’s a massive markup for a service that really doesn’t provide that much value other than avoiding the need to get off the couch and walk/bike/drive for 15 mins or so.
Of course why these people don’t just order takeout is unclear.
On the contrary, DoorDash provides a massive benefit. It is pretty to see that.
None of those restaurants offered delivery before DoorDash came along. Now people talk about having hundreds of options.
That's pretty clear indication that DoorDash is providing tons of value.
Not to mention they provide discovery of restaurants, online menus, online ordering, card payments.
Do people really not remember the old days when you'd call the pizza place and they'd answer but immediately put you on hold because there were four other customers also calling in? Then you ordered over the phone and had to repeat everything three three times to make sure they didn't mess up the order? And then they only took cash and god forbid you didn't have small enough bills for the driver to easily make change.
Lots of places offered takeout before DoorDash.
And they all still offer take out.
If you’re in an urban place, actually moving your car is a big barrier, and doing it on foot, bike, or public transit is a big chore, unless it’s on your block.
Big chore to walk or bike 10 mins? That's how long it usually takes unless you live in a giant and sprawling city.
Biking with takeout is a chore, and yes, 25 minutes of walking there, picking up the food, and walking back, is a chore.
I mean, you typically have the choice to eat your food there.
Yeah I wouldn’t usually do delivery or takeout from a place that close by - but during the pandemic I did, and I think some people might if they have some reason someone needs to eat at home (maybe a kid or a pressing work call or an injury or an important TV show to watch).
For what it’s worth I use it when I forgot my lunch. Doesn’t happen that often but I get 30 minutes for lunch and it has to also be the one time I get to go to the bathroom.
I mean at this point I usually am not really price sensitive. Just get me a burrito bowl and I’ll pay whatever you want but it’s pretty annoying that the vc subsidy for this went away and the price of making a small morning rush mistake went up 10 bucks. Not that any of this makes me feel poor that I sometimes have to overpay to get something vegan brought to my workplace.
or it's very clear!
The money I save picking up my takeout just goes to the beer I have while I'm waiting for my order.
lol holy heck, delivery food!
We never, and I mean literally never, got delivery food when I was growing up. Zero times in eighteen years. You want a pizza, you make it or you go pick it up. What's ten or fifteen minutes of your time?
Now pushing the age of 40, I think I've increased this lofty total to twice--I got a couple of delivery pizzas left on the front porch when I had late-2021 covid.
I mean, I think we never did as well (I'm early 40s), but literally the only place that delivered to us was Domino's Pizza. If you wanted anything else, you had to go pick it up from the restaurant. We never ate Domino's, so it's not really much of an achievement to have never had delivery.
Nowadays, I'm richer than my parents were at my age, and Deliveroo says that there are literally 433 pizza restaurants that will deliver to me.
Not 434. Bad economics. Thanks, Obama.
I live in the UK, so you'll need to blame the Tories on that one.
We sometimes get more than 2 deliveries a day lol. Should probably work on that.
Same experience. And I have only ordered delivery maybe 2-3x in the last 5-6 years when UberEats offered me a huge coupon but required delivery (and I still did the math to make sure I came out ahead).
Agreed. I think there is a broader trend of absolute disbelief in agency, combined with what I feel confident calling entitlement and a curse of comfort. Right and left, there is outright disbelief that we should be held responsible for our actions. The right blames adverse outcomes at the individual level on this mythical notion of 'elites' and whatever conspiracy theory is popular at the moment, and the left blames it on nebulous and specious notions of 'social structures' and the tenuous application of tenuously defined mental disorders. I frankly feel that we are collectively undeserving of the system our ancestors sacrificed to build. We are fragile, self indulgent, criminally comfortable, and profoundly unserious.
It has started to occur to me that the closer we get to utopia (the more easily we can see it), the farther we realize it is. Which is why I think there is such agitation over economic philosophy in a country as comfortable as ours.
That said, I may fit into the last part of your comment somewhat. I make $150-165k/yr and live in Manhattan. I pay a little under $4k for a 350 square foot apartment on the third floor of a building with no elevator or washer/dryer (and I get absolutely fucked on taxes). While I'm not living paycheck to paycheck, I certainly don't have a ton left over after I pay my expenses, and I think it would be a difficult to characterize my lifestyle as lavish. And for what it's worth I do not use social media or know/give a shit how my friends are living.
This seems somewhat relevant to my recent post, which I will shamelessly plug.
https://substack.com/@02tenon/p-150142787
Yeah, I do think there are unique situations like yours (and those situations are probably overrepresented in those who control The Discourse. That said, I'm guessing that living in Manhattan is a choice, made because of the substantial QoL it provides? Taking the tradeoff of a small apartment to live there is an example of the kind of lifestyle prioritization a lot of the biggest complainers argue shouldn't have to be made.
I think it’s very reasonable to expect to be able to afford to rent a small apartment in a good part of Manhattan and still save a solid amount per month on a 150k salary. And the fact that that is not the case is definitely indicative of a problem, although more one with Manhattan.
Yeah, absolutely, we need to build more housing and no city should be completely out of reach. But areas in demand will always have some element of scarcity that requires tradeoffs.
Oh for sure. Housing will always be expensive in New York. What you're saying applies, I think, to cities like DC or perhaps Boston where housing is very expensive but supply has more been able to keep up with demand. But New York, Manhattan in particular, is an example of extreme and deliberate supply suppression. If you walk through the most in demand neighborhoods here, so probably the most in demand and densely populated parts of the US, you will rarely find residential buildings that are above 5 stories (and they were usually built in the pre WWII era). It's to the point that unless you make 150, and probably even more, you have to make extreme tradeoffs that would be considered unreasonable anywhere else.
Yeah, I find it perplexing that people complain about how little their DoorDash driver makes, but also complain about the price of DoorDash.
Right wingers in the 80s who said people were rich if they could afford a microwave were actually correct all along.
I wasn't there--or I was only there in diapers--was this really a thing? I am fascinated.
I don't recall right wingers in the 80s saying people were "rich," per se. The issue, which certainly goes back to at least the 1980s, maybe earlier, are surveys that show fairly large percentages of people who report being below the poverty line also owning things that were unequivocally considered "luxuries" (or completely unavailable) not that many years earlier -- color TVs, microwaves, and air conditioning are the big three that I can think of.
(People today really don't appreciate the point that color TVs continued to be sold at a substantial premium for a long time after color broadcasting became common. This is a subtle point made in "Wonder Woman 1984" of all places. Watch the teaser trailer from 33 to 43 seconds: https://www.youtube.com/watch?v=sfM7_JLk-84&t=32s If you pay close attention, you'll notice that the wall of TVs showing Maxwell Lord's ad are framed with signage saying, "Watch in Vivid Color!" and TVs in the shop window with patriotic bunting are 27" color TVs being advertised for $749.95 -- that's the inflation-adjusted equivalent of about $2300 today according to the BLS CPI calculator.)
To some extent this goes back to my theory of everything regarding inflation--general electronics stuff (TVs, laptops, whatever) generally becomes cheaper per unit "goodness", and the population is generally used to this.
Unless somebody comes up with a more efficient chicken egg delivery and collection system, eggs *cannot* become quote-unquote "cheaper" (whatever their dollar amount).
Well, the answer is that people did come up with more efficient chicken/egg delivery and collection systems ("factory farming"), but we've hit the limits of that. To put it another way, William Baumol won't stop ****ing that chicken.
Of course, absolutely. But the SV-minded "the world is our oyster, and once we demonstrate a single improvement one time, it will reliably be a permanent improvement forever" viewpoint is wrong.
I know I changed topics.
Microwaves were expensive in the late 70s early 80s.
People even buy things without seeing the prices! I can’t fathom that idea.
Yeah, we get pizza or Indian delivered on occaision (two of the foods that actually hold up) but always scour the options available for discounts - you can easily find deals that essentially wipe out the cost of delivery if you're not picky.
Cutting your other spending to the bone would not actually solve the problem that the mortgage on an entry-level family home is 90% of your take-home pay. Even when the other 10% supports an excessive lifestyle by MCOL standards!
For one thing, you're a 10% pay cut away from default. You wanna bet that'll never happen over the life of a 30-year loan?
Maybe don't take on a mortgage that's 90% of your take home pay then? At some point people need to be held responsible for their financial decisions.
Right, this supposedly elite cohort is constrained by financial circumstances such that it would be unreasonable to hit normal middle class milestones, like buying an entry-level home for your young family. Which is exactly their point.
How could you even get a mortgage that's 90% of your take home without committing financial fraud?
Yes. That’s one way you get “I spend $3000/mo on DoorDash and I can’t afford to buy a house.” Thats a stupid amount of money for DoorDash, but it’s also irrelevant.
Yeah, but the specific scenario you're describing is really only applicable to a few superstar cities. We should build way more housing in those places (this is Slow Boring, after all) but if a mortgage would be 90% of your take home in Palo Alto, you can probably find a similar paying job in Pittsburgh or Milwaukee.
“The biggest problem with perpetuating this economic myth is that it can push people towards some wacky policy ideas, like dismantling capitalism or imposing blanket tariffs to restore some rose colored-vision of manufacturing in mid 20th century America.”
I really don’t think hardcore leftists and identitarians realize how much they’re helping to perpetuate the status quo by siphoning political attention and energy from more plausible reformist politics that focuses on improving material conditions for those who are genuinely deprived.
For people like that, their ideological identity would be threatened if they didn't project the belief that radical change is always necessary onto circumstances where it doesn't fit. (Damn you, Karl!) You saw that during the Obamacare debate; there was no shortage of "progressives" who'd rather let people die than see a CORPORATION make a PROFIT off their health care.
Resist, smash, overthrow, fight, against!! It's all about identity.
As the title of a Gramsci biography says, "To live is to resist". The results don't matter it seems, just the identity of being one who resists.
Medicare for all would still be better, businesses profiting off of taxpayers is still wrong, even if sometimes it’s a necessary evil
I would hope that they’re corrigible and could be made to see the better way < insert head patting emoji (for this thought) >
That would be good
Ehh I’m not so sure. People generally don’t like programs that only help a small sliver of the population. If you convince people that 60% of the population needs help, and so you need broad as opposed to targeted change, and therefore they will get some benefit out of whatever the solution is, you’re more likely to get them on side. Indeed I’m fairly certain that’s the only reason this stat exists at all.
Universality is well within the current economic and political paradigm. Sometimes there’s a good case for it. Sometimes it’s just too expensive.
It’s the energy wasted dreaming of revolution that I was thinking of.
This was the idea of the Swedish social democratic party, to design the welfare state in a way that provided benefits for the entire middle class.
It's all about heightening the contradictions.
Perhaps I'm a bit cynical but I think they are perfectly fine with reform policies failing to be enacted. Better to have the whole system fail then rebuild.
There are some like that online I suppose and they’re loud, but I think they’re very few and far between irl. I’m friends with a pretty lefty bunch, and I don’t know anyone in my circle or social media feed that’s actually like that - though FB algorithms keep trying to plug that kind of content for me.
1) My wife and I bought our first house this past summer. Throughout the process, I was amazed that lenders were very willing to lend us more than double what we were willing to spend based on how much we saved for a 20% down payment. Like, the monthly payments for the top end of the loans banks were throwing at us would have been 50% or more of our monthly take-home pay. How many people actually take out mortgages with payments that eat up large portions of their income? Probably more than I would prefer.
2) If America is the "land of opportunity" for immigrants from all over the world, doesn't that put a high floor on our poverty rate compared to other wealthy countries that don't take in a lot of immigrants? (Because immigrants tend to have less money when they arrive).
Yeah, this is one of the problems with the related narrative of generational poverty statistics. We're constantly refilling the bottom 10-20% or so with low-income immigrants who usually rise up the ladder.
You want the poverty rate to be higher because Trump passed huge tariffs
I want the poverty rate to be higher because we streamlined immigration
😎 we are not the same 😎
Are we tho? I’d like to know what the actual differential is between the native born and immigrant “climb rate”, and what their respective proportions of the bottom 10-20%% population actually are.
I think most of us would expect a higher climb rate for immigrants, but a higher proportion of native born. Which is its own genuine mobility problem! The existence of high-climb-rate immigrants doesn’t mean we shouldn’t help the native born increase their own climb rate.
Drawing from CDC natality data, immigrant mothers are disproportionately likely to have not finished high school and less likely to have finished college. They are also more likely to have an advanced degree, but that group is a very small one overall, so average education level, overall, is lower than for native-born americans.
But, overall they are more likely to be married or at least have acknowledged paternity, which I would believe is probably a strong predictor of upward mobility from whatever level the parents are at.
The lowest SES native-born populations, Black and Native Americans, both have low college ed levels and very high incidences of single motherhood, which implies to me lower levels of upwardly mobility and might be the single biggest factor preventing upward mobility (or maybe it's the higher birth rates starting from younger ages).
I'm definitely not saying we shouldn't help anyone get ahead. And I think we agree that there are major pockets of intergenerational poverty, it's just that the overall intergenerational poverty figures are often inflated well beyond reality by not acknowledging that most native-born Americans are actually doing better than their parents.
All federal funding should go to Memphis
'grats on the house!
No shade on you, not to be a buzzkill, but it’s a real sad statement of affairs that buying a house has become seen as a real big achievement we should be congratulating each other for.
Cheers and congratulations indeed, though!
"Become" a sad state of affairs, for fuck's sake.
Do you think "I just bought a house" was *ever* not a moment of congratulations?
This is exceptionally normal and has been normal throughout the entire human history of the idea of owning property!
I agree that it used to be considered a good but rather normal accomplishment.
These days it feels like you’re congratulating someone for a herculean effort.
Yeah. I mean it used to just be assumed. My grandparents moved to the country back in the late 50s and my grandfather started a small town auto body shop that he basically ran into the ground doing favors for people, according to my grandmother’s stories. My grandmother said, as evidence of their facing penury, that they moved back to Memphis “with barely enough for a down payment on a house” as if that was like escaping with only the shirts on their backs.
At the time she didn’t work outside the home and they had 4 kids.
Exactly. My parents bought their first house for like $65k. That’s like $150k in today’s dollars. I could’ve afforded that like 5 years ago.
I mean people say “Congratulations” when someone graduates high school. Just because it’s common doesn’t mean it’s not an achivement.
Thanks!
I definitely remember your point number one being something I noticed when I was buying
They’ve always been willing to approve more than we thought we could afford
The paycheck to paycheck conversations are almost always about how people feel, particularly relative to their peers or their parents. This is why the comparisons to the 1950s (or any other good old days era) are both bad and illustrative. That lifestyle is available, and it’s pretty cheap, but that’s not what people want - they want to feel like they’re keeping up with everyone and able to buy what they want to buy.
How much of this is due to social media? In anytime prior to the last ten years, you wouldn't know that a casual aquaintance took his family on a two week vacation to Italy. Now you do, and some people will immediately assume that they're not keeping up if they're not able to do the same.
Juliet Schor's 1998-ish "The Overspent American" made a similar point about aspirational spending before social media, but in the context of what we saw portayed on TV and in movies. Specifically, the fact that almost everyone depicted on TV was someone living a lifestyle of the top ~10% or so. With "Friends" being the most enduring example, although there are many others.
I think social media have basically extended this phenomenon, making it worse by making it more personal.
(One of Schor's point was that 1950's-style "keeping up with the Joneses" may have led to some excess spending...but it at least had a sort of cap because the "Joneses" were your neighbors and so probably had a generally comparable income to yours. )
The FOMO effect is something.
You could avoid that by staying off social media...
Was this directed at me? I specifically avoid IG for exactly this reason. There's a reason I used the second person.
Not personally at you, but at your comment. People could avoid that feeling of missing out from other people's social media posts if they stayed off social media.
Gotcha - agreed.
How is that lifestyle available? You largely simply can’t buy as cheap of a basket of goods, especially in real estate, healthcare, and education, as was the norm in the ‘50s.
Kevin D. Williamson at The Dispatch has written some compelling essays (in service of debunking Trump/Vance industrial policy) about how people "could live in the 50s" if they wanted to, but that would mean a living standard most of us would find at poverty level. Examples include a much smaller home, one landline (no smart phones), one TV with whatever you can catch via antenna, one car for the family, maybe one vacation a year and it's a road trip, etc. Our prosperity over the past 70-plus years has created a lot of lifestyle creep we take for granted.
The entertainment is a rounding error. (Which is great!) The problem is that there basically don’t exist cheap small houses in places that have reliable good jobs, most certainly not for those who aren’t investing in today’s far more expensive and time-consuming education process. One literally cannot finish high school and then spend my life in a solid union job while owning one of the small inexpensive houses that by all means still exist in Detroit. It’s true that there are some interesting modern options like working remotely from a cheap area, but systemically I just really don’t agree at all that you could downgrade to the 50s in any real sense.
That was my life as a child in the 1960s (in Palo Alto, no less!).
Buying 1950s healthcare would mostly mean forgoing the larger chunk of the medications, treatments and surgeries we now have. It would be hard to get as much 1-on-1 time with a physician, but that's the tradeoff.
Real estate is tougher to summarize because it's very location dependent. It was certainly easier to move to a modest house in California. But in large swathes of the countries houses built prior to 1950 are just as affordable as they ever were.
Sure, education is much more expensive. But fewer people took advantage of it back then and basic literacy scores were lower. When I've heard my older relatives talk about what Catholic school education was like it's frankly appalling.
And these 3 categories ignore so many other important expenses. No one wants to maintain a 1950s car as their primary transportation now, or pick from CBS, ABC and NBC and that's it. Airplane destination vacations and visiting relatives by air is a fully middle class thing nowadays. Those were only for the rich back then.
Yes, now we have no polio and cheap flights. The problem is that the *basics* - a roof, going to doctor when sick, somebody to watch the kids, a college degree (or even a technical degree) are all much more expensive. I agree a car today is better and much safer and I can buy new clothes every day if I wanted to. The issue is that it’s harder to “buckle down” if I lose my job or otherwise face economic misfortune.
Thing is, I define no polio and a male life expectancy of 78, rather than 66 as it was in 1955, as part of the basics.
In the 1950s there was no medicare or medicaid, and it may be harder to put a roof over your head for some people, but the vast majority live in more spacious dwellings under much larger roofs.
All in all, being a healthy, single car family in a small modest house outside of the biggest coastal cities is actually not that difficult for most Americans. Defined this way, more probably fell through the cracks in the 1950s. There were still people living in actual log cabins or houses without indoor plumbing. I spend of lot of time in my lower middle-class grandparents houses when I grew up. Today's equivalent strata of society lives much nicer, and very low income people live in those houses now, affordably, I would guess.
I spent a lot of time with my grandmother while my parents were working, or in some cases, cousins, etc. While I moved away from my hometown, some of my extended family didn't and rely on grandparents and assorted aunts and uncles for childcare. It's still possible.
I wonder if the someone watching the kids likes that the price of their services has risen
I think part of this is that we expect to spend more on healthcare and education than the median household did in the 50s. People just didn’t expect to have nearly as much of either as we do today.
For housing, there are 1,000 square foot houses people can buy, just not the ones people want today and not in the areas people want - we aspire to more, and we now spend more than we did then. If we simply didn’t spend on those things, it would naturally be more affordable.
Additionally I think there are specifically the working-class families whose grandparents worked in factories in the U.S. In Oregon it was the families of loggers who simply couldn't believe that maybe they should not count on those lucrative forest jobs. The jobs go away and we end up with poverty-stricken towns populated by alcoholics.
I don't blame them too much for expecting that they would be able to grow up and get family-supporting jobs (although "Allentown" should have provided a clue.) In this case, cultural expectations and habits led to less-educated perspectives on the world, which results literally in fewer choices (if you don't know it's out there or can't understand why it's gonna happen, you can't pursue it.) A common instinctively human response is to blame someone else rather than figure out how you personally are going to find another path. This cohort is important because I think they're the ones making up the Trump supporters. Doesn't matter if it's 10% or 60% - if they and their families perceive there's a reason to be mad and blame (us) then statistical truth will only convince marginal voters.
I’m not so sure. A 3bd/2ba bungalow is much more expensive, plus healthcare, childcare (because now mom has to work). Yes, we could eat tuna casserole, but remember mom’s not home and food is only 10% of the average American’s budget even with all the eating out.
A 3bd/2ba bungalow is rich by 1950s standards. Multiple bathrooms were a great luxury. That’s kind of the point. Standards have changed.
Yeah, those cute craftsman homes that are always cited as the "starter" homes that are out of reach for young families were homes for the wealthy in the 1950s. The actual 50s starter homes were pre-fab trash.
And in major cities they’re still crazy expensive
I think this gets at the point - mom (or dad) could stay home today. They often don’t because we want more money to buy more things that we didn’t 70 years ago. Your point about food illustrates this - we spend money on so many things that we didn’t buy before, so much so that the food share has dropped despite buying more expensive and higher quality food.
I don’t think that’s true at all outside of completely depressed economies. The houses in my neighborhood are mostly shitty postwar houses of about 1000 sf, you could be a one car family - there is decent bus service, but the schools I’m zoned for aren’t very good these days and the house prices are all 600k these days. These were mostly all built to support Boeing working class employees (according to Wikipedia). But house prices were much cheaper relative to a working class wage at Boeing in the 50s-60s. (The machinists striking make 76k on average.)
To live in a good school district in just a reasonably sized house is pretty cost-prohibitive for a blue collar worker raising a family with one breadwinner, unless by blue collar you mean master plumber or master electrician. But yeah we have refrigerators now (shittier than in the 50s though), high-speed internet and cell phones (which are bads rather than goods anyhow)
I’d also like to see the death of the related posting genre “I make a six-figure income, but I am financially struggling because of the mortgage and property taxes on my luxurious/prime location home, the payments on my new high-end car, and the cost of sending my kids to an expensive private school.”
These people very plausibly could just… live in a less expensive home, drive a used Honda Accord, and send their kids to public school, and then reinvest their extra income.
I don’t think those posts are claiming financial destitution - they’re claiming their authors are undervalued by society. “I’ve worked so hard, I contribute so much, policy should really reward people as wonderful as I am more”.
That’s why you see them pretty much across the income scale, from people who are clearly fiscal net recipients all the way up to billionaires losing their minds over the carried interest loophole.
No, I think it actually is claiming financial destitution in most uses of that expression.
It’s such a foolish and self-owning mindset relative to recognizing your good fortune, understanding that it’s usually the product of both your own efforts and a context created by the labors of others, and being grateful.
You misspelled Toyota Corolla.
You can’t really just live in a less expensive home if your six figure jobs are, say, in the Bay. Private school, sure, although I don’t think it’s *that* much cheaper to move into a top school district than to live in a mediocre one and pay for private school.
If you’re capable of making six figures, your kids will in fact do fine in life even if they went to a mediocre public school. And every area of the country has a range of housing options, many of which are usually cheaper than the homes the people who post this sort of stuff inhabit.
"I make boatloads of money and I have to [commute 3 hours a day | live in a trailer | spend it all on this shitty little home]" are all the same statement, which is that an apparently large amount of money is not what it seems given the regional housing market.
Sure, you don’t actually need to go to a good school district and it is possible to raise kids in a $1M condo rather than in a $3M single family home. But it’s pretty easy to sympathize with people who find having to make those sorts of sacrifices even while being objectively exceptionally successful rather galling.
Only if you believe all that nonsense that schools don’t matter. I sure wouldn’t want to send my kids to public school in SF or Seattle so long as they’re on the “math is racist” kick and not tracking. Shit, I’ve been subbing at elementary schools where multiple grades are in the same classrooms (talk about lol nothing matters) and where the teacher still reads books to the students in 5th grade to accommodate the illiterate.
I certainly do think that schools matter generally, but that they matter much less for children whose parents are near the top of the IQ and income distribution. If you’re very smart and have some resources, what your kids learn from you and from following their curiosity will likely outstrip what they learn in the classroom for most of K-12.
Parents who are smart and have resources pretty much always send their kids to good schools unless they’re pretty neglectful, and I think this effect is difficult to decouple. But yeah enrichment at home is great, and parents that smart and dedicated often home school if they can. I would want to home school if I had kids, especially if I could find a pod of similar minded parents.
None of that's really evidence of anything. My model is pretty much that nobody learns anything from the concrete curriculum at virtually any K-12 school in the US today, and if you want your kids educated you'll have to either do it yourself or hope they eventually get interested for themselves. I had a "top-notch" public school education that was good for literally nothing except skipping me past the 100-level courses in college, which is not obviously even a benefit. Much better to have been at a school with less distracting extracurriculars so my parents would've had to look for some serious enrichment; in math, any student can sign up for Art of Problem Solving and one year of that is worth two whole K-12 educations of any level I've ever seen.
I disagree, I had fantastic humanities instruction at my high school, though I’ll admit it was an elective. And chemistry was honestly phenomenal.
Ben Krauss wrote a thorough, clearly researched article debunking the myth that "60% of Americans are living paycheck to paycheck." Ben proves his argument by quoting Matt Darling and his statistics and other specialists' data. Ben ends his article with the strong statement "that claiming that 60% of Americans are financially destitute ...only reinforces a needless sense of collective economic doom."
Ben's proud grandparents
Ben, contrary to what a certain dipshit troll had to say earlier, I thought this was one of your best pieces yet - great topic, well written. Well done
Thanks!
Nice article. But when you write, "And if this is true, then the median American household would be in pretty dire financial straights", the expression you're looking for is "dire straits", like the '80s rock group. It's partly because of things like this that I really wish online publications/blogs took copy editing as seriously as professional print publications do (or used to).
Yeah, the loss of even very good writers reliably writing correctly is an underappreciated tragedy of the commons. It’s probably not directly “worth it” for most of these guys to hire a copywriter but it would sure as hell be worth it for me for everybody I read to do so.
I abhor the "lived experience" trope, being a fancy-sounding groups-laundered version of anecdata, but you'd think people would just recognize that this myth is absurd on its face.
Think about all of the people you know and the people you interact with day to day. You know how they live their lives; you know what they talk about in the break room or whatever. If one of them were really, seriously in dire enough straits that they would face true ruin if they were out of work for a month, they would probably bring it up, or at least inadvertently let hints slip.
SB is by no means a representative sample of the US population, but be real--how many people in your life does this describe? Is it *more than half*?
Also agree the “lived experience” cliche is one of the worst phrases in circulation—total cringe.
I know this is “me-search” but to answer the question: I have 7 close friend-households that I see on a regular basis. Including me, 4 of us are economically well off (a couple very well off). One is okay now but watching their career of the last 30 years (document translation) vanish to AI and is trying to figure out a career change in their 50s with no savings to speak of since it all went to a big house repair; they very realistically could reach the point in the next 5-7 years where property taxes and income crunch could push them out of their house. The other 3 are 2 renters and a homeowner. The homeowner is okay but only by working 2x full time jobs. The other two are operating in the red and could not weather a $400 expense. All are college educated some with multiple degrees. All are 40+. So while it’s not as dire as 60%, struggling people are out there. And as someone said above, I do think SB readers may skew to certain more comfortable demographics.
Document translation is one of the areas where I really do perceive an existential professional threat from the LLMs that we now term "AI"--my most recent hire had been providing translation and general language assistance to non-native-speaking researchers who wanted to publish their work in English-language journals. That job got kneecapped by ShitGPT and the like, in a rare application where they seem (IMHO) to make sense.
Real as this is (it sucks and I'm glad I hired them), this doesn't neatly map onto "wah wah end-stage-capitalism" dialog.
My understanding of this figure has always been the one Ben mentions. I’ve got a six figure income and a housing payment of around $3,000 and do enough fun things that my bank account never grows (though my retirement savings do). I can’t pay off my credit card until the next paycheck comes in, so if someone asked “are you living paycheck-to-paycheck?” I would say “yes”. My lived experience tells me this is a very comfortable life, so I don’t think of “paycheck-to-paycheck” as a meaningful sign of financial stress.
I actually know a number of people like that. Not in my workplace, but in my neighborhood and through PTA. I didn't think the number was 60%, but I thought it was much higher than indicated in this persuasive column. This makes me think that the "lived experience" thing is completely subjective since we all move within our bubbles.
Lived experience is a great thing to keep in mind—the experiences that other people have in their lives may not be what you project on them or expect. Used more collectively, it can tell you things that less anecdotal data might not capture, such as how people adjust to the specific circumstances in their communities, such as avoiding going out in the streets to play because of gun violence, or driving their kids everywhere because they're afraid it's dangerous for their kids to walk or bike in a place with too many fast, large vehicles. You can add some more objective data on top of that, but the lived experience information will help guide you to what kind of data you want to collect.
Uh, first, I guess.
Everyone remember "chicken soup costs $100 to make, and it's all Joe Biden's fault" discourse?
Is there a link?
You need chicken stock. Chicken thighs (you got to debone them). Celery, carrots, onions, butter, flour, and egg noodles. That's like $12 for a weeks worth of soup.
In lieu of a link, here's my very half-assed and rambling recollection (if you read her, Kat Rosenfield referenced it in what I feel was one of her rare bad takes, so she would have better details in the relevant post):
A woman with some measure of name recognition and some vague affiliation with right-ish networks (edit: it was Megan McArdle as pointed out by ATX Jake. I feel vindicated in my half-assed description as you could have replaced her in this episode with a dozen performatively heterodox, too-online clones) posted either her grocery receipt (or just wrote it out - remember, this is half-assed recollection) on Twitter in which the ingredients for homemade chicken soup for 4 - 6 somehow added up to well over $100 (edit - $50), citing ruinious inflation, etc (this came at around the same time that some dude with, again, some measure of name recognition and some vague affiliation with right-ish networks complained in the same idiom about a Doordash receipt for things that are genuinely expensive; I seem to recall turf and surf).
When people pointed out that this was literally inconceivable, the "it's condescending / elitist to scrutinize this woman's grocery bill / lived experience / etc." trap was sprung, the tedious discourse merry-go-round did its thing and we all edged a little bit closer to civilizational collapse. The end.
And yeah - as someone who cooks stuff from scratch, like, a lot, I was in the "that is literally impossible, you are making shit up for transparently partisan purposes" camp. Admittedly, I do live in the UK, where even taking the currency difference into account groceries are dirt cheap by American standards* (when I was visiting home this past summer, I was genuinely surprised by how much some things in grocery stores cost), but still.
* This is partially on the back of cartel-like behavior on the part of the big chains, who screw UK farmers, so I do make an effort to support them (the farmers, not the chains) directly through CSA-type programs.
Do you have a link to this? I'd really love to see what she put in $100 chicken soup. Like was it a hen hand fed truffles? Some Japanese vegetables that have been grown to weird shapes?
Maybe she didn’t have thyme, bay leaves, saffron, or oregano, so she “needed” to buy a whole jar of each spice for $6-10 each? (Whereas if you make this regularly, you’ve done that once and have enough for 100 soups.)
I sort of get that - dried herbs / spices are stupid expensive in the US for some reason (most are £1 - 2 for Tesco brand here). But it’s still bad faith-o-rama to do a “let’s go Brandon” on the basis of expensive dried herbs.
And saffron, I mean. That ain’t hay.
Mexican grocers and some places like Sprouts (bulk items) have cheap dried spices. Usually they are $3-5 are the grocery store though.
Someone posted the original tweet below. It’s deeply stupid.
We have a company here called Riverford, which is basically a farmers’ market that delivers. It’s great - they work with a lot of small organic farmers and pay them a fair price - which means the prices are significantly higher than the artificially low grocery store ones. I use it when I can both to support them, and because the quality tends to be really good. Also, these small farmers have unusual but good stuff (ever try salsify?) and the UK’s mild climate means that things are actually being grown year-round; eating seasonally is not as much of a bummer here as you might think.
Anyway, if I bought the ingredients, including a top-notch organic chicken to the tune of £25 ($30) from them, *maybe* I could get to the equivalent of $100 by buying enough to feed 10-12 people and adding lots of vegetables.
Wasn't it McArdle?
Oh yeah, right. I knew it was some too-online "kiss me, I'm heterodox" type. What a crappy, predictable, paint-by-numbers episode. What really got me whas how quickly things ended up at "any criticism of this is sexist."
And, point of order (someone found the tweet and linked it down below), she said $50, not $100. She's silly, but only about half that silly. :-)
(Full disclosure: I have a soft spot for McArdle from her Atlantic blogging days, fifteen+ years ago - mainly for her exhaustive kitchen-gadget reviews. Not read her in years, though, and won't defend anything she may or may not have got up to since!)
Thanks for pointing that out! Though in my defence it was, as advertisedf Half-assed Recollection (TM).
Good kitchen gadget reviews are worth their weight in gold, so if she did good ones then it's a good reason to have a soft spot!
What annoys me most about the whole episode is not necessarily what she tweeted - it's the whole discourse that evolved around the tweet. In retrospect, what I probably should have referenced was "Doordash is too expensive and it's Joe Biden's fault" discourse, but being an amateur chef I was drawn to chicken soup discourse.
Just for some color: In my host family in Moldova, which was mostly goose stock, you'd have to add up the cost of two dozen goslings in the spring, any seeds needed for their feed (corn and giant zucchini; they also liked crabgrass and who-knows-what-else in the local weed plot), whatever they paid the two babushkas who helped out with plucking in November, the cost of the cabbage, potatoes, sunflower oil maybe onions that my family bought at the weekly market, the cost of electricity to freeze the bones and meat and the cost of the gas to make the soup. The chickens pretty much took care of themselves, plus they gave us eggs every morning.
The Moldovans worked really hard. The young ones mostly wanted to move to the city where they could just buy the ingredients for their borș and not have all those morning, evening and harvest-time chores in addition to work. (By the way, we ate the cute little guy you can see next to my name.)
When were you in Moldova? My son was there this summer, and he befriended a young woman (30-ish) who had moved there from Italy to open a cafe becasue it was easier than in Italy. This surprised me at first, but not so much after I thougth about it. One of her parents was Italian and one was Moldovan, thus the ease of her moving between the cultures.
Intrepid traveling - it's not an easy country to get around, but beautiful and interesting. I was there in the Peace Corps 2013-2015 (after I retired, btw)
One of my fellow volunteers still lives there and has his own Substack. He opened a restaurant while I was there, and blogged about the bureaucratic barriers that seem set up for bribes. Maybe things are getting better.
A lot of Moldovans go to Italy to work and send remittances back home. They find it easy to learn Italian and Spanish based on their knowledge of Romanian.
That is fascinating, especially given the reverse immigration of the woman my son met. He spent 8 weeks in Kazakhstan in a Russian course then decided to spend about 10 days in Moldova, traveling by himself, on his way home. He enjoyed both countries. He was a complete homebody, until he started college in 2021. We encouraged him to go to a college other than the one on the same street as his high school, and now this!
And his Russian probably served him well in Moldova - Moldovans are bilingual in Russian and Romanian (even the youngsters, I believe, since so much TV is in Russian.) FWIW he's got a head start for any of the post-Soviet Peace Corps countries, if he's interested (although he'd also have to learn the "real" language of the country as well.)
Didn’t see anyone share it yet, so here’s the tweet. https://x.com/asymmetricinfo/status/1735126794058047843?s=46
Um no don’t debone the chicken—the bones make the soup tasty and rich! Even better if you throw a couple of feet/necks in (they’re cheap).
"you got to debone them"
That's blue blood chicken soup. Peasants don't debone.
Which, if you think about it, is odd - these days, the more highbrow thing is to invest more labor in preparing one’s food.
Well I have a wife to please thankyouverymuch.
People add a roux to chicken soup?!
You got veggies and fat, of course you make a roux. Thickens the broth.
This must be a Gentile thing.
But even so, the chicken soup at places like Panera doesn’t contain flour or butter either.
I can’t imagine it’s more common to make creamy chicken broth than just plain broth but this is still eye opening!
According to the old Vietnamese place I used to go, chicken is technically a vegetable.
Gentile amateur chef here. A roux wouldn't be my first move for chicken soup either, but if you were making something more along the lines of a stew you could go that route.
Not normal people, no.
First you gotta make a roux
I volunteer for a small non-profit that helps people who are struggling to pay their rent and/or utilities. We can only help with a small amount ($75) but there are also other non-profits in the community who can help with a small amount. Often times, our small amount + other small amounts can help individuals avoid eviction or having their utilities cut.
Even these people are more resilient than economic data might reveal. When push comes to shove, they are able to raise money through family and friends to help them cover their deficits. Or, they sell their TVs or other valuables on online marketplaces to raise money.
That doesn't mean that no one gets evicted or has their utilities cut. However, even those people who have very low incomes often manage to get by.
I'm surprised no one in the comments has asked who LendingClub even is. One of my pet peeves is media coding dubious studies from organizations no one has ever heard of. It's one thing to cite Brookings or other organizations that are well-known, but media citations of relatively unknown organizations don't provide enough context to evaluate who is behind the organization. Half the time they turn out to be an industry group citing in dubious proprietary data or a corporate astroturf org, while the other half of the time the think tank turns out to be a couple of guys running it out of their apartment who don't necessarily have good credentials.
Lending club is a personal loan matching site. I used them to consolidate and pay off some credit card debt. You put in some information and they go and see who will offer you a loan and what the basic terms of it are. So they do have a stake in things here but they also have a lot of data from both sides of the loan market.
But do they have a widely known and independently verified reputation for quality information? When a lot of their data is proprietary, is there a way for people outside the org to know it's good? I've worked on research projects with major industry groups for which my questions on data quality just met a wall of "proprietary information" where we couldn't verify the data quality. A lot of media pieces on such studies basically read like a press release since the journalists can't necessarily dive into the data (or have the quant skills to do so).
Isn’t that the point of this post their survey wasn’t of high quality?
... Yes, I'm agreeing with the thrust of the post. Stop being weird.
Voted early today. Simple and easy in person at the local library. Very professional volunteers. I love democracy! I have my I voted sticker on right now.
I voted last week from my kitchen table. And then took it to a library dropbox (or could have mailed it for free). Then I got a text notification that my ballot was received and couhted.
God bless California for allowing me to participate in democracy without even the friction of dealing with a fellow citizen.
Same! And I love seeing some of the same volunteers every time. But I decided to save my sticker for Monday to show off at work.
One economic indicator I follow is household savings, grouped by income quartiles. In the wake of the pandemic and government stimulus, savings accounts were full and people paid off debt and spent. Since the peak, savings have been depleted, particularly in the lower quartiles.
So the wealthy keep on spending and the lower income households cut back on things and/or increase their debt load. So regardless of what percentage of Americans are living paycheck to paycheck, there is a large economic divide.
Well argued all the way around and I agree with both the premise of the article and the conclusions. But one minor bone to pick: a lot of Americans have a good portion of their net worth tied up in their home, which is very much illiquid (Ben sort of acknowledges this but mostly glosses over it). I don't have the statistics for what percentage of Americans and what percentage of their net worth, but suffice it to say, people wouldn't be such NIMBYs if they didn't have to worry about their home values depreciating.