Middle class in a small to mid size city is $200k in annual household income. A family of three should have no problem in 1200sqft. Two kids is excessive, but if you do have two kids you'd be fine in 1500sqft.
Throwing out $200k as a typical middle-class income just demonstrates the bubble the OP lives in. I live in one of the wealthiest counties in the nation (Fairfax) and we don't come anywhere close to a $200k median household income.
Okay, but the submission says the middle class can't afford to live in cities anymore. You're saying, "Of course they can! Otherwise they wouldn't be middle class."
Could you elaborate (honest question)? My point of reference is The Netherlands, so I have very little context for that figure, as it would be ludicrously high for middle class over here (in part for very understandable reasons, welfare state and whatnot). I'm mostly curious about your views of the middle class and what they should be.
I agree with you, unfortunately people can't buy property based on what we believe middle class should be. The reality is property is cities is not affordable for the middle class. How to solve that is another problem.
Not in the US. We're facing a huge impending labor shortage. (And immigration just externalizes the problem of accommodating raising children from US policy to India or China policy.)
The trend in US wages/employment for youths doesn't seem to signal that. The trend in wages/employment for youths in nations with even lower fertility rates (Spain, Italy, Portugal...) doesn't seem to signal that. Even Japan, where absolute population decline is already underway, has good-but-not-amazing trends in wages and unemployment for youths. Where's the race to bid up the prices for young workers, and buy all their labor that's for sale, if an aging work force really is leading to crisis-level worker shortages? If the market expects a huge impending shortage of (e.g.) coking coal, you don't see the same lackluster demand for the output that's currently available.
Maybe you meant that the shortage isn't coming in the next couple of months or years, but in a generation or so, so the market reaction isn't there yet. The view that I subscribe to, which seems common here on HN, is that technological change is going to significantly reduce the market demand for human labor in a generation or so. I expect that automation will generally deflate the market price of human labor faster than an aging work force can inflate it.
Social Security solvency currently depends on lots of middle class workers earning wages, because its funding is structured that way. But that's a policy choice that is more easily reversed than fertility rates or technical progress in automation. If the problem is more about paying for retirees than lacking warm bodies to do work, higher fertility just makes government funding problems more severe: you end up with more people who need non-market support mechanisms if the market demand for additional human labor isn't there.
Does it? Your real wage is your wage adjusted for purchasing power. A labor shortage drives up the cost of production and of services, which increases prices for everything, and also makes it uneconomical for people to hire others for services (like taking care of elderly parents), then the math teachers and so on in that fashion until everyone is eaten.
That was slightly tounge-in-cheek :). I suppose it would be bad for most people. Personally, I spend:
- 15% on "luxury" goods and services such as travel, coffee shops, restaurants, event tickets, and my car, all of which I can do without at slight to moderate annoyance.
- 5% on necessary goods and services such as groceries, household supplies, and transit across the Bay.
- 80% on rent, including parking.
The cost of production isn't entirely absent from my true expenses; I do need groceries, and some tiny proportion of my rent pays for the actual materials, construction, and maintenance on the structure and associated infrastructure. But my dirt parking space next to BART certainly didn't need producing (the most produced thing in that lot is the fee collection machine), and I spend as much on that as I do on food.
So, I would not mind even a massive increase in the cost of goods and services, if it came with more money overall (which I can also use for space) and/or a decrease in the cost of space (i.e. fewer people contending for it).
OTOH, all Bay Area tech jobs ultimately rely on consumer spending, so if there is not enough of that going around, probably no paycheck.
It's not entirely inconceivable that the middle class is 6% of the population, or less.
Perhaps another way of thinking about the situation, is not that the middle class can't afford traditional middle class amenities, but that the proportion of people who can afford those amenities is shrinking.
It's not entirely inconceivable that the middle class is 6% of the population, or less.
<pedant>That's not how this works. Middle-class, is by definition, somewhere in the middle of the household income range. Exact position is open to debate, but you can't just declare "only the top 6% are middle class!"</pedant>
That's perfectly fair, and I don't think it's pedandic at all. Maybe we just need to re-think the traditional notion of the US as a "middle class society," and what that means. It conjures up expectations in my mind (house, car, kids, etc.) that might not be realistic any more.
Absolutely true. But with other posts throwing out $200k as a normal middle-class income, we probably need to define what we're actually talking about. The income range, or the lifestyle expectations. The whole point of the article (and others like it) is that the two things are moving in opposite directions.
This is entirely my point and it seems I've done a bad job at explaining it. If a house, car, kids, etc is middle class then you need the salary to match it. What people are calling a middle class lifestyle doesn't match up with their definition of middle class income.
I'd imagine that's less so when you look at popular cities. The parent post wanted an opinion on middle class. My opinion is that middle class incomes in cities is around $200k (or should be if you want to be somewhat comfortable). I see houses all around me in Portland going for $800k, $900k, and $1mm plus. That's certainly much more than what a middle class income could afford. So considering those prices are fairly standard, the middle class income has to be at $200k. Whether that's reality or not the math just doesn't work any other way.
> So considering those prices are fairly standard, the middle class income has to be at $200k
I think there is a reason why everyone is railing/downvoting on Ryan here, and it's because of a difference in definition. There's two ways to define "middle class". One is by what you can afford: house, car, but not stuff like a private boat, etc. The other way is just by taking some middle percentage of the income brackets (middle 60% or whatever).
Historically[1], Ryan is actually right here. For the baby boomers, both groups are right because they overlap.
Much of the societal issues were seeing and will continue to see for the near future are because those groups are once again starting to not overlap (in certain areas, as highlighted by the original article).
[1] Right by historically, I mean that centuries ago the lower class was like 90% of the population or something... Middle Class was mostly not a thing.
In order to live in those cities you do need a household income of $200K+. But that is not middle class. In such cities the statistical middle class would be $50-75K, but as a percentage of the population it would be a small (and increasingly smaller) group... Which is the crux of the problem.
Nationwide the middle class is more like $40-50K (household income).
If your household (how many earners it is comprised of) is over $100K in annual earnings then you're in the top quartile (25%!) of the entire country in income, and decidedly not "middle class" (though, depending on where you live, you may or may not have enough to afford a home, much less a boat, a beach bungalow, eating out, going to the bars, etc.). Keep in mind that a lot of these cities are okay for singles, but once those singles get married and have kids they rapidly discover they can't afford the big city anymore and have to leave.
The argument was that middle class could afford a decent place in cities with lowered standards -- but you define middle class as "people who can afford a decent place in cities?" Surely you see the circularity here.
Those prices are not standard for Portland. There are tons of houses to be had in Portland for $300k-$500k. And many of those are in neighborhoods that most of America would consider insufferably hip.
We have a lot more space in the US. A typical 4-bedroom suburban home is somewhere around 1800sq/ft and, anecdotally, that number has been creeping up.
Of course, all the space also has massive drawbacks... car-centric culture, sprawl, long commutes, harder to implement public transit, etc.
Other drawbacks to house size inflation: more space that needs cleaning/maintaining/heating/cooling, higher costs for buyers who want to own a house in a neighborhood but don't need or want to pay for extra space.
In the area I live in -- not even a big city -- you're basically forced to choose house size and house age at the same time. If you want only 1400 SF you're buying an old house with old quirks (asbestos, a history of lead paint, old wiring...) If you want a new house you're buying more square feet and the additional burdens thereof (more space to heat and cool, more space to clean). There's practically no such thing as a new well built small house, or at least none that I could find when I was buying. I ended up in a 1940s house because all the newly built houses were too large for my tastes. And those huge new houses often had huge lawns that needed a riding lawnmower and ridiculous amounts of water (why is everyone landscaping a desert climate like we live in rainy England, argh...)
Is there some weird feedback loop going on? "Our sales indicators show that buyers preferred even-larger new houses this year than last! (Because we didn't give buyers any options to buy smaller new ones.)"
The size vs age problem exists in DC as well. And it's exacerbated by the land value - many of the older, smaller homes are torn down to build mansions, even if the original house is perfectly livable. And it's even worse because the older house frequently has "better bones".
Me too. Sounds like the typically short-sighted drivel heard from those who think a smaller, or declining, population is a good thing. Usually it comes from a "look at how bad the humans are for our beloved Earth" point of view. But such individuals usually aren't particularly studied in demography or human geography. They don't realize the catastrophic effects of a sub 2.1 (US) population growth rate. I.e., the so called "replacement rate." Currently it stands at 1.9. As this trend accelerates it could theoretically result in massive social fall out. One of the obvious possible by-products is not enough workers to support an aging population: either in providing necessary services, or tax revenue to support things like Medicare and Social Security. Usually, from what I've read, what matters is how stable and gradual the trend is. If it's a slow increase or decline then it's potentially okay. If there are rapid changes, or shocks, it is likely to be much worse because it doesn't allow time for society to adjust to the new reality of things.
Glibly saying that having fewer kids on average is better is awfully bold, verging on ignorant (as would the opposite argument).
It is true that in order to make ends meet in a big city, many families have many fewer kids (one or two, from what I saw in San Diego).
It's fundamental: any culture which doesn't have a place for families with 3+ children is unsustainable. You can hope to make up the shortfall with immigration, but that's just kicking the can down the road. At some point your have to depend on your own harvest, not the surplus of your neighbors.
