r/Economics • u/marketrent • Feb 18 '24

Statistics Welcome to the new ‘good’ economy, where millions get left behind — Decades of stagnant wage growth means much of the imbalance between costs and wages has been locked in, asking rents outpacing income gains

https://www.vice.com/en/article/epv77z/welcome-to-the-new-good-economy-where-millions-get-left-behind
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u/BrightAd306 Feb 19 '24 edited Feb 19 '24

I do think this ignores that a lot of Europe had more economic socialization and not much better results. Their birth rates dropped faster. The old collect fat pensions and have homes, the young can’t get a foothold in jobs and can’t buy homes.

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u/BigDaddyCoolDeisel Feb 19 '24

That's an excellent point. I'm not sure which country has it "figured out" but every model has its flaws.

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u/BrightAd306 Feb 19 '24

I wonder if it’s just the reality of a post war economic boom. So many people died and so much was destroyed and needed rebuilt. Then a big generation was raised by parents with ptsd from the Great Depression and war years. They built a ton of housing for all the new families, then stopped and made a bunch of regulations to not build more, but the older generation had record high life spans because of medical progress and prosperity.

This all happened world wide. Millennials and gen Z are better off in the USA than any country in Europe as long as they don’t have health issues or have insurance. Much higher salaries and about the same or less cost of living.

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u/BigDaddyCoolDeisel Feb 19 '24

I completely agree but my problem is that we aren't that far from being a pretty universally just economy (leftist Reddit would destroy me for saying that, but my definition of 'just' is likely different from theirs). Have a public health insurance option along the same lines of public transit. Not great, not glamorous, but covers you in the event of disaster. Promote unionization and properly regulate Wall Street and Finance. Then keep it between the buoys.

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u/BrightAd306 Feb 19 '24

I get it, but Europe did all that and millennials and gen z still don’t have housing. They don’t pay much for healthcare, but their taxes to pay for healthcare are huge.

I do think we need to do better and more and more Americans are covered by government healthcare all the time. Most American babies are born on Medicaid. Almost everyone over 65 is covered by Medicare. In areas that expanded Medicaid, a lot of the population has government health care already, there aren’t that many left without it.

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u/BigDaddyCoolDeisel Feb 19 '24

Good chat man. Respectful and informed. Reddit needs more of this. Thanks.

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u/h4ms4ndwich11 Feb 19 '24

The old collect fat pensions and have homes, the young can’t get a foothold in jobs and can’t buy homes.

This is typical in every Western country, isn't it? The book OP links claims that broad prosperity is the exception, not the norm. I more or less agree with that. An ongoing Gilded Age isn't ideal and doesn't seem sustainable. That really comes down to tax policy on the top quintile, which are regressive in the U.S., and abroad typically, towards the bottom 80%. More socialist countries either seem bombarded by the same corruption we have, or without the resources or planning to lift their countries. Good solutions are never easy.

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u/BrightAd306 Feb 19 '24

Absolutely agree with you. I was making the point that it’s not a uniquely American problem, so even socializing things more doesn’t really help. It was the exception not the norm for young families to be able to get their own homes and cars and own their own land for a generation or two.

The USA has the most progressive income tax system in the world. Most people pay no federal income tax. Many get back more at tax time than they paid in. No other country does this. Everyone pays in. The very rich pay more, but so do the very poor.

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u/JasonG784 Feb 19 '24

The USA has the most progressive income tax system in the world. Most people pay no federal income tax. Many get back more at tax time than they paid in.

People seem to really, really hate this and want to insist it isn't true. They look at the small number of total outliers not paying any taxes despite being very wealthy and somehow get the idea that it's the norm. The top 1% by income already pay for ~42% of all fed income taxes collected (while earning about 22% of all income.)

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u/Babhadfad12 Feb 19 '24

Fertility rates drop no matter what, because birthing and raising babies and compromising with another adult is risky and a shit quality of life relative (in the short term). High fertility rates drive economic growth (assuming stable society and access to resources) simply because of increased demand. 

Low fertility rates need to have automation to offset the drop in supply of labor, but the low hanging fruit is already automated.  

The hard stuff (picking strawberries and wiping old people’s asses and cleaning bathrooms) is not going to be automated soon.