This is a very thorough overview, well put together.
As someone who was hired into manufacturing just before the jobs collapse detailed here, I have vivid memories of the way things were. Being employed felt valuable. Acquiring skill felt respected and rewarded. Then, still young, I myself contributed to the shift of this work out of the country, helping develop software that supported exchanging files with India and helping train Chinese management on our workflows.
I feel privileged to be one of the few of my generation who experienced first hand what a previous generation took for granted. But I feel like a Cassandra sometimes trying to tell peers, Yes, the work situation in America really could be so much better.
> This is not a spending problem. Families spend less on clothing, food, and appliances than a generation ago, adjusted for inflation. [19] The increase is entirely in fixed, non-discretionary costs: housing, healthcare, childcare, education.
I bet the explanation for this is that non-discretionary costs got higher, so people pulled back on discretionary spending. I do wonder if maybe people intentionally pulled back on discretionary spending despite small wage growth over time and capture was performed by housing, healthcare, and childcare. Or incentives by the government caused it. I have no clue.
I worked as consultant at a major west coast-based health insurer in 1993. A family plan, that is, two adults plus any number of children, was $300/month; a figure that wasn't far off from the cost of a studio or 1 BR apartment at that time anywhere but the most expensive coastal cities.
Today, that family plan, even as a HMO, can easily be $3000/month. I would guess that mythical apartment is maybe $1200/month now.
So what happened Health Care? how has the caregiver:administrator ratio changed in the past 30+ years? You've performed about 3x worse than Real Estate in terms of value, yet you're not quite as visible and complained-about because you hide behind employment. Hmmm.
Because your 1993 health insurance covered far less.
There was no out of pocket maximum, you were denied for pre existing health conditions, and a surprise bill could show up anytime.
Now, you can buy health insurance even if you know your anemic kid will need $1.5M of treatment in the year, and it will only cost you ~$10k to ~$15k per year.
To be clear, today’s health insurance premiums are not premiums either, they are taxes, due to the legal ban on underwriting health risks and caps on premium price ratios between various ages. For example, my kid is going to use up more healthcare than he will probably ever earn in his life, before he even turns 7. Your premiums are what is paying for that, aka wealth redistribution via “premiums”.
I totally agree on the healthcare thing, a few years ago I was working as an independent contractor and my health insurance premiums were almost $25k a year, for a plan with a $6.5k deductible. It’s bananas if you need to buy private health insurance.
Housing inflation cascades down into everything else too, since people require higher wages to afford housing... which drives up housing costs... which requires higher wages to afford housing...
Basically real estate is the thirsty sponge that soaks up all the gains.
"The people living inside these numbers describe them in nearly identical terms. “All my life, I thought that was the magical goal, ‘six figures,’” one writes. “During the pandemic, I finally achieved this magical goal… and I was wrong.” Sixty-two percent of American consumers live paycheck to paycheck; among those earning over $100,000, the figure is 48 percent."
My cousin makes around 60k/year. He had lower paying jobs before this. He now owns a home in a good area and doesn't live paycheck-to-paycheck.
He saved money for years, invested part of it, and was able to pay a large down payment on his house. His monthly expenses are low and he doesn't buy the latest or greatest.
Too many people spend money on booze, drugs, expensive hobbies, and traveling. They then wonder why they can't ever buy a house and have no money left over at the end of the month.
Does it make people feel better to write articles like this? I feel like we all know this stuff already.
Figure out how to make more money, or how to be happy with less, or go live somewhere else. (I’ve done all three, at various points.) Writing AI-assisted screeds on how broken the system is doesn’t bring us closer to a functioning system, and it sure as hell doesn’t help you live a happy life.
I do hope that America manages to solve these problems. But I wouldn’t bet my life on it.
I think it would have to be more of a professional organization, and realistically that would require a lot more rigor and discipline in our profession. Maybe to start with, model something like LOPSA[0].
Unions trample human rights and they don't increase wages long-term, rather they increase deadweight-loss and limit opportunities. I would not work for an employer with a mandatory union and I strongly recommend nobody work for one either.
“Unions trample human rights” is such an absurdist statement that I don’t even know how to respond. The vast majority of the countries at the top of any human rights index have strong union cultures, and the vast number of those at the bottom have no unions at all.
> Between 2008 and the early 2010s, Hanania wrote for alt-right and white supremacist publications under the pseudonym Richard Hoste.
> Hanania was a contributor to Project 2025 regarding diversity, equity, and inclusion (DEI) practices. His advocacy against DEI has been influential among Republican and conservative policy-makers in the United States, and Vox called him "the man whose tweets helped kill DEI".
Interesting you mention human rights, the author seems to not care much about that issue.
Unions as you describe (mandatory membership for employment) is not the only way for unions to exist; in the Nordics unions are a core component of the labour market, and there are no jobs where union membership is required, it's all voluntary.
What exactly about unions, outside of the USA, in countries like Norway, Denmark, Sweden, Finland, that trample human rights?
It’s not like Americans were invaded and forced to accept this. They repeatedly voted for it. Obama tried to work on healthcare, then had the largest electoral losses since Eisenhower, all up and down the ballot. Instead they voted for the real-estate billionaire. Trump has zero healthcare during a major pandemic - crickets. This country doesn’t want anything labeled “socialism”, and will hurt itself repeatedly to prove it. Last time it took a Great Depression to change their minds.
This is true but it is not the whole story. Both establishment parties have presided over and encouraged the financialization of real estate. The ludicrous CEO-to-worker pay multiple wasn’t voted for by anyone.
Get used to it, we have a lot more people that will be coming in and they all need to be taken care of. Unsustainable lifestyles are going to have to give way. We can’t all eat beef and have air conditioning and travel in retirement if we’re going to share this planet.
This is a very thorough overview, well put together.
As someone who was hired into manufacturing just before the jobs collapse detailed here, I have vivid memories of the way things were. Being employed felt valuable. Acquiring skill felt respected and rewarded. Then, still young, I myself contributed to the shift of this work out of the country, helping develop software that supported exchanging files with India and helping train Chinese management on our workflows.
I feel privileged to be one of the few of my generation who experienced first hand what a previous generation took for granted. But I feel like a Cassandra sometimes trying to tell peers, Yes, the work situation in America really could be so much better.
> This is not a spending problem. Families spend less on clothing, food, and appliances than a generation ago, adjusted for inflation. [19] The increase is entirely in fixed, non-discretionary costs: housing, healthcare, childcare, education.
I bet the explanation for this is that non-discretionary costs got higher, so people pulled back on discretionary spending. I do wonder if maybe people intentionally pulled back on discretionary spending despite small wage growth over time and capture was performed by housing, healthcare, and childcare. Or incentives by the government caused it. I have no clue.
[delayed]
I worked as consultant at a major west coast-based health insurer in 1993. A family plan, that is, two adults plus any number of children, was $300/month; a figure that wasn't far off from the cost of a studio or 1 BR apartment at that time anywhere but the most expensive coastal cities.
Today, that family plan, even as a HMO, can easily be $3000/month. I would guess that mythical apartment is maybe $1200/month now.
So what happened Health Care? how has the caregiver:administrator ratio changed in the past 30+ years? You've performed about 3x worse than Real Estate in terms of value, yet you're not quite as visible and complained-about because you hide behind employment. Hmmm.
Have you assessed the size of United Healthcare?
The number of paper pushers and executives is sustained by your premium.
Because your 1993 health insurance covered far less.
There was no out of pocket maximum, you were denied for pre existing health conditions, and a surprise bill could show up anytime.
Now, you can buy health insurance even if you know your anemic kid will need $1.5M of treatment in the year, and it will only cost you ~$10k to ~$15k per year.
To be clear, today’s health insurance premiums are not premiums either, they are taxes, due to the legal ban on underwriting health risks and caps on premium price ratios between various ages. For example, my kid is going to use up more healthcare than he will probably ever earn in his life, before he even turns 7. Your premiums are what is paying for that, aka wealth redistribution via “premiums”.
I totally agree on the healthcare thing, a few years ago I was working as an independent contractor and my health insurance premiums were almost $25k a year, for a plan with a $6.5k deductible. It’s bananas if you need to buy private health insurance.
Reminiscent of the Vibecession analysis done by Scott Alexander a few months ago: https://open.substack.com/pub/astralcodexten/p/vibecession-m... - may be good supplemental reading
And of course the evergreen Housing Theory of Everything https://worksinprogress.co/issue/the-housing-theory-of-every...
Housing inflation cascades down into everything else too, since people require higher wages to afford housing... which drives up housing costs... which requires higher wages to afford housing...
Basically real estate is the thirsty sponge that soaks up all the gains.
"The people living inside these numbers describe them in nearly identical terms. “All my life, I thought that was the magical goal, ‘six figures,’” one writes. “During the pandemic, I finally achieved this magical goal… and I was wrong.” Sixty-two percent of American consumers live paycheck to paycheck; among those earning over $100,000, the figure is 48 percent."
My cousin makes around 60k/year. He had lower paying jobs before this. He now owns a home in a good area and doesn't live paycheck-to-paycheck.
He saved money for years, invested part of it, and was able to pay a large down payment on his house. His monthly expenses are low and he doesn't buy the latest or greatest.
Too many people spend money on booze, drugs, expensive hobbies, and traveling. They then wonder why they can't ever buy a house and have no money left over at the end of the month.
> I had to ask myself why I can’t afford a nice home in a major city.
> Owning a home is the primary mechanism through which ordinary people build wealth.
That alone is a direct answer. Their wealth building is your failure. Their successful investments priced you out.
“Houses are for living, not for speculation.”
https://en.wikipedia.org/wiki/Houses_are_for_living,_not_for...
"Housing cannot simultaneously be affordable and a good investment."
Does it make people feel better to write articles like this? I feel like we all know this stuff already.
Figure out how to make more money, or how to be happy with less, or go live somewhere else. (I’ve done all three, at various points.) Writing AI-assisted screeds on how broken the system is doesn’t bring us closer to a functioning system, and it sure as hell doesn’t help you live a happy life.
I do hope that America manages to solve these problems. But I wouldn’t bet my life on it.
Reminder (which the article mentions only once in the context of worker productivity and pay growth): https://ethanmarcotte.com/books/you-deserve-a-tech-union/
I think it would have to be more of a professional organization, and realistically that would require a lot more rigor and discipline in our profession. Maybe to start with, model something like LOPSA[0].
0. https://lopsa.org
I’m a Unionen[1] member, so at least in Sweden this isn’t a requirement.
[1] https://www.unionen.se/in-english/this-is-unionen
Reminder: https://www.richardhanania.com/p/unions-are-not-the-way-to-h...
Unions trample human rights and they don't increase wages long-term, rather they increase deadweight-loss and limit opportunities. I would not work for an employer with a mandatory union and I strongly recommend nobody work for one either.
Wonder how many metrics are out there that we could use to compare "unions trample human rights" vs "unchecked corporations trample human rights"?
Like which one more frequently monitors your time in the bathroom?
“Unions trample human rights” is such an absurdist statement that I don’t even know how to respond. The vast majority of the countries at the top of any human rights index have strong union cultures, and the vast number of those at the bottom have no unions at all.
> Between 2008 and the early 2010s, Hanania wrote for alt-right and white supremacist publications under the pseudonym Richard Hoste.
> Hanania was a contributor to Project 2025 regarding diversity, equity, and inclusion (DEI) practices. His advocacy against DEI has been influential among Republican and conservative policy-makers in the United States, and Vox called him "the man whose tweets helped kill DEI".
Interesting you mention human rights, the author seems to not care much about that issue.
Unions as you describe (mandatory membership for employment) is not the only way for unions to exist; in the Nordics unions are a core component of the labour market, and there are no jobs where union membership is required, it's all voluntary.
What exactly about unions, outside of the USA, in countries like Norway, Denmark, Sweden, Finland, that trample human rights?
It’s not like Americans were invaded and forced to accept this. They repeatedly voted for it. Obama tried to work on healthcare, then had the largest electoral losses since Eisenhower, all up and down the ballot. Instead they voted for the real-estate billionaire. Trump has zero healthcare during a major pandemic - crickets. This country doesn’t want anything labeled “socialism”, and will hurt itself repeatedly to prove it. Last time it took a Great Depression to change their minds.
This is true but it is not the whole story. Both establishment parties have presided over and encouraged the financialization of real estate. The ludicrous CEO-to-worker pay multiple wasn’t voted for by anyone.
Get used to it, we have a lot more people that will be coming in and they all need to be taken care of. Unsustainable lifestyles are going to have to give way. We can’t all eat beef and have air conditioning and travel in retirement if we’re going to share this planet.
https://www.brookings.edu/articles/new-census-projections-sh...