Balmorhea said:
Matt Gruber said:
100% - everybody needs a plan. i moved back with my parents several times - that was plan B.
Okay, boomer.
Hey, we GenXer's did the same. Did your mom kick you out? Actually I didn't get to because Dad died while I was in school, Mom moved away and I couldn't afford to go to USC but had to use students loans to support not just me but the olders of the family. Oh, probably the only reason I have house today. They tracked Mom across state lines and moved in with. . . .
Balmorhea said:
The overall purchasing power of an average wage peaked in 1973.
In 1973, the median home value represented about 17,000 hours of the minimum wage. Today, it's about 38,000 hours of the minimum wage. Meaning even if you make double the minimum wage, a house is less affordable for you today than it was for a minimum wage worker in 1973.
Bottom line, you're going to be living in that cheap room for a long, long time.
When I was a kid, I took up an expression: "Bull Roar." My older brother learned it from me and would shout "BULL ROAR." He didn't know what it meant. I'm going to explain to you what's wrong with what you just said one more time. Then you can be expected to admit 'Yeah, that was bull roar about the purchasing power.' But are you honest enough to do that?
The secrets of the universe on disproving you. Don't look, DON'T LOOK! https://taxfoundation.org/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-brackets/
In 1973, a single person making minimum wage would be making what? 5k a year? Before my time, but I do believe I've read the California minimum wage was like $2.30/hour at the time. And the tax bracket paid 19% as head of household or married filing jointly. Single paid 21%. Married filing separately paid 22%. So depending, 17,000 hours represented maybe $65,000? For WHAT house? Maybe I should consider state income taxes, places like Texas don't have any. But accept this is an odd comparison that grows odder as you try to see how true it isn't. Property tax on that house included some local taxes, I understand the average was 7% a year before Proposition 13 just a few years later. So the annual property tax on that house was 1,100 hours. EACH YEAR. This is not counting that interest rates were HIGHER at the time.
2013, the most recent year I have. Dang, I believe that was $8.50/hour here. Tax rate 10% across the board. from $18,000 for the year we get $153,000, I'd say a small condo or townhome. The property tax was lowered by Proposition 13 to 1% in a rare outburst of conservatism in California in something like 63% of voters comprised of many who didn't even own a home. Since then it's been raised to 1.3%. So the annual property tax is 260 hours a year, EACH YEAR. 38,000 hours would be maybe $275,000, a small place. Property tax let's just say 450 hours a year, EACH YEAR. This is not counting that interest rates were LOWER at the time.
By the way, that's OBAMA taxes. Trump taxes are lower still.
Oh by the way, do you know what earned income credit is? This is where you can get not just ALL your tax in that low bracket back but they'll give you MORE than you paid. So your minimum wage hour might even be worth more than I gave it credit for in 2013, but not in 1973.
My degree in Economics is said to be the study of the management of scarce resources. I say it's the study of equilibrium. In 2013 if you bought the $153k own your own you start at equilibrium with 1973 and proceed to be better off financially from the very first day. If you bought the $275k house you might have the same house as 1973 and start out behind, but you start making up 750 hours EACH YEAR. You reach equilibrium at close to 30 years.
Given the lower interest rates of 2013, the mortgage payment if you financed the entire $153k might have been $750/month, 98 hours EACH month. The $275k would cost 135 hours each month. The $65k in 1973 would cost (I admit this is dicey and YOU SHOULD ACCEPT THAT) probably 120 hours a month.
My understanding is that in the 1970's you'd never succeed in financing with a payment more than 25% of your take home pay. Today I understand they'll write you for half or more of your take home pay. Get it financed, rent a room out.
In 1973 California was paying the HIGHEST percentage of property tax in the country. In 2013 we were 17th. There is more,so much more, that people don't bother to learn about before shooting their mouths off.
Meanwhile, in the 1970's you did not go through life with a cellphone, (Bill) you did not use a card to pay for things, (Fees) you did not have internet (Cost) you did not etc. etc. etc. There are real issues that you ignore. There's a real story whether you want to tell it or not.
A bull roarer is hard to truly define. It has served many purposes, communication, music, more to the point there was said to be religious usage that I first learned about when I was quite little. So when someone pompously said something and didn't know what they were talking about, I'd say "Bull Roar." My brother misused my original intend, but he abused everything.
So, as they say on TMZ, 'I call bull on this one' for your minimum wage nonsense. Except I just say BULL ROAR!
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