Of course they do. Median real weekly wages[1] have been rising for decades all while the average number of hours worked per worker have fallen[2].
Looking at an article from the CATO institute, over the last 30 years wages have climbed 169 percent, while food prices 111 percent.
But an even better measure is PCE, or personal consumption index. Rather than CPI, or any other "household basics" measure, which subjectively categorize goods and then tracks those, PCE measures the total dollar amount spent by the entire U.S. consumer sector on goods and services. This is what is used by the FRED database referenced in the reply above.
https://www.cato.org/commentary/why-dire-pronouncements-abou...
It’s 30 to 50% of most peoples paycheck, it’s really the piece that matters and the one that is most complicated to solve.
I'm semi-convinced that the reason why we see so many bad ideas in housing is because the good ideas negatively affect too much of the voting public. Or, they perceive the ideas as negatively affecting them.
Perhaps my view is too California-brained, but homeowners here like high prices because it gives more flexibility to downsell, they can get large home equity loans, and Prop 13 ensures they won't be paying full property tax (at least if they've been living there for a while). Even for those planning on living there until they die, their children would still like to inherit a valuable place.
At any rate, I didn't intend to limit the reasons to just price. The solution is to build more housing, but building housing is unpopular, and it isn't hard to see why. So we end up with bad policy like rent control instead.
This is not true.
Not that it matters as I don’t think this is what motivates NIMBY’s but for anyone reading that believes so, this is incorrect.
The old single family home next to the new apartment building gains land value. And this shows up county after county [1]. Building more housing is a valuation win-win, the pie just grows.
[1] https://gardner.utah.edu/news/recent-apartment-construction-...
And this is why large property owners fund YIMBY organizations. I have no idea how they've managed to convince people of normal intelligence that relaxing restrictions on zoning lowers property values, and that's why the selfish senior citizens who stubbornly continute to live in the homes they've lived in for decades are against it. It doesn't make any mathematical sense at all. They just are willing to believe anything that promises to give them what they want, which is other people's homes who don't want to sell and who don't want to live next to 900 people on a tiny lot with no parking.
The most insulting part is when they pretend that this is racism, while YIMBYs have been gentrifying black people from the neighborhoods they've been in for centuries, into the woods. The reason they're so frustrated about senior citizens in San Francisco or wherever is because they can defend themselves, while black people can't. Black people are being annihilated from urban neighborhoods; you're seeing them replaced by rent-stressed immigrants who don't have families or connections in the country to retreat to.
> Building more housing is a valuation win-win, the pie just grows.
No, it's a win for people who sell. It's not a win for people who want to keep their homes, and their communities. It's a win for alienation and cultural destruction, pushed by people who either have no roots, or who keep their roots safely protected a thousand miles away.
Community is still community in a condo.
>>"pushed by people who either have no roots, or who keep their roots safely protected a thousand miles away"
Imperceptibly different from the argument JD Vance makes against immigrants. Maybe rethink that tack.
Go to Manhattan and tell me that housing isn't built because of NIMBYism. It's: RTO (very important!), cost of land (land isn't increasing in volume), end of tax subsidies (programs that gave developers tax breaks), zoning (hey let's demolish all the jazz clubs in Greenwich Village and replace it with affordable housing - is that what you consider the correct line?), jobs (the economics of people moving to a place) and many many many more factors.
About once a week someone with a singular conception of the world of housing comes and you need to open their minds up a bit.
You want to lower housing costs? Maybe increase public transportation, give workers rights to work from home, and invest in expanding the suburbs by making them more dense. But don't do that until AFTER you've established the infrastructure piece. Not everyone wants to live in LA or Austin and spend hours in cars.
If you don't do these things then people all want to live in the same place, which is far more impactful than this "NIMBYism" thing, not everything is your local HOA or little town's regulations.
“hey let's demolish all the jazz clubs in Greenwich Village and replace it with affordable housing”
Or just rebuild them in the commercial space under the new taller condos, so more than just the nepo trust fund babies or lottery rent control people can live in them. These are all non-issues once you get over people’s aesthetic preferences.
This is not just a California issue, the space between downtown and midtown is severely under-built when compared to the economic output of those spaces.
How would Greenwich Village look if you turned it all into towers of rental apartments?
France uses expansion of the suburbs to make housing more available, and that includes trams, buses and yes, Metro expansion. You don't need to demolish the fucking bistros and parks to replace them with towers.
In NYC it could be done with NJ Transit being replaced, and better transportation. Then the border areas would become more dense because the investment returns would support it. People would want to move there to work in Manhattan.
Please don't turn world class cities into your LA or Houston Hellscapes of cars and highways. I'd rather pay a million dollars for a tiny one bedroom apartment in a real city than half the price in those soulless, cultureless places where you spend all day behind the wheel of a vehicle.
Back in the 1800’s when the more dense haussmanian architecture was put in. I’m sure their equivalent of pretty jazz clubs then were mowed down too. But over a 100 years the more housing made space for more people and better culturally richer city.
New York is a newer city, it’s time to densify is now.
I’m literally trying to densify, so that’s the anti-highway move. Tear down all of FDR and put in more NJ transit for all I care, I Love the Path.
We can do both, put more transit it and densify the low density sections of Manhattan. So more people have more choices.
Blocking this on aesthetic and legacy preferences is morally wrong.
Absolutely wrong. Haussmann's restructuring of the city was intended to REDUCE overcrowding and darkness due to the narrow alleyways, not to mention illness from the overcrowding. He lowered density, built parks, and then Paris expanded a lot when they absorbed the suburbs in the 1860's. Today Paris is extremely high density, and they're again expanding into the suburbs - look up Grand Paris projects. But the 6 story buildings aren't being demolished to make 30 story buildings like you seem to be suggesting is the thing to t do.
As much as I rail against a soulless place like Houston (with no housing restrictions like in NYC or Cali), I also don't want to turn our cities into Shanghai or New Delhi.
And by the way, what makes you think building more makes housing cheaper? It's not like making widgets in a factory. Gentrification makes things more, not less expensive - have you seen the history of Williamsburg, Brooklyn? Rezoning it turned it into a lux neighborhood with an Apple store, and attracted people from around the world.
There’s no point fighting against known norms in economics now. Induced demand in housing is hogwash: there are a certain number of people who dream of moving to east village and that number doesn’t magically grow if you build more housing. After decades of underbuilding, yes the demand is high, but it’s not infinite. Build out the suburbs too, build good transit, split the difference and the housing prices stabilize.
I was there a few years ago in the summer, and figured I’d go see live music at night, and there just was literally not any to see besides at the megavenues. And surprisingly few bookstores for a city that size. I think it’s possible there are more independent bookstores in New Orleans than in Houston, a much larger and wealthier city.
As a homeowner I don't want to see my home price go down relative to all other homes as that leaves me in a precious position if I need to move, but if all homes fall in price together then that actually makes the prospect of moving less risky as, if I have to move into a house that is a step-up from the one I have, the cost to do so is lower. That would be an improvement over the status quo. High housing prices are a problem even for those with significant equity in a home.
But who doesn't want to see their wage go down is those who build houses. This is the bottleneck. The vast majority of people cannot afford a new house, which means they're stuck in their used houses, which means there is no inventory opening up for those with no houses.
> it's just that the solutions are deeply unpopular.
Is it? The solution in motion is to use AI to push software developers out of software development so that they have to become construction workers, thereby increasing the supply of construction workers, pushing construction wages down. It doesn't seem that unpopular (at least not outside of HN, but even on HN many welcome it with open arms). Maybe it will become unpopular once the motions are complete? That's a tad bit late, though.
Noise and dust from construction are often mentioned as well. Construction means heavy trucks entering places where they usually don't intrude.
About half of US adults own their home. It goes up to ~2/3 if you include adult children, grandparents, etc. that live in the house but don't own it.
I wasn't trying to dance around this fact; my point is that a large fraction of the voting public has their interests aligned with keeping home prices high (presuming that these non-owning residents share interests with the people that do own the home).
The problem isn't so much that housing has gotten expensive. It's that many of the existing places have moved up-market compared to what they were 30-40 years ago. 75 years ago, Scarsdale NY or parts of Long Island were expensive. But Palo Alto was a drab middle class suburb. As the tech economy has boomed, that has driven prices up in Palo Alto for the same reason they were already high in Scarsdale. And now you have to move to Gilroy.
That's a misleading metric for two reasons. First, "people" includes all the people who bought a house decades ago before the prices went up, and correspondingly paid the old prices instead of the current prices. And second, it assumes that if housing becomes more expensive what people all do is pay more for housing rather than being unable to afford it and then having to take a longer commute to access housing they can afford, live with their parents, become homeless, etc., which negatively impact the amount or type of housing they get instead of the amount they pay for it.
Meanwhile between 1984 and today median income increased by ~290% while median new home prices increased by ~425%:
https://fred.stlouisfed.org/series/MSPUS https://fred.stlouisfed.org/series/MEHOINUSA646N
And that's with the gap having reduced a bit in the last couple of years, since home prices have declined slightly since the peak in 2022 while median income continued its usual trend.
> Meanwhile between 1984 and today median income increased by ~290% while median new home prices increased by ~425%
The average FHA mortgage rate in 1984 was 13.2%. Today’s it’s 6.8%. The more expensive house with a cheaper mortgage costs $482 per month less and $173,000 less over the lifetime of the loan.
Both inflation and wages have not gone up uniformly since they started being tracked. We all know the Trump/Biden covid inflation was bad, but by the end of Biden's term wages had mostly caught back up. The second Trump administration's policies reversed that trend.
Housing in particular cratered in some areas during the GFC, but then went wild especially around the covid.
People are moving out of opportunity zones (and you know…losing opportunity) or moving in with roommates to keep the average percentage low.
Feels like such a basic factor to miss for what is supposedly an economists blog. That metric means nothing.
From https://www.jchs.harvard.edu/blog/rental-housing-unaffordabi...
> The net effect of this longer history is that renters today spend much more of their incomes on rent than they did in previous generations. The median renter household in 1960 spent less than a fifth of their income on rent. By 2022, housing costs consumed 31 percent of the median renter’s income. And in inflation-adjusted terms, the median rent is up 75 percent over these six decades while the median renter income has risen by just under 15 percent.
Even when I was a kid in the 1980s I didn't know a single person whose household had multiple bathrooms, a dishwasher, or air conditioning. Not a single one.
Part of the reason why standards have increased is because incomes have increased.
I imagine they're in a high cost of living area, where tons of other people want to live. If that's the case, it probably shouldn't be any surprise that in a supply restricted market, the prices are also very high.
I’m not saying that’s the case. I’m only saying the metric “housing cost as percent of wages” isn’t enough to judge if people are doing worse or better
To take just one example: a 65inch tv costs just $700 compared to $4k just a few years ago
For examples:
1. there are 57,000 unoccupied apartments in NYC because city regulations on rents make them unprofitable to rent out.
2. the glacial pace of issuing building permits for burned out homes in LA.
3. the sudden influx of many millions of immigrants pushes up the demand for housing, resulting in higher prices
That's about 2.4% of the total number of rented apartments, and about 1.5% of the total housing stock.
How long do you think those apartments are unoccupied, on average?
What portion of the stock do you think would normally be healthy to have on the market?
What's a healthy vacancy rate in your opinion, and what do you make of NYC having a lower rate than the average American city?
> 1. there are 57,000 unoccupied apartments in NYC because city regulations on rents make them unprofitable to rent out.
> According to state data, approximately 57,421 rent-stabilized apartments were vacant across New York City
Is it actually more complex than that? If the regulation that makes it unprofitable to rent them out is rent control, that's still an accurate statement of why they're not being rented out.
The market, left to its own, will keep building because someone will see the prices people are willing to pay and think “I want in on that” but then the government comes in and blocks them from building. No building = supply lower than demand which always equals higher costs
Further, It would only have taken you one 5 second search to see the ways government regulations can cause unoccupied apartments
https://www.google.com/search?q=in+what+ways+can+government+...
Please try again.
P.S. google "how many unoccupied apartments in nyc"
Which market are you thinking of?
Los Angeles? Where the homeowner vacancy rate is 0.7% and rental vacancy 4%?
If you literally weren't thinking of anywhere when your responded, where did you get the notion from?
[1] https://api.census.gov/data/missing_key.html +/- one percent
2. Shelter accounts for roughly 34% of the CPI, whereas it makes up only about 16% to 17% of the PCE which underplays the pressures of housing people face. Housing arguably is one of the most basic necessity and people will spend on it. For majority of the people in the country housing as a % of income is the biggest expense, so weighing it at 16% sounds almost ridiculous.
3. PCE also famously isn’t based on household surveys like CPI which means it doesn’t accurately represent the actual inflation either.
4. PCE also doesn’t accurately represent lifestyle downgrades even though it tracks them. PCE will capture if you swap chicken for beef (like people are doing right now) but the conclusion you’ll come to is that people have the same amount of spending power as before.
Tennessee suburbs are eyewateringly expensive. Your parents made a living wage at a job that doesn't exist in the US anymore, and definitely isn't located in Tennessee anymore. The mean homebuyer is older than your parents.
You can get a cheap house in the middle of nowhere where all the industry was destroyed for imports, services destroyed for outsourcing and the retail was destroyed for the internet and big box chains, if you are a wealthy person who works remotely or at one of the local health insurance conglomerates.
If you are not a wealthy person who works remotely, you can't live there anymore; it is not cheap for you. In fact, all of your family (who has lived here, near each other, for generations) has to figure out where in the country they will have the best chance to feed themselves (or whether they should leave the country) and move there. Now, they're trying to get by without the support of each other, making them more alienated, isolated and dependent on corporations and the state.
There are natural limits to this sort of evil. People won't starve to death quietly.
By the people your parents voted in to do just that no less.
I also think it’s unfair to look at just food prices. Housing and healthcare have bloomed massively.
We should evaluate research by the research itself, rather than by the author’s subjectivity credibility alone. The is the point I was trying to make by providing alternative research and adding a little bit of nuance to the reply, but perhaps I should’ve been more forthright in addressing my own bias as well.
Why is this the argument when someone challenges your source, but when it comes to someone else's source your argument is:
> This is research from a labor advocacy group, with the explicit aim of the organization to advocate for this sort of thing. This doesn't mean the research is is automatically invalid, but it is bias worth mentioning.
Using CATO as a neutral source though, is sketch no matter what.
> Links the fucking CATO institute
Pot, meet kettle
I doubt there is a compelling argument why people should have to use CPI as the comparison index. I'd consider any investment that only matched CPI to be losing value for example; they should be tracking something one of the monetary aggregates.
The problem with the CPI basket is, it needs to be constant of products to be comparable, so NO technological advancement is considered in that basket. Instead, they use the price of butter and tomatoes. Well, a fictious 1950s person wouldn't care that is can buy more butter or tomatoes than we can, but would want smartphone and a plane ticket to thailand.
The monetary reason is that the reason those things go down is because of technology advances and not because of changes in the value of the currency. Inflation should be about the currency, and less about what cool advances people are doing to make cheaper TVs and better websites
The practical reason is that if the basics like rent and food go up relative to wages, then a lot of people end up crushed by the basics alone and have no disposable income left for the cool stuff. The baskets are often too biased towards spending patterns of those who live the good life and for whom luxuries actually matter
Have you looked at the actual weights?
https://www.bls.gov/news.release/archives/cpi_10142026.htm
Airline fares make up a whopping 1.04% of the CPI basket. "Information technology commodities" makes up a whopping 0.752%. Meanwhile the weights of essentials are: Food (13.507%), Energy (7.418%), Shelter (35.323%), Medical care services (6.834)
It's a statistical tool concerning populations, not a sampling of what hacker news user cicko in their wisdom thinks increases quality of life.
The quality of the house your grandparents (for 1920 probably your grand-gran parents) is vastly different. Those houses cannot be compared at all, when I take my dump in the heated warmth in a nicely smelling place listening to some music over my airpods.
That house trades at 13x now.
There is no house of any size for 3x in most areas of the UK.
You can’t handwave that away by saying “central heating”. The cost of part-of-a-house is far less than the total - not 10x more on top.
Part of the issue is population doubled since then but house building didn’t. Part is cheap debt in the 2000s turned everyone and their dog into buy-to-let landlords then AirBnB hosts.
Let's look at some real numbers instead of a folksy parable about grandma. Here are recent stats about rent arrears:
https://www.baselane.com/resources/unpaid-rent-debt-statisti...
And rental affordability:
In 2026, a full-time worker needs to earn $34.73 per hour to afford a modest two-bedroom rental home in the U.S. and $29.19 to afford a modest one-bedroom rental.
And mortgage affordability:
https://www.visualcapitalist.com/median-house-prices-vs-inco...
None of these are heading in the right direction.
Aside from technological and scientific progress in the medical field, it's generally been shown that people's lives have gotten worse.
“If you would please look at the chart…” when it is known that inflation is a politically-charged figure that is indirectly manipulated to show much lower figures than the price increases the average person with average expenses (rent, car, fuel, food, etc.) experiences.
Let alone doing comparison of inflation over longer timespans. Garbage model in, garbage numbers out.
You can think of it with a thought experiment: A smartphone (with hypothetical internet) in 1920 would be worth almost all the money in the world. If you simply had one smartphone in 1920, the richest billionares would offer most of their wealth to have one. Hence in 1920, a smartphone would be worth at least $10M in todays money. Yet you can buy one for $500 today - so you are twenty-thousand times richer than 1920. The same applies for flatscreen TVs, antibiotics (really valueable when you need it), polio vacination etc.
You can't measure this with CPI, yet people complain about the CPI is fake. It is just a statistical average, no more no less. It always was irrelevant. It is the arguments people do with that number, that are bullshit. Basic statistics teach you never use an average to come to conclusions about the individual.
Owners' equivalent rent of primary residence (sub6): score=-9.9748, rel_imp=24.937, yoy=3.3
Health insurance (sub4): score=-10.3886, rel_imp=0.818, yoy=-9.0
New vehicles (sub4): score=-11.6188, rel_imp=3.748, yoy=0.6
Used cars and trucks (sub4): score=-13.9776, rel_imp=2.688, yoy=-1.5
Motor vehicle insurance (sub4): score=-22.0197, rel_imp=2.531, yoy=-5.0
And that is the cause behind so much distrust in politics these days!
The problem is, sure, inflation as a whole using the official metrics may "only" be 3% YoY.
But WHAT THE FUCK does that have to do with the reality of the 99%, who see their grocery bill, their gas bill, their rents increasing far, far more than "official inflation" says?
The inflation basket includes way too much stuff people buy like, what, once every two decades like new kitchen appliances. It is of no use for me if that price stagnates.
But these transformations are not complete, and thus comparing "what people are getting for their money" now vs. then is challenging, complex and subject to a lot of debate and disagreement.
Not what real means!
So to point out how inanely out of touch economists are.
The problem with that is the worker economic base unit is a family not one person. Now compare 1960-70s where one person in the household works 40 hours a week. Compare with a modern family where both parents are working a combined 70-80 hours a week.
So yeah workers are working slightly less hours and families as a unit substantially more.
> Of course they do.
That level of certainty is not justified.
Hooray for just-in-time scheduling where workers have to be available full time but rarely get scheduled full time. It’s an innovation that has been great for capital and terrible for labor.
The reality is that requiring benefits imposes a cost, and employers manage that cost by limiting who qualifies. So yes, this hurt many workers - and disproportionately impacted disadvantaged people who didn't make the full-time cliff.
Ignoring increntives is actually shaking your fist at the sky.
Typically the real disagreement here is over whether workers should get benefits at all.
EDIT: can we get another `vouch` or two for groundzeros2015's currently [dead] reply? It's well-argued and an olive branch and deserves to be visible.
I addressed but one of your points here and ignored essentially the rest of your reply. A rather myopic one sentence reply to a more nuanced comment.
Sorry to sink to the lowest common denominator, friend. Thank you for making me see this.
re: regular people and their money, I will say, something about the bigger picture just feels off. I look at the graphs you linked to, and do not see it reflected in the people around me. I don't mean to be dismissive of the data, more that I feel like I am missing something, or it is, if that makes sense?
Furthermore, wealth applies more pressure against certain costs like housing[1] than against others like food or durable goods. Cheap toasters only go so far in making people feel like they aren’t falling behind.
[1] https://www.jchs.harvard.edu/blog/home-prices-surge-five-tim...
The reluctance to give up resources also an understandable aspect of human nature, but power concentration in the hands of the few is always problematic. I'm very much a capitalist but the last few decades have persuaded me that wealth taxes are a necessary and moral correction to capitalism's unfortunate spiraling acceleration of inequality.
For instance: marketplace competition requires some regulation, but recognizing that regulation is a necessary evil with many opportunities for abuse (e.g. regulatory capture) helps inoculate against socialism's worst excesses.
https://fred.stlouisfed.org/series/CPIAUCSL
People are earning about 12% more and working about 5% less since 1980, but everything costs roughly 3x what it did in 1980 relative to wages, and that's where most people are pinched.
Also, I chose weekly wages because annual wages are complicated by time off, which was the other item in question.
Compare that to how much wealth appreciated, like a price of gold or real estate.
Median real wages increased by the narrowest possible meaning of this word.
Trickle down economy is literally a trickle.