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Old 10-26-2014, 09:59 PM   #61
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Middle income people could never live upper middle lifestyles without overspending their means, and they still can't.

I agree. DH and I did manage some spectacular trips using reward programs, including a long weekend in Brazil in 2000 and a week in Paris last year with Business class flights, also $1,000. We gave up other stuff we didn't care about. You can't have it all and that's OK.
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Old 10-26-2014, 11:02 PM   #62
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Originally Posted by daylatedollarshort View Post
I do think the middle class overall is stressed but some of it is simply poor decision making, like borrowing 6 figures to get a degree from a private school for an unmarketable major. When has that ever been a good idea. Students now get more financial rope to hang themselves with, but some of the blame has to be on the students and their parents.

I don't see a lot of our kids' friends with accounting, engineering or IT majors from public schools back at home and unemployed. Mike Rowe has a foundation to close the skills gap between the jobs that exist and what kids are studying:

"Its not about this is bad or this is good. This is a skills gap. [] Its another inconvenient piece of the narrative that nobody ever talks about. There are three million jobs available right now. Companies like Caterpillar are struggling to find, for instance, heavy equipment mechanics.

The bottom line, Rowe said is that, We are lending money we dont have to kids who cant pay it back to train them for jobs that no longer exist. Thats nuts.

Mike Rowe: The 'Dirty' Jobs Alternative to a College Degree | Fox News Insider
Well just 20 years ago(for sure 30 years ago) just about any college grad with any degree could go find work and make enough income to pay down their student loans efficiently and live on their own. Companies were investing in people.

We have outsourced the USA to death and this is what we get now. Millions of college grads moving back home.

The reality is that Corporate America is just not really investing in America.
Shareholder value is the only priority now.
I think 20 years ago many Americans would have been upset with Corporations dodging taxes and parking (hiding) money offshore.But Its just business as usual now.
Didn't the EU instruct Ireland recently to stop allowing corporations to park money offshore with ridiculously low tax rates.

It just seems ridiculous that Corporations are hoarding trillions in cash offshore and at the same they are not really hiring or giving raises.

So this is the world we now live in. Its been great for the top 10%.




Yes kids definitely have to be very careful now with college degree choices.
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Old 10-27-2014, 08:44 AM   #63
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Many people in their 20s and early 30s now live with their parents due to this "race to the bottom economy".

So they are getting married later and not having kids because of the economy.

The entry level new home housing market is terrible because of lower wages and healthcare costs and student loan debt.
I have to wonder how many of those kids living with their parents borrowed money for college degrees that sounded like they led to fun jobs (let's say "communications", thinking I'll be an on-air TV reporter) without understanding that the job market for those jobs was already saturated.

I expect that there was a time when nearly all four year college grads got "good" jobs, but that was because nearly all four year college grads were either very bright or very well connected. Their brains or their connections got them the jobs.

Now we've pushed more marginal students into four year schools, pushed loans at them (college "financial aid package" letters routinely treat loans as "aid"), and we're getting more marginal grads with lots of debt.

Many parents and kids thought that any college degree was supposed to be a guarantee of an above-median job with a comfortable lifestyle. Now people have the degree and can't afford the lifestyle.

And, yes, that means they are likely to defer marriage and parenthood and home purchases.
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Old 10-27-2014, 09:29 AM   #64
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Well if my son lives at home in his 20s he will definitely be saving big money to buy a house while living in my basement.
Have a friend with a 43 y.o. son doing the same thing!!
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Old 10-27-2014, 09:31 AM   #65
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Now we've pushed more marginal students into four year schools, pushed loans at them (college "financial aid package" letters routinely treat loans as "aid"), and we're getting more marginal grads with lots of debt.

.
Worse yet, many of them aren't 'grads' and are just $100K-in-the-hole dropouts!
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Old 10-27-2014, 12:28 PM   #66
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I have to wonder how many of those kids living with their parents borrowed money for college degrees that sounded like they led to fun jobs (let's say "communications", thinking I'll be an on-air TV reporter) without understanding that the job market for those jobs was already saturated.

I expect that there was a time when nearly all four year college grads got "good" jobs, but that was because nearly all four year college grads were either very bright or very well connected. Their brains or their connections got them the jobs.

Now we've pushed more marginal students into four year schools, pushed loans at them (college "financial aid package" letters routinely treat loans as "aid"), and we're getting more marginal grads with lots of debt.

Many parents and kids thought that any college degree was supposed to be a guarantee of an above-median job with a comfortable lifestyle. Now people have the degree and can't afford the lifestyle.

And, yes, that means they are likely to defer marriage and parenthood and home purchases.
Yes its hard to believe that middle-class wages on avg. in the USA were actually higher 21 years ago in the year that current college grads were born.

The median wage is lower now than it was 5 years ago and lower than 15 years ago.

Globalization and outsourcing brought our standard of living(lifestyle) way down.

Technology disruption in the job market is a big issue now for all jobs.

Anesthesiologist being replaced by robots and CRNAs is a interesting area.
The next 15 years will be interesting in the job market.

There is so much disruption now in the economy its hard to tell exactly how things will turn out.

Tesla,airbnb,Applepay,google self driving cars,Amazon,UPS using natural gas for their fleet,Digital classrooms,Uber,etc, are all going to change the job market in different ways.

I wonder what college is going to look like in 18 years for a baby being born today.
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Old 10-27-2014, 12:31 PM   #67
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Worse yet, many of them aren't 'grads' and are just $100K-in-the-hole dropouts!
Yes many kids don't even finish college and walkaway with a student loan payment. Its crazy.
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Old 10-27-2014, 12:57 PM   #68
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Here in the Minneapolis area, most of the lower-priced homes are either in "bad" parts of Minneapolis itself, or in the older first ring suburbs. They typically have lower-rated schools than the rich parts of Minneapolis itself, or the newer outer-ring suburbs.

I'm in an area of one of the outer suburbs that is split between one district that is considered good and one that is considered less good (but not terrible). The home values reflect that pretty dramatically. Now that we have kids, we are looking to move into the good school district (as well as get a little bigger house). I'd estimate that the district change will add about 50k to the price of a 300k home.

I will pay it gladly in this new winner-takes-all economy though. We are moving in the direction of having no real middle class, IMO. I expect that my daughter's generation will be 20% high income workers and 80% $10/hr or less workers, with little in-between. I will make sure that she has every chance possible to be in that 20%. I will bid that house up, and since I can afford it, it won't be a problem for my family. The people I outbid will just have to make do with the other school district.

Hopefully, the pendulum will swing back again, and the middle class will thrive again, but its not something I'm betting on.

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I guess I don't see that personally because in the Bay Area a lot of the cost is in the land, so many of the lower cost subdvisions are made up of newer homes out in the boonies. The urban areas with the older homes are often where the prices are higher because of the location and proximity to jobs.
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Old 10-27-2014, 01:03 PM   #69
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Yes its hard to believe that middle-class wages on avg. in the USA were actually higher 21 years ago in the year that current college grads were born.

The median wage is lower now than it was 5 years ago and lower than 15 years ago.

Globalization and outsourcing brought our standard of living(lifestyle) way down.
Despite all of this, the United States still offers a standard of living that satisfies virtually every need. It is my belief that older Millennials will seize on this reality and be one of the happiest generations of Americans in recent history.

Older Millennials, such as myself, graduated college right at the beginning of the recession and quickly adjusted our expectations about what a happy, comfortable life really is. We were forced to, and that's not such a bad thing.

The younger millennials, the ones who have either just graduated from college, or who may still be pursuing an education were largely shielded from this event through the financial support of their parents. They'll continue to waste precious retirement money on needless consumption unless another recession hits them while they're still young.

Right now, at the beginning of my career, I have a family with a wife, two children, and a single income less than $50k a year. No one in this family has a need that goes unfulfilled. After all the expenses, we still manage an ample emergency fund of approximately 1 years living expenses, no debt, and retirement savings that put me on track to retire between 50-55 using very conservative estimates.

Maybe I can't buy everything on the list that started this thread, but I don't need everything on that list in the first place. The inability to afford all of these things is not a condemnation of our economy, it's a cultural shift akin to a market correction; an economic reality that gets us back to a place we should have been all along... at least for my generation.
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Old 10-27-2014, 01:10 PM   #70
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I think what is important to understand is that previous generations had a lot more leeway to make mistakes than the current generation. It's not like the Boomers were brilliant decision-makers and that they all optimized their life choices. They could go to college and flunk out, and it wasn't life-changing amounts of money. They could flunk out and still find a job that put them in the middle class. That isn't true for the Millenials.


There is less room for mistakes these days. It seems like most Boomers don't want to believe that their generation was extremely lucky, and that a large percentage of Boomers who were successful then would not be if they came of age today. They are looking at mistakes that all generations make when they are young and foolish, and thinking that they wouldn't make those mistakes today. They seem unable to remember that they made many of those same mistakes 40 years ago.

I'm an X-er, and I thought it was a little tougher for my generation, but we had it easy (economically) compared to today's generation.

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I do think the middle class overall is stressed but some of it is simply poor decision making, like borrowing 6 figures to get a degree from a private school for an unmarketable major. When has that ever been a good idea. Students now get more financial rope to hang themselves with, but some of the blame has to be on the students and their parents.
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Old 10-27-2014, 02:40 PM   #71
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I think what is important to understand is that previous generations had a lot more leeway to make mistakes than the current generation. It's not like the Boomers were brilliant decision-makers and that they all optimized their life choices. They could go to college and flunk out, and it wasn't life-changing amounts of money. They could flunk out and still find a job that put them in the middle class. That isn't true for the Millenials.


There is less room for mistakes these days. It seems like most Boomers don't want to believe that their generation was extremely lucky, and that a large percentage of Boomers who were successful then would not be if they came of age today. They are looking at mistakes that all generations make when they are young and foolish, and thinking that they wouldn't make those mistakes today. They seem unable to remember that they made many of those same mistakes 40 years ago.

I'm an X-er, and I thought it was a little tougher for my generation, but we had it easy (economically) compared to today's generation.
Our local community college costs $46 per unit. Students can even take many classes online and save on gas. In California familes of 4 can make up to $87K and qualify for significant grant money (not loans, but outright grant) for the public 4 years, and starting this year family making up to $150K get tuition breaks. The cost of attendance for commuters is around $16K per year, less with financial aid and the new tuition cuts for the middle class, at the state schools. A part-time job could bring in $5K of that and tax credits may cover another couple of thousand of so.

A graduate with a CS or engineering degree could pay back any remaining loans in no time. I do think the days of getting just any degree from any college no matter what the tuition costs and still getting ahead are over. Maybe in some states community colleges and 4 year public schools are more expensive? But here public schools and community colleges in particular can be great values for the money:

Nation's Parents Release Annual Ranking Of Top 50 "Perfectly Good State Schools" | The Onion - America's Finest News Source

This is satire but the Payscale reports on starting salaries by colleges actually show there is a lot of truth in the parents' financial logic.
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Old 10-27-2014, 04:58 PM   #72
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Despite all of this, the United States still offers a standard of living that satisfies virtually every need. It is my belief that older Millennials will seize on this reality and be one of the happiest generations of Americans in recent history.

Older Millennials, such as myself, graduated college right at the beginning of the recession and quickly adjusted our expectations about what a happy, comfortable life really is. We were forced to, and that's not such a bad thing.

The younger millennials, the ones who have either just graduated from college, or who may still be pursuing an education were largely shielded from this event through the financial support of their parents. They'll continue to waste precious retirement money on needless consumption unless another recession hits them while they're still young.

Right now, at the beginning of my career, I have a family with a wife, two children, and a single income less than $50k a year. No one in this family has a need that goes unfulfilled. After all the expenses, we still manage an ample emergency fund of approximately 1 years living expenses, no debt, and retirement savings that put me on track to retire between 50-55 using very conservative estimates.

Maybe I can't buy everything on the list that started this thread, but I don't need everything on that list in the first place. The inability to afford all of these things is not a condemnation of our economy, it's a cultural shift akin to a market correction; an economic reality that gets us back to a place we should have been all along... at least for my generation.
You definitely will do well because you get it. LBYM and pay yourself first.

Hopefully healthcare costs will get figured out sooner than later. That seems to be a deal breaker for many middle-class families.

Credit card debt also traps people. Been there done that. Not fun.
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Old 10-27-2014, 04:58 PM   #73
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Yes its hard to believe that middle-class wages on avg. in the USA were actually higher 21 years ago in the year that current college grads were born.

The median wage is lower now than it was 5 years ago and lower than 15 years ago.

Globalization and outsourcing brought our standard of living(lifestyle) way down.

Technology disruption in the job market is a big issue now for all jobs.

Anesthesiologist being replaced by robots and CRNAs is a interesting area.
The next 15 years will be interesting in the job market.

There is so much disruption now in the economy its hard to tell exactly how things will turn out.

Tesla,airbnb,Applepay,google self driving cars,Amazon,UPS using natural gas for their fleet,Digital classrooms,Uber,etc, are all going to change the job market in different ways.

I wonder what college is going to look like in 18 years for a baby being born today.

With my luck in a few years I will go to my in-network hospital and get screwed over with an out of network bill because I didn't know the anesthesiologist robot was an out of network robot.


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Old 10-27-2014, 05:10 PM   #74
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I think what is important to understand is that previous generations had a lot more leeway to make mistakes than the current generation. It's not like the Boomers were brilliant decision-makers and that they all optimized their life choices. They could go to college and flunk out, and it wasn't life-changing amounts of money. They could flunk out and still find a job that put them in the middle class. That isn't true for the Millenials.


There is less room for mistakes these days. It seems like most Boomers don't want to believe that their generation was extremely lucky, and that a large percentage of Boomers who were successful then would not be if they came of age today. They are looking at mistakes that all generations make when they are young and foolish, and thinking that they wouldn't make those mistakes today. They seem unable to remember that they made many of those same mistakes 40 years ago.

I'm an X-er, and I thought it was a little tougher for my generation, but we had it easy (economically) compared to today's generation.
I am right on the age line to be a X-er or Baby boomer.

When I graduated from high school globalization was really kicking in , so I have witnessed thousands of good paying white/blue collar jobs just disappear in my region.

So many young boomers have kind of experienced the same issues that millennials go through by having to change jobs frequently and not getting a real raise.
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Old 10-27-2014, 05:26 PM   #75
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With my luck in a few years I will go to my in-network hospital and get screwed over with an out of network bill because I didn't know the anesthesiologist robot was an out of network robot.


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Old 10-27-2014, 05:30 PM   #76
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I know I've posted this in some previous thread, yet it seems pertinent to this one. In the late 1970's, a quip was making the rounds due to the difficulty which many college graduates were having in finding jobs in their field:

"My daughter has her Master's,
My son, his PhD;
But Daddy is the only one
Who has a J.O.B."

In addition, younger "baby boomers" were already starting to blame the older ones for sucking up all the good jobs and pushing up housing prices.

Plus ca change, plus c'est le meme chose. I realize this is not a popular viewpoint.

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Old 10-27-2014, 05:43 PM   #77
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Yes its hard to believe that middle-class wages on avg. in the USA were actually higher 21 years ago in the year that current college grads were born.

The median wage is lower now than it was 5 years ago and lower than 15 years ago.

Globalization and outsourcing brought our standard of living(lifestyle) way down.

Technology disruption in the job market is a big issue now for all jobs.

Anesthesiologist being replaced by robots and CRNAs is a interesting area.
The next 15 years will be interesting in the job market.

There is so much disruption now in the economy its hard to tell exactly how things will turn out.

Tesla,airbnb,Applepay,google self driving cars,Amazon,UPS using natural gas for their fleet,Digital classrooms,Uber,etc, are all going to change the job market in different ways.

I wonder what college is going to look like in 18 years for a baby being born today.
The only place that I know to find historical data on median earnings is here:
https://www.census.gov/hhes/www/inco...orical/people/

There are a number of tables available that cut the numbers differently, so I'm not sure which one to use.

Looking at P-20, I see males going from $42,885 to $43,617 over the 21 years from 1992 to 2013. Females did better, going from $26,343 to $31,515.

Some of the female gain probably came from more hours worked and from different types of jobs. I could get more data by looking at more tables, but I'm going to guess that earnings have been mostly flat over the last 30-35 years -- not going up like we'd like, or like we saw in the previous decades -- but, not going down sharply, like the author of the OP piece claims.
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Old 10-27-2014, 05:45 PM   #78
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In addition, younger "baby boomers" were already starting to blame the older ones for sucking up all the good jobs and pushing up housing prices.
Well, that is much of the idea behind what some call "Generation Jones" -- a generation (really, half of a generation) which was "jonesing" for the deal their parents got but found that the deal was largely null and void by the time they got there. "Jonesers" are said to encompass the last few years of the Boom and the first few years of Generation X -- basically, mid 1950s to about 1966 or so. They are sometimes said to be the first cohort to not have it better than their parents.
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Old 10-27-2014, 06:04 PM   #79
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Such a relief to have one's own generational nickname.


A.

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Well, that is much of the idea behind what some call "Generation Jones" -- a generation (really, half of a generation) which was "jonesing" for the deal their parents got but found that the deal was largely null and void by the time they got there. "Jonesers" are said to encompass the last few years of the Boom and the first few years of Generation X -- basically, mid 1950s to about 1966 or so..
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Old 10-27-2014, 06:24 PM   #80
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Income is not linked to education. There is correlation, which is what they "sell". But there is NO causation.

Income can be accurately predicted by relative intelligence on aptitude tests (not grades).


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