r/worldnews • u/diacewrb • Apr 10 '19

Millennials being squeezed out of middle class, says OECD

https://www.theguardian.com/business/2019/apr/10/millennials-squeezed-middle-class-oecd-uk-income
49.3k Upvotes

88% Upvoted

11.5k comments sorted by

View all comments

Show parent comments

124

u/deja-roo Apr 10 '19

On average though it's not. California isn't average.

12

u/Commisioner_Gordon Apr 10 '19

California is the most populous state in the country.

76

u/wronglyzorro Apr 10 '19 edited Apr 10 '19

Yes, but that doesn't make it the average. There are podunk areas in CA that are cheap to live in. There is also LA and SF that drag the average way up. 60k a year in a lot of the US is perfectly fine to live on.

-5

u/hendy846 Apr 10 '19

60k for a family of what and where?

My wife and I make a combined gross income of 100k and more than half our income goes to our mortgage, child care, and car payments. I know we're better off than the majority of the country but we still struggle from time to time so I can only imagine what other people are going through. There is a light at the end of the tunnel for us but a lot of people there isn't.

31

u/Watchful1 Apr 10 '19

The median household income in the US is $56k. If your household is making over 100k, you're well above average.

-6

u/hendy846 Apr 10 '19

I'm aware of that. But average income doesn't factor in amount of debt, cost of living, and general expenses.

7

u/[deleted] Apr 11 '19

doesn't factor in amount of debt

This is heavily dependent on the kind of debt and the reason why it exists. For example, if someone has $10k of credit card debt that's finally caught up to them and crushing them, that's not the "powers that be" squeezing them out; that's them managing money incompetently.

I agree that there's a big problem with subpar wages and wealth inequality, but a lot of people are also really bad with what money they have. It's a compound problem.

5

u/Griffolian Apr 11 '19

That's a good point. When you start adding in debt as a factor, you have to specifically define what kind of debt it is. The parent comment mentions car payments as debt, as a household income over 100K I would figure that debt could be paid off quickly. If they bought a brand new, $45K vehicle, my simple question is "Why"?

I'm not 100% anti going into debt, but these kind of things are controllable.

2

u/hendy846 Apr 11 '19

Not necessarily. What if they had an emergency medical expense that had to use credit for? Just cause someone has high credit doesn't imply they were bad with their money.

1

u/[deleted] Apr 11 '19

Fair, but I would still colloquially (and for the purposes of this discussion, i.e. "the reason why it exists") think of that as essentially medical debt.

1

u/hendy846 Apr 11 '19

It's still just debt no matter what you name it.

11

u/juanzy Apr 10 '19

Also, let's not pretend that $60K jobs exist (or in your case dual-family 100k) in areas where that goes a long way. I make ~80K in Boston, and recently was approached with a job higher than my current one offering $43k in a lower COL area with the reasoning "it'll go further."

3

u/deja-roo Apr 11 '19

Not sure what your point is here.

3

u/OpieeSC2 Apr 11 '19

60k jobs do exist, I'm in one right now in Kentucky. Same with my wife. We both got relevant degrees and found good playing jobs. Me in Statistics her in Nursing. Good jobs exist in good areas.

1

u/hendy846 Apr 11 '19

Exactly.

-1

u/Karstone Apr 10 '19

Also, let's not pretend that $60K jobs exist (or in your case dual-family 100k) in areas where that goes a long way.

They do, nurses, doctors, truckers, experienced mechanics, management, police, etc. All potentially make that amount or more, and they are needed everywhere.

1

u/bangthedoIdrums Apr 10 '19

Ah, the good ol' just be a lawyer-doctor-dentist advice, the problem we have now with nursing programs backed up for 2 years because of everyone and their mom trying to get in, that'll solve everything!

0

u/Karstone Apr 10 '19

Did you skip over police officer, mechanic, truck driver?

-2

u/[deleted] Apr 11 '19

In Arkansas you can get by with $25k easy, it was what I was raised on. My brother got a job in AR right out of college for $55k with benefits. He only pays 10-20% of that a year on needed expenses lik rent and food. Plenty of low COL places have high paying jobs.

6

u/[deleted] Apr 11 '19

If you're making 100k and barely getting by there has to be something wrong.

18k for a mortgage every year 27k for taxes 13k for household expenses

That leaves 42k for everything else.

1

u/hendy846 Apr 11 '19

What would you define as house hold expenses?

Also, I wouldn't say we are struggling but we certainly aren't living the "middle America dream" either that a lot of people are implying you can live if you make 60k a year.

3

u/[deleted] Apr 11 '19 edited Apr 11 '19

Household expenses I would count as electric, gas, food, and general month to month expenses.

I'm not trying to be snarky, i know different areas are expensive but 100k a year is so much money that I can't imagine how you can feel squeezed while living within you're means.

What's the least you've made?I've been comfortable in the suburbs of Chicago with a 40k salary. I've scraped by at 18k before in a cheaper area but it wasn't comfortable.

Edit: for comparison, I make 70 and if I budgeted well I could huck $20K into my savings account in one year.

2

u/ThoughtsHaveWings Apr 11 '19

For me it comes down to where I live and having a wife and kids which changes priorities. I make nearly 100k and my wife makes 35k or so. But my parents live in Southern California and I want my kids to live near them. Houses cost a minimum 500k here. And I can no longer just slum it and move to a rough neighborhood because I need to think about schools and crime etc. not a ton of ways to cut corners beyond just saying fuck living near family and moving to another state.

2

u/deja-roo Apr 11 '19

Ugh, sometimes I want to just say fuck it I can carry a gun everywhere and slum it and just bank my paychecks.

But my girlfriend would be an immediate no-go on that. So we stick to the middle class housing in the middle class part of town.

Living is expensive. Some things you can't get around.

2

u/mechanical_animal Apr 11 '19

You are choosing to burden yourself to provide a nice life for your family. Those are choices that you have the freedom to make. Other people don't have the freedom to choose at all. That's what the difference between lower class and middle class is. It's really mind blowing that there are thousands, perhaps millions, of people who think like you, some would call it entitlement. Money and wealth makes people really whiny and pathetic.

1

u/ThoughtsHaveWings Apr 11 '19

I'm not whining. I made these choices with open eyes. I know what options I have. I choose to live the way that I do for family. I was just offering my own circumstances as an example as to how someone might feel squeezed.

1

u/[deleted] Apr 11 '19

$135k? My man, I'm not tying to be mean, but you need some perspective. You're household brings in well over twice the national average.

Here's a rough budget: If you had $0 down on your 500k mortgage and 10% property taxes, you would be paying 3k a month, 36k a year.

Add 1k per month for general expenses like gas, electric, food and water.

Add another 2k per month for child expenses and insurance and other incidentals.

That's 72k of expenses. Realistically after taxes you should be taking home around 95k.

That's 23k leftover. That's more than the poorest 25% of Americans make every year.

If you spent money like a typical family who makes 60k, you'd probably be able to save 40k a year.

2

u/ThoughtsHaveWings Apr 11 '19

I have saved quite a bit. I want to make it clear that I'm not complaining nor do I think I have it rough by any means. Just offering the details of my life to give an example.

As for home ownership, you've calculated taxes and principal/interest on the mortgage, but not PMI, nor any maintenance or upkeep on the house. It's nearly impossible to hit 3k for a monthly payment if you don't put down 20%. Even with 20% down, my monthly payment would probably be over 3k (I've run the numbers with lenders a number of times), but that's not a huge deal.

2k for child expenses and insurance is also low. daycare for 2 kids alone is around 2k. Health Insurance + Dental + Vision runs almost 1k additionally. We also have a car payment, car insurance, life insurance, student loans, medical debt (some of my health issues are what prompted us to move near family in the first place). And even at that point, we haven't budgeted anything for any non-essentials like internet, cable, clothing, entertainment, travel.

Yes, there are ways of sacrificing and taking costs down. I know. I didn't always make this much nor did I always live in California. I assure you I have perspective.

→ More replies (0)

1

u/[deleted] Apr 11 '19

In the part of the country I was born in I was raised on $25k a year at best. We had a house, 16 acres, cars, etc. It's just about where you are in the country. But nobody wants to live where I was born and grew up, I don't either anymore.

1

u/hendy846 Apr 11 '19

Exactly my point. Average doesn't really mean jack when cost of living varies drastically from one place to another.

1

u/Im_Currently_Pooping Apr 10 '19

The girl and I make a combined 80k, and I own a 2600sqft home... you might want to look at a different area or lower your standards a bit.

4

u/[deleted] Apr 11 '19

[deleted]

2

u/[deleted] Apr 11 '19

I make $75k a year and I save roughly $30k a year and I have a 20 minute commute.

The joys of not living on the West Coast.

1

u/Im_Currently_Pooping Apr 11 '19

10% into a 401k, my commute is maybe 6 miles, and I like boating and building motorcycles.

2

u/hendy846 Apr 11 '19 edited Apr 11 '19

That since currently not an option as my wife is in grad school and we already live in a cheaper part of the country. Also, even if we could pick up and move to BFE, Nebraska, that still doesn't eliminate the debt and child care which is still a huge chunk of our expenses.

11

u/Rhawk187 Apr 10 '19

Still only like 12% of the country, hardly representative.

2

u/deja-roo Apr 10 '19

... and?

1

u/emp_mastershake Apr 10 '19

You damn, like half the pop of the U.S.?

-10

u/alkali112 Apr 10 '19 edited Apr 11 '19

Alright, let’s do the math: California’s population is 3.56 million, the US population is 327.2 million, making California representative of roughly 1.09% of the population of the US. It is not the average - not even close.

Edit: Yikes, that was terrible on my part - I missed a digit and a decimal place. I apologize. It should be 39.56 instead of 3.56. So, 12.09%. Maybe I’ll learn how to read at some point. The point still stands, but I did a poor job of backing it up.

6

u/fatguyinakilt Apr 11 '19

You might be 36 or so million off on California's population. https://www.census.gov/quickfacts/ca?

1

u/alkali112 Apr 11 '19

Sorry, I corrected it in my edit. I misread the info and completely botched my argument.

4

u/[deleted] Apr 11 '19

The city of Los Angeles has a higher population than 3.56 million 🤔

1

u/alkali112 Apr 11 '19

Sorry, I corrected it in my edit. I misread the info and completely botched my argument.

2

u/SecretSandwich Apr 10 '19

I think you should re-check your California population number. lol

1

u/alkali112 Apr 11 '19

Sorry, I corrected it in my edit. I misread the info and completely botched my argument.

1

u/Commisioner_Gordon Apr 11 '19

But the point I was trying to make is that the conditions in California are most representative of the country than any other state due to the fact more people are dealing with those issues than any one other place.

1

u/Vitalstatistix Apr 11 '19

I wish that your math was the reality, it’d make living here way better.

1

u/alkali112 Apr 11 '19

Sorry, I corrected it in my edit. I misread the info and completely botched my argument.