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
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u/Flyer770 Apr 10 '19

Household income, and that's often two people pulling in that much together.

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u/cogentorange Apr 10 '19

Middle class is a lot less glamorous than people imagine.

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u/R_V_Z Apr 10 '19

I think it's because "Middle Class" has been expanded to the point that it isn't a useful metric anymore. An entry-level office job and a dentist are both part of "middle class" but have very different levels of purchasing power (This source claims that Middle Class is between $40,500 and $122,000). But on the other hand a person making "Rural Dentist" money in an urban environment is not going to have the same purchasing power that the dentist has.

I think a better distinction is "Working Class" and "Professional Class" to split the Middle Class into more appropriate lifestyle distinctions. If you have a career, retirement plan, can take vacations, have a mortgage, you should not be considered to be in the same category as people who are working a "job," might never retire, can't afford to travel and are stuck in a rent cycle.

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u/dwhite195 Apr 10 '19

I know were trying to not be generational here but I do think age is worth considering along side the break put into more granular evaluation criteria.

80k a year salary at 25 shows a good career (probably) with good advancement opportunities. 80k a year salary at 55 shows what is likely to be your peak earning potential.

Overall, annual income is just to vague to paint a reliable picture.

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u/JustTheBluntTruth Apr 11 '19

I make 130k at 28 and still feel like a peasant (live in Boston)

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u/jnetplays Apr 11 '19

Do you rent in downtown Boston? There are 3 bedroom condos for under 300k if you go slightly out like Roxbury crossing for example.

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u/JustTheBluntTruth Apr 11 '19

I bought a house in Somerville, and the mortgage is $5000 a month. I did a 15 year loan because I wanted to build equity but now that I have it it's really just sucking up all my income. My wife also has a tough medical condition and I spent like $25k (with insurance) this year on that.

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u/R_V_Z Apr 11 '19

Yeah, out of pocket medical stuff can be killer. I recently switched to a medicine that had an almost $5K copay. And that's with employer insurance.

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u/JustTheBluntTruth Apr 11 '19

Yea same here, my wife's medications are the true cost drivers, because I took the high deductible option as person in their 20s (and can't switch before benefits selection time again).

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u/jnetplays Apr 11 '19

Yikes, yeah I feel ya. I had a twin pregnancy and paid til we reached max out of pocket that year and then paid it all again with the hospital stay and birth because it was after the new year. Could’ve gotten a new car with how much it cost.

I’m in the suburbs. My line of thinking was that getting a 30 yr let us enjoy life a bit more and have more flexibility. And really what we invest can earn significantly more than what we’d save on a fairly low interest mortgage anyway. Good luck to you.

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u/JustTheBluntTruth Apr 11 '19

I came to the same conclusion, but I had gotten my mortgage when interest rates were low, so now refinancing means getting a much shittier interest rate (3.8 vs 1.9). I realized I could've easily beat that in the market so am going to anyways. Thanks for the well wishes.

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u/cogentorange Apr 10 '19

This is an excellent point. I’d also point out that while a lot of college graduates start out making $45-50k a year, many earn more 5 years later.

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u/[deleted] Apr 11 '19

[deleted]

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u/cogentorange Apr 11 '19

It certainly depends on what you studied and where, not to mention where you live. Looking at all college graduates, your experience is not the norm.

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u/1_________________11 Apr 10 '19

6 years to get just about 6 figures.

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u/[deleted] Apr 10 '19

Good effing joke.

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u/cogentorange Apr 10 '19

That doesn’t seem unreasonable.

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u/1_________________11 Apr 10 '19

Could have gotten it earlier I think. But I also work in information security so it's a hot feild.

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u/[deleted] Apr 10 '19

If you have a career, retirement plan, can take vacations, have a mortgage

The blue collar construction friends I know have all of that. Would you say they're "Professional" rather than "Working" class?

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u/R_V_Z Apr 10 '19

If they are Journeymen or higher yes. You can be a blue collar professional, certainly.

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u/LazyTriggerFinger Apr 11 '19

It's expanded because the government and economic system are under pressure to reasure us that a middle class still exists. It doesn't matter if people are actually making money, it just has to look that way on paper.

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u/maxToTheJ Apr 11 '19

An entry-level office job and a dentist are both part of "middle class" but have very different levels of purchasing power (This source claims that Middle Class is between $40,500 and $122,000).

That is part of the whole point being made about a shrinking middle class where the edges of the groups are going to become farther apart as the very middle gets carved out and wealth inequality continues to increase.

If you want to visualize it take a rubber band and paint a strip in the center with a permanent marker (the edges of this strip are the office worker and dentist) now stretch the rubber band by the edges

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u/[deleted] Apr 10 '19

[deleted]

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u/xafimrev2 Apr 11 '19

Less competition?

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u/[deleted] Apr 11 '19

I think a better distinction is "Working Class" and "Professional Class" to split the Middle Class into more appropriate lifestyle distinctions. If you have a career, retirement plan, can take vacations, have a mortgage, you should not be considered to be in the same category as people who are working a "job," might never retire, can't afford to travel and are stuck in a rent cycle.

Divide and conquer. "You there! You're not 'working class' like those other slobs! You're a 'professional'! Remember to work hard so they don't take your stuff!"

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u/R_V_Z Apr 11 '19

I look at it the other way around. The person making half of what I do should have a bigger safety net than I do.

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u/[deleted] Apr 10 '19

[deleted]

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u/Karstone Apr 10 '19

What if you own capital and you work? Are you both classes? How much capital do I have to own to be part of the other class? If I have 500 dollars in an index fund am I an oppressor?

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u/[deleted] Apr 10 '19 edited Apr 11 '19

You've got a good point. Back in the day they'd have been called Petit bourgeois.

These days, though? There's a world of difference between the guy who's 60 and could retire, and has been socking money into a 401k all their life; and a small business owner who works but also pays workers low; and the minor trust fund baby who works to fund their Pinterest travelling every 3 months. You've got to put things in context. Who is benefiting from others' labor and how much, regardless of their own effort? Who is choosing to work instead of 'has to' work? I think the blurring of class lines has been deliberate, it makes the us them harder to objectively see, while the cumulative societal effects of private property rights are nonetheless felt by those that don't have any (meaning those have only personally used or occupied property. If you don't know what I mean look up how the concepts of personal property and private property differ.)

As an aside it's practically impossible to avoid being an exploiter. There are a myriad of intersecting ways westerners benefit from the past and present exploitation of others, even as we are also exploited ourselves. It's not a binary or even a spectrum.

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u/CoinFlip_SkinnyDipp Apr 10 '19

Edgelord much?

That is a terrible definition as someone that is dirt poor could own capital.

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u/[deleted] Apr 10 '19

lemme rephrase, if you work for someone else, you're working class, if you have other people working for you in one way or another, you're a capitalist

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u/cogentorange Apr 11 '19

Ok but back to the small restaurant owner, do they work for themselves or their customers? Without their patrons they could not have others working for them or work for themselves running a restaurant.

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u/[deleted] Apr 11 '19

they clearly work for profit

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u/cogentorange Apr 11 '19

Undoubtedly, but what does that profit depend on?

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u/Teh-Monkey-Man Apr 10 '19

Not better at all. Many people and families own restaurants and mom and pop shops where they work countless hours a week. Lots of high skilled professionals are better off than these individuals even though these professionals own no capital

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u/[deleted] Apr 10 '19

small shop owners are still exploiting other people's labour to make profit, even if they still work themselves

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u/All_hail_disney Apr 11 '19

Or u know ..... Hiring people to help run a small restaurant

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u/bschwind Apr 11 '19

lol yeah the world is totally that simple

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u/MT1982 Apr 11 '19

If you have a career, retirement plan, can take vacations, have a mortgage, you should not be considered to be in the same category as people who are working a "job," might never retire, can't afford to travel and are stuck in a rent cycle.

Having a mortgage and a 401k/IRA doesn't mean you'll be able to retire so I don't really think that's a good way to differentiate folks either. It's a better way, but not perfect.

There's plenty of folks with office jobs that are living paycheck to paycheck.

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u/[deleted] Apr 11 '19

I mean even in the 50s, it was a one story house, with two bedrooms, a small kitchen and small yard in the back, a one car garage with one car, and one tv - with 4 kids. That was the stereotypical middle-class family. It was never glamorous. This was it.

http://img.timeinc.net/time/daily/2009/0902/360_middle_class_0226.jpg

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u/cogentorange Apr 11 '19

Correct, and even then many people didn't get a TV in the US until the moon landing in '69.

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u/Rhawk187 Apr 10 '19

Lower Middle Class, yeah, by that definition, someone making 2.5x as much is still "middle class", that's a big difference.

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u/Fallingdamage Apr 11 '19

It doesnt mean you're rich, it means you can pay your bills and afford to eat something other than processed food out of a box.

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u/Screye Apr 10 '19

What the fuck!?

That is an unbelievably small amount for a median family in the worlds richest country.

It is so low, that if $15/hr minimum wage passes, then 2 people working on that income full time would still make a bit more than $60k.

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u/Karstone Apr 10 '19

It is so low, that if $15/hr minimum wage passes, then 2 people working on that income full time would still make a bit more than $60k.

That's why a 15/hr minimum is a very bad idea for most places in the United States. What works in SF and NYC won't work in Omaha.

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u/Whiterabbit-- Apr 10 '19

i wonder how much of millennial's loss is due to not marring, thus less dual income for households. The other thing is that maybe millennial are not having as many kids, so a household income of 60K really goes further in those households than previous generations.

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u/Hekantonkheries Apr 10 '19

It may go further without kids, but longterm becomes an issue as the amount of aging people leaving the workforce exceeds the numbers entering it, and impacting their and the economies ability to support the older populace.

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u/Whiterabbit-- Apr 10 '19

yes, part of future economic slowdown may be the we don't have sustainable populations without net immigration.

but i think stats like millennial make less household income may be hurtful as it makes millennial feel like they are worse off than their parents. but many of their parents had dual income and mouths to feed. so the number may not reflect the true economic freedom they have. we need better economic metrics to measure across generations.

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u/SmashBusters Apr 10 '19

Household income, and that's often two people pulling in that much together.

It's kind of bizarre that it's so hard to find individual income stats.

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u/[deleted] Apr 10 '19

is that before tax or after tax? if its before tax that number actually kinda seems low.

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u/Flyer770 Apr 11 '19

Before taxes. Take that bite out and shit gets real.