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 LordofHats wrote:

Prestor Jon wrote:


What?! Companies have always paid payroll taxes. Every pay stub from every job you’ve ever worked has had payroll tax deductions on it.
https://www.fool.com/taxes/2018/06/24/the-us-payroll-tax-in-2018-what-you-need-to-know.aspx

What is's saying I think is that the tax burden of payroll taxes is paid by the employee, not the company they works for. That is, the employee is the one who actually loses money in payroll tax, not the company since the company just deducts its end from employee wages and then the government takes another cut from the employee because for some baffling reason there's no actual federal law governing how employers divide up these costs despite the presumed presumption that employee and employer are both paying equal amounts. In practice company's pay very little in payroll tax out of their own coffers.

Employers pay as much FICA tax as the employees. They just get to write it off as an expense.

We have had raises in our company here steadily since 2016. The first batch only hit certain pay grades back in 2015, I believe, but over the last two years every pay scale saw increases. Not to mention that we got considerably larger bonuses this year. I won't pin it on the tax laws completely, but between that and a marked demand for our engines, we've been getting raises, bonuses, and overtime fairly regularly. Contrast this with 2013 where I got to take an involuntary unpaid vacation for a month.

Mario wrote:

Easy E wrote:Is this normal? NO. Therefore, what else is unique about the present time to cause this stagnation?

* If I remember correctly a lot of the jobs after the 2008 depression where not the good type of jobs. Low benefits, low job security, lowly paid, easy to fire people.
* There's also the fact that interest rates are rather low since then so companies have an easier time getting the money they need but it also means our wages are worth less.
* Then outside investors have also been buying real estate in economically important areas, that means the working class has to spend more of their wages on housing just to keep up. All the while rural jobs have been declining which in turn puts even more pressure on rents in metropolitan areas.
* social safety nets: All kinds of benefits have been cut. Stuff that people working in low earning jobs relied to keep their heads above the water
* In the US: I think health insurance costs have also been rising faster than wages.
* In the US: Student loan, I think those have also been rising faster than wages.
* In the US: I think certain segments of the population have already relied a lot on credit to survive
* Fewer unions, thus less power to protect workers.
* Certain jobs have been automated away or made so easy that you can hire anyone to do it.

A combination of all that (and more) pushes the power balance further towards companies and away from workers (just look at how Amazon can treat its warehouse workers because of those issues) and as a result companies don't have incentives to raise wages for a significant segment of their (easily replaceable) workforce.

All good points. In addition, Government has been increasingly business friendly and less labor friendly across the board in the US. I do not know about the EU or other countries.

https://nypost.com/2018/06/23/why-the-middle-class-cant-afford-life-in-america-anymore/

Why is it everytime I see one of those articles, they tend to talk about places as if everyone lives in the highest costing cities of America?

Not to devalue the message of it, but it does seem to be so very common.

Because cities have the highest concentration of people?

 d-usa wrote:
https://nypost.com/2018/06/23/why-the-middle-class-cant-afford-life-in-america-anymore/

Here is the key quote from that article:

“Middle-class life is now 30 percent more expensive than it was 20 years ago,” Quart writes, citing the costs of housing, education, health care and child care in particular. “In some cases the cost of daily life over the last 20 years has doubled.”

It would be interesting to graph those costs growth along with wage growth to see the variance.

Of course, I am sure we will all hear about how a middle class life now includes flat-screen TVs, Ipods, and such. Even though those items have been decreasing in costs while staples like food items have increased.over similar timespans.


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 ZebioLizard2 wrote:
Why is it everytime I see one of those articles, they tend to talk about places as if everyone lives in the highest costing cities of America?

Not to devalue the message of it, but it does seem to be so very common.

Because that is where you find the middle-class and middle-class jobs?

Look around most rural towns and you will see that there are very few Middle-Class jobs, therefore articles about the Middle-class tend to be about people in the City.

Not what I said, are all cities up there with San Francisco, New York, and San Jose when it comes to the cost of living expenses?

Unless every place is that expensive and I've just never known such which is possible.

 d-usa wrote:
https://nypost.com/2018/06/23/why-the-middle-class-cant-afford-life-in-america-anymore/

A 1500 square foot house? That is a massive house! Of course that is expensive!
There is a simple solution to that problem:

A nice, comfy apartment. Much cheaper, much more efficient, much better for the environment.

 Easy E wrote:
In addition, Government has been increasingly business friendly and less labor friendly across the board in the US. I do not know about the EU or other countries.

It's the same everywhere just to different degrees. We went in the same direction of "business friendly" because it's better for the economy which is true because companies have a bigger impact when it comes to the raw numbers. Thankfully we have certain protections that can't easily removed. I can't be randomly fired like in some US states, I won't lose my 30 vacation days (and unlimited sick days) plus national holidays, my employer can't imply/force/push me into working more hours or to do unpaid work. My health insurance company can't find bs excuses to drop me if I were to accidentally become a reason for them having to spend money. But around all those more fundamental issues they have been chipping off bits and pieces. Unemployment benefits and social safety nets are supposedly much worse than before (and quite harsh). Companies get some benefits to stimulate the economy, and so on.

But with all that "good for the economy" talk nobody asks how the workers are doing with all those changes. It's just a slow slide downwards when it comes to prosperity. You don't really feel it from one year to another (except in hasher moments) but more and more people living on the edge of financial disaster get hit and then it's a hard crawl back up because there are fewer safety nets and as a result social mobility is declining.

There's this equation of "good for the economy" = "good for the workers" but that's not exactly true for some decades now yet politicians still make a lot of decisions with the assumption that it's true. And it's hurting people, especially the poorer ones.

Mario wrote:
There's this equation of "good for the economy" = "good for the workers" but that's not exactly true for some decades now yet politicians still make a lot of decisions with the assumption that it's true. And it's hurting people, especially the poorer ones.

One thing that springs to mind is how everything is just magic money that doesn't exist these days. Politicians (and workers) still think of physical things - a place to live, a factory where you work and cash earned - while the investors see numbers on a screen they can double by buying a succesful business, applying for all possible government subsidies and then selling it off in pieces (plus laying off the workforce) on the date it becomes possible without having to pay anything back. At no point did the owners see any real cash or even visit the place. And on the off chance they actually made a loss (say the sell-off was leaked and stock dumped too cheaply) and the banks they took loans from have to deal with it the same government pays.

Workers are asked to accept less pay or a lower raise so the economy works, while at the same time the numbers guys taking the profits also dip their hands into the money those workers pay as taxes. You basically get robbed both as an individual and a society.

 Iron_Captain wrote:
A 1500 square foot house? That is a massive house! Of course that is expensive!

I wouldn't call it massive. Then again, our definitions probably differ quite a bit due to my being in the western USA and you in Europe. My own house is 1677 square feet and is pretty typical for the area and current construction style. The master bedroom is pretty roomy, though.

That's too much house, with my income I'll be lucky to afford a single bedroom/bathroom house with no garage or basement.

 Breotan wrote:

 Iron_Captain wrote:
A 1500 square foot house? That is a massive house! Of course that is expensive!

I wouldn't call it massive. Then again, our definitions probably differ quite a bit due to my being in the western USA and you in Europe. My own house is 1677 square feet and is pretty typical for the area and current construction style. The master bedroom is pretty roomy, though.

The split is more urban vs rural than necessarily US/Europe. Smaller towns in Europe tend to build apartment rather than detached/row houses, though.

I live on a small-ish town of maybe 25.000 people, and the split between older town houses and detached/semi detached modern houses vs. apartments is maybe 50-50% of the population.

Anything over 50K which is still a small town and the proportion of apartments shoots up to 80-90%. In the US it's not until towns get much bigger that you see big apartment/condo developments, over here even in very small villages under 10K you will see newer developments being blocks.

 Breotan wrote:

 Iron_Captain wrote:
A 1500 square foot house? That is a massive house! Of course that is expensive!

I wouldn't call it massive. Then again, our definitions probably differ quite a bit due to my being in the western USA and you in Europe. My own house is 1677 square feet and is pretty typical for the area and current construction style. The master bedroom is pretty roomy, though.

And ofc, definitions may wary in other ways too. Europeans (usually) don't specify how many bedrooms an apartment or house has, but that seems to be very important when selling in the US. We're more concerned with how many rooms it has in total. Also the reporting on square feet or meters could be different - any non-living areas like storage space, cellar room or such is usually not mentioned in the total.

So for example where I live would be sold as a two-story house with two rooms upstairs, three rooms downstairs, a WC on both floors plus a cellar with various storage space (and the sauna with shower room). The "living" area to ask a price for would be maybe 120 square meters, but the cellar is another 60.

I teach in a secondary school in London and can barely afford living costs, like many of my colleagues. I’m only treading water until I decide to leave, a current work in progress. I can’t really put much into savings each month and I’ll never afford a house in London because they start at £250K for some gakky flat. I’ll need a £50K deposit minimum if the mortgage payments will be close affordable.

All the teachers, nurses and staff in other professional, essential services are priced out. That’s why so many people, like myself, do a few years and leave, long term prospects are terrible. But locals complain that their childrens’ schools struggle to recruit good quality staff and don’t retain staff long term, but bask in the comfort of the colossal price on the home they own. One of the most obnoxious thing about wealthy middle classes are their preoccupation with house prices and anything that could affect them, frequently any opposition to anything comes down to the impact on their house prices regardless of any intention to ever sell.

My school was recently rated Outstanding again, and has been for many years, yet there’s been at least one position in my dept that has been covered by long or short term supply for the whole three years I’ve been here. God knows how the difficult schools manage.

Middle class profession it is only in name. Wages are poor and living costs astronomical.

In certain regions even the rich have it quite hard:

https://shift.newco.co/letter-of-resignation-from-the-palo-alto-planning-and-transportation-commission-f7b6facd94f5?gi=d836d38d8416#.w7km62yzy

 Howard A Treesong wrote:
I teach in a secondary school in London and can barely afford living costs, like many of my colleagues. I’m only treading water until I decide to leave, a current work in progress. I can’t really put much into savings each month and I’ll never afford a house in London because they start at £250K for some gakky flat. I’ll need a £50K deposit minimum if the mortgage payments will be close affordable.

All the teachers, nurses and staff in other professional, essential services are priced out. That’s why so many people, like myself, do a few years and leave, long term prospects are terrible. But locals complain that their childrens’ schools struggle to recruit good quality staff and don’t retain staff long term, but bask in the comfort of the colossal price on the home they own. One of the most obnoxious thing about wealthy middle classes are their preoccupation with house prices and anything that could affect them, frequently any opposition to anything comes down to the impact on their house prices regardless of any intention to ever sell.

My school was recently rated Outstanding again, and has been for many years, yet there’s been at least one position in my dept that has been covered by long or short term supply for the whole three years I’ve been here. God knows how the difficult schools manage.

Middle class profession it is only in name. Wages are poor and living costs astronomical.

I thought the wealthy in London tended to send their children to boarding schools in Rutland and so on?

I just got an article sent to me about record numbers of people are quitting there jobs and swapping up to better paying ones.

http://www.latimes.com/business/la-fi-quit-job-20180710-story.html

The proportion of American workers who quit their jobs in May reached the highest level in 17 years, a sign that more people are confident they can find a new job, probably at higher pay.

Businesses advertised fewer jobs in May than the previous month, but the tally of open positions still outnumbered the ranks of the unemployed for the second time in the last two decades, the Labor Department said Tuesday.

The figures reflect a strong job market driven by optimistic employers seeking to expand their workforces. Last week's jobs report showed that businesses hired workers at a healthy pace and the unemployment rate remained very low, at 4%.

The share of workers quitting their jobs reached 2.4% in May, the highest level since April 2001. More quits are a sign of a strong job market because workers typically leave jobs for a new one that pays more. Workers who switch jobs see larger raises than those who stay in the same position, government data show.

Perhaps this will finally stir some wage growth?

I’ve always been ambivalent toward work requirements for social safety nets, but lately I’ve become more opposed. We already have an issue with corporations using these safety nets to pay people below a living-wage and using tax payer money to subsidize the existence of their workforce. But with more work-requirements I feel like it’s just a way for corporations to force the working poor into filling their jobs. Rather than raising wages, getting more applicants, and reducing the need for unemployment benefits and welfare, we end up with a system that forces people to work for corporations for a non-competitive pay while still needing welfare benefits.

The whole "Wal-Mart is the largest recipient of welfare benefits" thing comes to mind.

 d-usa wrote:
I’ve always been ambivalent toward work requirements for social safety nets, but lately I’ve become more opposed. We already have an issue with corporations using these safety nets to pay people below a living-wage and using tax payer money to subsidize the existence of their workforce. But with more work-requirements I feel like it’s just a way for corporations to force the working poor into filling their jobs. Rather than raising wages, getting more applicants, and reducing the need for unemployment benefits and welfare, we end up with a system that forces people to work for corporations for a non-competitive pay while still needing welfare benefits.

Work requirements only work if you also require businesses to hire and give a minimum number of hours. Otherwise you're just hurting the very people the safety nets are intended to help.

 ZebioLizard2 wrote:
Not what I said, are all cities up there with San Francisco, New York, and San Jose when it comes to the cost of living expenses?

Unless every place is that expensive and I've just never known such which is possible.

Yes. . . Take for instance, this contrast: I live near Tacoma, WA. . . a city that is expensive to live in, but not as much as Seattle is. I bought my home 4 years ago for around 250k. It's 2400 sq. ft. situated in a suburb. There's a crazy amount of new construction going on, due to political stuff involving taxes which means that more businesses are actually coming here, more people are hiring, etc. (hell, there's been numerous articles talking about a severe shortage of line chefs for restaurants, and while I'm no economist, apparently restaurant usage is a VERY good barometer of a local economy. . . so, business is boomin' here) which has driven the value of my home up considerably.

How, take how much I paid for 2400 sq ft. and compare that to my cousin, who is listing their 1500 sq. ft. home down in my home state of Oregon. And this house is not in the Portland metro area at all. For the most part, the remaining costs of living in Oregon are still lower than they are here, but housing is ridiculous. EDIT: My cousin is listing their house for 250k, which is fairly average in that city.

Additionally, among all the new single-family home construction, there's a lot of new apartment construction as well. . . The problem is, literally every one of them starts off with a studio at about 900 per month, with 2 bedroom apartments being higher than my mortgage.


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 feeder wrote:
The whole "Wal-Mart is the largest recipient of welfare benefits" thing comes to mind.

Agreed. I'm reminded of the many studies that outline the "walmart effect" that occurs in many small towns across the country.

For those unfamiliar with those studies, basically speaking, within 5-10 years of a Walmart or Walmart Supercenter opening, most of the previously established, locally owned businesses will be boarded up and gone. What happened in one Wisconsin town is reflected many times over across the nation as well. That is, their town's unemployment rate went down, but their welfare costs to the state more than doubled in that time.

Combine all that with the number of times that Walmart "negotiates" with local and state governments to not pay any taxes on that property, and you can see why it's a recipe that only benefits a select few.

nareik wrote:

 Howard A Treesong wrote:
I teach in a secondary school in London and can barely afford living costs, like many of my colleagues. I’m only treading water until I decide to leave, a current work in progress. I can’t really put much into savings each month and I’ll never afford a house in London because they start at £250K for some gakky flat. I’ll need a £50K deposit minimum if the mortgage payments will be close affordable.

All the teachers, nurses and staff in other professional, essential services are priced out. That’s why so many people, like myself, do a few years and leave, long term prospects are terrible. But locals complain that their childrens’ schools struggle to recruit good quality staff and don’t retain staff long term, but bask in the comfort of the colossal price on the home they own. One of the most obnoxious thing about wealthy middle classes are their preoccupation with house prices and anything that could affect them, frequently any opposition to anything comes down to the impact on their house prices regardless of any intention to ever sell.

My school was recently rated Outstanding again, and has been for many years, yet there’s been at least one position in my dept that has been covered by long or short term supply for the whole three years I’ve been here. God knows how the difficult schools manage.

Middle class profession it is only in name. Wages are poor and living costs astronomical.

I thought the wealthy in London tended to send their children to boarding schools in Rutland and so on?

The really rich do, but a lot of well-off middle class parents make sure to buy a house weel inside the catchment area of a very good state school. This saves the huge fees of private schools and also ensures possession of a desirable house which can be sold at a profit when your children leave school.

Here is an article from The Guardian, explaining a bit about the wages crisis.

TL/DR: 40 years of business-friendly, worker-hostile policy (such as attacking unions) in the USA and UK have worked.

 Kilkrazy wrote:

The really rich do, but a lot of well-off middle class parents make sure to buy a house weel inside the catchment area of a very good state school. This saves the huge fees of private schools and also ensures possession of a desirable house which can be sold at a profit when your children leave school.

We're not in London, but we basically did this. We moved in to the catchment area of the best school in our neck of the woods - cost us an extra £50k for a smaller house than we moved from if I remember rightly, but still a better deal than paying £3000 a term for the local private school.

 Ensis Ferrae wrote:


How, take how much I paid for 2400 sq ft. and compare that to my cousin, who is listing their 1500 sq. ft. home down in my home state of Oregon. And this house is not in the Portland metro area at all. For the most part, the remaining costs of living in Oregon are still lower than they are here, but housing is ridiculous.

How much is your Brother listing for?

Also, the "Wal-mart" effect is interesting. I am wondering how the "Amazon Effect" will play out.

As a local small business owner myself, I feel the effect of that just as much as Wal-mart. Meanwhile, my fellow small-businesses owners spend all of their time trying to fight each other instead of doing something together to protect/defend against these larger corporations eating our lunch.

 Easy E wrote:


How much is your Brother listing for?

Also, the "Wal-mart" effect is interesting. I am wondering how the "Amazon Effect" will play out.

As a local small business owner myself, I feel the effect of that just as much as Wal-mart. Meanwhile, my fellow small-businesses owners spend all of their time trying to fight each other instead of doing something together to protect/defend against these larger corporations eating our lunch.

Lol. . crap, forgot that part. . . my cousin is listing for the same price as my house was, so, 250k for "half" the house (I know it's not actually half but close enough)

I chuckled when I read about 900/month being high rent for an apartment. The cheapest apartments in my area (San Diego suburbs) start at 1450 for a 1-bedroom. And that is not for a nice or safe location.

 NinthMusketeer wrote:
I chuckled when I read about 900/month being high rent for an apartment. The cheapest apartments in my area (San Diego suburbs) start at 1450 for a 1-bedroom. And that is not for a nice or safe location.

My god, that is a lot of money.

TBF to California the minimum wage is $11.