Truck costs are a much larger % of income..........

[David Weaver]

Im just the villiage idiot but I dont need any rule of 72 to see that there is far less left over from my gross that matches 3 decades ago. Then we go to food, electric, heat, taxes, and so on. They are all the same.

There are things people did in the 1980s that I don't see many people doing now. as a kid, we turned our heat off at night for a 6 hour span. If you woke up during that time, tough. We didn't have air conditioning, neither did half of our vehicles (my mother's cars had it, but dad's sure didn't), we didn't go to the doctor unless something was really wrong, we watched network TV, most of my clothes came from yard sales, we got a lot of food in black and white boxes (if you want to talk about something that's definitely improved - generic and store brand food is head and shoulders above). The farthest we ever went for vacation was 4 hours. Kids did not get unscheduled presents back then, either. If you did, it was only for milestone items like learning to ride a bike, but you might have to wait until christmas or birthday to get one.

My parents had more nominal income than I do (that's without adjusting for inflation) and that's how we lived. They had more because both of them worked, and they also worked part time in their off hours.

Time has been less kind to tradesmen and dealer mechanics, but I also don't remember anyone back then working for $45 an hour. We had a master plasterer for the park service (a restoration plasterer, the finest plasterer I've ever seen) redo some of the plaster in our house on his off hours for $14 an hour, which is what the park service paid him on the clock. The plumber's service fee back then was $30 to come out (this is central PA).

I think if people were willing to live on what we lived on back in the 1980s (in terms of items and gadgets, etc, buying used clothes, etc) you could live awfully well.

My grandparents' habits made my parents look like high rollers. They had 7 watt incandescent bulbs in some of their fixtures.

Anyway, the other thing that's been hard on tradesmen is that nobody keeps anything. When's the last time you had a TV repair guy come out? We used to have one out every couple of years at least, to fix one of the TVs in the house (one of which cost $770 in 1975, which is probably about equivalent to $2k now - that was a HUGE deal to my parents to spend that kind of money).

What I'm getting to is that I don't think the whole picture is told just by comparing a flat tradesman rate, unless you buy exactly the same basket of goods. This discussion can go many ways, but talking about it doesn't make it any different. Here in the burbs I can't see many of the well maintained women ever living like my parents did, despite their inflation adjusted income not being nearly what my parents' was.

[David Weaver]

Here's a little something to temper the discussion - the SSI's national average wage index:

http://www.ssa.gov/oact/cola/AWI.html

If we look at 25 years ago. In 25 years, the average wage has a little more than doubled.

So the problem, I guess, is that a more clearly definable issue is that some occupations haven't kept up with inflation, but the average has. That would suggest changing occupations, I guess. If anyone was making $45 an hour 20-25 years ago, they were multiples of the average wage, but a lot of other folks didn't have that luxury.

What sticks out in my mind is things that are cheaper now, too, because of overseas manufacturing. A pair of levis jeans when i was a kid was $30. That was a princely sum in the late 1980s and early 1990s. Now those jeans are made overseas, and despite the average wage doubling or more, you can find jeans cheaper than that. They might not be quite as good, but they're way more than half as good. Those $30 jeans pretty readily got holes in the knees and at the pockets, etc.

Shoes - same thing. A pair of decent shoes was $50 back then. I can still get a pair of decent imported shoes or sneakers for $50. My 40 inch TV was less in nominal dollars than my parents' TV was in 1975. I expect it will probably last about as long, and it uses less electricity and gets more channels without cable (I don't have cable TV).

The whole picture is a lot more mixed. I'd love to do a survey of our lifestyles as kids vs. what we do now. I'm less well off than my parents, but I live better, and so do my kids. They get to do 10x as much as i ever did. I'll bet a lot of us who think that we're pretty reasonable with money would find that we weren't close to as good as our parents and grandparents were with theirs, and we don't work any harder. It's across all generations, too, there are people retiring at 70 now (and not just a few) who still have mortgages on their houses and credit card debt.

[Mark Bolton]

Here in the burbs I can't see many of the well maintained women ever living like my parents did, despite their inflation adjusted income not being nearly what my parents' was.

This is my point.

I agree fully that if you can scale back things get easier but I dont think in any way they compare to the rates of 20-30 years ago. Im not trying to get into a jousting match here but I have become quite adept at living a very modest live. I have become a pretty good appliance repairman diagnosing refrigerator defrost heaters, timers, TV components, stove and range components, all because when you DO call the repair man the cost for the repair, with the diagnostic, puts the repair at a total loss. Again, the cost of everything going up (and the income staying flat).

Your point of seeing the well maintained woman living like your folks is exactly what I am talking about. I too lived in a house where we were possibly the last in our area to get cable TV. I know for a fact we were the last in our area to ever have a microwave or any kitchen appliance like that. My mother was able to get electric bills to a level so low that to this very day I have know logical idea of how it was even possible. I dont think I ever knew AC in a car until I had moved out of the house and my mother bought a new car and suddenly there was this cool refreshing air blowing out of the vents and the windows were up!! We did have a fossilized window rattler AC unit that weighed about 900 lbs and would tack blankets up over the cased openings out of the living room just to keep that room (where the tv was) cool. In later years that AC unit moved to my mothers bedroom because she of course had to work.

In my personal life, I live about as close to a zero carbon footprint as I think you can reasonably while being in business. That said, the mere cost of "breathing air" now is far far greater than ever before and yet the wages are flat. I just had a recent conversation with an older woman (perhaps close to 70) who is on SS and she commented endlessly that her core expenses (no mortgage, no car payment, nothing), what I call her "nut", was higher than she had ever known in her 70 years. Not a single payment and her total annual expenses just for a frugal senior living alone were hefty. Im well aware of this myself because at 46 I am in the same position of being on a total cash basis. I owe _nothing_ but I have my business and its associated expenses. With that, Id say I could barely cover my annual overhead (just to stay alive) on a 15/hr job. My only vices are a cell phone bill and the additional property of the business.

When I was in my twenties I had friends that seemed rich who made 600/wk (gross). Had apartments and cars, lived, did some stuff here and there. That was good money. Now, you'd be lucky to make it as a hunky living out on your own if you were bringing home 350/wk.

I think its realistic for those of us who "saw" such a life to be able to retreat to it at some level if the need, or even desire, arises. But my point is we have a generation who has never even been exposed to the fuzz on the edge of the peach with regards to living a realistic/frugal life or perhaps just a life commensurate with your earning potential. But beyond that, the earning potential is flat.

[Mark Bolton]

Here's a little something to temper the discussion - the SSI's national average wage index:

http://www.ssa.gov/oact/cola/AWI.html

If we look at 25 years ago. In 25 years, the average wage has a little more than doubled.

So the problem, I guess, is that a more clearly definable issue is that some occupations haven't kept up with inflation, but the average has. That would suggest changing occupations, I guess.

I would severely question how those "averages" are affected over a range of income brackets. To lump all the income into a single pile is grossly unfair when you have a certain percentage of the population making ungodly sums of money. How does bill gates' 79 billion dollar net worth skew the social security averages? And the many many more behind him.

Always the skeptic but It would be interesting to see the averages for 15-50k salaries or see it broken down into some sub catagories.

Your Levi's jeans is a perfect example of things going up. The levi's jeans my mother bought when I was a child lasted. They were heavier, thicker, well made. I would get a pair or two a year if I was lucky. We had a store called Maurice the pants man that would run specials at back to school. Now you go to sears, target, and buy a pair of levis? I can blow a pair out in a month. They may cost 19.99 or 29.99 but Im going to buy 4-6-10 pair a year. Either that or I am going to have 10 pair in my closet to "spread the wear". I NEVER remember a time having 10 pair of jeans in my closet as a kid. I will guarantee you right now that I have more than ten pair of target/sears jeans that are all in a state of falling apart. If I only had two pair Id be walking around in my BVD's which are also falling apart sooner than ever.

Shoes in my world have gone through the roof. When I was a kid we would buy a pair of 50 dollar timberlands or something and they would last you a year or two. Now a pair of timberlands is like wearing socks to work. A decent pair of hard working work boots or equivalent shoes that will last will cost you at least 150 bucks if not closer to 200. A good pair of Georgia or Redwing workboots will run 200 bucks any day of the week. If you work them every day you may beat a year, two at best.

Appliances your dead on right. Its unreal how cheap appliances are now. To be able to buy a 23" flat screen monitor for 100 bucks is mind blowing. I recently threw out a 31" 16:9 tube type tv that was great when I bought it, took a crane to move it, and bought a much large flat screen that a 9 year old girl could carry for less money. Appliances, computers, kitchen geegaws, for sure. cheaper.

I just cant buy the argument that inflation or not, the "air" we breath is more expensive today in comparison to our incomes.

[David Weaver]

I think you summed it up pretty well with appliance repair, I think that's probably the issue. Nobody repairs or keeps things any longer (I know nobody is a bit of an exaggeration). But I remember when something really had to be dead as a doornail before you'd haul it down to the junkyard for scrap (those junkyards have disappeared, too, as townships don't want them and figure out a way to get them out).

I am also in a profession that was a lot easier to make it in 15 years ago, but the public doesn't value it as much, and that's just the way it goes. It's going to take sales ability in a few years just to do the work, it gets a little more competitive every year, and then I'm out.

I know plenty of people, however, who do very well salary-wise because they have good soft skills that I don't have, and frankly don't have any interest in practicing on a daily basis, anyway.

The national avg. wage indices don't hold steady for no career movement, so I can't apply them to my career (salary for an experienced person in my role hasn't done much in the last 15 years, and the top of the pay scale that existed 15 years ago doesn't even exist now, even without adjusting for inflation).

(side comment about the stinginess, we never made a long distance call and if you did, you were in trouble when the phone bill came. And as far as the electric bill, my parents didn't, and still don't, leave lights on unless someone absolutely needs them. My dad's favorite term is "lit up like a hotel" when he comes to our house. He uses only incandescent bulbs and I'm sure he still spends less on lighting than I do (i have no incandescent bulbs except in the oven). What can someone pick up on today to try to avoid being flat salaried over time? I don't know, but I could list a myriad of jobs that are just as you're describing yours to be and probably find just as many that have increased at the rate or higher than the NAW index. Maybe teachers and surgeons or endodontists or something.

I'll bet the master plasterers at the park service get a lot more than $14 an hour now, but have no clue. the guy who did my parents' plaster work left us with a couple of rooms that still have no cracks after decades.

[Larry Edgerton]

David, I typed a very long reply, and then it disapeared so here is the short version.

1300 sq ft of extremely efficient house.
Both my wife and I work full time.
Both cars simple base models.
Very basic phones.
No TV at all, none.
Big garden
No toys
No vacations for the last 6 years
We do not dine out often, usually once a month when I get paid.

We do fairly well, and we are not going behind but not really going ahead either. I can see the time when what we make will not be enough, even with no debt. I am preparing for that time and continually looking for ways to trim costs.

My concern is not so much for me, I am a survivor, but instead for the trudgers if you will that do not have it in their makeup to be anything else. And, I worry about those that are lazy wanting to take what I have when the reality of our politically created handout society comes home to roost. This is not a political statement, just an observation. Government supplied index figures do not mean a thing to me as I do not believe them. It is politically expedient for whoever is in power at the moment to manipulate them in their favor. I know the real costs, I am paying for every thing I have with the sweat of my brow.

Larry

[David Weaver]

I think some of those trudgers will figure out that they want to do something else, and others, as you say, will go to handouts.

I don't know what the answer is. My job isn't going to take me to retirement, it might not even take me through the end of next year. I have no clue if I'm going to stick it out and try to get another job in the same industry or if I'm going to try to go elsewhere. I hope something comes up and changes, but if it doesn't, I'll have to figure it out. That's just the way it is. Whatever it is, I'm sure I'll take a pay cut, and my wife will probably have to go back to work earlier than we were hoping.

I don't have a great answer for all of it, either, but for someone willing to be swift and do whatever it takes to make money (which often includes moving and working more than full time), there's plenty of opportunity. I see the new rosy faced kids coming into my profession, and they are far more flexible than my generation was coming in, and my generation was much more flexible than the one before. It's up to us to figure if we're going to cut back or figure out what we have to do to not cut back. For me, that would probably be something that involved schmoozing and I don't have the disposition for it, so you, me and everyone else will have to make our decisions.

We're reaping the reward of existing in a society where the rest of the world is picking up steam economically and we're not doing anything more than we were before, and living in a society where the last 30 years just have people borrowing and borrowing, etc, and thinking about how they'll come up with the money for payments some other time.

We all thought the late 90s were fantastic because of the eased credit, but it was a fake situation. Sure, it shows up as economic activity when people take a loan and spend the money, but that has to be paid back sometime, and as a society we're still living beyond our means, even if some of us are not.

(my last car was 18.5K - new - cheaper than my first car, and 10k cheaper than the car I got before. it's 6 years old now and our second car is approaching 11. Things are a lot different for me than I thought they'd be, but I still have it pretty good. If I have to move to find work, I'll move, I guess).

[David Weaver]

Random factoid as I'm gradually remembering what my parents paid various people over the years. I remember them getting their sidewalk redone around 1990, and the concrete finishers that were working the job told us they got paid $7 an hour to do the work (they were career guys - local guys in the 40s).

The next concrete work they got done 20+ years later was done by a couple of guys from mexico, who were working for a local company. They did the job in 34 hours, overnight. How do you compete with that? Dad said one of the guys left the site in the middle of the night to get food and bring it back, but that was it. That was a quoted job, I'm sure they got paid more than $7 an hour but I don't know how much.

[Jerry Thompson]

Ah yes Larry. I just love the inflation figures thrown at us. About all of the items measured are not the ones relevant to day to day living expenses. The basics are food, clothing and shelter. Then there are "Seasonal Adjustments?" There is a thumb on the scale there also. I am with you, I know that it takes a lot more to live on than they want me to believe. This is not political it is reality.

[David Weaver]

I'd imagine those inflation figures are used when pricing TIPS (inflation indexed), social security pay, etc. There's definitely incentive to keep things out of the "basket".

[Mark Bolton]

My dad's favorite term is "lit up like a hotel" when he comes to our house.

Now that, I literally laughed out loud for a good bit. Still chuckling as I write this.


I think its true that moving away from the jobs that are flat makes the most sense. And one would think that demand would increase, compensation would rise, and the cycle would start again. Who knows

I can completely associate with your "soft skills" comment. I am personally in an area where someone who could wrap their head around the business side of what I do, and not really care so much, could make a fortune. It doesnt mean they are less of a person or that I am better "because" I care more, but rather, get your head out of it a bit and focus on the books, profitability, making money, delivering what the customer asks for regardless of whether you agree with it or not, and so on. Be less passionate. I honestly just dont think I am able to do that on mass but I am to an extent. Or perhaps I am not able to do that on my own dime so to speak. Maybe if I were working for another company or a larger firm and you present the options to your potential customer and they pick crap, you deliver crap, you make your xx% on that crap, you deposit that in your bank, and you go to bed. Thats never been the way it works in my world. My customer picks crap, I tell them they are picking crap, they say crap is what they want, I resist, they demand, I say **** it, and outline it in the contract to protect myself, and then when the job is done they call me and say "why did you let me pick crap". That process is simplified I guess as scale goes up an customers realize they are responsible for their actions. They dont go back to Lowes or Home Depot to complain about the cheap junk they chose to save a buck, but they will to a smaller guy.

Its a deep well. Consumer mindset is definitely in a different place at least as it seems to me.

[Larry Edgerton]

David, in my short reply I did not specify, but the trudgers and the lazy are not one and the same in my book.

The trudgers are the people that you see every day. the girl at the gas station with a kid at home that takes your money for your morning coffee. The guy at the hardware store that helps you find that screw that you need. The kid that changes you're oil. The world is full of them, and they are an important cog in the machine that makes our society work. We need these people just as much as we need the people that make things work because lets face it, we all can't be the boss. For whatever reason, will, courage or intelligence they do not have the ability to go out and fight for the extra in life. They just do not think that way. Its not really even a fault of their own. But they provide a needed service and deserve to be able to make a living for an honest days work.

The lazy I speak of are already parasites, and if there is a problem with their host they will be looking for a new one. They have no redeeming quality's and their net contribution to society would be expressed as a negative number.

Larry

[Jim Becker]

I've actually sold jobs because my rate was higher than my competition. It doesn't happen all the time, but I emphasize my quality, longevity in business, use of quality materials, etc. over their likely fly-by-night pricing or lack of experience and quality.

I resemble that remark relative to my tack trunk work. (not really a "business", but something I do for some mad money) My work is nearly twice what another local fellow charges for "similar" products. What I sell is the quality of the work and the quality of the materials. Nothing is "ho-hum" and everything is tailored exactly to the client. When folks balk at my custom-for-everyone costs, I send them to the other guy cheerfully. He's a nice fellow and does reasonable work. But those who choose to go with me send me one, two or more people for new commissions because of what I actually deliver for their money. That happened this week. I delivered a commission a week or two ago to one local barn and just got two new commissions last night from two other folks from the same facility.

I guess that the bottom line is that anyone has to find a way to make "price" not be the primary, or at least only decision point. It's not easy when there are folks willing to work for less and not carry overhead that any sustainable business would feature...but it's still possible.

And congrats on the new truck, Larry! The current generation of vehicles are so nice compared to those of the past in many ways.

[Ryan Mooney]

More interesting data with the average (mean) and median (50th percentile) and the delta between them: http://www.ssa.gov/oact/cola/central.html

I tend to prefer percentiles and medians to averages because the average data can be heavily skewed by the high (or low) earners. The median is what 50% of the country make more or less than (the "middle" wage).

I'm slightly surprised that the median wage has tracked as close to the average as it has, it would be interesting to have data going further back on that.

Interesting side annecdote, I was recently talking to my 90yr old grandmother who had gotten a book of "what things cost in 1940" and a gallon of milk was $0.34 while wages were $1900/yr. Multiplying it out that means wages are about 22.5 times higher than they were then. So if the price of milk had kept up with wages it would be between around $8/gallon (if you use the average wage as the multiplier). Some other things have tracked closer (loaf of bread was $0.08 and would be $1.80, a house was $6,550 and would be $147,000 - both of which seem pretty close in the cheaper markets).

Relevant to this thread a car (unspecified type) was $800 in 1940 which computes out to $17,900; I don't think you can get much of a new car nowadays for under $18k (I bought my stripped Ranger 4x4 4.0L 6cyl in 2004 for $16k) - that's sort of comparing apples to apple cores though as there's no possible way you could buy a car with the minimal features of the average 1940's rig nowadays. Heck I don't know if you can even GET a manual transmission domestically on most of these rigs anymore (saved over $3k on that) much less manual windows, locks, etc..

[David Weaver]

Yeah, median is probably a better measure. Looking at the time frame, the median wage is about 2 to one, but it slipped against the mean about 10% or a little less.

You can have relative prices of 1940s food if you're willing to buy organic!! My wife buys some things organic and it drives me up the wall. Milk for the kids is just under $8.

I can identify with the new car price, though, too, and from what I see in the neighborhood, most people are spending a lot more.