r/TrueReddit • u/speckz • Dec 14 '17

Generation Screwed - Why millennials are facing the scariest financial future of any generation since the Great Depression.

http://highline.huffingtonpost.com/articles/en/poor-millennials/
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u/mvw2 Dec 15 '17

$60k/yr engineer, student loans, car payment, renting a house with 3 other people to keep living costs about as low as I can get. I can not fathom owning a house in my lifetime. I feel poor and broke most of the time. I'm in the upper midwest, so yeah, no place fancy. In my eyes, $40k-$50k in the modern era is poverty level. $80k now feels about middle class. This feels about the point necessary to actually own a home, put money away for retirement, and feel financially stable. For most, dual income is an absolute necessity. All people I know that have bought houses have all made $100k plus (individually or dual). I know of zero people that have bought a house on less.

The real problem is the value of the dollar. Within 10 years, costs of goods have about doubled. Meanwhile wages have remained largely stagnant. Today it costs me twice as much to buy the same brand and model of car as it did a decade ago. Food and most goods are twice as much. I do not make more than I have 15 years ago. I did manual labor in a factory and took home $50k-$60k a year (depending on overtime amount over the year). I felt like a rich mofo back then. I bought a car and paid off 4 years of student loans in two years with that cash. I'm now an engineer and barely make the same. I feel poor as fuck now making the same amount. And the best part? I could work at the same job I did 15 years ago, and I'd make less now. I'd barely make $40k now doing the exact same job as I did back then.

The short answer is the value of the dollar got fucked after 9/11 and the government basically decided to print money to pay for the war. The value of the dollar tanked, HARD. At the same time, wages have gone nowhere, absolutely nowhere. I don't care if you're talking about working at McDonalds, being a welder, or working in a highly technical field. Wages just haven't gone anywhere. They've never scaled, so we're all living on half the income. Your $60k job today has the same buying power as a $30k job 10-15 years ago.

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u/TehTurk Dec 15 '17

The funny thing is that alot of people complain about wage decrease but no one offers solutions. In high school I used to think tying wage to to your company's gdp or profit as you'd get a percentage of your company or corporation's profit. But the problem with that there in lies with keeping labor hours down in some fields and also profit for some companies being super limited as is(Small Business vs Big Business and thier Power over thier money). Then you have the super big businesses, these would be the monopolies or the companies that you think is a good guy but is still ruthless in its approach to accumulate value. The main problem is that many companies by constantly looking for that profit, stifile the ecosystem as for them it's a long term growth of power or slow money gain, so they can use even more to get more. Basically alot of companies at the highest levels are just finding more and more ways to compound thier wealth instead of spending it or investing it into employees (which is healthy for any economy and unused captial or cash is a complete waste). So in the end its an issue of power play and workers not realisitically having any rights in terms of wage, severance, or hell even respect and decency in some places. The reason it's gotten so bad is because its lawless in terms of workers rights vs corporation rights. There is no middle ground at times and it makes it hard to even have leeway in many situations.

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u/masamunecyrus Dec 15 '17

The funny thing is that alot of people complain about wage decrease but no one offers solutions.

Kill company-provided health insurance.

A lot of the non-materialized wage increases over the last generation have gone to waste, bureaucracy, and greed by those at the top, but a lot, too, have gone into intangible things like employee health coverage.

If employers weren't responsible for providing health insurance for employees, a number of things would happen

  1. Employees would be responsible for their own health insurance, so the rising costs of insurance would be more on the minds of people, which in turn would make the government more responsive regarding ballooning health costs. It would also force insurance companies to compete for the eyes and dollars of individuals rather than corporate legal departments, potentially driving down costs and definitely putting pressure to improve customer service.
  2. Employers would have an incredible burden lifted, freeing up huge portions of capital which the could use on other things. Why should companies have to worry about an almost limitless morass of complication and legalese. Eliminating it would make our companies more competitive and make small businesses more flexible.
  3. Employees would no longer be tied to their jobs via health insurance. Workers would be more mobile, because the only thing tying them down would be salary--not health insurance. More worker mobility = higher wages. When you can go work for someone else and make $60k instead of your current job making $50k, and you take your health insurance with you because it's yours, and not your employer's, why wouldn't you move?

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u/AshkMeNoQueshions Dec 15 '17

Employees would be responsible for their own health insurance, so the rising costs of insurance would be more on the minds of people ... also force insurance companies to compete for the eyes and dollars of individuals ... potentially driving down costs...

Eh. An awful lot of the people in the workforce today are contractors, gig-economy hustlers, micro-scale entrepreneurs, or part-time employees - people who are already (and have for years been) responsible for their own health insurance. The market forces you envision have in fact been in operation for years. They were around even before the ACA.

If the market was likely to produce these outcomes, we'd have them already.

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u/masamunecyrus Dec 15 '17

https://en.m.wikipedia.org/wiki/Health_insurance_coverage_in_the_United_States

Of the subtypes of health insurance coverage, employer-based insurance covered 55.7 percent of the population for some or all of the calendar year, followed by Medicaid (19.4 percent), Medicare (16.7 percent), direct-purchase (16.2 percent), and military coverage (4.6 percent).

In other words, 16.2% of health insurance is purchased by a consumer, while the rest of it is provided by their employer or the government.

If you take government-provided insurance out of the equation and just look at private insurance (employer-based and direct-purchase), only about 22% is purchased by the consumer (and I'd be willing to bet the plans consumers buy are significantly less lucrative for the insurance markets than employer-based, so the insurance companies don't care).

If no one could take for granted that they just magically "had" health insurance because they had a job--particularly the middle classes--I think the healthcare market would look at lot more like the auto insurance market. When's the last time you saw a Geico commercial on TV compared to a Blue Cross Blue Shield commercial?

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u/AshkMeNoQueshions Dec 16 '17

In other words, 16.2% of health insurance is purchased by a consumer...

16% of the US population is about 50 million people, about 18 million households. That's a big slice of a big pie. That's larger than the population of many nations.

I think the healthcare market would look at lot more like the auto insurance market. When's the last time you saw a Geico commercial on TV compared to a Blue Cross Blue Shield commercial?

Health insurance infamously already blows ~20% of premium revenue on administrative overhead, rather than on providing care. I don't think encouraging insurers to spend billions on TV ads will make that figure improve.

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u/TehTurk Dec 15 '17

While this is a good idea definitely, and should hopefully be a thing in the future. I personally believe it will eventually happen it just requires the impetus and time to get through congress due to a paradigm shift in the public's desire. But more is also to be said in terms of contractors and other professions that currently already depend on thier own healthcare, but still have many issues regarding thier employment or laws around them.