Finances in the Golden Era and today

[Miss Neecerie]

Ah, see, there's the rub. Any city that has the kind of jobs my husband does has overpriced housing. In past years, when my husband has broadened his job search to nationwide, most of the jobs he's qualified for are here, in the DC area, New York City or the San Fransisco Bay area, all overpriced housing areas.

Exactly.

As what the US does changes...so does the housing/job/economic market.

So this comparison of folks then and folks now....is skewed..because there are not local jobs that would provide for a family in many locations anymore.

Sadly, where the housing market is cheaper tends to coincide with where there is a lack of 'Today's type of jobs' available.

 

[MissHannah]

The problem in the UK is similar Kamikat - London has very expensive housing but the salaries are much higher. So if I moved back to my hometown the house prices would halve but so would my salary. Either way I've got no chances of buying my own place, and I'm a reasonably well paid professional, 12 years into my career. Imagine if I was a retail assistant or care worker or a nurse - I'd be even more screwed.

 

[kamikat]

The problem in the UK is similar Kamikat - London has very expensive housing but the salaries are much higher. So if I moved back to my hometown the house prices would halve but so would my salary.

In some cases, it doesn't work out the same. For example, when he was offered a job in San Fransisco, his salary offer was the same as he was making in DC, but the housing was 2-3x the cost. I've also heard a theory, that worked for me, that skilled labor/blue collar workers actually do better in smaller towns than in big cities. When we lived in Richmond, Va, a smaller city, my price for doing a haircut was $45 and that was pretty average. When we moved to DC, the average price for haircuts was $35. There were a lot more high end salons charging over $100 than in Richmond, but the mid-range salons were cheaper. We moved to a bigger city and I ended up making less more because there was more competition and the pricing of living was higher. Think about it, if you are in a small town and there are only a couple plumbers, you can set your price because people will always need a plumber. In a big city, you have to price yourself competitively.

 

[Paisley]

My cousin is in that position: she works in publishing, so she's stuck in big, expensive cities. But certain professions have probably always been that way, probably more so in the past because telecommuting didn't exist. (I know that's not an option for everyone.)

Aren't most jobs in most places today...today's type of jobs?

 

[MissHannah]

Well, I'm a graphic designer and I worked in my hometown as a designer for about 7 years. The jobs were few and far between (there would be probably 1 or 2 situations advertised each year) and most of them were for really dull agencies doing really terrible design. Now in London there are hundreds of jobs advertised every week and I can work in a huge variety of specialisms. And the pay is literally nearly twice as much. But the house prices are insane.

 

[jamespowers]

"Traded in their shovels for backhoes to dig themselves in dig themselves in really good"--I love it.

Yes, when you keep trading up, you're on a treadmill. But I'm not sure this is such a recent idea. The term "starter," as in "starter home," dates from 1946 according to my dictionary. The term "keeping up with the Joneses" dates to 1913, according to this site.

I think it's possible that people moved more than we imagine, but most of them probably did so to find work or get ahead.

On another note, there's a book that was published in the 20s and 30s that might be of interest: The Richest Man in Babylon. The book was taken from clay tablets excavated from ancient Babylon (in what is now Iraq) that recorded the adventures people had when they got into trouble with money. In that culture, you or a family member could be press-ganged into slavery to settle your debts--and a few people in this book were. Of course, the book gives some "cures for a lean purse." It's available as a free pdf here:

http://www.marcus-baker.com/wp-content/uploads/2010/05/theRichestManInBabylon.pdf

I doubt people moved as much as we do today. It is a much more transitory world today. How many actually live near their parents anymore? That was a requisite in many families years ago. I suppose they thought they would be their if their parents needed them. However today we run across the country for better wages and housing.
The Richest Man in Babylon should be required reading. Lord knows that finance of any kind is avoided in today's government school system. Years ago you had classes either independent or incluyded in other classes that prepared you to prepare budgets and manage money. Today the children are thrown tot he wolves with credit card companies knocking on their door with offers to college students. I think some of that has waned recently but it was around for many years.
It is true the concept of a starter home is really not new but the fact that many are likely never to have lived long enough to see the mortgage paid off is here now and quite frightening. :eusa_doh:

 

[jamespowers]

More efficient methods of farming, yes, possibly in some countries subsidies paid to the farmers, but also the farmers getting squeezed by the supermarkets. Some of the supermarket chains are so large that they have a pretty well captive audience; they can run those sorts of commodities as loss leaders to gain/maintain market share and can "negotiate" a deal with the farmers that doesn't leave them with a whole lot of room to move.

There definitely is a certain element of tough competition, however supermarkets are subject to the market as well. They depend on the commodities market and have to plan ahead to keep their prices within reason. The days of the small farmer are really over most food we eat today is produced on large company farms. The are also some rather large family farms that are doing very well. I have a friend in Ohio that is doing just fine as a third generation farmer. Being as large as these farms are, I think they might have a bit of clout in the pricing of their goods as well.

 

[jamespowers]

In some cases, it doesn't work out the same. For example, when he was offered a job in San Fransisco, his salary offer was the same as he was making in DC, but the housing was 2-3x the cost. I've also heard a theory, that worked for me, that skilled labor/blue collar workers actually do better in smaller towns than in big cities. When we lived in Richmond, Va, a smaller city, my price for doing a haircut was $45 and that was pretty average. When we moved to DC, the average price for haircuts was $35. There were a lot more high end salons charging over $100 than in Richmond, but the mid-range salons were cheaper. We moved to a bigger city and I ended up making less more because there was more competition and the pricing of living was higher. Think about it, if you are in a small town and there are only a couple plumbers, you can set your price because people will always need a plumber. In a big city, you have to price yourself competitively.

I almost all cases, higher salaries for the same job are the result of a higher cost of living within that geographic area. San Francisco is ridiculous because not only is the cost of living higher but you also pay a city income tax. :eusa_doh:
Competition may be good for some goods or services but on average most things cost more. In some cases you could actually be losing ground while still making more money.

 

[Paisley]

I doubt people moved as much as we do today. It is a much more transitory world today. How many actually live near their parents anymore? That was a requisite in many families years ago. I suppose they thought they would be their if their parents needed them. However today we run across the country for better wages and housing.

My family might be unusual, but my brothers and sister and I are the first in at least five generations not to move to another state or country after we grew up. (Having seen the place I was brought home to after I was born, I'm glad we moved for better wages and housing. ) We were born in at least five different states--my father worked on major construction jobs all over the West in those days. I'm pretty sure the gypsy lifestyle wasn't typical, though.

I agree with you that mortgages being paid off is becoming less and less common, but "getting the cash out of your house!" likely has something to do with that. My starter home is my finisher home. If I need cash, I go to an ATM.

If hocking your house is such a good idea, why not pawn the TV while you're on vacation? It's just sitting there.

ETA: Here's a table from the U.S. Census Bureau showing mobility rates since 1947. The numbers by percentage start at the bottom of p. A-2. It looks like people have been moving less and less since then. Most movers have moved within the same county. Movin' on up, maybe?

And for all my family's mobility, it was you (JamesPowers) who gave me the idea that people used to move more than we might imagine.

 

[jamespowers]

My family might be unusual, but my brothers and sister and I are the first in at least five generations not to move to another state or country after we grew up. (Having seen the place I was brought home to after I was born, I'm glad we moved for better wages and housing. ) We were born in at least five different states--my father worked on major construction jobs all over the West in those days. I'm pretty sure the gypsy lifestyle wasn't typical, though.

I agree with you that mortgages being paid off is becoming less and less common, but "getting the cash out of your house!" likely has something to do with that. My starter home is my finisher home.

If hocking your house is such a good idea, why not pawn the TV while you're on vacation? It's just sitting there.

Wow! That is quite a bit of moving. Sounds almost like a military family. One does what one has to to provide for one's family though and that is what is important.
Pawn the TV!lol lol lol My favorite thing on that cash scheme was them mentioning using the cash for a vacation---yeah right---from your senses!

 

[LizzieMaine]

My family might be unusual, but my brothers and sister and I are the first in at least five generations not to move to another state or country after we grew up. (Having seen the place I was brought home to after I was born, I'm glad we moved for better wages and housing. ) We were born in at least five different states--my father worked on major construction jobs all over the West in those days. I'm pretty sure the gypsy lifestyle wasn't typical, though.

I'm just the opposite -- I was actually the first member of our family in four generations to move off the same street that my great-grandparents had settled on when they came to this country. My mother still lives there, five houses up from the house she grew up in, and her next-door neighbor is the same gal she grew up living next door to. (They can't stand each other.) My grandfather died two houses down from the house he was born in. I was considered a radical because I moved thirty miles away.

There was less reason to move around in the Northeast in those days -- there was always work on the docks or fishing, even if you couldn't get a job doing anything else. And if you did move, it was the same thing in whatever town you were moving to.

 

[Richard Warren]

Debt is a tool. Its use or abuse lies in the hands of the individual. I have large business debts and small personal debts.

 

[Lincsong]

I should have stipulated "not in a ghetto."

Hey, a house is a house. And that house on 86th Avenue would be VERY vintage.

 

[Lincsong]

Well, if a guy made $2 plus change an hour in 1957 (minimum wage was $1) that equals $4200 a year, if he paid $11,000 for his house he was paying close to three times his yearly wage. If he made $1 an hour in 1945 (minimum wage was 40 cents) that was $2000 a year, if he paid $6,000 for the house that comes to around three times his wage.

 

[Tomasso]

Debt is a tool. Its use or abuse lies in the hands of the individual.

QFT

 

[jamespowers]

Hey, a house is a house. And that house on 86th Avenue would be VERY vintage.

Very ghetto vintage.:eusa_doh:

 

[jamespowers]

Well, if a guy made $2 plus change an hour in 1957 (minimum wage was $1) that equals $4200 a year, if he paid $11,000 for his house he was paying close to three times his yearly wage. If he made $1 an hour in 1945 (minimum wage was 40 cents) that was $2000 a year, if he paid $6,000 for the house that comes to around three times his wage.

Ok now translate that today. The minimum wage in California is $8 per hour. Even if a person makes twice that ($33,300 say) then where is he going to find a house that costs about $100,000 in California that is at all comparable to the one you could buy for three times their wages in 1957? A new house as you would have gotten in 1943?

 

[Paisley]

There are a lot of nice looking houses in Stockton. Here's a cute little place in Stockton for exactly $100,000. Fairly new, too.

http://ca.realtor.com/realestateandhomes-detail/3706-Wild-Rose-Ln_Stockton_CA_95206_1113201888?gate=cln&source=web

Whether you can get a $16 and hour job in Stockton, I have no idea.

ETA: I still think the person with a $16 an hour job would be better off getting a mortgage of no more than $64,000, or $80,000 if he or she has no kids and no other debt and a stable job. My house cost three times what I was making when I bought it. Then I was laid off and spent the next two years scraping together mortgage payments while working, at various times, at two jobs, a temp job, a warehouse job and overtime when I could get it. All low-paying with no benefits, no holidays, and no sick days. And I started out with no other debts.

 

[jamespowers]

There are a lot of nice looking houses in Stockton. Here's a cute little place in Stockton for exactly $100,000. Fairly new, too.

http://ca.realtor.com/realestateandhomes-detail/3706-Wild-Rose-Ln_Stockton_CA_95206_1113201888?gate=cln&source=web

Whether you can get a $16 and hour job in Stockton, I have no idea.

ETA: I still think the person with a $16 an hour job would be better off getting a mortgage of no more than $64,000, or $80,000 if he or she has no kids and no other debt and a stable job. My house cost three times what I was making when I bought it. Then I was laid off and spent the next two years scraping together mortgage payments while working, at various times, at two jobs, a temp job, a warehouse job and overtime when I could get it. All low-paying with no benefits, no holidays, and no sick days. And I started out with no other debts.

The problem is that you would then live in Stockton and be about 45 minutes away from where you could get a decent job. Maybe things have changed there but it was fairly bucolic last time I was there.
You are really not comparing apples with apples there. You couldn't get anything like that here for the money. [huh]

 

[Paisley]

One of my cousins used to live in Ventura and work in LA. A 45-minute commute would have been an improvement for him. That's about how long it takes me to get to work on the bus (it stops every two blocks for seven miles).

I think housing prices will have to keep coming down. I don't see how banks could continue making mortgages all out of proportion with borrowers' incomes.