Internet arguments like the $140,000 Question incident keep happening.
The two sides say:
The economic data is correct. Real wages are indeed up. Costs for food and clothing are way down while quality is up, housing is more expensive than it should be but is not much more expensive relative to incomes. We really do consume vastly more and better food, clothing, housing, healthcare, entertainment, travel, communications, shipping and logistics, information and intelligence. Most things are higher quality.
But that does not tell us that buying a socially and legally acceptable basket of goods for a family has gotten easier, nor that the new basket will make us happier.
This post is my attempt to reconcile those perspectives.
The culprit is the Revolution of Rising Expectations, together with the Revolution of Rising Requirements.
The biggest rising expectations are that we will not have to tolerate unpleasant experiences or even dead time, endure meaningful material shortages or accept various forms of unfairness or coercion.
The biggest rising requirement is insane levels of mandatory child supervision.
Our negative perceptions largely stem from the Revolution of Rising Expectations.
We find the compromises of the past simply unacceptable.
This includes things like:
These are mostly wise things to dislike. They used to be worse. That was worse.
Not that most people actually want to return. Again, Rising Expectations.
The Robber Baron: More to the point. You can move to almost any town in the Midwest with 20,000-200,000 people and live like a freaking king on a normal income.
You just can’t take trips to Disney every year, go out to eat every week, or have name brand everything.
Shea Jordan Smith (quoting Matthew Yglesias, link has key 11 second video): The issue is that living that lifestyle—never taking plane trips for vacation, rarely dining out, having a small house—would mean living like a poor person by today’s standards and people don’t want to do that. But that’s because we’ve gotten richer, not poorer.
Doing this requires you to earn that ‘normal income’ from a small town in the midwest, which is not as easy, and you have to deal with all the other problems. If you can pull off this level of resisting rising expectations you can then enjoy objectively high material living standards versus the past. That doesn’t solve a lot of your other problems. It doesn’t get you friends who respect you or neighbors with intact families who watch out for your kids rather than calling CPS. And while you might be okay with it, your kids are going to face overwhelming pressures to raise expectations.
Is the 2025 basket importantly better? Hell yes. That doesn’t make it any easier to purchase the Minimum Viable Basket.
That then combines with the Revolution of Rising Requirements.
In addition to the demands that come directly from Rising Expectations, there are large new legal demands on our time and budgets. Society strongarms us to buy more house, more healthcare, more child supervision and far more advanced technology. The minimum available quality of various goods, in ways we both do and don’t care about, has risen a lot. Practical ability to source used or previous versions at old prices has declined.
The killer requirement, where it is easy to miss how important it is, is that we now impose utterly insane child supervision requirements on parents and the resulting restrictions on child freedoms, on pain of authorities plausibly ruining your life for even one incident.
This includes:
We can severely cut expenses in various ways, but no, contra Matthew Yglesias, you cannot simply buy the 1960s basket of goods or services or experiences if you want to live most places in the United States. Nor if you pulled this off would you enjoy the social dynamics required to support such a lifestyle. You’d get CPS called on you, be looked down upon, no one would help watch your kids or want to be your friends or invite you to anything.
You don’t get to dismiss complaints until those complaints are stated correctly.
A rule for game designers is that:
People are very good at noticing when things suck. Not as good at figuring out why.
As in, I actually disagree with this, as a principle:
Matthew Yglesias: Some excellent charts and info here, but I think the impulse to sanewash and “clean up” false claims is kind of misguided.
If we want to address people’s concerns, they need to state the concerns accurately.
No. If you want to address people’s concerns rather than win an argument, then it is you who must identify and state their concerns accurately.
Not them. You. It’s up to you to figure out what the actual problems are.
Their job is to alert you that there is an issue, and to give you as much info as they can.
If this involves them making false claims along the way, that is good data. Notice that. Point that out. Do not use it as a reason to dismiss the underlying complaint that ‘things suck.’ There’s something that sucks. Figure it out.
What you definitely do not want to do is accept the false dystopian premise that America, the richest large country in human history, has historically poor material conditions.
Brad: A lot of folks seem think they are going to bring radicalized young people back into the fold by falsely conceding that material conditions in the most advanced, prosperous country in the history of the world are so bad that it’s actually reasonable to become a nihilistic radical.
Liberalism doesn’t work if you make expedient concessions to abject delusions.
Timothy Lee: Yeah, I think it feels like an easy concession to tell young people “ok I admit your generation has been dealt a bad hand but…” But when everyone does this it creates a consensus that today’s young people are facing uniquely bad material conditions, which they aren’t.
However, due to rising expectations and rising requirements:
All of that is before consideration of AI, which this post mostly excludes.
When people say the data are lying to you, or the data is wrong, they’re almost always wrong. Jeremy here responds to one such attempt from the previous go around. The data are what they are.
Yet the voters are not wrong. The practical ‘cost of living’ has gone up.
Voters realize this. They hate it. Inflation is now ~2.5%, but the annual rise in the cost of the basket of goods and services we insist you purchase or provide is higher. The new basket being superior in some ways is nice but mostly irrelevant.
Here’s a stark statement of much of this in its purest form, on the housing front.
Aella: being poorer is harder now than it used to be because lower standards of living are illegal. Want a tiny house? illegal. want to share a bathroom with a stranger? illegal. The floor has risen and beneath it is a pit.
Julian Gough: Yes. There used to be a full spectrum of options between living under a bridge and living in a nice flat or house. (I once lived in a converted meat storage room over a butcher’s shop, and briefly, and admittedly unofficially, in a coal cellar with a 5ft ceiling, and no electricity. I was fine, and life was interesting.)
Now there’s a hard cutoff, with no options in that zone between (free) under-a-bridge and (expensive) nice flat, where most artists and poor people used to live. So where can we now live?
The two Revolutions combine to make young people think success is out of reach.
Millennials, in terms of many forms of material wealth and physical living standards, have much higher standards than previous generations, and also are forced to purchase more ‘valuable’ baskets of goods.
This leads them to forget that young people have always been poor on shoestring budgets. The young never had it easy in terms of money. Past youth was even poorer, but were allowed (legally and socially) to economize far more.
Today’s youth have more income and are accumulating more wealth, and mostly matching past homeownership rates, despite higher expenses especially for housing, and new problems around atomization and social media.
But that is paper wealth. It excludes the wealth of having families and children.
Expectations are out of control.
Jason C: Might be an expectations problem vs an actual income one.
$587k is nuts. Claude suggests $150k-$250k depending on location, which seems reasonable as a combined household income for full-on life ‘success,’ and points out that trajectory is a factor as well.
John Ganz: By making comparisons constant, the internet has created a condition of universal poverty. When even the richest man in the world is not satisfied and acts like a beggar for social recognition, why should anybody be?
When the debate involves people near or above the median, the boomers have a point. If you make ~$100k/year and aren’t in a high cost of living area (e.g. NYC, SF), you are successful, doing relatively well, and will be able to raise a family on that single income while living in many ways far better than it was possible to live 50 years ago.
Certainly $587k is an absurdity. The combination of Rising Expectations and the perception of Rising Requirements has left an entire generation defining ‘success’ as something almost no one achieves, while also treating ‘success’ as something one needs in order to start a family. No wonder young people think they can’t get ahead, including many who are actually ahead.
That’s in addition to the question of what constitutes a ‘good job.’ Most historical jobs, by today’s standards of lived experience, sucked a lot.
There’s also this: People reliably think they are poorer, in relative terms, than they are, partly due to visibility asymmetry and potentially geographic clustering, and due to the fatness of the right tail having an oversize impact.
These perceptions have real consequences. Major life milestones like marriage and children get postponed, often indefinitely. Young people, especially young men, increasingly feel compelled to find some other way to strike it rich, contributing to the rise of gambling, day trading, crypto and more. This is one of the two sides of the phenomenon Derek Thompson wrote about in the excellent The Monks In The Casino, the other being atomization and loneliness.
The good news is that a lot of this is a series of related unforced errors. A sane civilization could easily fix many of them with almost no downsides.
We could choose to, without much downside:
And so on. Again, this excludes AI considerations.
The bad news is there is no clear path to our civilization choosing to fix these errors, although every marginal move towards the abundance agenda helps.
We could also seek to strengthen our social and familial bonds, build back social capital and reduce atomization, but that’s all much harder. There’s no regulatory fix for that.
Matt Yglesias points out that this goes hand in hand with Americans putting less value on things money can’t buy:
Matt Yglesias: People have started putting less emphasis on non-money sources of value, which I think is naturally going to lead more people to be unhappy with the amount of money they make.
A nice thing about valuing religion, kids, and patriotism is that these are largely non-positional goods that everyone can chase simultaneously without making each other miserable.
This change in values is not good for people’s life experience and happiness. If being happy with your financial success requires you to be earning and spending ahead of others, and it becomes a positional good, then collectively we’re screwed.
And Zac Hill points out the other problems with people’s #SquadGoals.
Zac Hill: The real reason so many people feel despair is MUCH closer to “I think my life will end in meaningless oblivion unless I am on an epic quest, a billionaire, or gigafamous, but this is gauche to admit and so I use proxy variables” than it is to “I can’t live on less than $140,000”
Also: “I, personally, will never marry/fuck an attractive person.”
Shockingly, all of this is mostly about how we create, calibrate, and manage expectations.
There were ways in which I did not ‘feel’ properly successful until I stopped renting and bought an apartment, despite the decision to previously not buy being sensible and having nothing to do with lack of available funds. Until you say ‘this house is mine’ things don’t quite feel solid.
Many view ‘success’ as being married and owning a home, regardless of total wealth.
If those people don’t achieve those goals, they will revolt against the situation.
So this chart seems rather scary:
Vance Crowe: This does not make for a stable society.
That leads to widespread expressions of (highly overstated) hopelessness:
Boring Business: An entire generation under the age of 30 is coming to realization that having a family and home will never be within the grasp of reality for them
Society is not ready for the consequences of this. A generation with no stake in the system would rather watch it burn. All the comments echo the same exact sentiment. If homeownership is not fixed, it is a steady slope to socialism from here.
Another issue is that due to antipoverty programs and subsidies and phase outs, as covered last time, including things not even covered there like college tuition, the true marginal tax rate for families is very high when moving from $30k to up to ~$100k.
Social media and influencing make all of this that much worse. We’re up against severe negativity bias and we’re comparing ourselves to those who are most successful at presenting the illusion of superficial success.
Welcome to the utter screwing that is the accelerated Revolution of Rising Expectations, in addition to the ways in which Zoomers are indeed utterly screwed.
Timothy Lee: The idea that Zoomers are “utterly screwed” in material terms is total nonsense and I wish people would stop repeating it. Housing is a bit more expensive than previous generations. Many other necessities — food, clothing, most manufactured goods are cheaper than ever.
I think the perception that Zoomers are “utterly screwed” is a combination of (1) opinion being shaped by people who live in the places with the most dysfunctional housing markets (2) extreme negativity bias of social media algorithms (3) nobody has much incentive to push back.
Nathan Witkin: I would add:
Timothy Lee: I think this #5 here is an important reason why so many people feel beleaguered. People’s expectations for what “counts” as a middle-class standard of living is a lot higher than in previous generations, and so they feel poor even if they are living similarly.
Beyond social media, I think another factor is that people compare their parents’ standard of living at 55 with their own standard of living at 25 or whatever. Nobody remembers how their parents lived before they were born.
I don’t think the “young people feeling they’re uniquely beleaguered” thing is new either!
That’s two groups of loadbearing mechanisms raised here on top of the general Revolutions of Rising Expectations and Requirements arguments earlier.
There are also real problems, as I will address later at length, especially on home ownership and raising children. Both are true at once.
Want to raise a family on one median income today? You get what you pay for.
Will Ricciardella: Can a family live on one income today?
Yes, but not today’s lifestyle on yesterday’s budget.
Here’s what it actually looks like:
• 1,000 sq ft home, not 2,500
• One used car
• One family phone — no smartphones for kids
• One TV, no subscriptions
• No microwave, no central A/C
• Home-cooked meals, no dining out
• No childcare, 1 parent stays home
• Public schools only
• Local sports, not travel leagues
• Basic health insurance: pay dental & extras out of pocket
• Simple clothes, thrift store toys
• Rare vacations, little debtThat’s how most families lived for decades and they raised kids, built communities, and made it work.
The issue isn’t that you can’t raise a family on one income.
The issue is that we’ve inflated “middle class” to mean upper middle luxuries: two cars, two iPhones, dining out, Amazon Prime, orthodontics, soccer trips, Disneyland, and a home office with Wi-Fi.
In 1960, one income worked because expectations were lower, families were more self-reliant, and debt wasn’t a lifestyle.
You want one income? You can do it.
But you have to live like the people who actually did it.Not poorer, just simpler and more deliberate.
The people of the past didn’t have a choice, but you do.
Tumultuous Turkey: Try getting a job without a cell phone. You can’t.
Try finding a 1000 sq ft home. You can’t.
Try getting a house phone without Internet and cable included. you can’t.
Avg cost of a used car is 25k in 2024. Try no car.
We are not the problem. The tax & gov is the problem.Analytic Valley Girl Chris: This advice would be less fucking retarded if you didn’t put a fucking microwave in the same cost bracket as a fucking air conditioner
Is there a lot of slack in the typical household budget if you are willing to sacrifice?
Yes. You can buy things like cars that cost less than the average. There are limits.
It is always interesting to see what such lists want to sacrifice. A lot of the items above are remarkably tiny savings in exchange for big hits to lifestyle. In others, they do the opposite. People see richer folks talking to them like this, and it rightfully pisses them off.
You can see the impact of the Revolutions in the replies, only some of which is about the smaller crazy asks. No, you can’t really do this. The world won’t allow it and to the extent it does it will treat you horribly and your kids will not accept it.
Another example of the gaffe of saying what you actually think about what to cut, as he complains about kids being ‘entitled to 37 pencils’:
The Bulwark: Trump at his speech on the economy: “You can give up certain products. You can give up pencils…They only need one or two. They don’t need that many…You don’t need 37 dolls for your daughter. Two or three is nice, but you don’t need 37 dolls.”
The thing about pencils is as you use them they disappear. You need another pencil. There are many places in education we can likely cut, and no you do not ‘need 37 dolls’ and we used to have far fewer toys and that was fine, but pencils?
Thus, people increasingly believe they need two incomes to support a family.
They’re noticing something sucks. Assume they’re right. Figure out what it is.
Matthew Yglesias: The claim that the *absolute affordability* of being a married, one-earner family with kids has fallen would — if it were true — have straightforward win-win policy remedies like “higher wages and incomes.”
When you reformulate to a more accurate claim what you end up with is the observation that it is is hard for one person to earn as much income as two people and that the wedge has grown as women’s earning power has increased.
This is very true but what’s the fix?
One that would “work” would be to push women generally out of opportunities for careers and white collar work — something more conservatives are tip-toeing around but don’t quite want to say.
[Links to: Women’s professional rise is good, actually.]
A change can be good. That doesn’t get you out of dealing with the consequences.
In this case, the consequences are that the second income gets factored into the Revolutions of Rising Expectations and Requirements.
Absolute affordability of being a one-earner family with kids has fallen, because again:
First, some brief questions worth asking in advance:
Zac Hill: [That two incomes buy more than one] is the rub of this whole discourse. Wages being much higher means the cost of a person not working is also much higher. But is that a problem in need of a solution? If so, what is the solution, and why is “accept a much lower income” not also an acceptable solution?
Even if you could somehow execute on the above plan to survive on one income by having life suck in various ways, that plan also takes two.
Not two incomes. Two parents.
Hey baby, want to live on one income, Will Ricciardella style? Hey, come back here.
Telling young men in particular ‘you can do it on one income’ via this kind of approach is a joke, because try telling the woman you want to marry that you want to live in the style Will Ricciardella describes above. See if she says yes.
The question ‘so what are you going to do about it?’ is still a very good one.
What do you do if families have the option of two incomes, and we set Expectations and Requirements based on two incomes, and you want to get by with only one? Adjusting how you spend money, and using the other parent’s time to save some money, will only go so far.
If you want one income households and stay at home parents to be viable here, I would say four things are required, in some combination. You don’t need all four, but you definitely need #1, and then some additional help.
I usually discuss these issues and questions, especially around #4, in terms of declining fertility. It is the same problem. If people don’t feel able to have children in a way they find acceptable, then they will choose not to have children.
On the marginal tax rates, consider these graphs.
That’s all obviously terrible policy, but it also means that you can obviously support a family on one $30k income if you could have done it on two $30k incomes, since your net benefits take home pay is not substantially lower after child care.
Alternatively or additionally, from a policy perspective, you can accept that you’re looking at two income households, and plan the world around making that work.
The big problem with a two income household is child supervision.
Ideally you do all of that anyway, it’s badly needed, and you open up both choices.
Now, back to the question of what is going on.
What should we make here of the fact that spending on food, clothing and housing (aka ‘necessities’) has collectively declined as a percentage of income, and also the food is way better and the houses are bigger?
The definition of ‘necessity’ is not a constant, as the linked post admits. The ‘necessities’ that have gotten cheaper are the ‘necessities of the past.’ If things like education and health care and cell phones are de facto mandatory, and you have to buy them, then they are now necessities, even if in 1901 the services in question flat out didn’t exist.
That’s not to downplay how much the past sucked. It sucked a lot. Go see Hamnet or Train Dreams or The Housemaid.
But there are other ways it didn’t suck. In large part that was because you were allowed to suck without the rug being pulled out from under you for the crime of not having a rug, and also you didn’t have to compare to all the families with fancy rugs.
Life is vastly better. Life also really sucks compared to Rising Expectations.
Setting aside AI, what do we do about it?