[legitster]

People are misreading the conclusion - the Covid related drop is normal and matches previous episodes, but the massive overall drop since 2000 is not.

The situation on the ground is unchanged - the amount of labor being generated per person has not really changed, but the overall pie has grown massively around us.

[vannevar]

This is consistent with the observation that the top 10% have captured a disproportionate share of GDP growth over the past few decades.

https://equitablegrowth.org/new-data-reveal-how-u-s-economic...

"The past three economic expansions have largely benefitted the top 10 percent. In each, the top decile received between 47 percent and 59 percent of all income growth in the expansion."

[u1hcw9nx]

Also note: Labor share has declined similarly across OECD countries for several decades.

Automation, robots, software etc. they are all capital share.

[stymaar]

> Automation, robots, software etc. they are all capital share.

I highly doubt automation and robots are a meaningful factor here, but IP and outsourcing have the exact same as automation.

[boelboel]

New factories use very few people, part of the reason why it's difficult for many countries to industrialize like South Korea or China did (climbing manufacturing ladder).

[stymaar]

> New factories use very few people

That's both true and false. Yes they need very few people to operate, but building and maintaining still need a lot of people.

[jjk166]

They need fewer people to build and to maintain than older ones did. Further the jobs from building the factory are temporary.

[SideQuark]

There’s plenty of papers showing exactly this. What do you think has driven productivity? People simply bring smarter?

The fact is capital expenditure from company or investors has bought machinery, compute, pipelines, transport, and massive investment to make those workers more productive for decades. As such, the returns to capital as a share has increased. Those places able to deploy capital to add productivity win over those that don’t.

And real total remuneration across all quintiles has increased significantly. BLS among others has all historical data to check.

If/when there’s a period where there isn’t more gains to be had by more investment per worker, and workers become more productive via their own skill (education, diet, genetic implants,…), then more returns will flow that direction.

This is all well known, and easily checked.

[stymaar]

> What do you think has driven productivity?

“Productivity” is a terrible metric for such a discussion, it's not what it sounds, it's merely “real” GDP/worked hours.

> The fact is capital expenditure from company or investors has bought machinery, compute, pipelines, transport, and massive investment to make those workers more productive for decades. As such, the returns to capital as a share has increased. Those places able to deploy capital to add productivity win over those that don’t.

This is the fairy tale you learn in econ 101, but in reality that's not what happened in the period, the businesses that won during the 2000-24 period (the so-called “tech” companies) were companies for which capex were well below average.

> This is all well known, and easily checked.

That's not “well known”, you're just saying the gospel. It doesn't matter if it's contradicted by evidences, you believe that how the world work so it must be true.

[SideQuark]

It's interesting you cut out the "There’s plenty of papers showing exactly this." then pretended the rest is simply ignorant belief.

> the businesses that won during the 2000-24 period (the so-called “tech” companies) were companies for which capex were well below average.

First, it's odd that when discussing the point about total US worker productivity and capital expenditures, you somehow think a sector consisting of less than 1% of workers is evidence. And even on that claim you are incorrect.

Here's the datasets for that period capex by industry [1]. You are demonstrably wrong by a large margin. I expect you to have some better sourced or more convincing data, otherwise it seems you're operating on belief, not evidence.

If you want to try again, try looking at all workers, not cherry picked examples.

> That's not “well known”, you're just saying the gospel

Here's google scholar on the literature around this [2]. Go ahead and tell me again how this is not well known? Pretty much every paper and piece of empirical evidence on this points to the same reasons.

[1] https://pages.stern.nyu.edu/~adamodar/New_Home_Page/dataarch...

[2] https://scholar.google.com/scholar?hl=en&as_sdt=0,15&q=us+pr...

[mech998877]

Robots (and other tools) are capital. A way I think of it:

if you formed a co-op of sorts, with let's say 20 people, starting with no land ownership and hardly any tools, they could try to make a business. Whatever they end up starting would be a fairly low-productivity business- washing windows, janitorial services, lawn service, etc. The more tools and land a co-op has to work with, the more productive they can be. With a few million dollars up-front they could have built a factory instead.

The increased productivity generated can be attributed to the capital share of income.

[stymaar]

That's econ 101. But that doesn't mean that's what happened in the real world.

The thing is you won't be able to name a single industry for which automation has had a significant impact on labor productivity during the 2000-2020.

The US lost almost half of its manufacturing jobs in the 2000s and it has pretty much nothing to do with productivity, and everything to do with businesses moving their production abroad.

Robots can have a huge impact in the coming decades, but you can't argue that they had negligible impact on the past two decades.

[9x39]

Automation isn't foreign to the topic. There's some discussion here that refrains from estimating too hard, but I think it's closer to outsourcing's effect:

https://www.stlouisfed.org/on-the-economy/2024/jun/worker-sc...

Outsourcing and automation both reduce worker leverage, which reduces wages, which could explain reduced labor share. I'm not sure how one would weight it all.

[stretchwithme]

Employee compensation comes from capital. And employees are working at companies that provide robots, etc.

There's a return on capital than is not spent on employees. That reflects how much capital is growing and how much can be spent on employees in the future.

[vannevar]

>And employees are working at companies that provide robots, etc.

Just as are the top executives. And the shareholders that have put money into companies that provide "robots, etc.". All these people, including labor, are stakeholders. If there was 5% GDP growth that got reflected as 5% growth in net earnings for the company, one would expect that all the stakeholders would see roughly a 5% increase in their personal earnings from the company. The dollar amount would be higher for higher earners (5% of $1M is greater than 5% of $50k), but the percentage increase would be roughly in line. The real world results are not even close to this "rising tide lifts all boats" ideal.

[9x39]

They didn't make the rising tide analogy, I read it as how much could be captured by labor if we increased leverage.

In any case, it doesn't follow that wages grow with earnings. Wages have historically been a lagging indicator.

[vannevar]

>They didn't make the rising tide analogy, I read it as how much could be captured by labor if we increased leverage.

Fair point, though it's not completely clear from the comment.

>Wages have historically been a lagging indicator.

Of course, companies don't know in advance that they're going to have GDP-assisted growth. My point was that growth on the back of GDP growth is a collective windfall, and you'd expect it to be evenly distributed. But it clearly isn't.

[PaulDavisThe1st]

> Employee compensation comes from capital.

All human collective endeavors (with few exceptions) require 3 kinds of human-related input: capital, labor and ideas.

Nobody puts their capital into an endeavor in which the plan is for the that capital to provide renumeration for the labor for more than the shortest possible time (*). The goal is always to generate revenue in sufficient volume to pay for the labor, and when that goal is met, that success is a function of all 3 kinds of contribution.

So no, employee compensation does not come from capital, but from revenue that results from the successful interaction of capital, labor and ideas.

(*) non-profits would be an obvious exception, except that nobody actually talks about investing capital in such organizations, we just make "donations" or "grants". That money plays the same role as capital, however.

[krsw]

Also weaker worker rights, gig-economy, continued outsourcing, H1B exploitation to undercut wages (aka 'take 60k for this 110k job or go home idk'), just straight up bad wage growth in general (min wage pretty much stagnant since the 90's), stock market rewarding RiFs, massively decreased market regulation, more take breaks for the ultra-wealthy, cutting SNAP benefits, bonuses transitioning to RSUs- taking 3-5 years you vest...

[wolvesechoes]

> Automation, robots, software etc.

Nah, it is just capitalism at work. Winner takes all.

[cherryteastain]

"Top 10%" is such a misleading slice here. The guy who's at the 9.99th percentile is a normal salaried worker not doing better. The gains are entirely concentrated in the tiny billionaire slice buried inside that 10%. In fact wage growth for the top decile has been recently slower than bottom deciles [1]. Incomes still grow fast in the top decile, but mostly due to assets. And those assets are disproportionately in the hands of the billionaire slice of that top decile.

[1] https://www.epi.org/publication/strong-wage-growth-for-low-w...

[pessimizer]

The top 10% incomes have tons of assets, especially homes.

Saying that billionaires "disproportionately" have more assets than non-billionaires is a tautology that says nothing. You might as well say that tall people have disproportionately more height than people who are not tall. Billionaire is a statement about wealth, not income.

> In fact wage growth for the top decile has been recently slower than bottom deciles

Which is a very good thing, but also doesn't address anything. The bottom deciles live from their wages. The top decile either put most of their wages into assets, are already so wealthy that their wages don't matter, or live in luxury they can't afford.

The macroeconomic purpose of inflation as a tool is to lower the wages of high wage earners - because socially you can't really lower people's wages, at best you can refuse refuse them raises. It's easy to raise the income of lower deciles to offset inflation, either through legislation or safety net. Middle-high wage earners who do nothing under inflation face an effective pay cut.

> The guy who's at the 9.99th percentile is a normal salaried worker not doing better.

He is not normal, he is in the top 10%. His income triples or quadruples a median income. He is of course not doing better than himself, but he is doing better than 90% of other people by definition.

[cherryteastain]

Point is that income from dividends, rent and capital gains far outstrips the $150k the 90th percentile guy makes [1], which you have conveniently ignored. The $150k 90th percentile earner has more common with the $50k 50th percentile earner than he does with the billionaire earning $100M of capital gains, dividends and rent from assets. The 90th percentile guy is a wage laborer like the 50th percentile guy; they are effectively the same class. The only different class is the capital owning class.

Being able to afford a slightly nicer car or house does not change your class. Being able to influence elections, buy lobbying power, play power games, being in the "in" group of capitalism changes your class.

[1] https://dqydj.com/income-percentile-calculator/

[somenameforme]

Household income at the 90th percentile is about $250k per the US census. [1] And wealth disparities tend to be much larger yet still since a significant chunk of the $250k spending is going to go into things they have equity in like mortgage/low depreciation assets/etc, as opposed to food and rent. Especially in modern times where seemingly every industry is trying to figure out ways to charge rent while providing as little in return as possible.

Oligarchs have always been in their own class.

[1] - https://finance.yahoo.com/news/income-puts-top-10-earners-16...

[vondur]

Aren't most of the tech workers here part of that 10% and I'd assume they own houses in some of the most expensive areas, so they are technically part of the capital class?

[PaulDavisThe1st]

Being a part of the "capital class" does not mean simply having passed a net worth threshold.

It means having sufficient liquid capital that you can invest it in uncertain outcomes, generally without fear of poverty or perhaps any real negative effects on one's life at all.

Owning a very expensive home in a very high cost-of-living place (or even in a not-so-high cost-of-living place) does not place a person in that position.

[archagon]

You think most of the tech workers here own houses...?

[tancop]

defining classes is complicated. if you do it based on income percentile it will always be arbitrary and never reflect actual economic relations.

the most accepted way to divide in socialist circles is based off where your income comes from, your relation to capital. if you have to work for someone else thats working class (proletariat), if you can be independent you are professional or middle class, if you own the means of production for others that makes you a capitalist. owning a house is only capital class if you rent it out.

from that pov almost all tech workers are professional or working class. with founder ceos its more complicated because they own capital but also work for themselves through their company so you can take them as either. i guess it depends on if you like that person.

[eudamoniac]

What class is someone who is retired on savings but doesn't own any means of any production?

[porridgeraisin]

"I define things so that I'm in the good set and _they_ are in the bad set".

It's also utterly deranged even when you just consider that most tech workers get compensated with stock.

[smallmancontrov]

Your incentives come from where your money comes from. This is a pretty basic concept and it's absurd to brush it off as a form of No True Scotsman.

You can get money from both labor and capital. This is called "middle class." Don't let it melt your brain, but don't oversimplify to "you owned a stock so are capital class" either. Just give the labor/capital percentages (ordinary income / capital gains) and note how it leans.

New grad tech worker: 100%/0%

Mid career tech worker: 50%/50%

Late career tech worker: 10%/90%

Retired: 0%/100%

[porridgeraisin]

Exactly. The original comment in this thread asked if most tech workers here are part of the capital class themselves. Which was answered by saying that if you're employed by someone else, you are part of the worker class and thus tech workers are part of the worker class.

Introducing the fact that it's a spectrum and that equity ownership (which a vast majority of people in this industry have) makes you a capital owner is exactly my correction to that.

[OGWhales]

They provided a decently accurate description of the working class vs the capitalist class. I don't think your reply fits here.

[lovich]

Most tech workers do not get compensated with stock. A fraction of the best compensated get stock. The next tier down get options with so many caveats that they are effectively worthless, and the tier below them are straight salary with no equity even entering the horizon for them.

And yea, once you start getting actual capital and start reaping the benefits of that wealth you start being identified as a capitalist in the socialist world view.

Edit: the comment I replied to originally had this sentence at the end

> Very typical for a certain type of folk. It's also utterly deranged even when you just consider that most tech workers get compensated with stock.

[porridgeraisin]

Eh? Which tech company doesn't give RSUs to fresh grads? Startups of course give options.

And how many american middle class+ (generalizing beyond tech workers) don't own equity?

[didgetmaster]

Every discussion about the 'top 10%' seems to make the underlying assumption that the set of people who fall under that category are consistent. While there are certainly individuals who enter the top 10% (or top 1%) and stay there; there are large numbers of people who move in and out of those categories.

For me personally, I am in the top 10%; but a few decades ago, I was not.

[PaulDavisThe1st]

The statistical evidence for your claim is not good. There is certainly a generational effect in that 5 year olds are typically not in the upper decile, simply because they generally have little to no individual wealth or income. But in the USA at least, most people die in the same decile they were born into.

[georgeecollins]

Exactly! And while a well off person may have a memory of a time in their life when they were not doing well (like in school, starting their career etc.) that can be misleading. You tend to end up like your parents more then was true three or four generations ago for many reasons: tax policy, less physical mobility, people tending more to marry with similar levels of education or income.

People debate how much social mobility there is in the US, but it seems pretty clear that the trend has been toward less mobility. The founding fathers of the US did not want to replace one aristocracy with another. Obviously there are some who think the change makes sense-- not me.

[bluefirebrand]

Something I've seen a lot is claims about individuals being self made, climbing the ladder from grit and ingenuity and such. Look at Bezos, he's an example of climbing the ladder! Or Zuckerberg!

And when you dig a bit more, you kinda find out this isn't really true?

I mean look at this AI summary of asking "Was Jeff Bezos born into wealth"

> Jeff Bezos was not born into wealth; his mother was a 17-year-old student and his adoptive father was an impoverished Cuban refugee who arrived in the U.S. alone at age 16. However, his maternal grandfather owned a large Texas ranch and later provided roughly $250,000 to help fund the launch of Amazon

Oh so his parents weren't wealthy only his grandparents. That's totally different

You know what my Grandpa gave me? A used car worth about 3 grand. Still amazing, I'm still very grateful to him! But the comparison here is absolutely not in the same league!

And I'm still a fortunate one, because many people get much less than a car from their families

[WarmWash]

The question is how many people get $250k from their family and lose it all.

Everyone's life is a mix of skill and luck, so to discredit skill, you would need to quantify the luck. An easy example is a lottery winner, a hard example is a Bezos. Any investor with the foresight to see what Bezos could do with grans money, would jump past her in line and give him triple.

[bluefirebrand]

> The question is how many people get $250k from their family and lose it all

I don't think that really matters? The fact that they even had that shot at all is such an incredible opportunity above people whose family simply cannot afford to even try

[grumpy_coder]

You have to have access to far more than $250k to be willing to blow that creating a startup. I may give my kids $250k for a house to live in. I do not have enough for them to yolo it on a dot com startup.

[mghackerlady]

This is bourgeois idealism. In reality, the people in the top 10% remain there and rarely fall

[jhoechtl]

This is a good point I haven't considered in the past and worth to take into the overall discussion.

[joe_mamba]

Here's what I found asking AI:

  US Household Wealth Distribution (Q1 2026, Fed DFA)

  Group       | Share of US Total Net Worth
  ------------|-------------------------
  Top 0.1%    | 14.4%
  Top 1%      | 31.6%
  Top 10%     | 67.9%
              | 
  Bottom 90%  | 32.1%
  Bottom 50%  | 2.5%

So, the top 10% holds roughly as much wealth as the bottom 90% combined.

The top 1% alone holds more than the entire bottom 90% minus the upper-middle segment.

To be in the top 10% you would need roughly 1,8 Million $ in assets (that's probably 90% of HN useerbase)

Basically, the bottom 50% are a slave class that doesn't even participate in the economy.

LE: The richest 20% are the only ones powering the U.S. economy, per Moody's Zandi. K-shaped economy all the way.

[didgetmaster]

Those numbers for 2026 may be right, but they absolutely do not mean that anyone who finds themselves in one of those categories must stay there.

While there are many people who are currently in the bottom 50% and will probably stay there; no one is a slave who has to stay there.

My original post (which is somehow unpopular on HN) points this out. I spent my first 30 years in that group and worked my way out of it.

[vannevar]

You are making the common mistake of confusing two different things: the absolute capacity for an individual to improve their income over their lifetime, and the relative capacity to improve based on their current decile. If progress depended solely on merit, you would expect economic growth to be more or less evenly distributed across the percentiles---the "rising tide raises all boats" idea. That this doesn't happen suggests that people in higher deciles not only have more wealth, but are more likely to acquire additional wealth. Many wealthy people---and even some poorer ones---maintain that this is because the wealthy must be more industrious. But the vast majority of wealthy people started life in the upper deciles. And it's clear that having wealth makes it easier to make more wealth.

If you doubt this, consider the following thought experiment: imagine two strangers, identical in ability. One wins a million dollars in the lottery, the other is poor. If you were forced to wager your net worth on which twin is likely to make the most money over the next 12 months, who would you bet on? Now think about what kind of qualities would it take to get you to change your bet. How much smarter and harder working would the man with nothing have to be to overcome the advantage of a million dollars? Or even $100,000? You might say, yes, maybe in one year money would have the advantage---but surely an advantage in industriousness would win out in the long run? The mathematical answer is no, because the lottery winner will have a bigger advantage at the beginning of year 2 than he did at the start. If you bet on him in year 1, the bet is even surer in year 2. The reality is that he will continue to pull away. And that's what we see in the real world distribution of wealth: the gap between the wealthiest decile and the next poorest continues to expand, creating increasing social and political strain, as we can plainly see today.

[joe_mamba]

>no one is a slave who has to stay there

That's like saying not everyone who finds themselves homeless must stay homeless, as if they can just choose to go buy a house.

>I spent my first 30 years in that group and worked my way out of it.

And what did the job market look like over the those 30 years versus today? You probably weren't competing with infinity AI bots at every resume application.

Not here to steal your thunder and deny your individual success story, but the tired "I pulled myself by my bootstraps" doesn't mean anything to the people who are strugling.

[didgetmaster]

The vast majority of the homeless in the US, are homeless by choice. They are addicted to drugs and/or refuse to get a job.

You don't have to be able to afford to buy a nice house in order to escape living on the streets.

You might think that my story is tired, but literally millions of people in this country have done the same thing. Telling people who are struggling that they can't improve, certainly doesn't help.

[rsalus]

> amount of labor being generated per person has not really changed

not true, labor productivity has been steadily increasing: https://fred.stlouisfed.org/series/OPHNFB

workers are simply capturing less of the economic value generated by their labor.

[missedthecue]

Increases in labor productivity is a curious thing to think about. Do I deserve more wages for using AutoCad instead of drafting paper?

- The amount I'm working hasn't increased. Still an 8 hour day.

- My job honestly is easier than it used to be; certainly less menial.

- Strictly speaking, the education requirement is actually lower. It's easier and a lower bar to learn to become a decent designer in AutoCad than to learn to effectively use old drafting tools (even though the formal four year engineering degree still takes four years).

But it's also true that in spite of this, my output is higher. Should I capture the increased output or should the innovators of the tools? What about the firms that invest in procuring these tools and production technology? Should the customers capture the increased output through lower prices? Or should the innovators, firms, and customers all get less, and instead my wages should get bigger?

[3D30497420]

Salaries aren't about what someone "deserves" or "should earn".

Those in control will try to capture as much of the return as possible. How much value the worker captures is based on their relative power (ability to move to a higher paying employer, scarcity of skillset, laws such as minimum wage, etc).

[larkost]

> Or should the innovators, firms, and customers all get less, and instead my wages should get bigger?

In almost all of the cases the "innovators" are themselves workers whose share of the outcome has been dropping. And the "customers" have never gotten a piece of the profits; we are already past the point where reduced prices would have happened (competition) in this system.

And I think that by "firms" you really mean some combination of executives and investors/shareholders. That is where the gains have been centralized. Do you really want to argue that management and investors deserve to have more of the gains? What have they done that makes them so much more valuable than similar groups in bygone days?

[rsalus]

the argument is productivity gains are increasingly driven by technological advances, which are spurred by capital investment. for example, if a company purchases software that increases their accountants productivity by 5x, should those accountants immediately be paid 4-5x more?

I would contend that the accountant should not - it should flow to who bore the cost of the input (capital owners). however, if you starve labor of those gains, it destroys the consumer base that capital relies on to buy its goods and services. therefore, society requires broad wealth distribution to function, which implies some level of redistribution by the state is needed.

[cataphract]

> it destroys the consumer base that capital relies on to buy its goods and services. therefore, society requires broad wealth distribution to function

This is becoming less and less true, because now consumption is becoming dominated by asset owners, to the point that a good jobs report is bad news because it means the fed are less likely to drop rates and through that inflate asset prices.

[rsalus]

> now consumption is becoming dominated by asset owners

absolutely true. I am not convinced that consumption can be wholly fueled by asset owners though.

[monknomo]

idk, if we look at a lathe, where the factory bought the lathe, this makes some amount of sense (although a closet full of idle lathes isn't worth as much as a factory full of lathe operators making stuff on lathes).

a saas subscription is (per user) probably cheaper than a lathe, easier to stop investment into (no need to resell to recoup some of the loan, just quit paying). A closet full of unused saas subscriptions is worth even less than a closet full of idle lathes.

And yet, these subscriptions make the knowledge worker even more productive (in dollar amounts) than a lathe operator.

obviously a knowledge worker can just subscribe to claude and start building, but building in a vacuum isn't worth a lot more than the closet of saas subscriptions. It's a mutal dependency, and it's the combined efforts of the team that results in this tremendous value add. I wonder if there isn't something there that is above and beyond the capital input and the risks associated with deploying that capital.

But maybe that's an argument for workers of the world uniting and founding their own companies together

[PaulDavisThe1st]

If using autocad does indeed make you more productive, then your 8 hours per day of labor generates more value for your employer.

Where the benefits of that end up is one of the most fundamental questions of politics. As you note, there are arguments for it to flow to any combination of several different groups. Deciding how much goes to each group is what politics is all about, in the end.

[jacobolus]

In practice what happens is that on average the tool-user's wages go up slightly but most of the jobs in the field are eliminated, and the resulting large profit mostly goes to managers and financiers.

[9x39]

Looking at cohorts of workers, automation tools like AutoCad reduce the expertise needed and commodify the job, which reduces leverage and thus per capita wages.

Consider the taxi or unskilled worker examples here:

https://mitsloan.mit.edu/ideas-made-to-matter/a-new-look-how...

All to say, as an individual, individuals rationally try to maximize leverage in a negotiation to capture the increased output. But what happens to classes of workers in different jobs varies. My take is that capital appears to be gaining leverage over wages back from many classes of workers, even if some limited classes of expertise are stable or gaining.

[rwmj]

Productivity is just aggregate output of the economy divided by the number of people-hours worked. You can argue about if that's a useful thing to measure or if the measurements themselves are accurate or if you should capture more of the output, but at root it's very simplistic. If you can use AutoCAD to generate more drawings than using paper which you (or your firm) sells for the same price per drawing, then your productivity did go up. Is that meaningful? Less certain.

[Teever]

Thats a good list of questions here’s another good thought provoking line of thinking:

As someone trading labour for a wage should I adjust my productivity to match the tools I’m using? That is to say if I’m using CAD should I bother using the tool to raise my productivity? Or should I just match my old hand drafting productivity rates? Should I attempt to raise my productivity rates with these new tools to meet or exceed the best rates from my coworkers?

What can we do to align my interests with those of my employer?

[WarmWash]

I think it is pretty clear that knowledge workers are internalizing the gains that newer and newer tools (and higher and higher rungs on the global economic ladder) have provided them, while at the same time capturing less of the overall gains that are being had.

Basically it's taking fewer bodies to create more value, and that value creation is so intense that even workers getting "ripped off" feel like they are making bank.

[skybrian]

More productive companies earn more revenue and can offer more compensation to try to get better workers. That's why software engineering pays more than many other occupations. It's not because they're nice.

But for this to work, employers have to believe that hiring better workers matters.

[forgotaccount3]

> Should I capture the increased output

You do capture the increased output by benefiting from a society where the cost to build safe buildings has drastically reduced.

Just because you don't get an immediate financial benefit doesn't mean you haven't benefitted from the increased output.

[limagnolia]

And many laborers have retirement accounts and pension funds that are also capital owners, so they benefit from increases in capital too.

[FatherOfCurses]

Assuming you don't retire during one of the periodic market bust cycles. I think a lot of workers would rather see more return on that increase in capital now.

[smallmancontrov]

r>0 is not the problem, r>g is the problem, and that one's a lot less morally ambiguous.

[wolvesechoes]

> Increases in labor productivity is a curious thing to think about. Do I deserve more wages for using AutoCad instead of drafting paper?

Please...

> But it's also true that in spite of this, my output is higher. Should I capture the increased output or should the innovators of the tools? What about the firms that invest in procuring these tools and production technology? Should the customers capture the increased output through lower prices? Or should the innovators, firms, and customers all get less, and instead my wages should get bigger?

No, only your boss deserves to gain from you productivity increase, that's obvious.

[nielsbot]

> Should I capture the increased output

yes

[zer00eyz]

The chart you're showing, absolutely reflects the reality of some of the most productive segments of our economy.

Ford now makes more cars, with fewer people. Sears used to have people who took photos, laid out catalogs, opened envelopes (with checks in them).... Amazon has none of that. We replaced switch board operators, with mechanical, then digital switching. More calls routed, fewer people required. go back 45 years and "draftsmen" was a job - replaced by auto cad.

All these industries have seen massive productivity.

Are the people flipping burgers more productive? Plumbers? Welders? Teachers? Nurses? -- to some extent yes, because of technology but not to the same extent as the previous businesses. Anything that qualifies as "service economy" work has not seen the same gains as Ford (see: https://www.aei.org/carpe-diem/phenomenal-gains-in-manufactu... )

[PaulDavisThe1st]

One cause for lack of productivity gains is Baumol's cost disease, which generally affects organizations involving N different people (for N>1) where for one or more reasons N cannot be meaningfully reduced, if at all. Orchestras are the canonical example.

There's a variant of this, however, in activities that are done essentially by 1 person (as is true for most of the examples you mention in your last paragraph). You can improve their individual productivity - more pipes fixed, more joints welded, more patients well-attended to (*) - but in the end you cannot get rid of the individual doing the work in the way automated manufacturing has.

(*) even with a nurse though, this starts to break down for activities where time is a critical part of whatever is being done. Sometimes caring well for a person is primarily a matter of spending time with them, and this is certainly true for teaching as well. In such cases, you cannot make the person "more productive" no matter what technologies you might provide them with.

[boelboel]

Construction notably has had productivity losses since the 80s afaik.

[zer00eyz]

Good call out, and an interesting case I was unaware of.

It looks like this is another facet of the "bitter medicine" that we're seeing around housing in general.

The first article that I saw pointed out that there is a correlation between productivity and regulation (of construction permitting etc). I would believe that because it has a corollary with "housing starts" (a measure of new construction) and its regional strength in the red/south portion of the country.

[legitster]

Fair, but the year over year growth of labor productivity has been really consistent, as has consumer prices:

https://fred.stlouisfed.org/graph/?g=tjto

So in terms of how much consumers are making in relation to their expenses, it's been remarkably steady this whole time.

[rsalus]

yes, but wage growth has not tracked productivity: https://fred.stlouisfed.org/graph/?g=1X020

household expenses have been increasing without commensurate wage growth, resulting in lower savings: https://fred.stlouisfed.org/series/PSAVERT

[bko]

Chart goes up, but you really need to look at percent change. Over the last 25 years it's averaged about 2%

observation_date OPHNFB_PC1

2000-01-01 2.99256

2001-01-01 2.58092

2002-01-01 4.27146

2003-01-01 3.68422

2004-01-01 2.97991

2005-01-01 2.18582

2006-01-01 0.99665

2007-01-01 1.58927

2008-01-01 1.30737

2009-01-01 4.07061

2010-01-01 3.15513

2011-01-01 -0.02491

2012-01-01 0.93870

2013-01-01 0.59941

2014-01-01 1.00795

2015-01-01 1.27023

2016-01-01 0.61567

2017-01-01 1.49513

2018-01-01 1.40965

2019-01-01 2.13337

2020-01-01 5.30657

2021-01-01 2.06281

2022-01-01 -1.46786

2023-01-01 2.13277

2024-01-01 2.91010

2025-01-01 2.25154

[rsalus]

2% is average. 1-1.5% is considered a slump, while anything over 2.5% is considered a boom. for instance, the post-ww2 boom (1947-1972) averaged 2.9%. at that rate of growth, a country's total output per worker doubles in roughly ~25 years.

[ijidak]

Is this inflation adjusted?

[ijidak]

Is this inflation adjusted?

[BoppreH]

> The situation on the ground is unchanged - the amount of labor being generated per person has not really changed, but the overall pie has grown massively around us.

My understanding is that "fixed" costs like rent and groceries have gone up and taken more of people's budgets, while wages failed to catch up with this inflation.

If that's the case, it's markedly different from "situation on the ground is unchanged". I don't know how the overall pie is doing, but it has not grown enough to compensate for the labor share drops shown in the article. The slice on my plate is certainly lighter.

[dozerly]

We have one of the worlds most prosperous economies, and half of the US is living in abject poverty while quality of life for everyone is decreasing.

[taeric]

I'm going to go on a limb and say half of the US is not living in abject poverty? Nor can I get behind the idea that quality of life for folks is on the down trend.

[digitaltrees]

I own a Medicaid home care agency in 13 states. We serve low income families and our caregivers, who earn $12-18hr which is higher than minimum wage, absolutely struggle. We have created food banks and housing assistance because even working people are a few sick days or one car repair away from homelessness.

I would encourage you to go work with average Americans in average towns. The facts on the ground are stark and eroding.

[logicchains]

>I own a Medicaid home care agency in 13 states. We serve low income families and our caregivers

There's an extreme selection bias there. If you run an agency that works with low income families you're not going to see a representative sample of the overall population.

[jancsika]

> There's an extreme selection bias there.

Maybe. Unfortunately, what digitaltrees wrote here is ambiguous. It could also be read as this:

Our caregivers serve low income families. Those caregivers, who are our employees, earn $12-18/hr which is above minimum wage. Our employees absolutely struggle. Our employees are the ones using food banks and housing assistance because many are one car repair away from homelessness.

digitaltrees: which interpretation is correct?

[dmoy]

I think the latter interpretation is correct. As in digitaltrees runs a business that does not pay its employees a living wage, who then have to rely on food banks and housing assistance.

[digitaltrees]

We have a private pay arm as well, so the other extreme. I also have a roofing company. And I look at the data.

[mrWiz]

If you read the rest of the comment you’ll find it’s about their employees rather than their clientele.

[digitaltrees]

It’s both. The clients are more impoverished but the caregivers also struggle.

I got into this to build software to lower admin expenses and improve operations for an otherwise under served industry. We are making progress and have supported thousands of people in having stable careers. The horror stories I could tell of other agencies exploiting people due to incompetence or malice are shocking.

[HEmanZ]

Median income in the US is much higher than $12-18/hr, it is about $30/hr. 25th percentile make $20/hr. 10th percentile make $15.58. https://www.bls.gov/news.release/wkyeng.htm

So, the people you are mentioning making 12-18/hr, are literally below 1 in 4, to less than 1 in 10. These are not “average middle class Americans” except maybe in that higher end. These are low wage earners and are far below “average”.

I mean absolutely nothing normative by this statement, nothing about whether this is good or bad or what we should do policy, socially, whatever. But saying someone making below the 10th percentile is average is like saying someone making $75/hr is average.

[digitaltrees]

They are within 25% of the of the median. So they are the lowest range of 50% of the bell curve.

[HEmanZ]

Literally not a single one of those numbers is above the 25th percentile. 18 < 20.

[taeric]

I would fully get behind us paying service providers far more than we do. To wit, it baffles me when people are upset about how much we allocate to pay for services that go to older people, but then we don't do any effort to make sure the services are provided by younger people. Indeed, we seem to go out of our way to make sure the people providing these services are, themselves, low income. It is baffling.

But even this feels like it is overstating things. You say folks are one car repair away from being homeless. And there is a lot of polling that shows people would struggle to pay for repairs. But full on homelessness? I can only assume that you are describing towns/cities that offer no transport assistance at all, that lands people into being so dependent on a car. I believe it, but I struggle to think this is literally half the nation.

[digitaltrees]

I had an employee that was homeless last week. We were trying to figure out what to do. We’ve been looking into buying apartments to convert them to condos for a first time home buyer program, but the economics are hard to make work. We have considered buying a camper that can move around

The reality is that when 40% of your income goes to rent, how many days of work can you miss before you can’t pay rent? If your car breaks down, how many days will your employer tolerate while you try to get it fixed, assuming you have the money to fix it.

You don’t have to believe me, just look up the state on the percentage of Americans living pay check to paycheck.

[taeric]

The stats on "living paycheck to paycheck" are notoriously rough. With some people that make 300k a year claiming they fit that category.

Don't get me wrong, I sympathize with your given scenario. I actually lost my car when I was younger. Was a rough few months while I got used to commuting without one. And I was lucky to have a roommate that kept my cost of living down.

And I remain a proponent of increasing pay to service providers. As well as finding ways to provide cheaper living conditions. First time home buyer programs are great, but seem unlikely to be relevant for the workers we are talking about? I see the median age of home care nurses in rural areas drifts up to 51-53. Which, granted, I see the median age of first time home buyer is drifting up. I don't think it is as high as those workers, though.

I do think there is a problem here. I just don't think it rises to "half the nation lives in abject poverty."

[PaulHoule]

Someone could interpret that as a lack of capitalism rather than the opposite.

That is, Henry Ford changed the world because he deployed capital to make workers so productive that they could afford to buy the cars they make.

A person paid to do child care in an organization with overhead, who has to pay taxes, etc. is not productive enough to put their own children in child care. So child care fails to revolutionize the world the way the car did.

See https://en.wikipedia.org/wiki/Baumol_effect

[mmooss]

> A person paid to do child care in an organization with overhead, who has to pay taxes, etc. is not productive enough

They are highly productive but the market doesn't value them. It values the backup forward on a basketball team - an almost completely non-productive job - more than a doctor. It values the owner of a company at $1 trillion, which is obviously absurd.

[newfriend]

It's not "absurd"... you're confusing moral value with economic scale.

A $1T founder is rewarded for building a massive system that employs hundreds of thousands of people, moved technological progress forward dramatically, and has positively affected the lives millions.

A doctor provides life-saving care, but they are physically limited to helping one person at a time. A backup NBA forward might not save lives, but their work is broadcast and monetized across millions of screens at once.

Arguing that entertainment is "non-productive" ignores human nature. People gladly pay to be entertained. If sports have no value, do you feel the same way about books, art, and movies?

[AngryData]

That story about Ford is just PR. Ford had to increase wages because he was churning through so many employees from injury and burnout that he had to convince people even living 1000 miles away to consider moving to Detroit and working on an assembly line. Otherwise he literally could not fill all the positions needed to run an assembly line.

[digitaltrees]

Innovative companies at the beginning of growth cycles are always generous to employees. Look at all the perks showered on staff for a long time. They are starting to pull that back as they get monopoly market power.

I would agree with you that more capitalism would be better but only if you acknowledge that monopolies are not capitalism; they are the logical end and death spiral in unregulated and unmanaged capitalism.

They are the black hole that a dead star collapse into.

[wolvesechoes]

> Someone could interpret that as a lack of capitalism rather than the opposite.

Only someone blinded by ideology.

[throw0101a]

> Someone could interpret that as a lack of capitalism rather than the opposite.

In Capitalism surplus economic value goes to the Capital class, so it seems like it is working as designed.

[PaulHoule]

Some goes to the capital class, some goes to workers. The Marxist eschatology is that there are pressures that cause the fraction that goes to capital increases over time and breaks the system.

Look at the good deal that the UAW has gotten for auto workers in the system, both US car makers and the union are pretty happy right to keep this system in place and shrink in the face of technological change like electrification not to mention abandoning small cars for large cars that are profitable for now.

(Funny how I often I see "good old boys" driving Asian compacts because they can afford Asian compacts, and I see office workers driving big-ass trucks)

[digitaltrees]

But if that capital accumulation is unchecked it destroys the very market forces such as competition and price setting functions through supply and demand necessary for capitalism to work. So capitalists should want to prevent monopolies and concentration of wealth.

[jzb]

I think “abject poverty” is probably overstating the case a bit. I do think quality of life is trending downward given the fact that housing, food, gas, medical care costs are all increasing while wages are stagnant or worse.

[gruez]

>I do think quality of life is trending downward given the fact that housing, food, gas, medical care costs are all increasing while wages are stagnant or worse.

???

https://fred.stlouisfed.org/series/MEPAINUSA672N

Note this is already inflation adjusted, so "housing, food, gas, medical care costs are all increasing" is already accounted for.

[mynameisbilly]

That chart doesn't make the case you think it does. Real median household income rising can be explained by things like more dual earner households (more women working since the 70s), more hours worked, etc. The household income can rise while the wages can theoretically remain flat or even fall.

The more relevant statistic is that median real wages have only grown by about 29% across 40+ years (~0.6% per year)

Since 2000, medical care costs have risen by 121.3%, hospital services by 275%, college tuition and fees by 196%, compared to consumer goods by 86.1%. Things like TVs and electronics went way down in costs while the essentials have absolutely skyrocketed. The cheap stuff drags the average down.

You need a lot more than a single graph to argue against the quality of life going down for Americans.

[gruez]

>That chart doesn't make the case you think it does. Real median household income rising [...]

Where are you getting household income from? It clearly says "Personal Income"

[dheera]

If you have negative net worth and the bank's money, not yours, is buying your food and housing, you are in abject poverty, just that the system is propping up your survival for a while.

A lot of the US looks like they're doing great but fits into the category above.

Non-poverty would look like:

* You make enough money to pay for your own food, housing, and transportation in full, with enough buffer for emergencies, without needing to borrow a cent

* You make enough money to be on trajectory to save up to pay for your own food, housing, transportation, and medical expenses in retirement when you are physically unable to serve the workforce

[jmye]

> You make enough money to pay for your own food, housing, and transportation in full, with enough buffer for emergencies, without needing to borrow a cent

So you're saying I'm in poverty because I couldn't buy my house and my car outright?

> and medical expenses in retirement

You're saying I'm in poverty because I understand and intend to use Medicare?

These are trivially poor definitions.

[dheera]

Medicare is a different thing, the government should be providing medical care for everyone to begin with, regardless of what they make.

My definition is if you need to borrow money to put a roof over your head, at the minimum renting, you're in poverty. There are huge chunks of the US population borrowing money to pay for rent.

If your locality doesn't provide adequate public transit, then a car is a necessity, and the onus is now on the locality's economy to make sure everyone can access that; if your locality doesn't pay high enough to afford that car without borrowing money, then yes, you're in poverty. Alternatively, the locality can choose to provide adequate, safe public transit, and the bar of poverty would change.

Most of the US doesn't think this way because they're delusional and have been conditioned to feed the financial system and pay for things with money they don't have.

[ifyoubuildit]

> So you're saying I'm in poverty because I couldn't buy my house and my car outright?

I think this isn't as unreasonable as it seems to everyone living it. It's like water to the fish.

We are conditioned that everything should be fueled by more and more debt, and your dollars should constantly be devalued so you can't stop grinding.

The little people can never be allowed to just work enough to accumulate what they need and then take it easy.

[skulk]

> Nor can I get behind the idea that quality of life for folks is on the down trend.

There is a pretty clear down-trend post-COVID here.

https://www.federalreserve.gov/publications/2025-economic-we...

[mc32]

Mississippi, the poorest state, has similar median income to Germany. I’m pretty sure 50% of the people there are not in abject poverty.

[impossiblefork]

Yes, but German society is structured to require much less energy, just as Dutch society is structured to use much less land.

If you put Germans whose lives function in a US-style, even just getting to work will be a huge drag.

Misery depends on the structure of society. Here in Sweden I can walk to work. This means that I'm spending zero money on travel to work, and that my travel to work contributes $0 to Swedish GDP. But this is actually better than if Swedish GDP were higher and I was traveling by car.

This is one way in which GDP can be extremely misleading.

[joe_mamba]

>Here in Sweden I can walk to work.

That's you. but nobody In Sweden drives to work?

I see walking to work as an relative to each individual and their job lcoatiopna dn circumstance of where they live, not a country related thing.

For example, ,ost of my jobs in EU that me and my gF had required a car to get to work because companies put their offices out in the boonies to save money so walking was not an option, and neither was public transport.

> But this is actually better than if Swedish GDP were higher and I was traveling by car.

GDP growth "experts" would disagree. It's the reason we don't have mandatory WFH for white collar jobs after Covid proved it's possible and salves the environment

[impossiblefork]

>That's you. but nobody In Sweden drives to work?

A smaller fraction than in the US. I think most people I know drive.

>I see walking to work as an relative to each individual and their job lcoatiopna dn circumstance of where they live, not a country related thing.

Well, it isn't. It's about how walkable environments are.

>GDP growth "experts" would disagree. It's the reason we don't have mandatory WFH for white collar jobs after Covid proved it's possible and salves the environment

Well, they may disagree, but the whole point is the goal of society isn't GDP, since GDP is easy to game with things like creating situation where people are effectively forced to waste energy, drive to work-- that sort of thing.

[afc]

Per Wikipedia, in 2018:

* Median household income in Mississippi: $44,717

* Median wage in Germany: €5,370 per month, equals $73,565.

So even the individual median wage in Germany is more than 50% higher than the median household income in Mississippi.

Sources: https://en.wikipedia.org/wiki/List_of_European_countries_by_... and https://en.wikipedia.org/wiki/List_of_U.S._states_and_territ...

[mishellaneous]

the Wikipedia page on Europe you cite lists average, not median wage in Germany.

the average household income for Mississipi is given as $76,305/year by this US census link: https://data.census.gov/table/ACSST1Y2023.S1901?q=S1901&g=01... (which is cited in the Wikipedia page you cite)

there is also another question. the figure you cited for Germany is gross wage. net wage would be €3,324/month, or $45,536/year. is "income", in the US survey, after taxes? i wasn't able to find the definition of "income" in the American Community Survey, but i notice that besides "income", they also have "earnings" (which is higher).

finally, we need to correct for cost of living. i think that would explain a lot of the difference.

[atq2119]

This doesn't actually seem to be true based on a quick googling, i.e. Germany has somewhat higher median income.

But in addition to the raw numbers, you have to keep in mind that they don't account for cost of living and that different countries account for various services differently, especially health care.

[mc32]

Totally understand that; but it counters the assertion of “abject poverty”. Perhaps relative poverty is a better descriptor but abject poverty is someone living in cardboard tents by the riverbank. Regular poor is living in section eight housing or subsidized housing. I don’t think we have 50% of Mississippians living in abject poverty.

[officeplant]

As a gulf state resident, a whole lot of us live in shitty old shotgun houses that have been patched up hundreds of times just waiting for the next hurricane to wipe us out finally.

I would assume this doesn't account for Germans having different healthcare costs which will aboslutely wreck the average American household with how fucked our system has become.

[chairmansteve]

This just demonstrates that there is something wrong with the statistics.

[shimman]

Okay and what exactly do you get for that income? What are the material outcomes for having a "higher" income than Germany? Because I know very few people that would openly choose to live in Mississippi versus Germany.

[mc32]

The GP claimed that 50% of the US lives in abject poverty. Mississippi our poorest state compares with Germany in terms of median income and Mississippi itself does not suffer from 50% rate of abject poverty. So by extension the US as a whole doesn’t suffer from a 50% rate of abject poverty (begging, trinket selling, selling off relatives, shitting in public, etc.) rates of abject poverty. That’s stuff you’d see in the Great Depression or Weimar Germany level stuff.

[shimman]

Okay so thank you for avoiding the question, once again what does a higher income in the southern US get you that people in Germany don't have?

People want healthcare, they want cheaper housing, they want high quality jobs, they want lower crime. Material outcomes absolutely matter and there is zero evidence to suggest that "high incomes" in the US translate to anything except more blood for corporations to extract.

[olivierestsage]

Sorry but you’re smoking crack if you don’t think quality of life is deteriorating in the US. The anxiety and misery is literally palpable.

[legitster]

"Abject poverty" is currently defined as living on less that $3 a day and dealing with things like chronic hunger and exposure.

The best approximation would be the homeless population in the US (about 500k people), but even then most homeless would not even qualify.

"Half" is a gross exaggeration.

[digitaltrees]

The homeless number under estimates people with unstable housing that aren’t on the streets.

I assure you that when your basic housing and nutrition are uncertain and missing even a few days of income will result in cascading effects of hunger and homelessness, the underlying stress is overwhelming.

It doesn’t have to be this way, we don’t let bullies steal all the toys on the playground and destroy the very ecosystem that they want to have fun in, why are we letting capital accumulate in the hands of the most effective capitalists at the risk of destroying the very markets that let them succeed.

I say that as a capitalist, if we lose the system because we allow unchecked Monopoly and wealth concentration, we won’t get it back.

[legitster]

I agree with all those things, but if we start making up numbers and definitions we're at risk of undoing actual progress.

Maybe it feels good to say "actually everyone is a victim of capitalism", but it muddies real necessary work when it comes to determining whether to prioritize how resources need to be allocated between a disabled person living on the streets vs a graduate student who is currently just a little underwater on their credit card payments.

[digitaltrees]

That’s a reasonable perspective. I would ask though, whether the fear of muddying the discussion is weaponized to create the impression of complexity, a broad range of intractable causes that lead to the conclusion that any solution is futile. The forces that benefit from the status quo deploy this quite effectively

[mishellaneous]

i agree with you that this is a technique that is used to make people give up. not only in the context of this discussion ("how is the economy doing"), but in many discussions. i see it being effective often enough for it to be worrying. i guess it's as they say, this is why you need a population that is indeed educated (on which these techniques would supposedly be less effective) for democracy to work.

[sfdlkj3jk342a]

What's your definition of "abject poverty"?

I find it hard to believe that half the US would meet the criteria for any reasonable definition.

[jandrewrogers]

The BLS and Federal Reserve both have data showing that the median American household has >$1,000 left over every month after all ordinary expenses, including housing, healthcare, and iPhones.

Any definition of "abject poverty" that includes a comfortable lifestyle and $12-15k excess income every year is not a serious definition.

[gruez]

>and half of the US is living in abject poverty

Source? All the ones I know of use questionable methodology like: "being able to afford a 2 bedroom apartment at median wage".

[Folcon]

Out of curiosity, what is your expected baseline of what the average person and family in the US should be able to afford?

[gruez]

"should" is a pretty woolly concept. "should" we have to work at all? UBI proponents don't think so, and that apparently that has 45% support. What's hopefully obvious is that not being able to afford a 2 bedroom apartment at median wage is a far cry from "abject poverty".

https://www.pewresearch.org/short-reads/2020/08/19/more-amer...

[Folcon]

I mean fair, but not relevant?

I'm asking you the question because a statement like 50% of [population] is making a claim to some notion of what they expect society to look like

you introduced the benchmark "not being able to afford a 2 bedroom apartment at median wage", though I would expect a modern day society that makes any claim to be wealthy to be able to have above 50% of it's population to be able to support something like that as that would indicate they can support a small family

You're saying that's not a good benchmark, so I'm trying to understand:

1) Do you have a different benchmark?

2) Is your key complaint that being unable to own a 2 bedroom house doesn't mean that individual or family is in "abject poverty"? In which case fair, though I would ask what does mean abject poverty for you?

It seems like you're saying 2, but I want to be sure

[gruez]

>In which case fair, though I would ask what does mean abject poverty for you?

The exact number is heavily contested[1], so I know better than to provide my own. That said, the official poverty lines are a pretty good place to start, and it's pretty safe to say is that whatever the line for "abject poverty" actually is, "2 bedroom apartment on 1 person income" is pretty far away from that. That claim doesn't require me to provide a specific poverty line.

[1] https://en.wikipedia.org/wiki/Poverty_in_the_United_States#M...

[mschuster91]

> All the ones I know of use questionable methodology like: "being able to afford a 2 bedroom apartment at median wage".

Well, that's (at minimum) what you need to raise a family and replace yourself in the labor pool.

[sokoloff]

In addition to that being obviously different from the line to “abject poverty”, it’s not at all obvious that a single median income should be able to support a 4-person family in a 2BR apartment or else the system is completely broken…

[mschuster91]

> it’s not at all obvious that a single median income should be able to support a 4-person family in a 2BR apartment or else the system is completely broken

Either the Western world allows people the financial and real estate resources to have children in the next 5 years or we're all fucked. The tail end of the boomers enters retirement in 10 years and while millennials can take care of the boomers, eventually we will need to be taken care of, and for that millennials need to have children now as long as we still can.

[sokoloff]

Biology requires two people for the system to work.

Economics could as well and the system would still work.

[eudamoniac]

Someone should inform all of the poor children being born and raised everywhere in USA and earth that they need a 2 bedroom apartment to exist, actually

[gruez]

That's a laudable goal, but hardly "abject poverty"

[IncreasePosts]

In the 1950s Americans were doing a good job at replacing themselves in the labor pool, and household size was larger and houses were smaller.

Why is it impossible for Americans to live with 300 sq ft per person like baby boomers did as kids, but now we must live with 600+ sq ft per person?

[AngryData]

Because margins on building smaller housing is lower so nobody with capital is investing in it. The same reason the US doesn't build cheap commuter cars, nobody with money to invest is investing their money on such a slim margined product with no windfall conditions.

[mschuster91]

> Why is it impossible for Americans to live with 300 sq ft per person like baby boomers did as kids, but now we must live with 600+ sq ft per person?

Because the American suburbia developers want some nice chunky profits. It isn't enough any more to sell glorified matchsticks and cardboard.

[marcusverus]

The United States doles out >$30K/year in welfare spending for each person (not household, each person) under the poverty line. And that's just HUD/SNAP/Medicaid. The idea that any significant portion of the US is living in "abject poverty" (let alone half!) is hysterical in every sense of the word.

[dismalaf]

The poverty rate in the US is 10%.

https://www.census.gov/library/publications/2025/demo/p60-28...

[marcusverus]

It's actually far better than that! When people hear "poverty rate", they think "the percentage of people living in poverty". That's not what the census data on poverty is reporting, though. The census data is based on income only. It excludes in-kind welfare (Food Stamps, HUD, and Medicaid) and even excludes some welfare that is paid out in cash (like refundable tax credits). In other words, the census data is reporting that 10% of Americans earn under the poverty line. The number living under the poverty line is far, far lower.

[zer00eyz]

> half of the US is living in abject poverty while quality of life for everyone is decreasing.

The 350 million Americans looking at the top of the US economy and crying need to turn around and take a look at what's behind them.

There are something like 7 billion people behind them, worse off.

[digitaltrees]

It can be both. Look at the stress hormones people live with. Look at other stats like rising infant mortality, dropping IQ etc.

[zer00eyz]

> Look at the stress hormones people live with.

https://research.senedd.wales/research-articles/poverty-and-...

Does being poor cause mental health issues, or are mental heath issues a cause of poverty... The answer here clearly better access (read free) to mental heath care, and it wont have the impact one would think (see the UK data).

> Look at other stats like rising infant mortality

You mean the attributions tied directly to maternal complications: https://www.cdc.gov/nchs/data/vsrr/vsrr033.pdf

The thing is we changed how we collect this data, to something that would be considered bad: https://www.washingtonpost.com/health/2024/03/13/maternal-mo... - There are tons of criticism on how we collect this data, they are valid, if you dont like this source, find another its a mess of our own creation.

> dropping IQ etc.

The largest root cause is that people spend too much time on their cell phone dumbing themselves down. Think about that one... no one feels the need to elevate themselves, they are happy to spend time on what amounts to leisure. Would you have sympathy for the person who gets fired cause they chose to play 18 holes of golf 5 days a week rather than do their job?

[digitaltrees]

You seem to be arguing that people are poor because they have mental health issues or are otherwise to blame.

The first article you site contradicts that position.

I would also argue that regardless of the cause, society should provide mechanisms to take care of people. Just like we don’t blame people for crop failures, hurricanes, fires or other catastrophic health issues, and instead have insurance, fire departments, etc. poverty is a consequence of social policies. We should strive to create social policies that have less inequality because they are more stable, safe and consistent with what everyone would want if they didn’t know what role they would occupy.

[stdgy]

"Listen folks, it's no big deal if you can't afford rent or to purchase a house. Ignore my vacation homes in Aspen, Jackson Hole and Nantucket. Just think about how much better you have it than the people in Haiti and get back to work!"

[zer00eyz]

> purchase a house.

This is a functionaly unmovable number. https://fred.stlouisfed.org/series/RHORUSQ156N

> you can't afford rent

Because we as a society have drastically changed how we use housing: https://www.census.gov/library/stories/2023/06/more-than-a-q... -- Multi generational housing was a thing. Having roommates was a thing... the premise of "golden girls" would be lost to a modern audience, because cohabitation is dead. The premise of "bosom buddies" would get canceled for its insensitivity, but no one would understand because boarding houses are all but gone.

Building every one in the world an American style house, would cripple the globe. Concrete, Sand, Copper, Wood are going to become massive problems long before we get close to getting the job done.

> Ignore my vacation homes in Aspen, Jackson Hole and Nantucket.

You think that vacation homes are causing the housing crisis? Are eroding wages elsewhere? The industry of these locations is TOURISM, and a fair bit of it is international. (Not Nantucket).

It's not like whaling is going to make a comeback to make Nantucket a viable place to live again.

> Just think about how much better you have it than the people in Haiti and get back to work!"

Plenty of Americans look at musk and say "lets eat the rich" ... the problem is that the rest of the world has those same hungry eyes for us.

[FatherOfCurses]

This is like an abusive parent saying "Stop crying or I'll give you something to really cry about."

[Avicebron]

This isn't relevant to this discussion. You're welcome to go complain on a message board in Mumbai about wages in the US.

[logicchains]

It absolutely is relevant to the discussion. Many Americans are ungrateful and envious of the Americans wealthier than them, in spite of the fact that their own living standards are still far far better than the majority of humans on the planet. And some of those hypocritically think that the wealth of richer Americans belong to them, but would never consider giving their own wealth to people across the globe who are poorer than them.

[scottyah]

The people who want money from people richer than them never want to give up their own to the people who look to them with the same eyes.

[jodrellblank]

That is a false claim. Voting for taxation to support the less wealthy is almost a defining feature of what it means to be 'left'. Voting for taxation to support international aid and outreach and healthcare is very common. The 'left' supporting colonial- and war reparation payments is common. Donating money to charity, tithing, nationally and internationally is common across the board.

> "from people richer than them"

You may want to spend some time reflecting on where that money came from. How much lobbying and market manipulation, employee abuse, bullying, exploitation, wage theft, government (taxpayer-funded) grants and infusions of cash, bribery, corruption, dark patterns, law-breaking were involved, and how much tax avoidance and evasion was involved.

[dcrazy]

Can you define “abject poverty”?

[vdqtp3]

> half of the US is living in abject poverty

Anyone who believes this has absolutely no concept of what abject poverty looks like.

[digitaltrees]

If you’re only complaint is the word “abject”, I encourage you to try to live on anywhere from $7 to $15 an hour, in a part-time job that doesn’t guarantee week to week how many hours you’ll get.

That is a very common reality.

[cityofdelusion]

My room mates all lived on slightly above minimum wage with part time hours. They were not in abject poverty. They were just plain poor. They still had cars, phones, video games, food, water, shelter. They each had an ACA plan heavily subsidized and probably were eligible for other welfare but didn’t use it as far as I am aware.

[digitaltrees]

Do that for your entire life with no advancement. Do that with kids. Do that with elderly parents. Do that until you can’t physically work.

The range of human experience is longer and broader than being a 20 something single young person

[marcusverus]

If you remove the word abject, the argument is:

> half of the US is living in poverty

This statement is also false.

> I encourage you to try to live on anywhere from $7 to $15 an hour

That's the bottom quintile, not the bottom half. The Median household income is $83,730, which would be more like $41.50.

[idiotsecant]

This is quickly going to devolve into 'nobody suffers unless their suffering as at least as bad as the worst suffering that exists', so let's just go ahead and get that out of the way and move on to something less pointless.

[Bjartr]

GP could have just said "poverty" and the vast majority of unconstructive discussion that has followed could have been avoided.

Instead they said "abject poverty" as an emotional emphasizer, and people rightly called them out.

[porridgeraisin]

Yep. A lot of such people use words in order to elicit the reaction a legitimate use of said words would get, because they don't want the usually more muted reaction/attention using the correct word would get.

[Jabrov]

It's not about being pointless, it's just plain wrong.

The median (not average) household income in the US is 80K USD. p25 is 40K. p10 is 20K. They're struggling, sure.

But I wouldn't call that abject poverty.

[9rx]

> But I wouldn't call that abject poverty.

But you could. There is no law of the universe that is going to stop you. Words are something randomly made up by humans.

> it's just plain wrong.

Again, words are completely made up, so it can't really be wrong in the traditional mathematical sense. It could be misinterpreted, perhaps. Of course that is dependent on how you've chosen to randomly make up "wrong".

[porridgeraisin]

I know it's against the rules, but oh my this reminds of me a certain other popular forum site in its heyday.

[scottyah]

Have you looked up the definition of abject poverty? It is "the most severe and hopeless form of human deprivation". It's the subject of the conversation, how is that pointless?

[win311fwg]

While you are able to look up someone's definition of abject poverty, the only definition that is relevant in this context is the one held by the author of the earlier comment. It is unlikely you can look up his definition (before he replies to those who have asked for the definition in force).

[latency-guy2]

If only their definition matters then their only purpose in this thread is to derail the conversation, or in other words railroad everyone else out because only they can be right.

People responding reject that, because if you're not being specific, you're not making an argument, you're just here to be an asshole.

Since you've made this point, I've gone ahead and reported that comment.

[jmye]

> the only definition that is relevant in this context is the one held by the author of the earlier comment.

This is absolute nonsense. We use common language to refer to common things in understandable ways in order to communicate with each other. You don't get to just handwave baldly incorrect statements as "well maybe he just has a different personal definition" without basically rendering literally all conversation moot and pointless.

"Yeah, I know he said 2+2 is 5, but you don't know he defines 5" is just as patently silly.

[Fernicia]

[Citation needed]

[win311fwg]

dozerly. "We have one of the worlds most prosperous economies, and half of the US is living in abject poverty while quality of life for everyone is decreasing." Hacker News, 30 Jun. 2026, https://news.ycombinator.com/item?id=48734916

[Avicebron]

It's amazing how few people are willing to admit there is a problem. Spend 45 minutes driving around the state I live in talking to random people and it's painfuly obvious this is reality that some. I suppose it's mostly epstein sympathizers who are pushing the narrative that everything is perfect and nothing needs to be done.

[micromacrofoot]

the top 1% have nearly as much income as the bottom 80%

https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...

[gruez]

>the top 1% have nearly as much income as the bottom 80%

>link for "Distribution of Household Wealth in the U.S. since 1989"

income =/= wealth

[digitaltrees]

I don’t think that makes the argument you think it does. Wealth concentration is even more extreme.

[gruez]

The point is that his original claim is either incorrect, or is not supported by the source he cited.

[digitaltrees]

That doesn’t logically follow. If the claim is 1% control 80%.

And the counter argument is wealth is different than income the implication is that wealth inequality is 1) lower than income inequality and 2) more important for some unspecified reason.

But if wealth inequality is more extreme then that means 1% control GREATER than 80% of wealth. So point 1 is false. And point 2 is most likely irrelevant because greater concentration likely means whatever harm from one category would track the other category

[porridgeraisin]

Bigger picture truths don't justify smaller picture lies.

[micromacrofoot]

The linked view of the chart is distributed by income percentile, the title is "Wealth by income percentile"

[gruez]

>The linked view of the chart is distributed by income percentile, the title is "Wealth by income percentile"

That's still measuring wealth, not income. The correct statement to draw from the chart is that top 1% by income have nearly as much wealth as the bottom 80%.

[micromacrofoot]

the only difference is whether or not its realized, no? they're using wealth to avoid that

[colechristensen]

It's just rent.

Rent for the homes we live in (including "rent" as mortgage payments to the bank)

Rent passed through as costs to the consumer for the businesses we patronize.

We're stuck at home more affording to be able to do less so the people who own don't have to work.

[imightbebatman]

I have a similar PoV. I think rent seeking without sufficient checks is one of the biggest problems in our economy.

But the underlying problem that people aren't paid enough is still true. Outside a few fields, most people are underpaid. It's even more stark when measured against productivity increases during the same time periods. That wealth went somewhere. It wasn't to most people.

People have a tendency to get upset when they realize these kinds of things.

[colechristensen]

Restaurant operations is one of the places where it's most clear the rent is the biggest problem.

You can say restaurant workers need to be paid more, and ok sure, but where is that money coming from? You pay labor, food suppliers, rent, utilities, taxes, and... where exactly is the money to pay workers more coming from?

With the number of empty storefronts in my city (not to mention restaurant closures) it's clear owners aren't making money hand over fist or there would be many more restaurants.

Restaurant workers in my experience are more likely to go to more restaurants and they can't because... their rent is too high and the price of food at restaurants is too high.

The common denominator with all of it is money being sucked away from people doing work and people hiring work by... rent seekers.

The "labor share of income" is exactly this. How much money is getting sucked out of the rest of the economy to prop up the do-nothing class. Retired people whose retirement investment was selling a house for much more labor than they bought it for and real estate owners doing as little as they can to maximize income they aren't earning.

[Ekaros]

From outside it doesn't look like not being paid enough. It looks like affordability problem. Prices in general are too high.

Rents in general are part of this. Both for housing and commercial property. Somehow getting profit from both rent and appreciation is the goal of the system.

Well that is what population voted for and choose not to overthrow system for so maybe they deserve it.

[mancerayder]

Underlying rent are other things going up - property taxes, input costs like labor and materials, and insurance.

While we must be mindful of greed and abuse, we need to include all underlying costs before just assuming people are cranking up rents. I'm not a landlord but I own property and the costs are gotten vicious lately. Labor is expensive, materials are insane, energy costs, and now insurance are suffocating. And in states with high property taxes, watch out.

[Ekaros]

Energy is one variable. But have things gotten less efficient as things keep going up in prices? Is more labour needed to produce the same? There is stuff like regulation forcing more expensive things. But in general if there was efficiency gains things should keep the same price or drop. Somehow this isn't really happening very well.

But my thesis really is that these things are not underlying the rents. But rents are actually underlying these costs. And well in general the rent seeking economic process build on ever growing valuations of everything.

[mancerayder]

Your theory is just that - theory. Just talk to someone who owns property, or do the research. Insurance costs, Up, energy, Up, when something breaks, it costs more to fix it. It's basic input cost math.

I don't know what 'efficiency gains' means here. Maybe you're thinking of car production or software development. Insurance goes up due to climate change, due to insurance companies taking advantage of a poorly regulated environment, whatever other reasons. Energy goes up due to world events, due to more people, due to extreme weather. Labor costs go up due to inflation.

It feels as thought the 'rent is too damn high' crowd needs an enemy, and the enemy is landlord. And again, not a landlord, but I'm getting bitten by high costs of keeping property. I didn't even talk about the property taxes.

If I WERE a landlord, I'd either pass it along to the tenant as higher rent, or I'd sell the damn thing.

[honeycrispy]

And it's wild to me how we can't seem to figure out how to bring the cost for this down. Building affordable houses should be our no. 1 priority.

[colechristensen]

Just tax corporate owned vacancy. In a slump there will be apartment buildings that are mostly empty because they refuse to lower the rent as lowering rent triggers property re-valuation.

Office buildings sit mostly empty for the same reason.

Tax the owners to punish the bad bets and eternal growth expectations of banks to force them to use the space to the benefit of the community or be forced to sell when they run out of money. Use zoning laws to prevent the destruction of units to avoid taxes.

[taiwan_num1]

We already don't have enough housing and you want to increase the cost of entry to build? This would just reduce competition and new builds even further. Hard to see this kind of policy coming out ahead if any increased utilization of existing buildings is cancelled out by the lack of new ones.

[colechristensen]

No, I want to crash the price of real estate, bankrupt the incumbents, and realign incentives to be focused on resident quality of life.

Percentage return on investment has nothing to do with the basis. Investors will have to serve a lot more people to get the same absolute return. The percentage return won't change all that much for actually building and operating. The year over year growth in valuation and rent is what needs to go (buildings go through several sets of hands over the first decade or so anyway).

[scottyah]

If you build plenty of houses, they become affordable. The latest Affordable Housing is mostly gov-enabled scams, at least in San Diego. They are being made for greater costs than the luxury housing since the funding is guaranteed. Then the same developers are incentivized to keep all rates high by building less.

https://sdhc.org/wp-content/uploads/2025/04/107_Workshop_RAN...

[colechristensen]

I don't want affordable housing mandated, I want the opposite. Force builders to build 1500 sq ft three bedroom apartments. Flood the market at the top end with SPACE and then tax vacancies of these spaces aggressively.

This sets a price cap, makes these high density spaces affordable for people who want to live their whole lives there and not just their single 20's, brings diversity into communities and drops the floor out of the prices on these single occupancy closets going for $2000 per month.

[banannaise]

This isn't just about residential rent. Commercial rent squeezes businesses, forcing wages downward and prices upward.

[mistrial9]

repeated efforts to develop "dwelling units" on a large scale have collapsed in corruption. There are financial players who are very aware that there are vast amounts of monthly monies at play. This is not unique to the USA in fact it is a repeated theme in the capital economies.

The US Federal Housing and Urban Development Department was intimately involved in the Savings and Loan collapse of the late 1980s. It was punted around and repeated in the 1990s, but the stock market gains of the late 1990s diluted the news in public. That phase culminated with a dot-com bubble collapse and ultimately, the 2007 dollar credit crisis. Leveraged purchases of real estate were part of that financial soup. Many of the players from that time were "boomers" and their seniors, so living memory of those circumstances are now fading. There are many, many non-fiction books about these topics.

[deepvibrations]

Indeed. It's a game of monopoly where one person owns all the property, and everyone else is just rolling the dice and, paying rent every turn.

[CGMthrowaway]

>the amount of labor being generated per person has not really changed, but the overall pie has grown massively around us

I don't see where the article made that claim. Are you making it yourself and can you support it? That sounds like something that would happen when technology improves. What the article does do, is pose a question that it never answers: "When the labor share falls, it means that productivity, prices, or both [which?] are growing faster than wages."

[legitster]

The Fed tracks this: https://fred.stlouisfed.org/graph/?g=tjto

Unit cost on labor has increased at a more or less steady pace this whole time. Ergo, it's not so much that labor is decreasing as other things are increasing faster.

It's hard to argue that technology is increasing labor productivity an order of magnitude faster than it was in the 50s. It's more likely something else in the dataset (returns on capital/rent) is exploding in value.

[CGMthrowaway]

Is "unit cost on labor" the same as "the amount of labor being generated per person"? I don't believe it is, especially so in the context of the article's question which I raised.

[insane_dreamer]

I don't know which people you're referring to, but the conclusion is pretty clear: the _share_ of the total pie captured by labor is shrinking. Productivity is increasing, but capital is capturing all, or almost all, the benefits of that increased productivity and economic growth.

AI is going to further exacerbate this inequality.

Time to re-read Capital In the 21st Century.

[jameslk]

That overall drop in share of income since 2000 is related to the "giant sucking sound" Ross Perot warned about in 1992:

"It's pretty simple: If you're paying $12, $13, $14 an hour for factory workers and you can move your factory South of the border, pay a dollar an hour for labor, ... have no health care, that's the most expensive single element in making a car, have no environmental controls, no pollution controls and no retirement, and you don't care about anything but making money, there will be a giant sucking sound going south."

While Perot was warning about NAFTA, the jobs did go elsewhere: China and other countries with cheaper labor. Globalization led to labor competition, which increased the supply of workers.

Meanwhile, companies captured the value of the increased supply of workers. More cheap labor = more production, for a world that had latent demand for cheaper output. It ended up a net benefit for businesses (capital owners), and overseas workers. This is at least partially if not significantly where the growing gap between wage growth % and GDP growth % comes from.

The macro economists were right that globalization would be more efficient overall for the world, economically. But that came at the expense of the US labor that saw its wage growth eroded as a consequence.

[guptadagger]

>the amount of labor being generated per person has not really changed

im not really understanding what you mean. i dont get how labor is generated, in particular. do you mean to say the amount of total hours dedicated to labor per person or something else?

[rsalus]

he's referring to labor productivity, e.g., the economic value produced per unit of labor input. it also _has_ changed significantly, as seen here: https://fred.stlouisfed.org/series/OPHNFB

however, unit labor costs has also been increasing (although they remain variable): https://www.bls.gov/opub/ted/2026/productivity-up-0-3-percen...

[gruez]

Probably to referring to hours worked, eg. https://fred.stlouisfed.org/series/AWHAETP

[rsalus]

no, he's almost certainly referring to labor productivity. https://fred.stlouisfed.org/series/OPHNFB

[dismalaf]

Since 2000 the biggest economic change is software. While most workers doing physical jobs have only made themselves slightly more efficient (or maybe mass immigration has maybe even reduced efficiency in some sectors), some workers (tech workers) have made themselves hundreds or thousands of times more efficient and captured the gains as equity (either in their own startup, their job, etc...). The positive is that growth overall has still lifted living the average living standard.

[coffeecantcode]

Benn Jordan just released a new video proposing that we are not in “late stage capitalism” and instead we are currently an offshoot of capitalism called “leverageism”.

In the video he describes how when people like Elon Musk get to the level of wealth that they are at, it becomes far more beneficial for them to take from (or stunt) the spending power of lower classes than it is to add to their own net worth dollar figure - simply put, the former moves the needle far more in their favor than the latter.

Definitely explained the idea of our slice remaining the same while the overall pie around us is getting larger.

*Edit: Benn not Ben