The cost of living our lives is rising

gene430 · 02-07-08, 09:44 AM

We all complain about the cost of living rising, but, how much of it is really a change in how we live our lives? I thought this was an interesting piece on that.

PolitiByte - Political forums, news, opinions, and information. - Cost of living our lives is rising

Yeah, prices have gone up on most things, but look at the amount of "things" we now need.

1069 · 02-07-08, 09:59 AM

"Things" have become so expendable lately.
They are meant to break down and be replaced on a regular basis.
This wasn't always the case.
The last car we had- before the fairly new Corolla we have now- was a '76 Chevy Nova. It was easy to work on, built to last.
It's almost unimaginable to think that one of the fiberglass piece-of-****e cars manufactured today could actually last 40 years. And even if it could, the owner wouldn't be able to do the work himself, with a book checked out from the library.

Clothes- in the 90s, I was very into vintage clothing. It was amazing to me how well-made these clothes from the 60s and 70s were. They were meant to last for one's entire life. A lot of items were hand-sewn. If they ripped, they could be repaired. Of course, a lot of them required special attention: handwashing or dry cleaning.
It's unimaginable that the clothes we buy at Target these days could last more than a couple of years, or that we'd even want them two years from now, even if they did last that long.
Some of those vintage clothes, you could see where the hems had been raised and lowered on the dresses. Someone wore those outfits for decades, making minor alterations here and there as styles changed.
It's impossible to imagine this now; our clothes are cheaply made in overseas sweatshops; when we're tired of them, when they are no longer in style, when they fall apart in the wash, we throw them away without a thought, and buy new ones.
Even shoes- shoe repair used to be big business. People kept their shoes for most of their lives, and merely had them fixed when they broke down.
Appliance repair, same thing. There used to be little "repair" shops that fixed things like broken toasters and vacuum cleaners.
Now, no more.
It's cheaper to replace things than it is to fix them.
But that wasn't always the case.
Things had more value, once.
Although not in my lifetime.

Solidus · 02-07-08, 05:17 PM

I present two BLS tables for review.

#1 1989 household expenditures
#2 2006 household expenditures

Taking the examples put forth by 1069 of Clothes, Transportation, and Household appliances we find ...

In 1989 5.7% of household income went to Apparel and Services.
In 2006 3.9% of household income went to Apparel and Services.
Conclusion: Since I'll readily agree with 1069 that we purchase said items more frequently, the reduction in price is more than enough to reduce the amount of household income it takes to clothe ourselves. We are better off now.

In 1989 18.6% of household income went to Transportation.
In 2006 17.6% of household income went to Transportation.
Conclusion: While we may buy a new car every 5-10 years now, and people can't fix them without a trip to the mechanic. We are better off now. (Bonus we also spend less on Car purchases 8.2% then, 7.1% now)

In 1989 3.9% of household income went to Household Furnishings.
In 2006 3.5% of household income went to Household Furnishings.
Conclusion: Essentially the same, but I'll take my 2006 furnishings over my 1989 furnishings for the same percentage of my income (obviously the 2006 versions 'cost' more, but I'm making more too). To be exact Major and Minor appliances held steady at 0.5% and 0.2% respectively (by category).

So, sure things cost more but we also make more. We're better off now than then. Nostalgia is not congruent with economic data.

J

American · 02-07-08, 10:50 PM

Quote:

Originally Posted by 1069

"Things" have become so expendable lately.
They are meant to break down and be replaced on a regular basis.
This wasn't always the case.
The last car we had- before the fairly new Corolla we have now- was a '76 Chevy Nova. It was easy to work on, built to last.
It's almost unimaginable to think that one of the fiberglass piece-of-****e cars manufactured today could actually last 40 years. And even if it could, the owner wouldn't be able to do the work himself, with a book checked out from the library.

Clothes- in the 90s, I was very into vintage clothing. It was amazing to me how well-made these clothes from the 60s and 70s were. They were meant to last for one's entire life. A lot of items were hand-sewn. If they ripped, they could be repaired. Of course, a lot of them required special attention: handwashing or dry cleaning.
It's unimaginable that the clothes we buy at Target these days could last more than a couple of years, or that we'd even want them two years from now, even if they did last that long.
Some of those vintage clothes, you could see where the hems had been raised and lowered on the dresses. Someone wore those outfits for decades, making minor alterations here and there as styles changed.
It's impossible to imagine this now; our clothes are cheaply made in overseas sweatshops; when we're tired of them, when they are no longer in style, when they fall apart in the wash, we throw them away without a thought, and buy new ones.
Even shoes- shoe repair used to be big business. People kept their shoes for most of their lives, and merely had them fixed when they broke down.
Appliance repair, same thing. There used to be little "repair" shops that fixed things like broken toasters and vacuum cleaners.
Now, no more.
It's cheaper to replace things than it is to fix them.
But that wasn't always the case.
Things had more value, once.
Although not in my lifetime.

Blah blah blah blah

SFLRN · 02-10-08, 05:58 PM

Quote:

Originally Posted by 1069

"Things" have become so expendable lately.
They are meant to break down and be replaced on a regular basis.
This wasn't always the case.
The last car we had- before the fairly new Corolla we have now- was a '76 Chevy Nova. It was easy to work on, built to last.
It's almost unimaginable to think that one of the fiberglass piece-of-****e cars manufactured today could actually last 40 years. And even if it could, the owner wouldn't be able to do the work himself, with a book checked out from the library.

Clothes- in the 90s, I was very into vintage clothing. It was amazing to me how well-made these clothes from the 60s and 70s were. They were meant to last for one's entire life. A lot of items were hand-sewn. If they ripped, they could be repaired. Of course, a lot of them required special attention: handwashing or dry cleaning.
It's unimaginable that the clothes we buy at Target these days could last more than a couple of years, or that we'd even want them two years from now, even if they did last that long.
Some of those vintage clothes, you could see where the hems had been raised and lowered on the dresses. Someone wore those outfits for decades, making minor alterations here and there as styles changed.
It's impossible to imagine this now; our clothes are cheaply made in overseas sweatshops; when we're tired of them, when they are no longer in style, when they fall apart in the wash, we throw them away without a thought, and buy new ones.
Even shoes- shoe repair used to be big business. People kept their shoes for most of their lives, and merely had them fixed when they broke down.
Appliance repair, same thing. There used to be little "repair" shops that fixed things like broken toasters and vacuum cleaners.
Now, no more.
It's cheaper to replace things than it is to fix them.
But that wasn't always the case.
Things had more value, once.
Although not in my lifetime.

If everyone wanted high quality, durable clothing, they wouldn't shop at stores that sell less durable apparel. Moreover, individuals who want to spend their money on nice, long-lasting clothes, they can "invest" at more upscale retailers. A good number of people may like durable clothes because they enjoy trying new things. This is only a reflection of consumer preference and not some result of markets. If you still want to buy a pair of jeans (or chinos), a suit, or a pair of shoes, that will last a lifetime those options are available (these clothes also tend to look quite nice, thus the higher price).

metreon · 02-19-08, 02:42 PM

Quote:

Originally Posted by Solidus

I present two BLS tables for review.

#1 1989 household expenditures
#2 2006 household expenditures
...

Conclusion: ...So, sure things cost more but we also make more. We're better off now than then. Nostalgia is not congruent with economic data.

Using the data provided by the BLS tables, I would think the stats show that people are worse off, not better. The news recently reported that several decades ago the average person saved 20% of their income, while today the average person spends 120% of their income. If people both spend less and save less, then it is because they are offseting some other expense. Moreover, one can not use proportional expenditures to accurately gauge budgetary improvement unless the basis for that expenditure and income also remains proportional to its historical norm. In other words, if one's monthly expenditure profile remains about the same, but debt increases, then direct costs are being hidden by deferred costs, or income is being devalued in some other way.

For example, The BLS expenditure breakdown on housing is not a good representation of the actual cost of housing. Liability and risk in housing have increased disproportional to individual income over the last 50 years. Back then, homes usually could be bought for little over 2-3 times the individual (not household) median income. During that time period, changes in lending products and policy have allowed people to both take on greater risk along with less monthly outlay for that risk. However, even with those financial props, housing outlay has been increasing compared to other budgetary costs (increasing 4% from 1989-2006), according to the BLS tables.

Allowing housing debt to increase without a proportional increase in monthly outlay has allowed housing prices to inflate beyond fundamentals, like income, assuming productivity is the historical basis of affordability. That may be the basis for statistics which show Americans are increasingly indebted, and no longer save.

Increasing debt is not the only way to distort the significance of BLS statistics. The well-publicized decline of job benefits over the last few decades also invalidates a direct comparison of income stats. A decline of job benefits directly corresponds to a decline of real income, a decline not reflected by income statistics, such as those in the BLS tables, regardless whether they include adjustments for inflation. That decline may be the reason the BLS statistics show an increase in the proportion spent on health care. Some however, may simply go uninsured, raising the count of the uninsured.

The changes in the BLS expenditure stats over the years therefore do not show much other than some superficial changes in budgetary apportionment. They are partial clues. If you were to make an educated guess, it would more likely represent a decline in the standard of living. Direct average expenditures do not account for actual debt, nor do they account for other ways in which income has been devalued.

Edify_Always_In_All_Ways · 02-19-08, 05:14 PM

Quote:

Originally Posted by American

Blah blah blah blah

Your, sir, are now considered a major candidate in the race for the top prize at the first annual Pathetic awards. Congratulations.

I really can't see the problem with our cost of living increase. It's the way of the free market- people have a right to make bad decisions. In the case of the recent U.S. mortgage crisis, faulty info from real estate companies may have been at fault- but if you buy an SUV, good luck with the price of gas.

I also really don't see the point of a huge TV. TiVo on a regular television gives you far more entertainment, and a laptop with a decent Internet connection can give you all the entertainment you can stand.

Solidus · 02-19-08, 07:17 PM

One flaw I note in my previous post; the percentages are amounts of spending, not income. Ie. In 1989 5.7% of household spending went to Apparel and Services.

Quote:

Originally Posted by metreon

Using the data provided by the BLS tables, I would think the stats show that people are worse off, not better.

You would be wrong. The data shows people are spending smaller portions of their income overall, and smaller portions of their spending on the 'nostalgic' goods as asserted by the OP.

Quote:

Originally Posted by metreon

The news recently reported that several decades ago the average person saved 20% of their income, while today the average person spends 120% of their income.

Link? The BLS tables do not support this assertion, it shows people spending a smaller portion of their income (ie. saving more). As a survey of expenditures and income there may be other data that is more accurate for your assertion.

Quote:

Originally Posted by metreon

The changes in the BLS expenditure stats over the years therefore do not show much other than some superficial changes in budgetary apportionment. They are partial clues. If you were to make an educated guess, it would more likely represent a decline in the standard of living. Direct average expenditures do not account for actual debt, nor do they account for other ways in which income has been devalued.

It most certainly does not represent a decline in standard of living. People are spending smaller portions of their income (than in 1989), and deriving equivalent satisfaction (otherwise they would spend more for higher quality goods).

If income is being devalued than people would have to spend more of their income to achieve equivalent 'value' in goods/services. This is not supported by the data, indeed the opposite is the case.

If people can take on more debt but can service it with smaller portions of their income, how has debt not been accounted for?

J