Political Memes

I still think the key flaw in thinking for 1974 or 2025 is that minimum wage was never intended to be able to purchase a home. Rent an apartment with room-mates? Sure. But nobody earning minimum wage at any point should expect to be able to buy a home. It's literally the minimum.

In 1970 you could rent an apartment for $108.

https://www2.census.gov/programs-surveys/decennial/tables/time-series/census-housing-tables/grossrents.pdf

The federal minumum wage in 1970 was $1.60 an hour.

So at 40 hours a week, you were making $268.80 a month, your rent was 40% of your income. Rule of thumb is 33% so you're over, but still functional. Got a room-mate? 100% doable.

Now the average apartment is $1,378 for a 2 bedroom.

https://www.statista.com/statistics/1063502/average-monthly-apartment-rent-usa/

With the federal minimum wage of $7.25, you're only making $1,218 a month. You're underwater at that point. Rent is 113% your income.

With 2 bedrooms, to get it to 1970 levels, it would have to be rented by 3 people, 3,654 monthly income, rent would be around 37% the combined income.

I think a further thing to point out in this math... is we'd also need to take into account average transportation and food expenses. Because while I'm not smart enough to do the math to calculate it out. On top of say housing relative to income doubling. Prices of necessities also need to be calculated out. If housing costs scaled with wages, but food cost doubled wages, that would still be a large factor on buying power.

Mortgages don't typically involve compound interest, unless you miss payments. In order to actually pay off the mortgage the payment has to be higher the the interest for the same period. It's expensive because borrowing money for 30 years is expensive even at low rates.

Do you have math behind this posting? Or is your number randomly generated?

Yeah in the 50s and 60s the US was still riding the post WWII high. Now a lot of the world has (re)industrialized and so we're all competing against each other.

Ah but that’s my point, you can’t compare like for like because the value of a house is far more than just the physical building. It’s location, location, location, and the town your house is in is a whole different place to what it was in 1968.

Again, not defending the state of the market, just pointing out that extrapolating this out to the requirements of minimum wage is more complicated that calculating 500,000/19,500

Variable rates are still available and common. They tend to be slightly lower rates than fixed rate mortgages due to volatility risks.

I interpreted their remark to be more about the fixed rate though. The $20,000 house could have a 20% fix interest loan.

They did say "shooting up", so maybe they are presuming variable rate mortgages.

Yeah man it's rough in the city. I also really don't want to live far away, so... 🥲

sounds about right. my dad was born in 1954, and that's what he thinks i should be earning

If you subscribe to the definition of inflation that assumes renting instead of home ownership and homesteading in rural frontiers with challenging weather (deserts, swamps, tundra) rather than in gentrified places with pleasant weather (e.g. every existing metropolitan area).

The way I see it, unless people somehow shrink in size or a wormhole opens to another Earth-like planet, real estate prices are inversely correlated to population which continues to rise.