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poorgradstudent.
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May 27, 2014 at 8:49 AM #774408May 27, 2014 at 8:54 AM #774409
spdrun
ParticipantThis house was sold in 1983 for $96,500. Mortgage rates back then was ~12%. So, monthly payment back then was $794/month. Today, that house just went pending @ $465k and current mortgage rate is ~4.25%. Which puts the monthly payment @ $1830/month. You’re looking at an increase of 2.3x in housing cost for your average middle class family. That doesn’t seem to outrageous to me.
Rates below 5% are an anomaly — costs with such low rates aren’t a good measure of true expenses, since rates only have one way to go in the next year or two.
May 27, 2014 at 10:03 AM #774412ltsddd
Participant[quote=AN]But don’t you think Old Town/Mission Hills is an anomaly (along with other Uptown areas) when it comes to cost of living? Here’s an example of Mira Mesa.
http://www.sdlookup.com/MLS-140023149-92126
This house was sold in 1983 for $96,500. Mortgage rates back then was ~12%. So, monthly payment back then was $794/month. Today, that house just went pending @ $465k and current mortgage rate is ~4.25%. Which puts the monthly payment @ $1830/month. You’re looking at an increase of 2.3x in housing cost for your average middle class family. That doesn’t seem to outrageous to me.[/quote]
Minimum wage earners are not middle class.
Regardless, let’s play with your example and use that to calculate what it would take to come up with the 20% down payment:
20% down payment for $96,500 is $19,300. That takes roughly 5761 man hours to earn at $3.35.
20% down payment for $465000 is $93,000. That takes roughly 11625 man hours to earn at $8.
How is that better?
May 27, 2014 at 10:18 AM #774413CDMA ENG
Participant[quote=livinincali][quote=joec]Does anyone else see this minimum wage fight as simply being welfare so the poor masses don’t revolt and start doing bad things to everyone else?
I suppose I look at it as not really a “business” case or logical analysis, but as shown time and time again in history, the “haves” really don’t want to see what will happen when the have-nots get too pissed off with the current situation. I think in France, some kids and young people torched hundreds of cars in a street. This isn’t good for anyone.
[/quote]Thanks for bringing up France it’s a great example of how minimum wage doesn’t necessarily help employment prospects. For example minimum wage in France is 1430 euros per month ($1959 in US dollar terms). France also has a work week of 35 hours per week so if you assume 4 weeks per month and divide by 35 hours per week you end up with a minimum wage of $14/hr in US dollar terms. In France youth unemployment is about 23.5% compared to the US’s 18.5%.
In Germany youth unemployment is less than 10%. Guess was minimum wage Germany has. That’s right, none. It has a law stating you can’t pay an immoral wage but that’s decided on a case by case basis by the courts. For example a entry level grocery store worker in Germany can be paid the equivalent of $7 US dollars per hour and it’s not immoral.
Also if you’ve every been to France and Germany you’ll know that’s it’s a lot cheaper to live in Germany than in France. Compare Berlin to Paris. Honestly you’d probably be better off in Germany as a cashier in Berlin than a cashier in Paris even though you might get double the monthly salary. It’s all relative.
Can Walmart afford to pay it’s workers $13/hr in San Diego. Sure. With automation, price increases, laying off the weakest performing staff, etc, they’ll make it work. Of course it’s only better for those that happen to work at Walmart and keep they’re job. Also those designing/building those automated systems. Anybody who was already making $15/hr and doesn’t get a corresponding raise loses because they are now forced to pay higher prices for things. In addition those that lose their job to automation are now on the welfare roles somewhere.
People posting here who are making $100K don’t really care. The price increases at the grocery store or restaurant are fairly negligible in their budget. Food/Entertainment is probably less than 10% of their budget so a 10% increase in prices for low skilled labor in restaurants and general goods/foods stores only adds 1% to their overall budget.
While people have linked studies that show minimum wage increases haven’t greatly negatively impacted the economy. Nobody has linked a study that shows major increases in minimum wage greatly improve the overall economy. I thing the realty is at best minimum wage increases changes the winners and loses and prefers experience over youth.[/quote]
+1
May 27, 2014 at 10:25 AM #774414ParticipantJust to be nit-picky, Germany is instituting one next year. It’s also had unofficial minimum wages set by union negotiations in a given industry for years.
May 27, 2014 at 10:37 AM #774416
CoronitaParticipant.deleted.
May 27, 2014 at 12:03 PM #774418an
Participant[quote=ltsdd][quote=AN]Minimum wage earners are not middle class.
Regardless, let’s play with your example and use that to calculate what it would take to come up with the 20% down payment:
20% down payment for $96,500 is $19,300. That takes roughly 5761 man hours to earn at $3.35.
20% down payment for $465000 is $93,000. That takes roughly 11625 man hours to earn at $8.
How is that better?[/quote]I understand minimum wage is not middle class. I don’t expect a minimum wage person to be able to buy a place like this. But they might be able to buy a place like this: http://www.sdlookup.com/MLS-140009602-5281_Caminito_Cachorro_San_Diego_CA_92105
Sold for $78k in 1985 and selling for $199k today.
The payment in 1985 would be $547/month, assuming 20% down and 10% interest rate.
The payment today would be $783/month, assuming 20% down and 4.25% interest rate.
It would take 4975 hours worked @ $8 today and would take 4656 hours worked @ $3.35.
How’s that not better? You’re getting paid 2.3x more, yet your cost of living per month is ~36% higher than when it was in 1985.
May 27, 2014 at 12:09 PM #774419ParticipantHow do food, fuel, utility, HOA prices compare now to 1985?
BTW – good luck buying that place on $8/hr or $16k/yr.
Mortgage: $783/mo
Taxes: $200/mo
HOA: $115/mo
Insurance: $25/mo(?)That’s $13,476/yr excluding any unexpected repairs. Probably won’t even work at $13/hr or $26k/yr since the debt-to-income ratio would be a bit out of whack.
May 27, 2014 at 1:23 PM #774424Participant[quote=AN][quote=ltsdd][quote=AN]Minimum wage earners are not middle class.
Regardless, let’s play with your example and use that to calculate what it would take to come up with the 20% down payment:
20% down payment for $96,500 is $19,300. That takes roughly 5761 man hours to earn at $3.35.
20% down payment for $465000 is $93,000. That takes roughly 11625 man hours to earn at $8.
How is that better?[/quote]I understand minimum wage is not middle class. I don’t expect a minimum wage person to be able to buy a place like this. But they might be able to buy a place like this: http://www.sdlookup.com/MLS-140009602-5281_Caminito_Cachorro_San_Diego_CA_92105
Sold for $78k in 1985 and selling for $199k today.
The payment in 1985 would be $547/month, assuming 20% down and 10% interest rate.
The payment today would be $783/month, assuming 20% down and 4.25% interest rate.
It would take 4975 hours worked @ $8 today and would take 4656 hours worked @ $3.35.
How’s that not better? You’re getting paid 2.3x more, yet your cost of living per month is ~36% higher than when it was in 1985.[/quote]
It’s not better because there are many other parameters that are left out. House payment is not the only thing that measures the cost of living. Let’s not forget that in this simple scenario we’re ignoring one important thing – today’s interest rate is an anomaly.
If you truly feel that the folks making minimum wage today are having a higher living standards than those in 1980 (then what the fvck are we doing complaining about where our country is heading?) then let’s just say we agree to disagree. It’s not necessary to cherry-pick some numbers to prove your point.
May 27, 2014 at 1:37 PM #774425Participant[quote=spdrun]How do food, fuel, utility, HOA prices compare now to 1985?
BTW – good luck buying that place on $8/hr or $16k/yr.
Mortgage: $783/mo
Taxes: $200/mo
HOA: $115/mo
Insurance: $25/mo(?)That’s $13,476/yr excluding any unexpected repairs. Probably won’t even work at $13/hr or $26k/yr since the debt-to-income ratio would be a bit out of whack.[/quote]The only reason I brought up housing is because that’s the best source I can find with some historical data of how much it cost to put shelter over your head. My assumption is that rent vs PITI should be similar through the years, obviously excluding the bubble years.
I’m not trying to say people on minimum wage should be able to buy a place easily or at all. But unless you can provide a better source for historical rent for each type of housing unit, this is the best I got.
Also keep in mind that 50+% of minimum wage earner are younger than 25 years old. Most college educated people barely start to buy their first place @ 25-30 years old, so why would you expect people on minimum wage to do so. FYI, that example I gave, you’d qualify for FHA if there are dual income making minimum wage. Do you think in 1985, a dual income person making $3.35 ($6.70/hr combined or $13k year) be able to buy a $78k place?
May 27, 2014 at 1:43 PM #774426Participant[quote=ltsdd]
It’s not better because there are many other parameters that are left out. House payment is not the only thing that measures the cost of living. Let’s not forget that in this simple scenario we’re ignoring one important thing – today’s interest rate is an anomaly.If you truly feel that the folks making minimum wage today are having a higher living standards than those in 1980 (then what the fvck are we doing complaining about where our country is heading?) then let’s just say we agree to disagree. It’s not necessary to cherry-pick some numbers to prove your point.[/quote]Dude, if you need to resort to cursing, then we’ll just stop right here. I was trying to bring some number to the discussion, just like everyone else who brought anecdotal rent evidence. But obviously, you can’t handle data that contradicts your POV.
May 27, 2014 at 3:34 PM #774427ParticipantIf you make minimum wage then you need to move out of San Diego… Pure and simple…
CA for that matter… This is not a state for low income earners…
Hell I have wondered if it was a smart thing to do to continue to live here and I have a decent income.
Go somewhere you can make a decent living and stop drawing comparisons about COLA in SD.
Las Vegas is just across the hills and plenty of ppl make a nice living with no education and no real skills.
This whole discussion is analogous to one of us moving to Beverly Hills and complaining that 100K a year doesn’t afford us what we want there.
If you cant afford to live somewhere… go some place you can…
Plus there are a lot of comparisons of “Where I use to live then and now”… a lot of those place are dumps I am sure but I have lived in a lot of desirable dumps in my life too… They were desirable because of the 3 Ls… so that comparison is not really valid either… You think Mira Mesa is nice?!? Hell no… its a dump… but its a dump that is close to Qualcomm and while that fact remains it will continue to outpace the market… I am sure most of these comparison are similar…
Almost everything about California is an outlier argument…
As for minimum wage… I know just enough small business owners to believe “the Republican” argument of job destruction… but I would not debate for a second that the monopolization of wealth in this country will not have serious consequences…
CE
May 27, 2014 at 3:54 PM #774428ParticipantCA for that matter… This is not a state for low income earners…
California is a large state. All depends where in CA you choose to live and work. See also:
http://www.realtor.com/realestateandhomes-search/Yreka_CA/price-na-100000/rntsby-5?ml=3
If you live in a sufficiently rural area, property taxes are low, yet a mortgage under $100k can go a long way.
May 27, 2014 at 4:49 PM #774429Participant[quote=CDMA ENG]They were desirable because of the 3 Ls… so that comparison is not really valid either… You think Mira Mesa is nice?!? Hell no… its a dump…[/quote]I guess it boils down to, either you live where the 1% live or you live in the booney or the dump or the ghetto.
I totally agree that CA in general are not a great place for low income. It’s purely supply/demand. If you want cheap housing, just increase supply over demand and you have falling prices. Either that or make it to undesirable that people will leave. But giving people more $ will only increase housing cost even more. Just look at the bay area. Even engineers are being priced out up there too.
May 27, 2014 at 5:19 PM #774434CA renter
Participant[quote=ltsdd][quote=AN]But don’t you think Old Town/Mission Hills is an anomaly (along with other Uptown areas) when it comes to cost of living? Here’s an example of Mira Mesa.
http://www.sdlookup.com/MLS-140023149-92126
This house was sold in 1983 for $96,500. Mortgage rates back then was ~12%. So, monthly payment back then was $794/month. Today, that house just went pending @ $465k and current mortgage rate is ~4.25%. Which puts the monthly payment @ $1830/month. You’re looking at an increase of 2.3x in housing cost for your average middle class family. That doesn’t seem to outrageous to me.[/quote]
Minimum wage earners are not middle class.
Regardless, let’s play with your example and use that to calculate what it would take to come up with the 20% down payment:
20% down payment for $96,500 is $19,300. That takes roughly 5761 man hours to earn at $3.35.
20% down payment for $465000 is $93,000. That takes roughly 11625 man hours to earn at $8.
How is that better?[/quote]
Don’t forget property taxes. And then there’s healthcare, and all of the other expenses that have shot up since the 80s. That leaves less money for house payments (P&I), too.
I’ve lived in the 80s and today. Things are much worse today for most working people than they were in the 80s.
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