Just a thought.

Zach

I was wondering if you have done any research on the effects of zoning laws on the price level. After all zoning creates ARTICICIAL scarcity within cities thereby razing values above their naturaly prevailing rate. I think this could be a significant reason why housing prices are up. Also, where I live, Winter Park, Florida, is a traditionaly planned city with grid street patterns and multi use development. People love the city because it is so unique for Central Florida. Most of Central Florida development is noted for its rather bland style of planning around big government roads and therefore people value land in Winter Park much more than they would under a naturaly occuring market order. I have a hypothesis that this current situation is one of the most severe causes of the impoverished peoples suffering. The only solution in my opinion is to restore development back to its normal market order.

Houses here in California are more expensive now than then because local governments have made it so much harder to build new ones.

No, in pounds they get paid a lot less, at least half. The median wage there is less than here even after adjusting for PPP. Kids get paid 3-5 pound an hour, instead of 6-10 dollars they are paid here, and the median wage when adjusted by exchange rate comes out only 80% of ours, meaning that if indeed a pound only goes about as far as a dollar, they actually only make 80% of 60% of what we make.

And I disagree because you've missed my point and the data that I gave you to prove it. Yes, women are working more. True. But if the number of earners in a household has actually gone down slightyly or is the same (and in a family too in case you think that households are like roomates or something and don't count) then what does it really mean?

I posit you this.

In 1975 it was difficult to make ends meet and very often teenage sons had to get a job and not go to college and be one of the earners in the family. In part this was because women were busy with the younger kids and there was not a lot of extra income to pay for a baby-sitter etc. By 2000 this had changed, incomes were higher, women were *able* to go to work and kids were able to go to college or move away from home and set up their own household, rather han help out mom and dad.

Hence, the same number of earners brings in more income now, but it is different earners – then it was dad and son, now it is mom and dad.

I'm not confusing them because I'm not comparing them; I provided both because the families went back further, but households is more appropriate.

I'm pretty sure they do NOT get paid 80% more!

Many moms work today, it's true, but more and more people are discovering that the incremental benefit of them (or their husbands…let's not be sexist) working is often negligible once you add in the incremental costs of childcare, work clothes, commuting (how many people in the 1970s had two or more cars, by the way?), etc., to say nothing of the intangible costs in terms of stress. But would I turn back the clock for that reason? Absolutely not, because women's human capital is being put to good use in the workforce, if not at home.

I think, "la," that your nostalgia has clouded your thinking.

In addition, everyone in CA where I grew up could afford a nice home and Mom's didn't have to work. Almost everyone could afford to go to the doctor. People were able to fix their cars themselves, and they were made of stronger materials, so you could keep them running forever. The cars were also built in America by well paid Union labor. There wasn't as much prepared cardboard food, and people weren't as fat.

I'd take 1975 over 2006 any day of the week. It is hard to imagine how much better life was in so many ways then.

http://www.census.gov/hhes/www/income/mednhhld/p23text.html

the table 2 they refer to is at

http://www.census.gov/hhes/www/income/mednhhld/t3.html

At the first reference be sure to look at this conclusion—

Although the median income of married-couples with children increased substantially between 1969 and 1996, the effect on this increase of excluding the earnings of wives from the income definition is striking. When the earnings of wives are excluded, the median income of these households showed a 2 percent increase over the period, rather than a 25 percent increase.

Married-couple households without children also had substantial gains in median income between 1969 and 1996, and again the increased importance of the earnings/income of the wife was very evident. Among households with a householder under 40 years old, median income increased by 34 percent over the period but only by 17 percent when the earnings of wives were excluded from the income definition. Households with a householder between 40 and 64 years old had an increase of 34 percent when the earnings of wives were counted, but an increase of 16 percent when the earnings were excluded.

The median income of households with a female householder with children and no spouse rose by 10 percent between 1969 and 1996, but the median income of households with a male householder with children and no spouse fell by 8 percent.

Note that this data is from Census, the same data source you used.

Moreover, if you go to the BLS you will find that the participation rate of females age 20 and over has grown from 46% in 1975 to 60% in 2005.

I think my original point about adjusting the data for the impact of wives working is
still valid.

You see, we have a comparative advantage making MRI machines, airplane tickets and disney world. They have a comparative advantage making blenders and other plastics. We can spend our larger salary buying nicer stuff because we do buy a cheap blender and our companies – like Disney – buy cheap plastics from China too.

WOuld you rather spend 10% of your paycheck on a belnder made in the USA or 2% of your paycheck on a blender made in China and 10% on a trip to Disney?

You get much more for your money – and are in the end a bigger boon to the USA – if you use trade to all of our advantages.

No, now you have an '05 US Software Developer buying a blender for much cheaper and far less out of his paycheck; that money goes to a Chinese man; then the remaining 99.99% of the US Software Devloper goes to buying a laptop, 2 airline tickets and trips to Disney World, seven nights out at a top-end restaurant and health insurance that will allow the Software Developer to realize that he has Carpal Tunnel Syndrome (so he can get a free massage) or epilepsy, using the new MRI machines and 5 day EEG monitoring.

Krowne makes a comment a few threads above that jiggered my memory. He wrote: "Yet for all the benefits of cheaper goods, services have picked up the slack. I wonder if one can show that the dramatic drop in the goods portion of cost of living is a major contributor to permitting things like health care to inflate…"

And, I would have to agree with him. But, whereas he SEEMS (and I may be wrong here) to think this is somehow a bad thing, I simply see it as people using that "excess" disposable income (vis a vis 1975) to purchase things they could never have dreamed of in 1975 like….Viagra! Can I get an "Amen!"

I think Krowne is right on…that disposable income has effectively translated itself into a rightward shifted demand curve in many services, including education (of all types) and healthcare, which has been exacerbated by gold-plated health coverage for most Americans, who then have NO incentive to do their personal part in reigning in prices. Econ 101, in other words.

But, rather than being "bad," per se (and much of it probably is bad to the extent that the incentives are wrong), think about what it brings us: improved health, quality of life, more leisure (as we hire others to do things we used to do ourselves in 1975, like clean our houses, etc). Meanwhile, think of all the cottage industries that have sprung up, such as the aforementioned house-cleaning industry (which, I'm convinced, would probably raise GDP by several tenths if it was all "on the books"!)

The memory Krown tickled was that, in the past month, I've had two people I respect a great deal tell me how hard it is to "make ends meet." I thought about that, and I realized that we ALL struggle to "make ends meet." Why? Because our consumption budget is like the proverbial goldfish…it grows to the size of the tank it's in. But that assuredely DOESN'T mean that "we're struggling"…that's just sheer human obliviousness to how good we really have it compared to…ourselves in 1975!

in the 1975 family: 1.573
in the 2001 family: 1.569

in the 1980 household: 1.386
in the 2003 household: 1.312

So, rather than having more earners on the average contributing to the higher median incomes, we seem to have fewer.

http://www.census.gov/hhes/income/histinc/f12.html

http://www.census.gov/hhes/income/histinc/h12ar.html

Someone can tell me if I've made a mistake.