Only a hundred years ago, a bunch of immigrants from places like Germany or Spain or Italy could arrive in New England (including New York City), perform manual labor, provide for their families on one income, and pool their additional money to _build whole buildings_ as social or fraternal clubs.
That has more to do with the cost of building than a lack of pay. When you don't account for higher education, buildings, and healthcare, Americans are significantly richer than they were in the past. The problem is that politicians don't bother to address the underlying perverse incentives that are the root causes of these rising costs. They can win elections just fine by throwing money at the symptoms, even though they cause even more long-term pain. Until these root causes are addressed, most of the money squeezed from employers is simply going to go to the rent seekers in areas. The most clear example of this is tech salaries going to Bay Area landlords.
I grew up in the 1950s and 1960s in Detroit. It was a place where a high school diploma could get you a secure job that would support a middle class family. It’s all changed and Detroit is now half the size it once was while cities like Houston and Austin have grown tremendously.
Why did that happen? Did corrupt unions kill the goose that laid the golden eggs? Or was it poor management of the automotive giants that allowed overseas companies to take market share. Did wages across the board fall behind inflation or was the automotive fundamentally changed by automation.
I wish I understood what happened since I actually lived through that period.
My sense is that German automotive companies dealt with Japanese competition better than American ones did, though I'd love for someone who knows about the history of the industry to chime in. Germany had strong unions and was a market leader then, similar to the US, so it suggests something was wrong with American automakers, labor unions, or the American government that led to the disaster.
I wonder if Germany was more aggressive with tariffs to protect automakers from competition.
> I wonder if Germany was more aggressive with tariffs to protect automakers from competition.
It's somewhat the opposite actually. Germany taxes imported cars, but at least it still allows them. At the behest of automakers and unions, the US banned imported cars entirely in 1988. This allowed American automakers to profit despite stagnating. It wasn't until foreign subsidiaries started capturing market share from the US that American automakers were forced to innovate again.
There was a combination of factors. I suggest reading the book "On A Clear Day You Can See General Motors" for some starting information. But for some information upfront, in the 1950s GM had become the largest automotive company in the world, buying makes from all over the world with the money they made from their contracts with the U.S. government during World War II and the subsequent money from their core U.S. divisions within the Sloan Ladder. GM had seen Volkswagen as a threat, but only Volkswagen thanks to their quick proliferation during the 1950s at the lower end of the market. To them the French were essentially making toys, the Spanish would never make anything worthwhile under Franco, the Italians had already gained a reputation for extremely fragile and temperamental cars, and the Japanese were producing enclosed golf carts. Only the British and the Germans were a threat, but by the mid 1960s British automotive manufacturing was nosediving, and German cars were still divided into economy and ultra luxury with almost nothing in between thanks to slow post war recovery and targeting the U.S. upscale market.
During the 1950s the U.S. had invested huge amounts of money into Japanese manufacturing in order to have a cheap place to outsource labor to, and as a good will gesture after what happened during World War II. The Japanese, taking technology from American manufacturers, started making their own advancements. By the late 1960s they were on-par with the Americans in ingenuity, but lacking in quality. This applied to everything from their radios to their cars. At the same time, the Japanese yen was inflated compared to the dollar, making it a good idea to export Japanese goods to the U.S. so that Japanese companies could then trade in U.S. dollars internationally. The goods were cheaper to manufacture and import, and it made companies like Matsushita and JVC quite a lot of money they'd use in the 1970s. Toyota and Nissan were also picking up on this, selling the Toyota Crown and Corona in the U.S. as lower cost luxury options and the Nissan Bluebird (as the Datsun 510) as a cheaper alternative to European sports sedans.
In the U.S., by 1965, GM had a majority control of every market. They had done this by essentially siloing every division and making them work on their own, with their own funds, with no collaboration between divisions without executive permission. Permission which was often not granted. This worked fine for the European and Australian divisions like Vauxhall and Holden, but it was starting to strain the U.S. divisions. Then in 1968 three disasters occurred simultaneously for GM. Semon "Bunkie" Knudsen defected to Ford. Chrysler began courting Mitsubishi for captive imports of cheaper Japanese cars. And Lee Iaccocca perfected the personal luxury coupe with the upcoming 1970 Ford LTD and Lincoln Continental Mark IV, the dominant car template of the 1970s.
In 1973 you had a massive recession thanks the the 1973 OPEC Crisis and the 1973 Stock Market crash. These new huge vehicles that Iaccocca had gotten the U.S. addicted to were suddenly much more expensive to buy and run thanks to being opulent and thirsty. Ford was not immune to this, despite the success of the Lincoln Continental and Mercury Grand Marquis. This worked in Chrysler's favor however, as they had both the Dart in the wings and their captive Mitsubishis. Chevrolet meanwhile had blown public trust with the Vega in 1970 thanks to it rusting on the dealer's lots and destroying it's engine within the first month of ownership. Then once again they took a hit with the 1971 Pontiacs and Buicks, both of which were poorly received due to polarizing styling and issues like the trunks filling with water thanks to a ventilation engineering oversight. Chrysler had misread the market with their 1968 styling, and it took costly changes to slowly update the body dies to be in line with industry styling by 1973.
This primed the Japanese manufacturers to swoop in and take over. Datsun struck first, with the B210 and the 720 taking spots in the economy car and mini truck markets that the Big Three had ignored. Honda hit next with the Civic CVCC, capitalizing on the 1973 OPEC Crisis to provide a fuel efficient vehicle to panicking Americans who weren't satisfied with the disappointing Ford Pinto and Dodge/Plymouth Aspen/Volare twins. Toyota came in last, but strongest, introducing the third generation Corolla and reworking the Celica slightly for 1976 to fit American tastes. With the combination of Americans scrambling for smaller and more fuel efficient cars, the weak Japanese yen compared to the dollar, cheaper Japanese manufacturing due to automation, and cheaper Japanese steel thanks to being untreated and of thinner gauge, Japanese cars sold like crazy after 1973 and spread from California all the way to the East Coast.
This of course caused the Big Three to panic. GM tried several times to fix the Vega and it's siblings, only managing to make just as bad a car each time in the Monza and then the Cavalier. The 1980 X cars were a disaster, with the Chevrolet Citation and it's sisters driving customers away from GM for life. The failed 1985 downsizing of the full sized cars under Ed Cole's direction left every division's cars looking like clones of eachother both inside and out. And finally the dilution of the Oldsmobile brand by naming every car Cutlass killed their last golden goose. The GM10 "W-body" cars, meant to come out by the 1984 model year and engineered to the standards of the 1980 Honda Civic, ended up five years and hundreds of millions of dollars over budget when they arrived in 1988 as 1989 model years.
Ford disregarded the 1970s oil crises almost entirely, continuing to bank on large personal luxury coupes to keep them afloat. A token gesture was placing the Mustang on the Pinto platform for 1974 and playing it up as a baby Thunderbird rather than the performance heavy brute it was in the 1960s. By 1978 these tactics had nearly bankrupted the company, forcing a scramble to the Fox platform as they quickly downsized everything and killed vaunted nameplates to scrub any ill will from the brand. Were it not for the continued sales of the Lincoln Continental Mark V and the development of the Tempo and American Escort, Ford might've followed the path of AMC in the 1980s.
Chrysler was... Chrysler. They were up and down like a spring as they had always been. They suffered through 1973, suffered the failure of the Aspen and Volare, suffered the death of their profit ensuring muscle cars due to rising insurance costs and the fuel crisis, and suffered having to sell an ailing Rootes Group and essentially leaving the European market. But before they sold the Rootes Group they filched a rather interesting piece of technology in the Talbot Horizon. A car which they reverse engineered into the Dodge Omni, the basis of the K-Cars that Lee Iaccocca would champion and eventually pervert throughout his stay at Chrysler during the 1980s. As such Chrysler was the best positioned to survive the 1980s.
But then we come back to Europe. To the already small, fuel efficient, high quality cars that GM had thought no threat in the 1960s. If, during the 1970s, GM had brought over vehicles such as the Opel Rekord and Vauxhall Astra, they would never have had to waste money developing the Vega, the Monza, and the Cavalier. The cars already fit the market GM was targeting. The same was true of Ford. If Ford had brought over the Ford Escort, Taunus, and Granada, they wouldn't have had any need to develop the Pinto, Tempo, and Fairmont. Detroit was too insular and xenophobic to take the option that would have saved them. An option they would inevitably end up adopting thirty five years later anyways.
Detroit died for a number of reasons. But the main reason was the pride of Ford and GM.
> Did corrupt unions kill the goose that laid the golden eggs?
Yes, go look up % of costs going to labor for the USA automotive industry back during the glory days of Detroit. The only reason it worked at all was there wasn't a fraction of the global competition.
"provide for their families" was also a much lower standard than it is now. Back then having a good life (for immigrants at least) didn't mean a large house in the suburbs and 3 cars, it meant an entire family of 5 sharing 1 bedroom and walking everywhere. A pair of jeans was a multi generational investment. If your family could afford one bicycle, you were living large.
This was unimaginable wealth compared to what was available back home. You had all 3 meals and even meat! Meat! The luxury.
sauce: I'm from one of those European countries where 1 in 6 people emmigrated between 1880 and 1920. Literature from the time (that we read in school) contrasts the local situation with the riches of America as reported by people who sent letters.
Being able to "walk everywhere" is itself a kind of luxury nowadays, because there are limited walkable cities in the US and they have all become very expensive.
It's often actually much cheaper to live somewhere in the suburbs where you can't walk everywhere, because everything is designed around cars.
The fact that everything is designed around cars is one of the invisible nooses around the neck of America. When you look around and notice that everything is covered in cars, that's hard to unnotice. All those cars, roads, parking lots, highways, box stores, mile of sewer and water pipe, cost a staggering amount and are going to start costing a lot more to maintain over the next decade as systems age out and need replacement or maintenance. Not to mention the cost of demolishing the country we spend the previous 300 years constructing. The vampiric system of automobilism has made everything much more expensive for everyone.
Living in a semi-crowded city, near your family and friends, should be the default, cheap option. Instead we've wasted about 10 trillion dollars pave the entire continent. Possibly the most expensive mistake ever made in history.
It disturbs me that your comment is "greyed out," whatever that means: you're speaking an obvious truth. The car-scale of American infrastructure is an impediment to physical health; it's an impediment to social capital, and therefore to democracy and to mental health, as well. It funnels us down restricted, commercial avenues--pun intended. It's physically dangerous, it's chemically toxic, it's ecologically destructive, and it's damned expensive to maintain!
It's obvious when I visit a city / countryside with poor transit and pedestrian infrastructure how much more I suffer. It's so damned obvious, it's the first thing that screams out to me right when I land / pull in / ride up.
I can't understand what literate person would take issue with the core of your assertions.
Apartments are fine as long as they're good apartments. Properly-built concrete walls completely mitigate the sound problem you mentioned below. In four years at my current place, I've never heard a neighbor's voice from inside my apartment.
Shitty slumlord apartments are what everyone wants to escape from, in my experience.
The post to which you're responding said nothing about apartments. Do you mind connecting a few dots for those of us less well-versed in the presumptions of your milieu?
The post didn't explicitly say "apartment", but it said:
> Living in a semi-crowded city, near your family and friends, should be the default, cheap option.
What kind of dwelling, apart from apartments, are there in a "semi-crowded city"? They may not be high-rises, but even if it's a "multi-family house", it's still "apartments". There's only a (usually thin) wall separating your room from your neighbor's. This is one of the main aspects people typically hate about apartments.
Funny enough, having everything being designed around cars is actually more expensive for society on the whole. Walkable cities everywhere would actually be cheaper, and then it also wouldn’t be a luxury.
The quality of living a family in the suburbs has today is like what a rich person a hundred years ago would have.
I see people with houses, multiple brand new cars, TVs in every room, and who take a vacation at least once a year complain about the economy their entire life.
The fact that some people don’t know how well they have it is not evidence that everything is fine.
Watch a few news reports on poverty in America and you will see that a decent percentage of working adults live with their entire family in a small cramped apartment, can’t afford any vacation, and likely can’t afford emergency medical care if it comes up.
And even those people in the suburbs with all those TVs could have more financial security and work fewer hours if our economy was more fairly arranged.
They didn't say "everything is fine". There's a lot wrong with everyone's economy from the perspective of "we work just as hard, why don't we get the same stuff?"
However, I think you're misapprehending quite how much worse things were a century ago. Now the poor may struggle to afford a PET/CT/MRI/ultrasound scan, or a PCR test, or a dose of antibiotics, or a heart (lung, liver, kidney, bladder, pancreas, ovary, …) transplant, but 100 years ago they did not exist. Diabetes only stopped being lethal just over 100 years ago, the first successful human treatment in the beginning of 1922. Smallpox no longer exists. And so on.
No I’m not misapprehending how much worse things were a century ago. I simply believe that argument has no bearing on the discussion of a fair distribution of wealth in todays society. No one today lives 100 years ago as a matter of simple fact. Yes, we have antibiotics now, and that’s great, but that has nothing to do with the fact that workers are producing vast amounts of wealth and receiving very little of that wealth as remuneration. We have cars today that make certain kinds of transportation easier, but that has nothing to do with a lack of maternity and paternity leave for new parents. We have cell phones so we can now talk to anyone in the world but that has nothing to do with the fact that business owners will selfishly decide to ship 1000 jobs overseas with no input from the workers who will be disenfranchised.
I’m talking about unfair power imbalances today. This has nothing to do with the past.
Not even close. That rich person had servants, could go on lengthy vacations, etc. and most likely they had substantial passive income.
The key thing to understand is the difference in how precarious those situations are: that affluent suburbanite has some shiny things but their cash flow is much higher than their wealth. A TV in every room is a rounding error on the $11k/year each of those new cars costs on average, and over the course of someone’s working life that kind of thing makes a huge difference in net worth.
The American healthcare system factors into this significantly: if your income depends on showing up to work daily, all of that can go away with a single health incident which leaves you unable to work. A truly rich person is considerably more likely to be able to ride something like that out.
Similarly, retirement is a source of stress for many Americans. Having given mortgage processors and car companies millions of dollars over your life won’t help you much then.
The rich people of the past had no internet, cars, air travel, or much health care by modern standards. The average 2022 American is vastly better off materially.
What they had was social status, and I think that's more what you're talking about. Social status is incredibly important for humans, so I understand focusing on it. But since it's pretty much a Zero Sum Game, nothing much changes there.
Commercial aviation was just getting started, yes, But a rich person in 1922 had luxury rail travel, boats, cars, horses, etc. Most importantly, they had time: air travel is important for most of us because having a paltry couple weeks per year means people try to do things like weekend trips which couldn’t otherwise work. If you’re truly rich, you have a lot more margin for having other people do the unpleasant trips for you or adjusting schedules to suit your comfort.
Health care is the biggest differential - wealth can buy you out of a lot of lifestyle factors but a hundred years ago was just before the dawn of the antibiotic revolution. That part is true, but it isn’t a factor of rising incomes and given how many Americans have stress, lower quality of life, and experience severe financial strain due to healthcare costs I don’t think it’s attributable to higher incomes.
My point was that this isn’t so clear cut: healthcare is great, but a lot of things are mixed because humans care about relative status and the real signifiers continue to be things which involve other humans doing labor for you. Even though Netflix exists rich people still go to the opera because it’s an experience most people can’t afford.
>The rich people of the past had no internet, cars, air travel, or much health care by modern standards. The average 2022 American is vastly better off materially.
No, while rich people in the past had no iPhones or internet, they had something far more valuable than that: income generating businesses and appreciable assets like land, housing, gold, fine art, jewelery, etc.
And no, the average American is vastly poorer now as housing, stable well paying jobs, healthcare and education, are now massively out of reach for the average joe than they were a few decades ago. Having iPhones and internet doesn't make up for these.
Which somewhat reduce that risk. People on SSI are usually struggling, not affluent, and actually getting those benefits can be a struggle for people with conditions less clear cut than, say, losing limbs.
I’m not saying they’re not worth having but again that there’s a big gap between someone being rich and a middle-class worker with decent active income.
Most, myself included, have a very limited understanding of the economy we are part of, so I'm not surprised by complaints. Every so often, someone making 2 or 3 times the national average income makes an ass of themselves on TV by claiming they're economically disadvantaged.
In some senses, you don't even have to go to the suburbs to be unimaginably better off now than it was possible to be a century ago, because a century it was not possible, at any price, to make a weekend trip between New York and London; to be immune to the common forms of seasonal flu; to have a video call with someone; to get penicillin; 3D printers, and indeed all CNC machines more complicated than a loom controlled by punched cards, would've been fantasy; and so much more besides.
TVs are cheap now. So are 3D printers, travel, and phones.
> Every so often, someone making 2 or 3 times the national average income makes an ass of themselves on TV by claiming they're economically disadvantaged.
Someone making 3X the US national median income is paying roughly the US national median income in federal/state/local taxes. They're paying a median working citizens' earnings in taxes.
How would you feel if someone taxed you an absolute amount that would leave 50% of your countrymen penniless? And they denied you tax breaks, like the child credit, that they grant themselves? And then that same 50% vilified you to boot?
Nobody said "not fine". You mentioned "economically disadvantaged". Such a person person literally is disadvantaged in some economic ways. Not all. Not most. But some.
You asked how I would feel. That's the answer to that: I'd be fine.
And as I'd be on 3x average pay, the only way a tax break could possibly be large enough to make me not better off economically was if average people get so many their tax rate is negative.
>TVs are cheap now. So are 3D printers, travel, and phones.
Being able to own disposable gadgets made in China doesn't make you rich. Those are not necessities. But you now what is? Housing, stable well paying jobs, healthcare and education , all of which are now massively out of reach for the average joe than they were a few decades ago.
And a century ago? Because that's what this sub-thread is focusing on.
And, like I said, much of what we now consider basic healthcare had not yet been invented.
And even in the last decades, those cheap Chinese gadgets you're so dismissive of, they give access for free to not just k-12 but also university and post-graduate level educational courses and materials on topics which had not been invented then either.
And the tech also lets more work remotely, changing the dynamics on housing.
The whole point of civilization is that generation to generation, our standards of living should increase.
Instead, they are regressing. If we are comparing to 100 years ago, we sure should have been doing better! If we compare to 50 years ago, there are some key ways where we have regressed within the United States.
The key here is that when we are speaking of standards of living, we are speaking within some narrow contexts. In the developing world, standards have blossomed. Within the United States, the GDP has continued to grow but the value hasn't spread equally.
I can say that in the lower 50% of people in the US, the standard of living has markedly decreased. For 50-80%, it's mildly increased. For the top 20%, it's doing just fine, but it's never been a better time to be wealthy as the pathway for compounding growth on wealth has never had so many tools.
That really puts things into perspective for me.