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Old 06-13-2017, 08:49 PM
 
Location: Chicago
941 posts, read 847,050 times
Reputation: 1112

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Making $15 per hour, unless you have a huge debt load, would put you right in the traditional 30% range for renting at $900.
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Old 06-14-2017, 07:18 AM
 
Location: Grosse Ile Michigan
27,776 posts, read 65,692,477 times
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Quote:
Originally Posted by MetroMetro View Post

I do have to disagree with your point about nothing being new or unique to this generation - I think the student debt load has ballooned far beyond what it was for past generations, which hinders the ability for folks my age to buy a home.
This is the only thing we appear to disagree on. I agree the student loan debt is certainly higher in raw numbers and may impact a greater number of people. However lots and lots of us graduated with considerable debt. For me it was $70,000. That is $146,000 in today's money. However I started at $57,000 which is 119,000 today and almost no one starts that high now right out of college. Most people had lower student loan debt, like $30,000, but they also had only a bachelors degree which meant they started at $30,000 with a very few up in the $40,000 range. I think those ratios in today's dollars are pretty common, except starting pay.

I was 33 when I first bought a house and I was only able to do that because the market tanked in the middle 1990s and because FHA loans let you finance 94%. Even so, I had to cash in our life insurance policies, use a tax return, borrow from the kids college funds, my wife sold her Disney and Polaroid stock and a savings bond her grandmother bought for her as a child, we borrowed some money from my parents from her parents and from her grandma. The owner carried 3% of the down-payment as a second. We bought a run down house in a minority majority city with generally bad schools. I was 33 years old.

We had almost no curtains for several years. For at least a year, we put blankets on the floor of our dining room for meals or ate outside. For a time, our older daughters slept on mattresses sitting ont he floor. Almost none of our neighbors spoke English, we had to drive our kids to school ourselves (no one at the neighborhood school spoke English). For them to play outside our yard, we had to drive them to a local park and stay with them. The house needed tons of work and for a time, our stair case railing consisted of orange construction fencing. We felt lucky to get a house anywhere, we did not complain that we could not afford something in a premier neighborhood which were occpied by older families and people like my friend who married an heriess.

The only reason we were able to pay off student loan debt was the house increased in value a lot and we refinanced and paid off all of our debt. Keep in mind too, back then interest rates on student loans ran 18 - 22% and some of the private ones were higher. I think I had one at 11% - it was subsidized. However I could not make the monthly payment at first and had to re-finance for a longer term through Sallie Mae at a higher interest rate. Today, I think recent graduates would go nuts if their loans were at even 11%, let alone 22% or 29%.

Student loans are a burden, but they are nothing new. They have been a burden for many decades. The bigger problem is that a college degree is no longer the ticket to a high paying job except in a few limited areas, and too many of today's kids go through college with no guidance and choose majors that will leave them essentially broke their entire lives.

I do not see a big difference to today other than starting pay is so much lower in today dollars. While much of that is a poor choice of college majors, there is likely some other factors influencing this discrepancy.

I think primarily what today's young people are complaining about primarily is their poor choice of a major/degree and their failure to marry an heiress. Sure it is hard to buy your first house. It has always been hard.

Last edited by Coldjensens; 06-14-2017 at 07:35 AM..
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Old 06-14-2017, 08:11 AM
 
12 posts, read 12,507 times
Reputation: 41
Quote:
Originally Posted by Coldjensens View Post
This is the only thing we appear to disagree on. I agree the student loan debt is certainly higher in raw numbers and may impact a greater number of people. However lots and lots of us graduated with considerable debt. For me it was $70,000. That is $146,000 in today's money. However I started at $57,000 which is 119,000 today and almost no one starts that high now right out of college. Most people had lower student loan debt, like $30,000, but they also had only a bachelors degree which meant they started at $30,000 with a very few up in the $40,000 range. I think those ratios in today's dollars are pretty common, except starting pay.

I was 33 when I first bought a house and I was only able to do that because the market tanked in the middle 1990s and because FHA loans let you finance 94%. Even so, I had to cash in our life insurance policies, use a tax return, borrow from the kids college funds, my wife sold her Disney and Polaroid stock and a savings bond her grandmother bought for her as a child, we borrowed some money from my parents from her parents and from her grandma. The owner carried 3% of the down-payment as a second. We bought a run down house in a minority majority city with generally bad schools. I was 33 years old.

We had almost no curtains for several years. For at least a year, we put blankets on the floor of our dining room for meals or ate outside. For a time, our older daughters slept on mattresses sitting ont he floor. Almost none of our neighbors spoke English, we had to drive our kids to school ourselves (no one at the neighborhood school spoke English). For them to play outside our yard, we had to drive them to a local park and stay with them. The house needed tons of work and for a time, our stair case railing consisted of orange construction fencing. We felt lucky to get a house anywhere, we did not complain that we could not afford something in a premier neighborhood which were occpied by older families and people like my friend who married an heriess.

The only reason we were able to pay off student loan debt was the house increased in value a lot and we refinanced and paid off all of our debt. Keep in mind too, back then interest rates on student loans ran 18 - 22% and some of the private ones were higher. I think I had one at 11% - it was subsidized. However I could not make the monthly payment at first and had to re-finance for a longer term through Sallie Mae at a higher interest rate. Today, I think recent graduates would go nuts if their loans were at even 11%, let alone 22% or 29%.

Student loans are a burden, but they are nothing new. They have been a burden for many decades. The bigger problem is that a college degree is no longer the ticket to a high paying job except in a few limited areas, and too many of today's kids go through college with no guidance and choose majors that will leave them essentially broke their entire lives.

I do not see a big difference to today other than starting pay is so much lower in today dollars. While much of that is a poor choice of college majors, there is likely some other factors influencing this discrepancy.

I think primarily what today's young people are complaining about primarily is their poor choice of a major/degree and their failure to marry an heiress. Sure it is hard to buy your first house. It has always been hard.
I would agree that a big problem is that a college degree is no longer the ticket to a high paying job. But, anecdotal personal experiences aside, the student loan debt load is simply not what it was 10 or 20 years ago. This greatly affects my generation's purchasing power. Not saying it wasn't a problem before, it certainly was, I'm just arguing that the magnitude of the problem has increased for folks my age.

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Old 06-14-2017, 09:06 AM
 
12,564 posts, read 7,624,034 times
Reputation: 4774
Quote:
Originally Posted by MetroMetro View Post
I would agree that a big problem is that a college degree is no longer the ticket to a high paying job. But, anecdotal personal experiences aside, the student loan debt load is simply not what it was 10 or 20 years ago. This greatly affects my generation's purchasing power. Not saying it wasn't a problem before, it certainly was, I'm just arguing that the magnitude of the problem has increased for folks my age.
I agree....and that does not hold well for the economy in the future if everyone (not literally) is going to college, going into debt, and not getting the good paying jobs following college. Even if they are getting decent paying jobs, their debt amounts to claims against their future earnings. Hence, the economy gets the benefit of the spending today at the expense of future spending. In other words, college graduates who are working are spending more of their pay on debt than consumer purchases, which hurts the economy.
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Old 06-14-2017, 10:31 AM
 
2,952 posts, read 4,355,284 times
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To me, the whole "kids choose dumb majors" thing is usually associated with smug engineers whose jobs have not yet been exported to a third-world country.

Yes, there is a need for STEM jobs and, yes, it is obviously foolish in many instances to take out a $100,000 in loans for a major that leads nowhere.

However, among economically and financially literate people, there is something close to a consensus acknowledging that there is not the opportunity for advancement in this county that there was 30 or 40 years ago. The plant manager of yesteryear is the Chick Fil A manager of today.

This really shouldn't come as a surprise to anyone. When you let your economic policy be dictated for decades by a cabal of economists and CEOs who sell the idea that you can merge the most developed economy in the world with about 5 billion impoverished people and, according to their "model," it should work out well in the end, do you even have a right to complain when things go wrong?

I'm not sure there is anything to be done about globalization, but at the same time, burying your head in the sand to its effects is not helpful, either.


Enjoy that "service economy!"
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Old 06-14-2017, 10:54 AM
 
Location: Chicago
941 posts, read 847,050 times
Reputation: 1112
Yeah, the funny thing about it is that nobody ever questioned a baby boomer who wanted to major in English or Philosophy. They might not have ever worked in their field, but they generally got decent jobs in middle management because degrees were prestigious. Being an engineer requires math aptitude that the average person will not have... if we all did, engineering would pay the same as working behind the register at Kroger.

The truth is that baby boomers went off and did whatever they wanted, rode more positive economic headwinds to prosperity, worked hard to pull the ladder out from the next generation via get rich quick schemes writ large, told their kids a lot of lies about following their dreams, and then shamed their kids for doing just that when they emerged into the world that had been created.

Also: everyone I know who chose to major in "useless" subjects in college were the children of upper middle class to wealthy parents. I feel like there is a high correlation between the children of doctors and lawyers and engineers and choosing to major in anthropology at an expensive liberal arts college.
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Old 06-14-2017, 11:05 AM
 
12,564 posts, read 7,624,034 times
Reputation: 4774
Quote:
Originally Posted by jonnynonos View Post
To me, the whole "kids choose dumb majors" thing is usually associated with smug engineers whose jobs have not yet been exported to a third-world country.

Yes, there is a need for STEM jobs and, yes, it is obviously foolish in many instances to take out a $100,000 in loans for a major that leads nowhere.

However, among economically and financially literate people, there is something close to a consensus acknowledging that there is not the opportunity for advancement in this county that there was 30 or 40 years ago. The plant manager of yesteryear is the Chick Fil A manager of today.

This really shouldn't come as a surprise to anyone. When you let your economic policy be dictated for decades by a cabal of economists and CEOs who sell the idea that you can merge the most developed economy in the world with about 5 billion impoverished people and, according to their "model," it should work out well in the end, do you even have a right to complain when things go wrong?

I'm not sure there is anything to be done about globalization, but at the same time, burying your head in the sand to its effects is not helpful, either.


Enjoy that "service economy!"
The "Education is the Key" mantra has always been a myth. I do not know what the exact figure is today, but a decade or so ago only something like 26% of jobs in the economy required a college degree. What would happen if, hypothetically, 80% of the labor force had college degrees while only 26% of jobs required degrees?

The truth is that the law of supply an demand still governs opportunity. College produced higher incomes when the supply of college graduates was less than demand for them. However, as soon as the supply of college educated people exceeded the demand for college educated people, a college degree lost its value. Granted, there are some disciplines where the supply is still below demand and these are your occupations that will pay better, as a general rule.

Going to college and getting a degree is no guarantee for descent salary anymore, because too many people are getting degrees now.
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Old 06-14-2017, 11:14 AM
 
Location: Grosse Ile Michigan
27,776 posts, read 65,692,477 times
Reputation: 32973
Quote:
Originally Posted by brodie734 View Post
Yeah, the funny thing about it is that nobody ever questioned a baby boomer who wanted to major in English or Philosophy. They might not have ever worked in their field, but they generally got decent jobs in middle management because degrees were prestigious. Being an engineer requires math aptitude that the average person will not have... if we all did, engineering would pay the same as working behind the register at Kroger.

The truth is that baby boomers went off and did whatever they wanted, rode more positive economic headwinds to prosperity, worked hard to pull the ladder out from the next generation via get rich quick schemes writ large, told their kids a lot of lies about following their dreams, and then shamed their kids for doing just that when they emerged into the world that had been created.

Also: everyone I know who chose to major in "useless" subjects in college were the children of upper middle class to wealthy parents. I feel like there is a high correlation between the children of doctors and lawyers and engineers and choosing to major in anthropology at an expensive liberal arts college.
I think I may be a boomer, or just on the other side of the line. I majored in English and was two classes short of a Philosophy major. Back then no one questioned it, they were just happy/proud if you went to college.

My degree did get me a job offer - editing the brochures you see in car dealerships. $20,000 a year.

An English degree does not qualify you to teach English, so it is not even self perpetuating. The only options were the "any degree" options usually filled by people with BA degrees in things like art history, psychology, business or political science. Jobs like insurance adjuster, construction management, or many types of sales jobs where the only requirement was a bachelors degree in anything. I think a lot of those kind of jobs have become more specialized and now require a specific degree. However back then a law degree was a guaranteed ticket to big income.

When I was in school, the women who majored in those areas usually said they were getting their MRS degree. Guys mostly ended up in sales.

My daughter - a psychology PhD candidate recently pointed out she thinks there are just too many people and too much automation to keep everyone employed in the things we actually need done, so we just make up jobs that are not really needed to keep everyone busy. She said there are like 20,000 PhD's in her field. A few hundred would be plenty to conduct the meaningful research that actually needs to be done. The rest end up researching obscure or ridiculous things that really are of almost no worth at all, but it keeps them busy. Many of them teach new psychology students who in turn can teach and research meaningless things. It is not without any benefit however, some are researching real important and useful issues. Some of the useless issue research accidentally comes up with some data or conclusions that end up being important for meaningful research. However she believes many jobs in many different fields serve no other purpose than to keep people busy.
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Old 06-14-2017, 11:26 AM
 
Location: Chicago
941 posts, read 847,050 times
Reputation: 1112
keep in mind that the purchasing power of $20k in the early 1980's was between $50k-$125k in 2017 dollars. The job you describe being offered with your BA from Wayne State is something many of my friends with honors English degrees from UMich would kill for, as it is many work as preschool or ESL teachers, stringing together income based on multiple part time jobs while applying for technical writer, paralegal and social media jobs or weighing a number of grad school fantasies that, as you point out, probably wouldn't work out any better for them. Most of those psychology PhDs will end up teaching part time intro to psych classes for meager salaries... some large schools now allow grad students to elect not to teach lower level classes and instead give them administrative tasks that provide them with more marketable and valuable skills in the long run.
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Old 06-14-2017, 11:26 AM
 
Location: Southeast Michigan
1,285 posts, read 1,077,960 times
Reputation: 1574
Quote:
Originally Posted by brodie734 View Post
Yeah, the funny thing about it is that nobody ever questioned a baby boomer who wanted to major in English or Philosophy. They might not have ever worked in their field, but they generally got decent jobs in middle management because degrees were prestigious. Being an engineer requires math aptitude that the average person will not have... if we all did, engineering would pay the same as working behind the register at Kroger.

The truth is that baby boomers went off and did whatever they wanted, rode more positive economic headwinds to prosperity, worked hard to pull the ladder out from the next generation via get rich quick schemes writ large, told their kids a lot of lies about following their dreams, and then shamed their kids for doing just that when they emerged into the world that had been created.

Also: everyone I know who chose to major in "useless" subjects in college were the children of upper middle class to wealthy parents. I feel like there is a high correlation between the children of doctors and lawyers and engineers and choosing to major in anthropology at an expensive liberal arts college.
A lot of us baby boomers worked hard, period, and made certain that our children did the same. When we graduated from college in the late '70's, the economy was taking a dump. As first in the family college grads, we had worked toward useful degrees because we knew that we had to, in order to find gainful employment. So jobs weren't hard to come by. Our parents, who grew up during the Depression, were not going to support us after college. We knew that we would be on our own to sink or swim.

Don't blame everything on Mom and Dad.
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