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Comment by zaroth | Hacker News Reader

It’s entirely expected that unemployment this low will increase wage growth.

What’s different this time is that inflation has been so tame this far into the process. At this point in the 2000s boom cycle we saw inflation was ticking over 5%, whereas today it remains tame under 3%.

This means for the first time in a long time the higher wage growth is actually making a significant difference in people’s real income.

Another factor that’s not widely reported is that the insurance marketplaces seem to be stabilizing and rate increases for 2019 are single-digit and some areas are even seeing decreases. Compared to the 20, 30, 40% increases in the early years of the marketplace that makes a huge difference.

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Except inflation mask the deeper issues, housing and health care has been increasing faster than inflation rate in many years. PcW reports health care (employee only) at 5.5-7.5 rate annually since 2010. They expect 2019 to have 6% rate.

It is interesting how you see that since I see it differently;

1. It is not a significant difference in real income since the costs of housing and health care cost has been increasing much faster than inflation. 2. The "rate" of the marketplace "premium" may be smaller, that does not mean the value of the plan is the same. They've been crippling the plans every year in my marketplace to remove max costs, so that in the long run, you will end up paying much more in medical costs. A few years ago, I wouldn't have to pay anything after a certain amount, drugs are covered, and now, for nearly 20% more monthly premium, I have to pay for all drugs, 20% of all medical costs even after deductible. 3. Insurance mandate expires in 2019. I'll just drop insurance as it's already too expensive even if the "premium" is only 10% higher than last year. It would've been cheaper before the ACA with some decent plans.

Student borrowing has also flattened off to single digit increases, similar to healthcare cost increases.

Either those things have nearly maxed out their cost potential, or it's the strong dollar (the dollar imploded during the disastrous Bush years, which sent nearly everything priced in dollars skyrocketing that wasn't nailed down (consumer prices and wages were largely nailed down)).

Might be a combination of those things. The average student debt acquired for a four year degree, has been nearly flat for six years, after soaring from $20k to $30k in six or seven years (between the years '05-06 and '11-12). This six year span is the longest period of flat growth in individual student debt accumulation in a quarter century.

Two important dates that clarify your accurate observations:

2005 - As part of the 'Bankruptcy Abuse Prevention and Consumer Protection Act' student loans from for-profit and non-governmental entities were given immunity to dismissal in bankruptcy. [1]

2012 - College enrollment flatlined. [2]

It's basic supply and demand. The widespread deregulation of university tuitions paired with lifelong debt even from private creditors removed all cost barriers to education. And so the only weighting factor in the supply:demand relationship was how many people were willing to take the poisoned fruits of ever-larger life long loans. And so universities kept ratcheting tuition up under spurious justification. Until the number of people entering university flat lined.

[1] - https://en.wikipedia.org/wiki/Bankruptcy_Abuse_Prevention_an...

[2] - https://www.statista.com/statistics/183995/us-college-enroll...

There still is no real wage growth [1]. Low unemployment should allow workers to bargain, but it's not happening.

[1] https://www.washingtonpost.com/business/2018/08/10/america-w...

the chart shows that in inflation-adjusted terms we've lost ground relative to the year 2000. and of course, prices have skyrocketed for essential goods like healthcare.

and new essential goods are necessary now, too. think internet and phone, neither of which were as expensive or as necessary in 2000.

then there's the unprecedented level of student loan debt.

so yeah, people are far poorer now.

i'm tempted to say that the unemployment stat isn't real either. 5% unemployment is supposed to be churn, yet we're beneath that, which means people are afraid to leave jobs or there is some other thing that the stats are hiding.

IIRC, the unemployment number comes has eligibility requirements. Meaning some NEETs are no longer part of the statistic if they've been out of the workforce for too long.

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