this post was submitted on 08 Oct 2023
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[–] rambaroo@lemmy.world 6 points 1 year ago* (last edited 1 year ago) (2 children)

$120k is "wealthy" now? 120k isn't even enough to buy a fucking house in most cities in the US. Actual wealthy people aren't affected by this law because they don't have regular income.

[–] Grumpy@sh.itjust.works 6 points 1 year ago* (last edited 1 year ago)

120K lands you at 86th percentile [1]. So... relatively, you are sorta well off.

Sure, you can't buy a house with that income in a big city. But that merely shows how fucked up the real estate bubble is. Just think, the top 86th percentile earning person is no where near enough to even buy a home. Houses are about 1m in my neighborhood. So you need to earn about 250k/yr to realistically afford a home. That lands you at 97th percentile. So just top 3% of the people can actually afford a home on a single person's salary. That's how fucked we are.

The median income for a non-family household (i.e. single) is 45k, and family household is 95k (possibly dual income) according to 2023 census [2]. So, you're doing relatively quite well in comparison.

Who is "wealthy" is a subjective term. So a median person might see someone making 120k as wealthy.

[–] rexxit@lemmy.world 3 points 1 year ago* (last edited 1 year ago) (1 children)

I've seen this on Reddit before: Six figures means you're rich, because that was true in the 80s, right? Obviously people don't have a clue that 40 years of inflation has made that middle class.

Also: income is not wealth, and the willful lack of understanding on that point blows my mind. A person who is wealthy can live an upper middle class lifestyle or better without ever having to work again. A person who has respectable income may have minimal wealth, or even mountains of debt (student loans, mortgage, etc). A person who makes 100k could be a few months unemployment away from losing their house or lease, while a person with "wealth" may not have to work at all.

People don't become filthy rich working full time for six figures. The wealthy (~$20-50m net worth and up IMO) are people who made their money with something other than labor - through investments and things that the government doesn't really classify as normal income.

Edit: It's like the saying goes: nobody makes a billion dollars. They take a billion dollars. If you tax the wealthy on income, you collect very little tax, because it's not classified as income. Meanwhile you're going to tax an engineer or physician who probably have hefty student loans and work their asses off full time, at the highest marginal rates because we don't or can't tax wealth.

Edit2: we've got minimum wage internet trolls who think an employee software engineer is basically a cigar chomping capitalist because they make over the median wage. The middle class has shrunk and maybe you're not in it. Get a clue, dumbasses.

[–] SaltySalamander@kbin.social 2 points 1 year ago (1 children)

Six figures means you’re rich, because that was true in the 80s, right?

No, this was not any more true in the 80s than it is now.

[–] rexxit@lemmy.world 1 points 1 year ago* (last edited 1 year ago)

I certainly agree based on my previous statement that income is not wealth, but I was trying to make two points and mixed the messages.

One is that amounts of money that were once considered an unbelievable amount for income or wealth - say $100k and $1m - have now been eroded by inflation to fairly modest money. In the 70s or 80s, having a million meant never working again. Earning 100k a year when a house cost $50k was huge money, and might lead to wealth quickly, if one bought several houses with it.

Another point I'd like to sneak in is that there's almost no modern equivalent to that kind of employed income. On paper, inflation puts it at 400k - so maybe today's equivalent of a surgeon - but the 50k house now costs $500k-1m. Notional inflation being 4x, while the critically important things have gone up 10-20x means that something harder to quantify is broken, and upward mobility isn't working the way we expect. The same opportunities don't exist. We are less likely to turn income into wealth over time than at points in the past, and so the tendency of people to erroneously think high income = wealth may have a reasonable basis in history that has never been less true today.

Edit: and it's not just houses, it's the stock market. The advent of the internet and e-commerce resulting in tech stock growth 1995-today is a phenomenon not likely to be replicated in any other area. We may be running out of growth to be had. The ability to get 10-20x your money over 30-40 years of investments is probably gone, and with it the prospect of comfortable retirement for even relatively high earners.