为什么中产阶级的生活越来越难以负担？数据与感知的真相

LA is just like, I don't even know how people live here. It's insane. It is impossible to live in Ontario. Everything is so expensive. London I don't know what type of limited edition Oliver Twist lifestyle you're selling to us, but we can't hack it. It's too much. In a recent survey, between 75% and 91% of Europeans reported that prices in shops are rising faster than their incomes. And in America, the number is a whopping 90%. So middle class life is clearly getting less and less affordable. But why? The most popular explanations emphasize rising inequality, the skyrocketing cost of housing, college and health care, as well as rapidly rising energy and food prices after the pandemic. And yeah, this all sounded pretty plausible. But when we dug into the data, we ran into a pretty serious problem with the entire idea that middle class life is getting less and less affordable. Sure, most people report it, but on paper they are wrong, both in the US and Europe. Median wages, adjusted for inflation, are up 20 to 30% compared to the year 2000. And remember, that's the median wage, not the average. So a handful of billionaires are not ruling the trend here. Sure, some stuff has clearly gotten much more expensive, like college childcare and those kind of things. But because what used to be true middle class luxuries like a car, clothing, toys for kids, or a massive TV, these have all gotten so much cheaper that it kind of balances out on paper. So what's going on? Why do people feel like they are living in a time of stagflation? That is the cost of living rising faster than income. While the data says we are actually in a pretty healthy economy, there are really only two possible answers. Either people are missing something and being irrationally pessimistic, or the official data is missing something. Instead, behavioral economists tell us that human psychology is full of blind spots. We do suffer from extreme nostalgia, for example, and we fall for doing gloom news, and we may even misinterpret basic facts. Like, for example, surveys show us all the time that Americans tend to believe that inflation is rising even when it was already falling. But at the same time, I do know that the way that inflation is calculated has changed over time and that it's far from perfect. For example, the Bureau of Labor Statistics, the institution in charge of measuring U.S. inflation, claims that housing prices have increased below average wages. And come on that that can't be right. Anyone who has recently tried to buy a home knows that this cannot be true. So in this video, we're going to go in-depth on three theories that can explain why middle class life is just getting less and less affordable, or why it feels that way, even if it's technically not true. These theories are number one, the theory of the vibecession. Number two, Baumol’s cost disease, which is very interesting. It states that actually middle class staples like education and medical care may be getting more expensive precisely because your TV got so cheap. And finally, the theory that inflation statistics are missing what's really going on today. And of course, at the end, I'll give you my take on which of these theories the evidence actually supports.

So without further ado, let's start with the first theory. The theory of the vibe session. Because while inflation has undeniably been higher than we were used to for the longest time, unemployment honestly looks really good compared to historical standards on both sides of the Atlantic. And that's very important, because while we were all focusing on rapidly rising prices, driven especially by energy and food, something remarkable was happening in the labor market right after Covid, thanks to big government stimulus during lockdowns and then everyone going outside to spend all of that money. There was actually a massive hiring explosion in 2021, which enabled which came to be known as the Great Resignation. That is, the labor market was so hot that for the first time ever, many people who already had a job were able to find a better one. Unemployment fell dramatically and median wages jumped up massively. Sure, it's true that inflation hit hard in 2022, and that almost entirely eroded this impressive wage growth. But if we look at the graph, median wages have been growing ever since, even faster than inflation. So then why was consumer sentiment collapsing? Some economists pointed to the fact that during the post-Covid period, media framing of economic news became increasingly sensationalist. Negative. But in a recent massive survey, Harvard economist Stephanie Stern Java uncovered a deeper psychological bias in how human brains process money. You see, we experience pay rises and price hikes completely differently. Inflation usually raises both wages and prices at the same time. But when people get a raise, they tend to credit their own hard work or talent. Well, if prices in supermarkets soar, they do not connect that these two things together. They do not see them as part of the same high pressure economy. Instead, inflation feels like an arbitrary pay cut forced upon you by greedy corporations or inept politicians. So while few linked the Great resignation of 2021 directly to inflation, the 2022 price surge was widely felt and largely blamed on bad politicians and greedy corporations and this frustration could explain why consumer sentiment dropped so sharply, even though on paper wages had gone up faster. Although, as you can see here, they did go up slower than before the pandemic. But while it's clear that vibes played a role after Covid, it cannot fully explain the trend. Why middle class life feels less and less affordable because this is a much longer trend. Already before Covid inflation, there was a widespread feeling. For example, when Trump was elected in 2016 that middle class life was getting less and less affordable. So to explain that longer trend, we need a second theory. Perhaps one of the biggest ideas that can explain why, despite cheaper TVs and other goods, middle class life staples like a home, good health care and education seem to have gotten less and less affordable. But first, if you are one of those people who also likes to think about the big ideas you'll enjoy, today's sponsor the book The Ultimate Guide to Rebuilding Civilization by Hungry Minds. You see the real reason why we have amazing and cheap TVs and electric vehicles today is because of a long chain of inventions, each building on the last, and that's made producing things dramatically more efficient. This book tells that story. It's an illustrated encyclopedia of humanity's greatest inventions and discoveries, with 880 topics across 400 plus pages, from agriculture and metallurgy to electricity and computing. And it's not just interesting. It also looks the part. I personally love how it mixes engineering drawings with medieval art and even the hardcover. It's pretty cool. It's honestly the perfect coffee table book that draws the attention of guests and in my case, my kids right away. And to me, that is really cool, because I'd love to pass my fascination for the inner workings of human civilization on to the next generation. And what better way to spark the imagination of kids and through gorgeous drawings like this? This is why I think the Ultimate Guide to Rebuilding civilization may be the perfect gift. And clearly, I'm not alone, because the book has raised over $2.3 million on Kickstarter and Indiegogo, and it became a bestseller in 2023. There's even a hidden puzzle inside which I will not spoil. So if you are looking for the perfect coffee table book or a gift, a curious friend, check out The Ultimate Guide to Rebuilding Civilization using the link in the description, and use Code Money ten for 10% off. Now back to our current civilization.

Let's deep dive back into our second theory for why middle class life feels increasingly unaffordable. Bombs cost disease. Okay, let's go back to 1993. I was but a mere child. And yeah, I do remember that according to my middle class parents who were teachers, goods were considered pretty expensive. Whenever our washing machine broke. My parents, I remember, had to save months to replace it in big television with something that I, as a child of course, really wanted, but my parents told me they were outrageously expensive. Also toys for kids. But now, as an adult with an income similar to that, what my parents had honestly toys for my kids. They just feel really cheap, especially compared to our super high monthly daycare bill and actually, if you look at this graph, we can see that it's not just me imagining things. Inflation has not been just all prices going up. At the same time, the prices of services like college tuition and childcare have gone up by a lot, while simultaneously prices of goods like clothing, toys and TVs have gone down significantly in comparison, already in a famous 1960s paper, economist William Barmore theorized that this is no coincidence. These are two sides of the same coin. The logic is the following. Imagine that the economy only has teachers and farmers. Thanks to the invention of tractors and fertilizers, each farm is now able to produce and sell much more wheat and earn more money. However, the teacher cannot use the same technologies to teach more things to more students. One teacher, one classroom, 30 kids just like a century ago. But there's a problem if farmers are suddenly earning four times more because technology made them four times more productive, why would anyone stay teacher? To prevent a total collapse of the education system, schools have to raise the wages of teachers to keep up with those of farmers. Essentially, we are raising the weight of teachers not because they're more coming, more productive, but because productivity is growing in other sectors. And as a consequence, the relative cost of educating each child quadruples, while the cost of each loaf of bread limits. Now, of course, it's important to stress nobody in this economy is poorer. They are all richer. The farmer can make a lot more bread, and because his income rose as much as the teachers, he can still afford the same education for his kids as before. The teachers whose pay track the farmers can afford. Also those classes for their kids and they can afford much more bread. So what has changed is not just how rich they both are, but much more so. What things cost relative to each other. Bread now feels almost free, but well, we then might have expected that schools would get cheaper to the opposite actually happens. Schools now feel outrageously expensive. That is, bombs cost disease, TV production, toy production, clothing production. It all has become much more efficient. But college child care and medical care, they all still operate roughly similarly to how they did in 1993. So according to this theory, the graph is exactly what we would have expected to happen. Wages had to rise in universities, daycare centers and hospitals just to keep up with rising wages elsewhere. And because these services did not get more efficient, their price had to go up a lot as wages went up. At the same time, interestingly, because many of these services in Europe are done by the government, cause disease can also help explain why our taxes in Europe have gone up and up. Well, it doesn't feel like government services have gotten much better. Government costs have simply gotten higher and higher compared to the economy, as they had to keep raising wages in low productivity sectors to keep up with a much more productive private sector. Indeed, as you can see in this graph from Norway, this is exactly what happened. Private sector prices went up far slower than those in the government and defense, which relies heavily on machines, was somewhere in between. But what does the changing cost structure of services versus goods have to do with a feeling that middle class life keeps getting more expensive? Well, let's go back to the life of my parents in the 1990s. They worried about being able to afford the latest computer that I might need for school, or that they might need for their work. They worried about not having enough savings to replace a broken washing machine or a broken car, but their mortgage, that was pretty low. Their local taxes were pretty low, childcare was pretty cheap, and so was my education. Meanwhile, what worries me is my mortgage bill, a massive daycare bill. And since I live in Europe, the rising tax burden which of course indirectly funds my kid's education. Yet honestly, I was just ordering a massive TV the other day for my channel and I was surprised how cheap it was. Same for these super fancy toys for my kids. The cost of these toys is just almost nothing compared to the monthly daycare bill. So what if the reason that people feel like the middle class life is getting more fragile? Is that what used to be expensive were essentially luxury goods? Well, what is expensive today are essentials. That is, if one of my parents lost their income, they may have needed to buy a used washing machine rather than a new one. They may have had to work on an old computer longer, and we could not have the fancy TV the neighbors just got. But when I lose my income, I am at risk of losing my house. I'm at risk of not being able to afford daycare, making finding a new job even more difficult. So is by most cost disease, simply making middle class life feeling more fragile? I think this is part of the explanation, absolutely. But when I was looking at the graph, something strange stood out to me because I'm very sure my mortgage bill today is much larger compared to my income than that of my parents back in the 1990s, but according to this graph, that's not the case. So I still think we need our third theory as well.

There is something wrong with inflation statistics. Why do official statistics say that housing costs went up more slowly than wages did? While that's clearly not the case, when we looked at the way inflation is calculated, we essentially found four reasons why rising house costs do not properly show up in inflation statistics. The first is that because a home is both seen as something that people live in and an investment, economists do not just look at house prices directly. After all, if I own a home with no mortgage and that house gets worth more, it, doesn't that feel like inflation to me, it feels like I'm getting richer. Therefore, in the US, economists instead calculate true housing inflation by looking at how much homeowners could have rented out their place for. But because house prices have gone up much faster than rents did since 2000, this completely misses that. People who recently bought a home have a far higher monthly mortgage payment now than what they used to have. And to make matters worse, since many renters are actually in rent controlled units where rent barely changes every year, average rent increases look much lower than they actually are for a young person or family. Signing a brand new lease today. And third, the official rent increase number is a nationwide average. But we all know that the real housing crisis is concentrated in growing economic hubs where the good jobs actually are. The cheap, stagnant rent in Toledo, Ohio or Hala Germany artificially offsets an expensive surging rent in New York or Frankfurt. And finally, what's especially relevant after Covid official inflation statistics do not take into account the costs of borrowing. That is, until 1983. U.S. inflation used include mortgage interest rates in Europe. They never counted this at all. All of this made little difference, though, when rates were falling or stayed near zero for an entire decade. But when interest rates started rising rapidly, inflation statistics suddenly missed a major part of people's expenses. How much? Well, a 2024 paper by Boaz Gummer Schultz and Larry Summers rebuilt inflation the old way with mortgage, car loan and credit card interest rates included. And by that measure, US inflation. In late 2022 was not 9%, which is very high. It was actually 18% instead. And to me, this closes the rest of the puzzle. After the Covid lockdowns, median wages increased a lot, even above the official inflation numbers. But once you add borrowing costs back to inflation, it makes sense that anyone with a car loan, credit card debt, or simply trying to buy an apartment with a mortgage genuinely felt like their wage was not keeping up with their costs. They were right. Specifically, the authors estimate that the cost of borrowing explains roughly three quarters of the gap between how bad people say things are and how good the statistics look. So in conclusion, why does middle class life keep getting more expensive? Or is it actually getting more expensive? To me, I think the best answer comes from the last two theories. Baumol's cost disease theory can explain why a lot of middle class life staples have gotten a lot more expensive, and how that makes middle class life feel much more fragile than it used to. It is due to increased productivity in goods that were essentially luxuries. The cost of many essential services have skyrocketed in advanced economies, and since it was much easier to give up buying a big TV than canceling your mortgage, the result is that middle class life feels a lot more fragile today than it did decades ago. That being said, while on paper the median wages have kept up with inflation, we have seen that inflation still feels really bad. And more importantly, in my opinion, if you are not in a rent controlled housing unit, or if you did not own a house already for years and years, then inflation was genuinely quite a lot higher than the official statistics suggest. Therefore, I think it's more important than ever to solve the housing crisis, to make housing more affordable again. And as it so happens, I made a lot of videos about that recently. So go check them out. And of course, also check out this cool book, The Ultimate Guide to Rebuilding Civilization. If you are looking for a gorgeous coffee table book or the perfect gift now with 10% off using the links in the description.