There's actually way more disposable income today than even 100 years ago. We just spend it on things that didn't exist before like car insurance and iPhones.
Car insurance is legally mandatory if you drive a car. If your income is predicated on being able to commute by car (as it is for many Americans, though hopefully a trend toward remote work will ameliorate this somewhat) then your insurance is no more optional than your gas.
People also talk about smartphones as though they're a luxury item, but for most intents and purposes owning one can be viewed as required. Tons of services, including your bank, require a cell phone for authentication, if not to use their services at all. Everyone from your boss to your spouse has an expectation that you can be reached most if not all of the time. I try to avoid being reachable at all times, but this is a luxury I can afford because I'm relatively well-off and technologically adept, and I still can't get around 2FA requirements for everything.
So like, if that stuff is bought with "disposable income", is rent?
Disposable income in the US is at record highs, both at the median and average, inflation adjusted. It has not gone down.
And the median and average for disposable income is a lot higher in the US than in Europe. US disposable income is only comparable to the most affluent nations of Europe: Norway, Sweden, Denmark, Switzerland.
Americans waste an enormous amount of money on consumer garbage. Until recently it was very common for households to have $150-$200 / month cable or satellite TV plans. It's still common, just slightly less so thanks to Netflix etc. $200-$300 family smartphone plans are common.
Americans also flip in and out of cars frequently, losing huge sums of money doing it. And they buy ridiculously over-priced new vehicles, which they keep for relatively short periods of time.
"Disposable income" is not some vague philosophical term that we have to haggle over. It simply means income minus taxes paid to government.
Please please don't redefine economic terms to suit your intuitive belief about what a word "should" mean because you are wading into an area where you don't know the agreed upon terminology. That impedes communication.
If you want to refer to income after paying necessities, then this is "discretionary income".
I wasn't aware this was a technical term, but if we insist on this usage, the post I'm responding to is even less meaningful, because this is drawing a pedantic distinction between money that's tied up in expenses and thus, at any rate, not money that the relevant party is really making decisions about
I mean do you really want to compare my disposable income with my great grandparents? They'd hit me up side the head if they knew how much I blow on weed a month and random bullshit like latex Halloween costumes. To them eating out was a luxury they could afford maybe once or twice a year. I eat out like every other day.
Our standards are way higher these days cause the truth is we're all spoiled.
You keep saying disposable income (money after taxes) when you mean discretionary income (money after necessary expenses such as rent, bills, transportation and food).
Laymen versus technical. If I'm talking to a random person on the street I'm gonna say disposable. But yes I mean discretionary. My discretionary income is still huge. Well over 50% of my paycheck. It's also not even fair to say though because it's still my choice to have upgraded my living situation. Sure I'm locked in now but I could sell my house and downgrade at any time and my discretionary will go up.
Unfortunately, your confusion is endemic of the problem with government statistics using disposable income as an indicator of prosperity, and is even being quoted by others in this thread. Indeed, you likely googled "historical disposable income" to back up your statement - which is exactly the problem with using the incorrect term.
I wont make the comparison to 100 years ago (as you did) because that was a period of time including 2 world wars and the great depression., But adjusted for inflation, people generally have LESS discretionary income now than they did in the 60s. Again, this is hard to corroborate with official poverty statistics due to changes in the cost of living (and conversely, the provision of benefits such as food stamps), which are frequently petitioned to be amended.
Over 12% of americans have such low discretionary income they have to rely on food banks - a figure comparable to the 1970s.
10x more people in the UK are accessing emergency food from food banks than they did 10 years ago.
It is a terrible state of affairs, to be honest. Please dont use disposable income :)
I'm not confused lol. In America homes are just bigger now than they used to be. You can still go small though. No one said you had to take on a huge mortgage. That's why discretionary is a bad metric to use.
I see, so people are in poverty because their houses are too big...
Maybe you should check your privilege. Your 50% discretionary income is FAR from the norm.
Median income is less than 45k (gross - this means before tax, etc) - than means 50% of the population earn LESS than that. 25% earn less than 24k. 10% earn less than $9k...
These people cant afford a small house, let alone a big one...
Lol this is hacker news. I could care less what you think about my privilege. It's hilarious that you're assuming my so-called privledge when my family came to the USA with almost nothing. I'm not here to be your little social justice pawn while you make assumptions.
Just to be clear so there's no ambiguity. I don't care about the poor in america. I seriously could care less. My entire family immigrated to the USA in the 90s and none of them are poor. They all self made themselves into upper middle class lives within 20 years. Meanwhile Americans born in America with every advantage and privilege just whine all day and want more more more for nothing.
Also sick and tired of constantly having social justice internet warriors tell me I'm privileged when I'm literally self made from zero. It's not privileged when you work your way up from fast food to six figures tech work. that's called "earning" things. Please learn the difference.
The reality is you are spouting crap about people being poor because (apparently) their houses are too big (??), while also not knowing (VERY) basic economic terms. I was just giving you facts.
Honestly, your lack of awareness is quite astounding - but it appears that you are overentitled as well as privileged, so that kind of makes sense.
