Idiot that decided to pay all employees 70K a year? Reality has its say

[Firethorn]

Funny, I thought that health and auto insurance was a lot more expensive now than in 1973  

That's because we can do so much more.  Used to be that in a 55mph collision you pretty much went off to the morgue.  Cheap.

Today between advances in vehicle safety and medical care, both of which are expensive, you actually have a pretty good chance of not just surviving the accident, but returning to 'full' functionality.  But that's expensive.  Still, increase vehicle safety even more, and you turn what used to be crippling accidents even at relatively low speeds into non-injury events, or at least non-long term injury events, and you 'save' oodles of money.

As for robots and automation - never said it wasn't.  Production is more efficient today, so you can get more truck for your money.  A lot of the features like increased safety are design issues to boot, more than construction - so making a safer vehicle isn't actually that much more expensive than an unsafe, except for a few high dollar items like the airbags.  And even those are cheaper than they used to be.

So then ... billions for an unnecessary device forced down everyone's throat?

Ask my coworker how 'unnecessary' the device is.  Still, quick check: ~15.6M vehicles sold a year, $500 each for the backing camera, $8B/year.  Of course, actual cost for factory standard install is more like $50, so $800M would be a better cost estimate.

That's assuming, of course, that 'nobody' would want one otherwise, but going by several sources, they're a popular enough option that people trade up trim levels to get them, at a cost of several thousand now.

There is an entire segment of "poor" in the US that would find themselves living paycheck to paycheck whether they were making $20K/yr or $200K/yr.

No arguments here about this.  Mom's a public accountant.  Ask her about the heart surgeon with the expensive wife...  She said it was amazing how much a family earning less than $100k could save, while the family earning $500k/year was broke every year with nothing to show for it - not even vacation photos.

"Income inequality" is not defined by not being able to afford a Mercedes, cable TV, or a smart phone.

I'd take the smart phone out.  It's often cheaper than a home phone today, and is used for all sorts of things, including job searching.

[dogmush]

Also, FWIW, min wage in 1973 was 1.60/hr.  So we aren't talking min wage income in either time frame.

I have no idea how Google got that average, or how accurate it is.  I wasn't making no $40k untill I had been working a couple years and wasn't "entry level", but that was also a while ago, so without pulling an inflation calculator up I don't kow where I would stand in 2015 dollars.  and I don't care that much.

My point, other then being bored at work and curious, was that lots of times we "remember" things about when we were young that don't hold up to really looking at, or aren't as bad as we really think.  the "back in the good old days" syndrome.

Which is not to say wages haven't stagnated.  I think they have.  Or rather I think we feel (or are) forced to buy things that even as little as 25 years ago were crazy extravagent and our social strata (whatever that may be) wouldn't buy.  So our total buying power is reduced.  But individual items tend to have held kinda steady.  Or gotten better.  Like I said, a 2016 F-250 is a WHOLE lot more truck then a '73.

[zxcvbob]

I didn't say it'd be a good idea, just possible.  See the trailer park foot note.  I'm going to bet if you have a brand new pickup in your first year at work, not a lot is going into your 401k.

They may still have the last laugh: when 5 years from now they have a still-kinda-nice truck, and the government has confiscated all our 401(k)'s to pay for their Medicaid.

[dogmush]

They may still have the last laugh: when 5 years from now they have a still-kinda-nice truck, and the government has confiscated all our 401(k)'s to pay for their Medicaid.

frak

[SADShooter]

They may still have the last laugh: when 5 years from now they have a still-kinda-nice truck, and the government has confiscated all our 401(k)'s privvate retirement savings to pay for their Medicaid, Social Security, student loan forgiveness, and interest on the national debt.

[KD5NRH]

Ask her about the heart surgeon with the expensive wife...  She said it was amazing how much a family earning less than $100k could save, while the family earning $500k/year was broke every year with nothing to show for it - not even vacation photos.

Don't have to be a heart surgeon for that one.  My ex could find something to spend any attempt at savings on.  Got an extra $500?  Suddenly the chimney that's been fine as is for years needs a professionally installed $300 cap instead of the $30 one from Lowes and a couple minutes of me driving masonry screws.

I'd take the smart phone out.  It's often cheaper than a home phone today, and is used for all sorts of things, including job searching.

This.  A couple of my job searches happened almost entirely on smartphones, using library or TWC computers to send PDF resumes.

[KD5NRH]

They may still have the last laugh: when 5 years from now they have a still-kinda-nice truck, and the government has confiscated all our 401(k)'s privvate retirement savings to pay for their Medicaid, Social Security, student loan forgiveness, and interest on the national debt.

Yeah, the student loan stuff is making me wonder if I should go back and try to get a couple interesting degrees, then see if I can get the loans dropped.

[Nick1911]

They may still have the last laugh: when 5 years from now they have a still-kinda-nice truck, and the government has confiscated all our 401(k)'s to pay for their Medicaid.

I've seen some rumblings about "means-tested" social security payouts.  IE: You get less-to-no Social Security payout depending on what you're drawing from your private retirement funds.  Certainly within the realm of possibility - and yet again shaft those who made responsible choices and (probably) were as a group, larger contributors to the social security system.

[dogmush]

I've seen some rumblings about "means-tested" social security payouts.  IE: You get less-to-no Social Security payout depending on what you're drawing from your private retirement funds.  Certainly within the realm of possibility - and yet again shaft those who made responsible choices and (probably) were as a group, larger contributors to the social security system.

That would piss me off if I actually expected to see any SS payments at all.  I'm 35, and just assuming that any money that goes into SS is gone.  If I'm lucky when I retire SS will buy my first cup of coffee every month.

[Ben]

I've seen some rumblings about "means-tested" social security payouts.  IE: You get less-to-no Social Security payout depending on what you're drawing from your private retirement funds.  Certainly within the realm of possibility - and yet again shaft those who made responsible choices and (probably) were as a group, larger contributors to the social security system.

Yup, I've seen a lot recently on various versions of this, from both sides of the aisle. And yes, once again shafting the people that were thrifty and thought ahead.

[Ben]

Also, point taken on the smart phone. I should have been more specific and said they didn't need the $600 iPhone.

[brimic]

Free market. I sincerely hope the guy's strategy pays off. Wage stagnation is a legitimate issue (usually handwaved away by "but you can buy a faster iPhone or PC") and will continue to be an issue.

I think he went overboard, but I guarantee he'll be getting better employees in the long run. Most business want exceptional to above-average performance/employees for average or below-average wages.

Yep.

[Tallpine]

I didn't say it'd be a good idea, just possible.  See the trailer park foot note.  I'm going to bet if you have a brand new pickup in your first year at work, not a lot is going into your 401k.

I'm pretty sure 401K was not an option in 1973 

Ask my coworker how 'unnecessary' the device is.  Still, quick check: ~15.6M vehicles sold a year, $500 each for the backing camera, $8B/year.  Of course, actual cost for factory standard install is more like $50, so $800M would be a better cost estimate.

That's assuming, of course, that 'nobody' would want one otherwise, but going by several sources, they're a popular enough option that people trade up trim levels to get them, at a cost of several thousand now.

Imagine ... letting the free market work 

FWIW, min wage in 1973 was 1.60/hr.  So we aren't talking min wage income in either time frame.

Honestly, I don't really remember the exact amount that I started at with CIG in November 1972.  Min wage was $1.60 then seems like it went up a little about then.

a 2016 F-250 is a WHOLE lot more truck then a '73

Actually, way too much more truck for a lot of purposes    My old 1976 GMC is almost a mid-size compared to what they are making now 

[makattak]

Despite all the new requirements, the amount of labor required in a new pickup is actually less than the '73 one.

As for the backing camera, well, one of my coworkers lost their 3 year old daughter to a backing accident. :(

And the other safety features also generally save money through reduced injury - what you'd save on a '73 vehicle's manufacturing price you'd more than end up paying in increased insurance costs. 

Ok... how does the labor required to build a truck have anything to do with the price? So they have substituted capital for labor. That doesn't mean it is now cheaper to build.

Further, I said nothing about the value of all the added features to modern vehicles. They are, demonstrably, safer than previous versions.

That also makes them costlier. If you are going to complain that a "bare-bones" pick-up now is more expensive than the "bare-bones" of 1973, you have to understand that "bare-bones" is nowhere near as bare now as it was then.

I'm doubting the 1:1 trade-off on insurance costs, as well, but numbers on that are not easily found.

My point it is that we can't compare products today to products of 1970s. We have a significant amount of government regulation priced into EVERY product. (In addition to tort-protection, as well.)

[Tallpine]

I said nothing about the value of all the added features to modern vehicles. They are, demonstrably, safer than previous versions.

I take issue that a vehicle with noticeably limited visibility is "demonstrably safer" than the older ones.  It's only "safer" if you run into something 


Anyway - another thing that has gone up even more than the dollars would indicate is housing.  Back then, I could find cheap places to live (not sharing) that weren't dangerous.  I don't think that you can do that now.

And if you want to buy a smaller (800-1200sq ft) house on a lot, you are pretty much stuck to rotten neighborhoods in most places.  So you're forced into either a mcmansion or an apartment :(


I'm just glad that I'm not a young adult trying to start out on my own in today's world.

[zxcvbob]

Anyway - another thing that has gone up even more than the dollars would indicate is housing.  Back then, I could find cheap places to live (not sharing) that weren't dangerous.  I don't think that you can do that now.

That's because they changed the lending laws so that the wife's income could be included in qualifying for a loan.  Sounds liberating doesn't it?  Nope.  Property values immediately jumped.  Before, a married couple could buy a house on just one income, and now it pretty much *required* two incomes to buy a house.  (not sure if I'm explaining this very well)  The only ones who profited were people who already owned property at the time of the change, and the banks of course.  Women were the big losers.

[Firethorn]

Don't have to be a heart surgeon for that one.

Not saying that you have to be.  It's just that mom talked about their case once a bit.  No name, nothing beyond profession.  But the amount of money they managed to 'waste', and keep in mind that Mom doesn't consider a vacation 'wasted money'.  For her to consider it wasted, you literally have to gain no value from spending the money.

Yeah, the student loan stuff is making me wonder if I should go back and try to get a couple interesting degrees, then see if I can get the loans dropped.

I'm back in college myself, it's refreshing.  No loans though, GI Bill.  Right now you have to remember that to get the loans dropped at the moment you'd need to attend a college that loses it's accreditation and then goes 'suddenly bankrupt' such that you can't get your degree or transfer your credits - no transcript office left open, plus not accredited so places won't take them.

Also, point taken on the smart phone. I should have been more specific and said they didn't need the $600 iPhone.

Reasonable. 

Ok... how does the labor required to build a truck have anything to do with the price? So they have substituted capital for labor. That doesn't mean it is now cheaper to build.

A truck built to the old feature-set would be, relatively speaking, dirt cheap.  The modern trucks end up costing a comparative amount, often a touch cheaper, once you do all the voodoo-math to find what equivalence you can.  Things like inflation, target audience's income, etc...

That also makes them costlier. If you are going to complain that a "bare-bones" pick-up now is more expensive than the "bare-bones" of 1973, you have to understand that "bare-bones" is nowhere near as bare now as it was then.

Very much so.  What I was trying to get at is that if you were to look at the price difference between a US Spec vehicle and an Indian spec vehicle of similar market segment, the safety is easily worth the money if you value your own life at all.

My point it is that we can't compare products today to products of 1970s. We have a significant amount of government regulation priced into EVERY product. (In addition to tort-protection, as well.)

True, and feel free to rail against that.

Imagine ... letting the free market work 

Yep, my only complaint about it is forcing ME to get a number of features I don't want to get the feature I do.  Reading up on it, the requirement is almost a classical ineffective one - two years before the cameras are required on 10% of vehicles, they're on 20% of them, and quickly trending towards being on more vehicles, because like I said, people want them.  Soon enough they'll be a standard feature, and that's even without the government regulation.

BTW, the regulation was because a politician mistakenly backed over and killed his 2 year old.

[Tallpine]

the regulation was because a politician mistakenly backed over and killed his 2 year old.

Was he intending to back over someone else's two year old   

I reckon that the camera would help to identify your target.

[RoadKingLarry]

My '11 Ram 1500 Quad cab 4x4 has the back up camera/parking assist feature. In addition to the camera it has proximity sensors in the bumper. It does make hooking up to a trailer a one man operation.
It has a high end entertainment system with am/fm, cd, satellite, a 32g hdd, and Bluetooth connectivity for hands free phone operation and streaming music from a smartphone. The drivers seat has 38 way adjustment with adjustable lumbar support that my wife manages to turn into a torture device everytime she drives it. It has a rear window defroster and heated mirrors. New it listed as equipped for about $38k. I bought it used with 120K miles on it for a good bit less than half of that and a couple grand below blue book.  I don't need all the fancy crap. Give me heat and air conditioning, a good am/fm radio with an aux input and I'm good to go.
But the loaded versions are what sells with the highest profits for the dealers and it seems that people can't live with out electric windows and built in GPS and stereo systems capable of rattling the neighbor's windows from 2 blocks away.
If I could find a basic 4x4 truck with heat and air, a basic radio, cloth seats and rubber floor mats with a manual transmision I'd jump on it, but I don't think they make 'em that way anymore.

[Firethorn]

with a manual transmision I'd jump on it, but I don't think they make 'em that way anymore.

With a manual?  Most companies don't anymore.  It as a fight to find mine back in '08.

Part of the reason is that because people don't know how to drive and they've changed up the way an automatic transmission works, you actually get better fuel economy from the automatic.  It works much more like an automated manual transmission than an old slushbox style auto.

Automatic windows are cheaper now than manuals, but yeah, feature creep.

Consider that you can't get the backing sensors and such without the rest of the gimcrack, even though it's something highly useful for a work truck that tows.  Faster or you don't need two people.

[zxcvbob]

Can't you tow a heavier trailer with an automatic transmission than with a manual?  Or is that just on cars?

[RoadKingLarry]

I guess it's just old school-itis on my part.
 I've never had a manual transmission fail but I've had several autos give up the ghost on me, and replacing a clutch is a darn sight easier and cheaper than rebuilding/replacing an automatic transmission.
That's one reason I'm considering a new Jeep Wrangler, you can still get a manual and the auto is a $1300+ option.

[Perd Hapley]

I take issue that a vehicle with noticeably limited visibility is "demonstrably safer" than the older ones.  It's only "safer" if you run into something 

Aren't trucks actually bigger than they were a few decades ago?

[RoadKingLarry]

Pretty much. My '83 1/2 ton Chevy was low enough with stock height I could reach over the side of the bed and actually get stuff out of it. Not happening with my '11 Dodge.

[makattak]

Anyway - another thing that has gone up even more than the dollars would indicate is housing.  Back then, I could find cheap places to live (not sharing) that weren't dangerous.  I don't think that you can do that now.

And if you want to buy a smaller (800-1200sq ft) house on a lot, you are pretty much stuck to rotten neighborhoods in most places.  So you're forced into either a mcmansion or an apartment :(

I'm just glad that I'm not a young adult trying to start out on my own in today's world.

Guess why that is! (I'll give you a hint: it's bigger, it's badder, it's TOO MUCH for Mr. Incr.. errr... no, not that one. But still, bigger and badder than it was in 1973.)