Take a look at Matt Yglesias's The Rent Is Too Damn High (http://www.amazon.com/dp/B0078XGJXO); many "fun" municipalities like Seattle have restricted development to the point that housing is extremely expensive. If you move from Seattle to, say, Houston or Dallas, you'll probably see your effective rent shrink by 35 – 50%.
Secondly: see Tyler Cowen's books The Great Stagnation and Average is Over. Those books are too sophisticated and deep (though they're quite readable) to summarize here, but the shortish version is that Western economies are undergoing a lot of profound shifts driven by a combination of technology and Baumol's cost disease.
in the last couple years have been rent, medical, and dental in that order
Alex Tabarrok's Launching the Innovation Renaissance is also good: regarding medicine and dentistry, part of the issue is Baumol's Cost Disease and part of it is the powerful lobbies that restrict entry into those fields through licensing regimes and other means.
Finally, a general note: be wary of any answers in this thread that don't cite any sources and ideally those sources should be books. The issue is too complex for simple answers, and the simple answers that one tends to hear also tend to be wrong or missing a lot of important information.
"If you move from Seattle to, say, Houston or Dallas, you'll probably see your effective rent shrink by 35 – 50%."
Right. If you don't own a car already, you would almost definitely have to, and your job options in the $110k range will put you on an oil rig if you have a master's degree in mechanical engineering, if you can even reach that.
My ex father in law made about $110k at 60 working as a geological consultant for oil companies.
Basically: job opportunities are not the same.
Disclaimer: I am a Texas native. I speak with a lot of knowledge about many municipalities where most of the people I have known in my entire life have lived. Even the rich ones are poor.
Your argument that medical and dental costs would be lower if we didn't restrict entry based on licensing is alarming at the very least. Had I read that first I probably wouldn't have responded, but I've already typed, so, bleh.
I don't know why pushing back on licensing requirements invented last century is alarming. We already see it with the rise of PAs and nurse practitioners. People who aren't doctors are prescribing medications and performing routine procedures.
Also, making $110k in Texas as software engineer is very doable without working on an oil rig. Of course, salaries vary a lot when you start factoring in benefits like healthcare and 401k matching.
I agree, the issues are quite complex. I cited a fed paper in my reply below -- thanks for taking the discussion up a notch.
Something I'd like to understand better is why capital (and not labor) is capturing a higher share of firms' overall income than in past years. As I noted in my reply, the decline of savings means this is a double-whammy for people, as they get hit on the front end with lower upfront cash payments, and on the back as well, when they don't share in any upside of corporate profits, due to no share ownership.
I can't footnote this ( although look a lot to both Tyler Cowen and Arnold Kling ) , but labor is relatively less mobile than capital. Capital has become more mobile.
Actual capital - machinery - has taken it as hard as has labor. This leads many to think that the increases may be closer to rents than profits. It's also harder to say what the effect of online is; for people under ... what, 25-30?, "likes" on the Internet act as a form of currency that may verge on real currency at the edges.
Take a look at Matt Yglesias's The Rent Is Too Damn High (http://www.amazon.com/dp/B0078XGJXO); many "fun" municipalities like Seattle have restricted development to the point that housing is extremely expensive. If you move from Seattle to, say, Houston or Dallas, you'll probably see your effective rent shrink by 35 – 50%.
Secondly: see Tyler Cowen's books The Great Stagnation and Average is Over. Those books are too sophisticated and deep (though they're quite readable) to summarize here, but the shortish version is that Western economies are undergoing a lot of profound shifts driven by a combination of technology and Baumol's cost disease.
in the last couple years have been rent, medical, and dental in that order
Alex Tabarrok's Launching the Innovation Renaissance is also good: regarding medicine and dentistry, part of the issue is Baumol's Cost Disease and part of it is the powerful lobbies that restrict entry into those fields through licensing regimes and other means.
Finally, a general note: be wary of any answers in this thread that don't cite any sources and ideally those sources should be books. The issue is too complex for simple answers, and the simple answers that one tends to hear also tend to be wrong or missing a lot of important information.