People think they can do one-sentence quips to describe how economies work.
https://www.aei.org/carpe-diem/chart-of-the-day-or-century-3
The story of this decade is that people think the economy is terrible despite the usual metrics like unemployment and inflation being not too bad. One explanation is that before 2008 young people could get on the housing ladder but we quit building single family houses and it got harder to get a mortgage -- you see cranes in the air in many towns and sometimes 5-over-1s going for miles in some places like the DC suburbs.
Housing doesn't really fit into the conversation at hand about cheaper labor leading to lower prices.
Something interesting that touches on both of these topics (housing and product cost) is that, if you look at how much of household income is spent on housing and food combined, they stay fairly constant. As commodity goods get cheaper and cheaper, more money is spent on the inelastic and luxury goods.
~30% of new construction is labor. ~50% of repair is labor.
Have you ever dealt with home repair or building or are you just regurgitating whatever the LLM told you.
And what percentage of a house's price is the building?
> ~50% of repair is labor.
And how much does the average home owner spend on repairs a month?
I've been in my current house for almost 3 years. I've had one significant repair that would have cost around 3k. I did it myself but that was the quote. Not too bad.
In places where people are concerned about a housing shortage, the majority of the cost is land.
This is true in constrained areas like SF bay area. Back when I was digging into real estate economics, I found data on this from HUD, they have a price indicator dataset. https://www.fhfa.gov/research/papers/wp1901
Also look at the Lincoln Institute, they have fantastic studies.
In places like San Francisco, 80% of the value is in the land. In other places, it's 15-35%. The historical national average is about 33% but now it's a bit higher.
Completely different economic rules dominate in constrained areas like San Francisco versus unconstrained areas like Phoenix. But most housing is in unconstrained areas, the constrained areas are expensive elite sections. In most of the country, house prices track construction costs, and the high land prices are effectively economic segregation that weed out antisocial people, causing these areas to be even more desirable and sought after, which raises the bar even higher. All "nice areas" are nice because of gatekeeping, and in the US this is usually high land prices. Traditionally, each city had its own immigration policy, and they would chase out of town people who weren't seen as productive or who were antisocial, and as a result, you would have poor people living on the outskirts of towns.
In places like SF, richer people move in, house prices go up but there is not much change in the population. In other places, more people move in and more housing is built.
A lot of the debate surrounding housing boils down to people imagining a world where SF housing rules applies and thinking this is appropriate national policy, or others looking at national datasets and thinking this would apply to places like SF. Much of housing and land economics seems counterintuitive, for example how cities get less dense over time, e.g. https://www.lincolninst.edu/publications/working-papers/pers...
But once you learn how to think about it, it all makes sense.
Anecdotally like half, depending on the area. Plots of land go for $500k in Boston suburbs and new construction homes go for $1m.
A conversation that you reframed from wealth distribution to the weirdly much more narrow “cheaper products for end users”. Even though wealth inequality has been studied plenty in itself.
I’m not buying the mind-commodity that you’re selling.
A further up comment refers to robots picking strawberries.
Over the longer term and adjusted for inflation of course. Any manufactured good that isn't supply constrained really.
Either the products have gotten cheaper (food) or the product has become significantly better at a similar price point (cars) and, often times, both (televisions).
Food is much more expensive, like 30% here in Europe, much faster growth than inflation. And before you state that food is accounted for in inflation: economists are doing some dirty tricks here by finding subpar replacements.
Cars are also much more expensive for the same quality, far surpassing inflation.
I will concede TVs and electronic gadgets, though.
[1]https://www.bls.gov/opub/100-years-of-u-s-consumer-spending....
> Cars are also much more expensive for the same quality, far surpassing inflation.
Cars are much, much more value then they used to be.
The Slate truck is as close to what cars used to be in the seventies. No power steering, no power brakes, no crumple zones, no fuel injection, etc. All those features cost a lot of money yet the amount of money spent on cars really hasn't gone up in accordance.
A 1970 Honda Civic cost 2k base. A base model today appears to be around 25k. that's more than inflation but it's also a luxury car, in comparison.
The vehicle market is less about low pricing as much as it is feature sets at price points. In other words, the prices stay roughly static but they pack in more features.