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points by carlosjobim 18 hours ago | 0 comments
Higher salaries = everything which is produced by working becomes more expensive. That is not a problem for people who work for a living, because they have higher salaries and can afford it. But it is a problem for those who do not work, because they'll might have to sell their surplus real estate to afford cost of living.

But mainly it is that you would need to remove or decrease benefits for those who do not work in order to have room for higher salaries. That is not a problem for the unemployed because higher salaries means that the only people without work are those who do not want to work. But it is a big problem for those who do not want to work and for example would like to live off their real estate.

The gut reaction to higher salaries is that people would have more money to purchase real estate or pay rent, but I think the downwards effects for real estate are much stronger. And the evidence is that in every country which has seen a period of high salaries for workers, real estate has been cheap during that period for workers to buy.

[–] Loughla 17 hours ago
> And the evidence is that in every country which has seen a period of high salaries for workers, real estate has been cheap during that period for workers to buy.

Real question. Do we have evidence of this from anything except developing economies pulling countries out of poverty? Like a first world country sort of thing. Because to me it seems like higher salaries comes first, and the property would lag for a bit while the market reaches its new level. Does that make sense?

[–] carlosjobim 15 hours ago
I think that high salaries / increasing salaries is the foundation for an economy developing at all. So cause and effect are reversed from what you mention, if I understood correctly.

High salaries and cheap housing was the reality in I think every first world country when they developed after WWII.

[–] SoftTalker 16 hours ago
Why would the landlords not raise their rents just like everyone else? When everything is multiplied by the same factor, nothing changes. You might have 2x the salary but if rent and food and everything else is 2x also, your buying power stays the same.
[–] Timon3 11 hours ago
When salaries are high enough, more people can invest in building more housing. So as landlords drive up the prices, the market balances.

But since the wealth gap keeps widening, fewer and fewer workers can afford this, as they get priced out of locations that offer good employment. At the same time the rich keep investing their money into higher-margin industries. Consider that for landlords owning enough housing, building more can have a negative RoI, and they all know that they all know this!

If you don't believe me, think about just how quickly the datacenter boom became reality. All that money was waiting around, and evidently could have been turned into a lot of building activity in a short amount of time.

[–] throwaway85825 15 hours ago
Because rent is set by supply and demand, if you price too high renters will move somewhere else.