Where I talk about children who go to Universities I mean to say of course that during this period 30-50 you have children, who at the end of that period go to Universities. My bad.

don't get it

Red - are you talking about how much workers earn over time and apparent age biases in salary, or how a person's consumption curve isn't smooth over their lifetime whilst their salary curve is, so adjustments have to be made.

Actually goldfinger, I'm talking about how the two phenomena don't correspond. People make their peak salaries when they're older (because they're moving ever higher up the corporate ladder etc.) but have their peak expenditures a good twenty years before that moment!

Right, but when you look at the net difference between salary and expenditure, the peak is of course in retirement. People generally have enough money in their 30s, 40s, and 50s. Its in their 70s and 80s that they run into trouble.

Trouble, yes, but when I'm 70/80 I'd be happy to take some trouble, in the sense that I'd be willing to live a very modest life, drive a very modest car (if I'm driving at all) etc. etc., if that means in my 40s and 50s I could get my kids into the right Universities and, I don't know, pay their piano teacher. It's not a good example, but I hope you catch my drift.

I think you should explore a phenomenon called "debt", which allows for easy substitution between future and present consumption.

GP ulytau, but what if you google translate this:

http://www.nrc.nl/nieuws/2013/01/07/capgemini-verlaagt-lonen-oudere-werknemers-tot-10-procent-salarisverlies/

If I google translate anything, my head will probably explode. I'm not falling for your ploys.

When you are in your 70/80s you expect you will be happy to live a more 'modest' lifestyle?

Does that mean you measure your own success by how excessively you can afford to live in your working life? Why does this change in your 70s and 80s? Is it just the story of your life that you expect to give up trying at some point... That sounds like you also assume you're going to commit suicide - being too old your life will come to a point where you naturally decide you want to die (and perhaps this is a healthy attitude) but i think that most people find they come to that point in life and don't want to give up.

My point being, why not give up your luxuries now? Sure the economic consequences of not consuming might hurt someone else, but living within your means (ie having savings, rather than going into debt) both allows you to make up for any future income-expenditure change, and/or invest in changing tue world in a way you think is actually worthwhile.

For example, I setup a business last year, investing a non-trivial amount of my savings to get things going.

"Does that mean you measure your own success by how excessively you can afford to live in your working life?"
-Nope, didn't imply that either, I find this question misplaced.
"Why does this change in your 70s and 80s?"
-Kids are probably gone, only yourself to take care of.
"Is it just the story of your life that you expect to give up trying at some point... That sounds like you also assume you're going to commit suicide - being too old your life will come to a point where you naturally decide you want to die (and perhaps this is a healthy attitude) but i think that most people find they come to that point in life and don't want to give up. (...)"
This and most of it afterward except for the savings in business thing struck me as kinda weird :-)

It makes sense logistically, but no employer is going to hire an experienced 25-year-old straight out of grad school over a 55-year-old that has tons of experience *and* now works cheaper. Unless you're talking of government funds, I don't see how that would work.

Redhouse, great thread. If you look up poverty statistics, you'll see that a huge, huge percentage of children are below the poverty line. When our kids were young, I was aghast at the difference in takehome pay between me and people with twice as much experience but who were teaching the same number of students or fewer, and who didn't need the money as much. Our salary curve should be shallower, starting younger teachers at a higher rate, in my opinion. And some teachers fought tooth and nail to keep the benefits system we had, in which they could get the entire amount of their benefits package paid in cash if they had coverage through a spouse's employment or just didn't need it--Which pushed up the average cost for the rest of us, and at one point around 2000 we were paying $8000 out of our takehome pay for family medical coverage.

On an individual level you could explore multigenerational housing. There's been a shift towards separation and surburbia. Used to have a farm house shared by many and additional houses built on family land when necessary. The shift has made housing a huge cost.

On a societal level you could explore universal healthcare. With free education, the big costs for children are healthcare and child care. If basic health was covered then the salary disparity wouldn't be as much a concern regarding 'needs'.

(The need for child care seems to be linked to both the previous issues. If extended family could live and care for child, and a second salary wasn't needed for healthcare costs, then daycare would be less of a necessity).

This is idiotic. Pay is based on experience, not age. Switch careers at 50 to an entirely different field and you end up at the bottom of the pay scale again. Most people who are experiencing pay increases over a career are not doing manual labor so age/body condition has nothing to do with it, if you are employed as muscle then you probably cap out much earlier than your age limitations. Live within your means and you will have no trouble paying for things and you might even retire with dignity. If you hav the I want it now mentality you will rack up debt and never build wealth and have less than adequate retirement funds.

Redhouse has hit on one of the fundamental problems of capitalism - that people's income is often not related to their needs.

There is a solution, of course.

"From each according to his ability, to each according to his need."

Guys, what I think redhouse is worried about is providing enough for his children to do what they want - take piano lessons, go to college, etc - and he then says that after they move out, all those expenses go away and he's comfortable with less. That doesn't make him selfish.

The more obvious and less state controlling solution is, of course, for family members made wealthy by their position on the salary curve to assist those in less favourable positions.

Octavious, the bggest effect we see is for people to choose to have smaller families, so less mouths to feed, less piano lessons and less college fees (though this also decreases consumption)

@Redhouse : "Does that mean you measure your own success by how excessively you can
afford to live in your working life?"
-Nope, didn't imply that either, I find this question misplaced.
"Why does this change in your 70s and 80s?"
-Kids are probably gone, only yourself to take care of.

No, you said you'll be happy to drive a smaller/cheaper car when you are older/retired. You basically said you'd be willing to live with less luxuries (ugnoring the increasing health care costs you might face)

The implication that in your 40s or 50s you need a big fuel guzzling car, something which can drve fast to feed your ego and make yourself feel powerful...

At least that is what i read into your reference to consumption related to car-size. Because, em, that is the example you choose.

You said nothing about decreased costs due to the independence of your children; you refered to reducing your living costs - 'I'd be willing to live a very modest life'

My question is this: why can't you live a very modes life throughout your life; make savings and then be able to afford all of the varying costs you will facd.

Whether that means choosing to spend your savings on raising a family or starting a business or other selfless endeavour.

I assumed he meant going from driving a minivan to a coupe and from living in a single family detached house near a good school to living in a townhouse/condo/etc without regard to municipal amenities.

Also, id argue income is often related to need--especially when talking about family unit. Do both spouses work? Does either/both work a second or third job? Does either spouse return to school to improve job prospects? This all appears more common than not to me.

The basic premise is flawed in that it males the assumption of the 30 to 50 with kids. It also assumes the income.curve continues to go up when in reality mpst people.retire at some.point in their 60s and have to live on a pittance plus savings. So the curve does drop at some point. As afar as people.having kids and sending them to school. Some do, yes. But many stay single without kids throughput their life or get married but never have kids (my wife and I) or expect their kids to.pay for their own education as they will appreciate it more (what my parents did with my brother and me). So the dislike of the curve only applies to one specific segment of the population.

Those who have salaries that increase over time and have kids, though only being a segment of the population, seem to be the majority. Furthermore, it would appear that a discussion could proceed regardless of the proportion the segment constitutes.

@ulytau: LOL.... I guess :D
@Mujus: TY, yes, that's the kind of situation I'm referring to. I'll get back to that a little later.
@jcbryan: When you talk about the farm, which I found very interesting, do you mean that you yourself used to live that way or people in general? And yes, as for your last post, the discussion can proceed despite @Draugnar's objection (who's right in saying that the curve drops at some point, although the curve probably drops more dramatically in the USA than in the EU, and it doesn't change the fact that for most people, as jcbryan points out, the income curve is shifted down the road with respect to the expenditure curve).
@Gen. Lee & @orathaic, see @goldfinger's (3rd) and @jcbryan's (2nd) posts. I'm not a "I want it all I want it now" kind of person, neither am I interested in fuel gurgling cars, however, when you have a family your car will automatically need to be a lot larger than if you're only you and your wife. Kids simply take up space, and imagine going on a holidays with your entire family or just with your wife. A good, slightly bigger than average, strong car for a family in which both parents work, IMHO, is not a luxury but almost a necessity.
@Jamie, I believe the solution you're looking for has not survived the test of time :-)
@Octavious, agreed, interesting, that's another individual level solution like jcbryan pointed out, I'm interested both in individual level and society level solutions to this problem.

I think my work is done here for now...

@ Jamie - I think Redhouse has also hit on one of fundamental beauties of capitalism, which is that it's a system that allows a great amount of freedom. You get to manage your various personal resources the way you see fit, according to your personal values, and you get to live with the results of your choices.

I didn't say it couldn't proceed. I was pointing out the flaw in the basic premise. And, as it may happen, the majority of America isn't salaried, therefore their salaries don't increase. Must be salaried to get a salary. And the increase in those cases after the kids are out are what allows those folks to put money away for retirement. If all you have at retirement in the US is Social Security, you won't have a modest life in a condo or townhouse or a drive a modest car. You will be dirt broke, living in a bad part of town and working for food money at McDonalds or Burger King, maybe a greeter at Wal-Mart. Discuss.

@Flemgem: i believe that the point of having a socialist government is to prevent individuals from falling prey to the worst problems of capitalism.

That is why in most European nations we have mandatory contribution to social insurance - so you pay even if you die and will never benefit from it in your old age. This allows old people to benefit from contributions of the current working age population. IE the marxist slogan "From each according to his ability, to each according to his need" - it can also be seen as a bet on your own survival... unfortunately the more people who survive the less you get to keep. Likewise, with increasing life expectancy and increasing health care costs associated with old age, the income vs cost curves of old people across Europe are making it harder to be comfortable (unless you have kids who are willing to support you, or a personal pension plan to supplement your earnings)

Who said you said it couldn't proceed? ;p

I think the distinction between salary and wages is insignificant to Red's concerns. Non-exempt hourly workers typically have a similar situation where they earn more as they become more experienced. No need to lose the forest for the trees. The idea is that people get less money annually when they're in their traditional child-rearing years and more money annually in their empty nest years.

Also, I am not familiar with a traditional retirement scheme where you bank on wage/salary increases in the years after your children leave. Surely there has been generational differences in retirement planning (e.g. defined benefit pensions for past, defined contribution plans for present). But it seems constant that you put some away throughout rather than anticipate saving the last few years.

You put some away throughout, yes. But with more income and less expenses, you can put even more away so retirement is truly comfortable.

One of the extremely many problems with "from each according to his abilities, to each according to his needs" is that "needs" is such a flexible term. Food, water, and housing are needs. But are piano lessons for the kids? College? How good a college? How about cable TV?

Once somebody doesn't have to pay for their "needs" anymore, they can start thinking up all kinds of needs. When it's their own money, then things may be tough because good things that they really want (piano lessons for their kids) may be hard or require a lot of sacrifice; but it will clarify what are their actual needs and enable them to direct their choices/the system's production to fulfilment of what their needs are.

(Not that sacrificing for your kids is a bad thing. It's a good thing, and the advantages are many -- not only do they learn the piano, but it is a way of communicating how much you value them).

As far as wage increases go, there are three big reasons they increase with age. One: inflation. We can eliminate this factor by comparing a younger and older person in today's economy. Two: promotions - doing different work as you get older. So compare like jobs between different ages (i.e. factory work or basic office skills). Finally three: experience. This isbwhat I want to talk about. Because no fresh from college engineer is going to have the real world skills of a 30 or 40 year veteran. That is why the older workers will and *should* male more than the younger ones. There isn't any age discrimination against the young. In fact, the opposite is true. Older people out of worknfind it harder to get a job because they are perceived as short timers by prospective employers. Once you cross 55, it becomes daNed near impossible to find a job.

"From each according to his ability, to each according to his need"

Fucking **moronic** Whenever some idiot spews this, they *fail* to define "need". Here is what you "need" - a nutrional paste, a loin cloth, transportation to a warm environment so that you don't need a furnace.

Fuck off with your communist bullshit. Just sayin' You a god damned hypocrite, because if you *believe* this philosophy, the **live it**...and I **assure** you, you don't need to be on the internet, and don't need webdip....but you want it and you use it. If you lived your philosophy, you would take **all;** you excess wealth and find someone that does need it until you can demonstrate equality in society around you, or at least no longer find anyone with less than you. LIVE what you spew. Go find a homeless person and give of your wealth. Go to you local government agency and find some families in need --- you will find some with far less than you -- and sell some of what you have to lift them up to your level....and unless you are willing to do this, fuck off. Tired of the hypocritical commies around here.

THAT being said...hope all is well with you Jamie...thinking about you and Draug and CM and the others around here with ongoing concerns that have come to light.

@ Orathaic - I think I get the idea of European-style socialism. It's further toward the "safety" end of the spectrum, while the U.S. is closer to the "freedom" end of the spectrum. I respect Europeans for their choices - hey, freedom means you can pick your own government and thereby give up some of your freedom if you prefer safety. But is it unfair to point out that part of the reason European nations have been able to provide such lavish social services is that 1. for fifty years the U.S. shouldered the burden of defending Europe from the USSR and 2. the gigantic, dynamic, capitalistic U.S. economy gobbles up European exports like French wine and German autos, supporting the European economies?
Not trying to be excessively nationalistic or something, just floating some discussion points.

And the first thing that popped through my brain was "Here I am contemplating trading the Jeep for a Mercedes E350 this Spring.

You sure you're not going for Audi/BMW?

And in a world of "needs" Draug would be riding a bus that is tainted with the smell fo urine...

Thought about an Audi A6 but it is too expensive (nearly 40k used), the A4 is only a 4 cylinder, and the Bimmers just aren't my style.

I'll respond in more detail to what's been said in this thread later today, but before I go on, yes, @Draugnar, you have a good point, but in @Mujus' case for instance, things are different. Teachers with 30 years of experience under their belt aren't a lot better than those with 10, in fact some starting teachers are better than those who've been in the profession for their entire lives.
The point is, those who've been there their entire lives have had a chance to organize and financially protect themselves like Mujus explained, and that's what gives them their advantages, not the fact that they're better.
I hope the economy organizes itself in the future filtering out this latter effect a bit, not the former.
And also, I disagree that experience is worth everything. Having a CEO for your company for example who is a little younger, still has a long career ahead of him and is ambitious could be much more interesting than someone with a lot of experience although obviously, that isn't necessarily so.

"But is it unfair to point out that part of the
reason European nations have been able to provide such lavish social services is that 1. for fifty years the U.S. shouldered the burden of defending
Europe from the USSR and 2. the gigantic, dynamic, capitalistic U.S.
economy gobbles up European exports like French wine and German autos,
supporting the European economies?
Not trying to be excessively nationalistic or something, just floating some
discussion points."

The big hulking USSR was a threat to those who opposed it; ie those who chose to ally with America, without The US of A 'defending' us there would have been no threat - because no-one could have afforded to ally with the US... So arguably no defence FROM the soviet union would have been necessary.

And secondly - trade goes both ways; the US economy benefits from European purchases - and this is one of the major success stories of the Marshall plan - money invested in redeveloping europe after the war allowed europeans to buy american goods (same with japan, the same kind of development aid failed across the rest of the world... And i would argue it was the re-development of previously destroyed lifestyles which made the difference, people were ready to embrace the institutions and their educaion was at a sufficient level to appreciate the economy)

And the 'huge american economy' is second only to the combined European economies (of the EU, though with a population of 450 million the EU is still behind on GDP per person)

Oh, and the historical narative which says the US 'saved' europe from Soviet domination is not necessarily wrong - but tue cynical alternative view is the US choose to 'save' the European economic trading partner to use them as a corporate colony (ie colonised by American corporations)

The what if scenario where the US didn't 'save' Europe is completely open to posibilities because it didn't happen.