Friday, May 02, 2008

EEKonomic$ 101


Back in 1973 I was 15 and I needed to get a special work permit to be a 'stock boy'.

This document ensured that I would not be forced to work past 10pm, was not exposed to morally undesirable situations,
(which I would have loved at that point in time),

my tasks were strictly limited to light work well within my physical capacity (come on look at those muscles!)
and that it didn't interfere with school (D'OH!)...
and all for $1.50 an hour!

Now to keep things in context I lived with my parents in an average Suburban Bungalow for which they had forked out $18,000.

I still didn't have my driver's license but the following year I passed my test in this, my Grandmother's new Datsun 510, and bought myself a 1966 Ford Falcon (in excellent condition) for $100.

In the NEWS today a report from Statistics Canada revealed that from 1980 to 2005 the average Canadian worker's salary rose by $50...
FIFTY DOLLARS IN TWENTY FIVE YEARS!!


On top of that the current Housing Boom (which has already peaked in the USA) continues to thrive despite the dire warnings from Economists who have repeatedly warned that it is unsustainable, and that there is growing evidence that as the overvaluation in home prices climbs above underlying economic fundamentals, that there is a risk of an eventual correction.


YA THINK?




I have personally witnessed the average price of a house in WhatEVERpeg grow from $18,000 in the 70s
to $82,000 in the 90s
to the current cost of $173,000,
which is still about half the Canadian average of $314,000.

Our house has doubled in value in just 10 years...WHY?
It's not as if there is a Baby Boom or the Immigration Floodgates were opened.
As far as I can tell the only thing fueling the 'HOT' market here was a 50% Divorce rate!

In DemographEEK terms WhatEVERpeg's population growth is 'tortoisian' at best... I don't know if that's a real word.




Regardless, if the average salary has only increased by a paltry $1 per week over 25 frickin' years but the cost of a house has doubled, even tripled in some markets, I would not be surprised if that 'correction' happened any minute NOW.


It's definitely a 'Seller's Market' which is great for both my Parent's generation and the oldest Baby Boomers who want to downsize and move into a Condo..
but for people who want to move up and especially young people who are just starting out and don't have any equity to play with it is an unmitigated disaster...
always loved that term...
hyperbole rocks!




The other obvious EEKonomic trend has been the widening gap between the RICH, the Middle Class, and especially the Lower Income Earners aka the Poor.
Here in Canada, during the past 25 years the earnings of the Rich actually increased by 16.4%,
the Middle Class earnings grew by $50,
and the income of the Poor has decreased by 20%.


It seems that we are headed back yonder to days of Olde...



Serfs Up Dude!







36 comments:

  1. Stock boy?

    You look more like the pool boy.

    ReplyDelete
  2. This all sounds terrifyingly familiar.
    The statistics re Rich, Poor and middle class have caused our Gordon untold misery in today's local elections.

    But house prices are now descending rapidly.
    Good news for some and disastrous for others.... there must be a better way.

    ReplyDelete
  3. LOL....Donn was that you! man! :D

    oh well...unplanned future, rising price of everything...its about time for that asteroid or killer swarm of alien bees or the trifid or watever coz atleast we dont have to BUY food...:D

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  4. As a fully-employed father paying out huge amounts in child support and earning a good wage, I can only chuckle at this and cry at the same time.

    I can't afford a house in this market. The prices are incredibly over-inflated.

    I do shudder and wonder about the ability of my kids to actually buy a house. I think all the boomers have to actually die out before things will return to normal.

    Oh, wait. That would include me. Yikes.

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  5. I'm pretty much resigned to the fact that my kids will never leave home and that we need to find a house with a 2 br suite down to accommodate the si-chee-ai-shun. But get this: the house my parents bought for $21,000 in 1961 and sold for $79,000 in 1974 (property on Vancouver's North Shore had already started its sickening ascent) is now worth $1.5 million, on half the subsequently subdivided property. This, of course, has NOTHING to do with the house itself and my dad, real estate genius that he is, lives in gov't subsidised seniors' housing and has about $15 in his bank account. I hope he never dies as we can't afford a funeral. :)

    PS As for static income levels, mine has declined sharply, but that's a whole 'nother story.

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  6. I suppose being single helps. I bought a house at the right time and now the prices have tripled in as many years. My salary has not!

    Sigh!

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  7. Sooner or later the world economy is going to collapse and we'll have another Great Depression. Frankly, I can't wait. It'll fuck everybody over, but what do you need most in those sort of times? CRIME FIGHTERS!!! Aidan's job should be fairly secure, and if not we'll just go into pornography or organised crime :)

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  8. grumblhhoid2:15 a.m.

    Ah, this obsession with the facts of economic life, it'll be
    the undoing of our northern neighbors. Here in the land o'
    milkin' plenty, we use the same
    cause and effect metrics made so
    popular among unruly schoolkids.
    "What? Why can't we hold our hands
    over the bus drivers eyes, going
    down a steep, winding road?" Sure,
    the bus _Is_ very likely going to crash, but won't that pump up the funeral and bus replacement biz?

    C'mon Donn. Any Yellow liquid in a cup is (by vox populii) lemonade, isn't it? Maybe? Probably? Possibly? We're just not yelling it in numbing unison yet, I guess.

    ReplyDelete
  9. Come here matey.
    Have a beer with me and dont worry ya wee head about such trival things.

    Hey I was earning over $500 a week until my injury and now I get $400 a week cos I'm still injured but when they pass the new laws i will get $200 a week and be pensioned off as a lost cause.

    Cheers.... "F&@K it ya only live once!

    ReplyDelete
  10. And here I thought the US of A was the only eekonomically-deranged nation. The insanity appears to be spreading.

    Yer right: Serfs Up!

    ReplyDelete
  11. MJ
    Then I shall dance the dance of the Pool Boy!
    Which won't make any sense unless you used to watch Mad TV

    KAZ
    Go Boris! HAHAHA Vicus will have a kniption. The secret is a more equitable distribution of wealth..which is impossible for us greedy little monkeys but you never know.
    The deck will get reshuffled and the same people will end up with all of the Aces.

    GHOSTAY
    That would be too easy HA
    My guess is that it will get worse before it gets better..except this time some of our world leaders will be tempted to take the toys off of the top shelf that they haven't been allowed to play with for 60 years.

    WITHINSTER
    Boomers. We are our own worst enemy..demographically speaking. Our HUGE glut(the PIG in the PYTHON) is almost at the rear end and all of the economic forces that we unleashed, from building schools to retirement homes will have come full circle. Who will fill the hole of 90 million Boomers in North America? People from other countries, nobody is going to start having 5 kids again...this is going to really upset the apple cart and the faux homogenous 'ideal' will quickly unwravel and be replaced with a more international mish mash of cultures...prolly for the better if the basic tenets of our progress are maintained. BUT if everyone tries to incorporate their old traditions and conflicts it will implode. We won't be here to see that, but our kids will.

    ANDREA
    Back in the 80s I travelled to Vancouver quite regularily and I remember shaking my head when I heard about the cost of living in North Van. HUH? Of course it was totally influenced by foreign investors and the scarcity of land..location, location, location.

    We are the sandwich generation looking after parents and children..what are ya gonna do?
    I made way more money in the 90s but the more you have the more you spend on 'crap'...atleast now I concentrate on people instead of stuff.

    GAUTAMI
    So this is a global phenom...imagine if our stupid governments quit wasting money on superficial projects and actually worked at improving the lives of it's citizens? The corporations running the show are trying to make sure that kids in Darfur have a Coke in their hands even if they don't have any food, schools or clothes.

    STACY
    Well that's quite a combination, albeit the two are almost always joined at the hip. Anytime that money is being made on a vice either the government or organised crime have their finger in the pie.

    Crime will EXPLODE if there is a global depression and the terrorists will have a field day making things worse...until some General 'snaps' and takes out spots like northern Pakistan or Iraq...a short fuse and a long range missile is a very dangerous combination..and they will use them.

    GRUMBLOIDSKY
    WELCOME BACK!!!
    In your country of milk n plenty you already have a blindfolded bus driver heading for the edge of the cliff!

    I know that it is pointless to kvetch about the system because we won't ever storm the bastille..we don't have enough pitchforks..unless Walmart has a special in the rioting and rebellion section.

    WHITESNAKE
    You're right. Ole Solomon said who by worrying can add a single day to their life...but he didn't mention anything about blogging about it!

    ReplyDelete
  12. 'tortoisian' should definitely be a word.

    As should 'Japanificated'

    This is all.

    ReplyDelete
  13. It sounds all too familiar. We are going through it here in Denmark.

    I almost bought an appartment last year but thank god I didn't.

    What goes on must come down before going up again eh?

    ReplyDelete
  14. What CyberPete neglects to mention is that he blew his housing budget on shoes.

    And cocktails. The kind with tiny umbrellas.

    ReplyDelete
  15. and it looks like it was the right investment to make MJ

    ReplyDelete
  16. JONAS
    It's a global thing. Many Economies in the developing world are ON FIRE and as they race to live as frivolously as we do, the demands on natural resources are going to explode.

    My oldest daughter is on a European vacation, and she just called me a few minutes ago actually..she said that the infrastructure on the whole continent is being repaired...
    it seems as though the 'OLD' WEST is worn out.

    FATHORSE
    The Sea Of Japan has been Japanificated..eviscerated of all living creatures to maintain a technology loving culture living on a resource free miniscule strip of land atop a volcanic time bomb.
    tick tock tick tock

    CYBERPETE
    Really?That scares me because here in North America the small homogenous northern European countries are regaled as utopian models of modern civilization...
    except for the cultural relations nightmare stirred by cartoons. Who needs freedom of speech anyway?

    MJ
    Not that there's anything wrong with that! Ya gotta LIVE.

    ReplyDelete
  17. You know, if I could have BROKEN my ankle instead of tearing tendons I would have...I have 9 days until I am 47 so 50 is right around the corner for me! LOL...but no matter how old I get, I will ONLY be a number to me because I can guarantee you that I will NEVER act my age...LMAO.

    You can steal any play list you want. I have close to 4000 songs on my computer. Let me know if you want any help...

    Hope you had a great wknd!

    ReplyDelete
  18. thats YOU in 1973? WOW Donn u look so darn HOT bak then too!

    Keshi.

    ReplyDelete
  19. JILLIE
    It must have been exscrutiating..ugh.
    Groucho Marx said that "You are only as old as the woman you feel" so I am actually a few years younger HA!
    I have about the same number of songs in my Music Library too and I meant that I was stealing the player..what a great idea allowing the visitor to scroll through and find something new or old..excellent. It reminds me that Music should be HEARD and not SEEN..atleast the first time that come into contact with a song.

    KESHIROO
    Oh how you flatter this old man..I appreciate the modifier TOO..HA!
    I know that you live in one of the worst home affordability spots on the entire planet..any sign that prices are levelling off..I didn't think so..you're too close Far Eastern wealth.

    ReplyDelete
  20. Homey Love,

    I pray that the world has a new beginning but I fear the fools that run our countries care for no one but themselves. In the end, it will not matter. Multi-generational families are the norm now and maybe that is a good thing for families, but the economy is going south here and we all know that.

    Forgive me but where the hell did our humanity go? Why do the well off only care for themselves? Why doesn't our governments care about the people that live in their countries? This saddens me.

    Soft love,
    T

    ReplyDelete
  21. TARA
    I always picture a chimpanzee trying to carry ALL of the bananas. They already have an armfull but they keep picking another and it rolls off of the top...then repeat the processs.

    "Insanity is doing the same thing over and over again and expecting different results."
    Albert Einstein

    ReplyDelete
  22. Is that a dime bag you're holding?

    ReplyDelete
  23. **any sign that prices are levelling off..

    nah..very soon my new address will be:

    Keshi J.
    Red Beach Umbrella
    Bondi Beach
    Sydney.


    Keshi.

    ReplyDelete
  24. We are fabulous over here, we really are. However what happens in the US doesn't stay in the US. It speads like a disease or the facination of Fergie...

    Equally frightening.

    Freedom of speech is so politically incorrect these days it's disgusting.

    ReplyDelete
  25. まさか家のエレベーターでフ ェ ラされるなんて思ってなかったよ。。ww
    「ここでフ ェ ラさせてくれたらもっと報 酬あげるよ♪」
    って言葉に負けましたwww
    途中で扉が開いた時は焦ったけど、おかげでもっとオッキしたwww
    http://pak3.net/yutori/

    ReplyDelete
  26. As our pay increases so does the cost of living. I think things that have chaged is that the young people, sort of like my age, want to be where their mum and dad are at now...like, they want 2 new cars, the big house and eveything that opens and shuts, they get it, not with their wages, they get it on credit, and well, we know what that leads to when they cannot pay it back. People say it is hard now, but it is as hard as people make it.
    I remember when my mum and dad would sit and balance the books, every Friday.
    I was 2 yrs old in 1973. My mum and dad bought their house for 10,000 dollars! Wow, sounds cheap, but it wasn't back then. And well, it isn't cheap to buy a place now is it?
    Love the pics, you are awesome dude!

    ReplyDelete
  27. MJ
    No it's just Knacksot but a Dime Bag was that big back in the 70s..and it really was only ten bucks.

    KESHIROO
    Red Beach Umbrella HA!
    The listing will read;
    Beautiful Spacious Open Concept Home with Prestigious Address and beautiful Ocean View! Close to all amenities.

    CYBERPETE
    Political Correctness spells the DEATH of Common Sense.
    There is a huge difference between acknowledging a person's right to believe in complete and utter nonsense and being forced to adopt it as the truth. HELLO!

    You can believe whatever you want as long as you understand that I am still allowed to use my brain.

    TINY SQUARES PERSON
    I have no idea what you are saying..seriously..do you have a translation device I would like to know?

    CAZZIE
    Spot On! Instant gratification vs. saving and scrimping until you could manage it...
    the caution and logic of our parent's generation was induced by our grandparents who went through the depression.

    It only took 2 generations to completely abandon the principles of sound financial planning.

    That's really frightening...
    a rude awakening and a hard lesson in Life 101 are waiting in the wings..
    except this generation is going to demand satisfaction to quench their sense of entitlement.

    ReplyDelete
  28. just wanna say 'hi', and that i should never have started my own business. life was simpler before.

    ReplyDelete
  29. And we're (the U.S.) leading the way, no?

    Leading the way right down the toilet.

    ReplyDelete
  30. OMG oodness, you are so right Donn. This market insanity concerns me too; I made peace with the fact that I'll have to rock the tiny house look for a while since the slimmest upgrade in an old house of 300 sq feet more or a even smaller old house with a renovated kitchen/bath would cost us 100,000$ more than we paid for this one a couple of years ago.

    The most ridiculous thing too is that mine and my close friends in similar home situation's obsession with wanting a bigger better house increases in direct proportion to the market value prices. I have to try real hard to stay reasonable and remember that it's not the time to buy a house or even a condo.

    I met with a Rona kitchen designer to satisfy my upgrades need. The shiny and new thermofoil wood veneer cabinets that we are looking at should distract me for a while...

    p.s. I am sorry that I don't comment often on your blog; I am shy about writing on other people's blog... I am trying to get over my commentophobia I promise ;)

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  31. haha yes definitely!

    Keshi.

    ReplyDelete
  32. I've pointed out all of this (well, except for the stuff that was specific to you) to my Dad every time he said, "When I was your age..." and went on to tell us about how many properties he had already bought and sold.

    ReplyDelete
  33. First of all -- I was a women's clothing store stock girl at 15 in connecticut where the houses always cost a bunch and professionals like myself made $4.50!
    Here's the bad news: it was when Ebony and Ivory was HUGE and it was on the loop of music played in the store. This meant that on a Saturday I would hear the song roughly twice an hour for 8 hours.

    That's right -- pity me.

    And on the subject of music, your favorites juke box ROCKS!!!The Cure, Bowie, The Ramones AND the NY Dolls -- Homo-esc, you're the best!

    ReplyDelete
  34. MISTI
    That's what you GET for being a
    GO-GETTER! Simple Schmimple..who wants a simple Life pffft!

    KEVIN
    Hey Dude how are ya?
    Yes you are thank you so much for taking one for the team.

    EM!!!
    Forget the commentophobia..you couldn't possibly say anything 'stupider' than what I write.
    This market is obscene..what these values are based on is beyond me..now it costs more like $200/sf to build COME ON! Perhaps the supply siders are cheering but the reality is that it will collapse under it's own weight..and it won't be pretty. The remedy will be another War since that is the only way that our Governments know how to spur the Economy.

    Rona=Air Miles YAY!

    KESHIROO
    You have to luv those zany Realtors and their phraseology. Veryu creative.

    ANNA
    Oh the dreaded When I Was Your Age intro...whenever I hear that my brain usually 'turtles' and I start trying to remember TV theme songs.

    MUTHA
    $4.50! La-di-da! Thank goodness I don't have that song on my list!!

    I'm glad that you found a few that you liked..I was considering doing a few of these by decade..which would make sense but HELLO! Maybe on a rainy day...I still love those 'oldies' they instantly transport me back to a time when I thought that Life was simple.
    *sigh

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  35. Where do you get these numbers from? And who are the Middle Class whose earnings grew by $50 over the past 25 years?

    ReplyDelete
  36. SPENTRAILS
    Statistics Canada. Honest.
    I can send you a copy.

    Of course there are lies, damned lies, and statistics.

    ReplyDelete

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