UM Student in the Headlines for Being Out of Touch
I'm sure many of you have read/heard about the "Relative Wealth" column in the Michigan Daily. Well, seems like it has made the national news circuit as well.
http://finance.yahoo.com/news/university-michigan-student-insists-earni…
Daily column:
http://www.michigandaily.com/opinion/02jesse-klein-relative-wealth16
The first paragraph reads like a satire.
Another student's rebuttle:
http://www.michigandaily.com/opinion/jenny-wang-response-relative-wealth
Jenny is remarkably measured in her response.
Mods feel free to delete if this is not appropriate.
February 19th, 2015 at 3:32 PM ^
I'm not going to lie, I initially thought the original article was a well-crafted piece of satire.
February 19th, 2015 at 3:34 PM ^
Just enforces the stereotype of people from California being rich out of their minds unless they're from Compton or something
smh.
February 19th, 2015 at 8:05 PM ^
just "outta" Compton, but I'm not a Californian so what do I know.
February 19th, 2015 at 8:59 PM ^
I don't think anyone is just "outta" compton either, I think you have to be straight outta compton.
February 19th, 2015 at 11:01 PM ^
February 19th, 2015 at 4:37 PM ^
When I started reading it I honestly thought she was trying too hard to make it satirical and was going over the top in the first paragraph. I continued to read on and slowly started to realize that she maybe wasn't writing a satire at all, but instead actually believed what she was writing.
February 19th, 2015 at 5:56 PM ^
“Because of the high cost of living in Palo Alto, I grew up middle class”
No. Just no. What is it with this weird logical fallacy that keeps popping up everywhere?
It's not just Klein - I hear this line of argument all the time from supposedly well-educated people who belive that they're middle class simply because they live in a high-cost area.
February 19th, 2015 at 7:38 PM ^
I have a related pet peeve: the way that people use "upper-middle class." I had friends in college whose parents made hundreds of thousands of dollars per year and the kids still said they grew up in the upper-middle class. I have no problem at all with people who grew up wealthy, but would it kill extremely wealthy people to acknowledge that, yes, they actually are wealthy?
February 19th, 2015 at 9:20 PM ^
If a couple are making the low hundreds of thousands per year, 200-300 thousand, I wouldn't think of them as wealthy, and certainly not as extremely wealthy.
February 19th, 2015 at 10:30 PM ^
I was talking about families earning a little more than this, but even so, a household income of $250,000 would put a family somewhere near the 98th percentile in the U.S. (if the website I'm looking at is correct). I'd imagine that most people in the 2nd percentile of household income rightfully consider themselves poor. Why isn't the 98th percentile wealthy?
To me, "upper-middle class" implies something like the 65th-80th percentiles. If you're in the 98th percentile, you're wealthy.
February 19th, 2015 at 11:15 PM ^
I guess it all depends on perspective. I remember hearing about a survey several years ago where people were asked about what age they equated with middle age. Teenagers responded with 35, those in their mid to late 20s said 45, those in their mid to late thirties said 55. It was always about twenty years away. I would say something similar goes with trying to determine middle class. 15 years ago when my wife and I were making about $60,000 per year I probably would have agreed with you. Now that we make a bit over double that, I certainly don't feel close to wealthy, and $250,000 doesnlt really seem wealthy to me either.
We do have a decent house (in a state with very low cost of living) but rarely eat out and drive Chevy's, mine 5 years old with 85,000 miles, hers 12 years old. Our youngest child is a senior in college and our saving grace on educational costs was that our children earned merit based scholarships that paid nearly all of the expenses for two of our children (including approx. $120,000 for the daughter who attended MSU as an out of state student) and the other about half of her expenses were covered by scholarships. Without those scholarships, they would have most likely commuted to a regional university or used the wages they earned to pay the difference if they were living on campus and paying the higher tuition and fees. We rarely take vacations, don't wear expensive clothes or jewelry. We don't live extravagantly but do have a bit of a cushion in money to tide us over in the short term in case of some emergency.
We do know some wealthy people. One family we know owns two houses (that we know of). One is probably worth about $2 million, the other is a 5 bedroom, 5 bath vacation home with the expensive tvs, appliances, etc. They very well may own one or two other houses. They drive the latest German luxury cars and really don't have to work at all. They could never earn another dime their entire lives and still be well off.
February 19th, 2015 at 10:59 PM ^
...is the 90th percentile, and $300K is the 95th percentile for household income. Household median income is $52K.
I would to consider oneself middle class if they were more around the median, and the top 5-10% would be... wealthy. Happy to reserve extraordinarily wealthy and disgustingly wealthy for the 1 percenters, which I understand to be some sort of motorcycle gang.
February 28th, 2015 at 8:18 AM ^
As mentioned elsewhere, annual income in excess of $250k puts a family in the top 1%. Wealthy.
The fallacy is this. We are so segregated by income in the US that we can easily be surrounded by people in the same income strata. If everyone in your neighborhood has a similar house, similar vehicles, similar income, it is easy to assume you are like "everyone else." The elitism and privilege and cluelessness is mindboggling to me.
February 19th, 2015 at 11:13 PM ^
My dad was a surgeon and my mother stayed at home (dealing with me and my three siblings). My dad made upwards of $300,000 a year, but I never felt like I was "upper-class." My first car was a $400 15-year-old rusted out Plymouth that stalled multiple times per two-mile trip to the high school. I didn't have a gaming system because I was told I'd have to buy it myself and I wasn't very good at saving my own money. I had a couple nice outfits that I liked.
Then, my best friend would pick me up in his brand new CTS wearing Patagonia and Ralph Lauren and take me to his house, which was bigger and nicer than mine, where we'd choose from his video game library featuring dozens upon dozens of games for multiple next-gen consoles -- or alternatively, swim in his pool, or in the winter shoot hoops in his indoor gymnasium.
From my perspective, I was not wealthy. I didn't know how much my dad made but from what I knew it couldn't be as much as what other parents were obviously making.
It wasn't until I got into college that I realized how privileged I was growing up and how "wealth" is very relative - and compared to most, my family was certainly wealthy.
Most people who grew up in wealthy families also grew up around countless families that were significantly wealthier. It's easy to have a flawed understanding of wealth and poverty when you grow up in a socially homogenous bubble.
(And for that matter, indigent people don't understand wealth any better than wealthy people understand poverty. A lot of people assume that someone's privileged, lucky, has nothing to complain about, or whatever, just because their family has a large income -- and that's not a fair assumption to make about somebody.)
February 19th, 2015 at 11:38 PM ^
See now if Ms. Klein presented her case like you did. Nobody would be having an issue.
February 19th, 2015 at 3:35 PM ^
Oh, you tease. From this click-baiting thread title I feared far worse than some vapid Daily column happening to get shared a bunch.
February 19th, 2015 at 3:39 PM ^
Lol I'll try to make it less click baity.
February 19th, 2015 at 3:35 PM ^
For this girl. Granted, $250,000 in silicon valley isn't exactly $250,000 in the UP...but yeah, not a good idea to write this if she ever wants to get a job in journalism.
February 19th, 2015 at 3:38 PM ^
Cost of living varies how much you actually live on and no doubt that area of the country is insanely expensive. While her parents make a ton of money, her life growing up may have looked like a relatively middle class existence.
Just sort of one of those things I'd never ever come out publically and say...
February 19th, 2015 at 3:52 PM ^
While relative wealth is a thing, someone making the federa mininum wage in nyc and someone making the federal minimum wage in central michigan are going to have different lives there are still gaps. The difference between thinking your middle class because you bought an expensive house and actually being middle class is choice. Her parents chose to buy a 2.2 million dollar house because that is what mattered to them. They could have lived 45 minutes away in a much cheaper house and spent their money on different things, like a second floor or a pool. The person who is actually middle class has no choice but to live in the one floor house 45 minutes away because they can't actually afford anything else. You are not middle class just because everyone in your town makes the same amount as you.
Also I'm pretty sure the line "vacations over versace" pretty much summed up how dumb the piece was.
February 19th, 2015 at 5:51 PM ^
Keep in mind that property values in the Bay Area have skyrocketed (to put it mildly) over the past 20 years or so. It's likely that her parents bought their house when prices were reasonable and that they wouldn't be able to afford it if they had to buy it at its current market value (in California, property taxes are based on the price you paid for the home, not its current market value).
February 19th, 2015 at 8:26 PM ^
February 20th, 2015 at 2:06 AM ^
a 4 bedroom 3 bath 2100 sf 5 year old house in a truly middle class city ( Dublin ) in the SF Easy Bay region where " normal" people lived for 325k in 1992. Now worth over 1 mil. And this is no great shakes ( no basement , 2 car garage ) . This is truly middle class in the East Bay now.
February 20th, 2015 at 6:37 AM ^
While acknowledging that the article is poorly written and that she comes across as whiny and clueless, there is some validity to her point.
The reality can be different than how things appear.
We purchased our current home at the depths of the Detroit area housing market just over four years ago. It's now worth 60-75% more than what we paid for it. We are literally living in a house that we could not afford to purchase at the current value.
Plus, she isn't giving us the complete set of facts. What we don't know is when her parents bought their home and what they paid for it. Maybe they purchased it 15 years ago for $500,000. Yes, they have $1,500,000 in equity, but it is equity only on paper, and with their lifestyle and where they live, it is likely that the bulk of their savings is in the house.
So, while if they sold their house they would be wealthy, it is possible that they are living a somewhat middle class existence in their very wealthy area.
And, yes, I agree with those who have argued that they choose to live in this costly area. We live in the community of Southeast Michigan where houses have a very high cost per square foot. And, we live in what is probably the most expensive area within this community. We could have a much larger house elsewhere for less money, but we like living where we live and are willing to make the necessary "sacrifices" to live here. But I'm smart enough to realize that these "sacrifices" are really rich people problems...and not "real" problems as she is portraying them.
I wish she would've had a friend read the piece before it was published or just had the smarts to not go public with such an inane argument.
February 20th, 2015 at 9:55 AM ^
and make $250,000 a year, then they are well off. Even despite their equity. And although the equity is just a number until you sell, being able to sell and make money on a house is a huge deal.
It seems that this is a hard case to make no matter what. The only reason she doesn't feel wealthy is because she compares herself to people who have more. Choosing to like in a desirable place full of wealthy people and paying more to get less is a choice of the wealthy. Although I don't make near as much as her parents do, I feel I am wealthy in I am able to make these types of choices, despite not being able to get a dream house in the exact location I want.
February 19th, 2015 at 3:57 PM ^
I don't disagree with her premise I guess...of course cost of living is going to be a lot higher in Palo Alto than Ann Arbor (and Ann Arbor, at least around campus, can be pricier than most places in Michigan).
February 19th, 2015 at 5:32 PM ^
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February 19th, 2015 at 5:54 PM ^
I live in the Bay Area and judging by how manny Ferraris I see on the freeway on a daily basis, I don't even think her point about Californians not splurging on luxury items to show off their wealth is accurate.
February 19th, 2015 at 6:20 PM ^
February 20th, 2015 at 11:56 AM ^
Ms. Wang clearly acknowledges how priviledged she feels. There is always somebody worse off, this does not make her out of touch.
February 19th, 2015 at 7:41 PM ^
"Somehow she turned that into moaning about how the rest of the country treats money as a status symbol while the Bay Area stayed true to their roots, man."
Yes -- by doing so she marked herself as a (temporarily transplanted) coastal journalist, junior class. (Quite disappointing that Ms. Wang, in her rebuttal, seemed to take that assertion at face value without applying any critical thinking to it ...) Thou shalt take gratuitous potshots at flyover whenever possible.
Classic NoCal humblebrag: "Look (obliquely, not directly) at how cool I am!"
What's hilarious is that a subset of the SF Bay population is *extremely* competitive on socioeconomic issues. As noted above, they try to be coy about it, but it's not hard to miss. Well, not if you pick up on little nuances ...
February 19th, 2015 at 9:47 PM ^
February 19th, 2015 at 4:19 PM ^
Cost of living may be vastly different, but a lot of things cost the same regardless of where you live. An iPad costs the same, a car costs (mostly) the same, a plane ticket costs the same, a brand name jacket costs the same. A family that makes $250k in a high cost area and a family that makes $80k in a lower cost area may have to spend the same percent of their income on "essentials" (food, housing, utilities), but if both can set aside 5% of their income for luxury consumer goods, the family with $250k will still be able to buy much more.
And that's where her tone grates - she may be choosing between Versace and European travel, but most "middle class" people don't get to choose either, at least not very often.
February 19th, 2015 at 6:22 PM ^
This is a really good point.
February 19th, 2015 at 8:15 PM ^
If you make $250,000 and dont have a lot of write offs you are going to pay 33% in Fed taxes and 15% is state taxes, our sales tax is over 8% on purchases. Even gas here has like 40% tax added to it. Your entry level home in San Diego county is $450,000, to live in a larger home in a good area or school district you are looking at minimum $650,000. If her parents had a mortgage on their $2 million dollar home and they took home half of their $250,000 salary, yeah they are middle class here. There is an upper class here and she wouldnt be in it. Now bash her for comparing, but making $80,000 and owning a $200,000 house in Michigan puts you in the upper .10% worldwide, thats in the top less than 1% so you would be in worldwide standards the 1%ers! So yeah its all relative. http://www.globalrichlist.com/
February 19th, 2015 at 9:48 PM ^
Then move.
February 19th, 2015 at 10:37 PM ^
Exactly. 99% of people in the world would probably love to be able to live in San Diego. It's gonna be priced accordingly. This is how economics works.
February 19th, 2015 at 10:57 PM ^
February 19th, 2015 at 4:37 PM ^
When you make 250k where you live is a choice. You can find sub million dollar homes in actual middle class neighberhoods in every single direction around palo alto. They just chose not to live in them because they wanted to spend the money they made on being in a better neighberhood. That is a fine choice but it is also a choice. If I make 50k and you make a 150k but spend 100k on a car you don't get to say that we are in the same economic class.
February 19th, 2015 at 4:55 PM ^
Ding ding ding. This is my response to every NYC'er who makes this argument. Your high cost of living does not make you middle class--it means you have chosen to spend a signifiant amount of your upper-class wealth on your housing.
It's like me buying a new porche every year and then saying that my remaining income isn't that much higher than everyone else. Yeah...because I just chose to spend it all on a porche. Choosing to spend it all on high-price housing is no different.
February 19th, 2015 at 5:25 PM ^
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February 19th, 2015 at 6:25 PM ^
Yeah but to work in Grand Rapids you need to live fairly close. You don't have to live in Manhattan to work there (although obviously anywhere in the NYC orbit is going to be pricey).
February 19th, 2015 at 7:12 PM ^
You don't need to live fairly close to downtown to work in GR... Where did that come from? With the commutes some people have into Manhattan you could live out in Hastings, Portland, Grand Haven, etc and have a shorter commute into Grand Rapids, time-wise. Traffic is nowhere comparable to Manhattan/anywhere in NYC...I live in Ann Arbor and traffic is worse at rush hour here.
Source: a GR native.
February 20th, 2015 at 11:00 AM ^
It's a lot easier to sit on a train than drive.
February 20th, 2015 at 12:03 PM ^
It's also a great deal easier to open your garage door and get into a vehicle than it is to walk a few blocks, cram into a train, transfer lines then walk a few more blocks or maybe even get into your car to finish the trip.
February 20th, 2015 at 11:00 AM ^
It's a lot easier to sit on a train than drive.
February 19th, 2015 at 7:53 PM ^
Yep, this is totally on point. When I live in the Bay Area I lived in a relatively cheap area (Pleasant Hill) where you could get a house similar to the one she describes for maybe $700M nowadays. Rough guess. If you had an appraisal you would find the three bedroom house in Palo Alto would be valued at perhaps $200M perhaps but that the land would be worth $1.8MM in Palo Alto and $500M in Pleasant Hill. There is a lot of value in location and people pay top dollar to be in Palo Alto for whatever reason. That has value. A middle class family could not afford the option to choose between a moderate house in an insanely expensive area and a mansion in a much cheaper area. And rest assured, she could certainly have bought a $2 million home that actually is a mansion in parts of the South Bay or East Bay. And then she would not make this argument. It's only because the thing they own is the more intangible aspect of land or location value that she is not able to see it as the form of wealth it is. And it is a form of wealth, because you can sell it for an assload of money.
February 20th, 2015 at 2:21 AM ^
February 19th, 2015 at 4:38 PM ^
February 19th, 2015 at 9:46 PM ^