More average salary stats to argue over.....

PasturesNew

My 20' square room costs just £20/month less than my friend's 4-bed council house in an OK area just outside the M25. Her household income is double mine as her partner earns at least 3x what I do and she is a SAHM.

carolt

JonnyBravo wrote: »

Agree with all the post bar the last bit.

Virtually none? I'm afraid I disagree.

eg the two women in my team who have just returned from maternity leave both use their grandparents as unpaid childcare.... not full time so yes they have some childcare costs, but not horrendous.
How many families get a house and probably a few years of pay rises etc before needing to pay for childcare?

Of course as soon as they're at school childcare costs drop significantly and this is for a large proportion of their lives at home. Then they become old enough to leave alone.
All mitigating factors.


So in short... yes childcare is expensive and yes lots of people pay it.

Do I agree that (by logical conclusion of your statement) "virtually everyone" with children is paying horrendous childcare costs.

No.

How many people can count on childcare from family members?

I had - we would not have survived without it. But I know that I was pretty unusual.

And the numbers of grandparents etc able to provide full-time care, to fit in with the full-time wage?

Surely, you'll agree, virtually none.

Having children is expensive - as well as childcare costs - and that does NOT stop once children start school, far far from it! - how many people have full-time jobs which finish in time to pick children up from school and give full school holidays? (NB It's not an accident I'm still a teacher......) - don't forget that children add multiple costs to the household budget, as any parent will know.

So, I repeat - a couple with children do not have take home pay anywhere near 2 X average full-time pay.


Plus, as PasturesNew has just pointed out, lots of people aren't in couples anyway, and the number of single person households is growing all the time. Trying to apply double average income as some sort of standard is, frankly, ludicrous, given this background.

ad9898_3

HAMISH_MCTAVISH wrote: »

The realities of life are simple. Not everyone can afford to buy a house.

Agreed, however the last decade has skewed the reality. You haven't been here long so I will give a situation I once had, in '96 I bought a 2 bed semi in a nice semi rural area with drive, garage, front and back garden, it was a relatively new build (not LA housing at all by the way). I bought this house on a 3.5 x salary with 10% deposit, I was on way, way below the average wage at the time.

This same house in 2007 could only be bought by someone using the same criteria as me if they were on 40k a year.

I rest my case.

JonnyBravo

carolt wrote: »

How many people can count on childcare from family members?

I had - we would not have survived without it. But I know that I was pretty unusual.

And the numbers of grandparents etc able to provide full-time care, to fit in with the full-time wage?

Surely, you'll agree, virtually none.

Agreed. My colleagues certainly don't get full time help from their grandparents.

carolt wrote: »

Having children is expensive - as well as childcare costs - and that does NOT stop once children start school, far far from it! - how many people have full-time jobs which finish in time to pick children up from school and give full school holidays? (NB It's not an accident I'm still a teacher......) - don't forget that children add multiple costs to the household budget, as any parent will know.

I'm a parent to an 18 and a 15 year old. So I also know.
I also know that it is vastly cheaper once they are at school. After school clubs and after school care is clearly cheaper than all day care. I know cos I used it.

carolt wrote: »

So, I repeat - a couple with children do not have take home pay anywhere near 2 X average full-time pay.

Agreed. I'm not sure I said anything that contradicts this?
I did say that I disagreed with the point you were making that anyone who had kids had horrendously expensive childcare, bar virtually none.

carolt wrote: »

Plus, as PasturesNew has just pointed out, lots of people aren't in couples anyway, and the number of single person households is growing all the time. Trying to apply double average income as some sort of standard is, frankly, ludicrous, given this background.

Agree entirely.
Of course it is true that the true representative average number for the population probably lies somewhere between one and two salaries though.
I won't even attempt to guess what it is as the number I'd guess would clearly be too high for bears and too low for bulls but I really do believe the long term average has moved over the last couple of decades.

carolt

Reading the article in the OP, I found this comment very thought-provoking:

"Comparing total salary earned is very misleading due to the importance of taking into account the cost of living. For example, to keep it simple, say the cost of living is £20k per year. Someone earning £25k can then save £5k per year after cost of living is taken out of their salary. However someone earning £50k can save £30k per year. Therefore even though £50k is only twice as much as £25k, in terms of quality of life, £50k allows savings of 6 times as much per year. Now compare someone who earns £250k per year. That means they can save £230k per year, so it would take someone earning £25k per year 46 years to earn the same amount of savings. 46 years is a whole working lifetime, that the other person earns per year, so it's no wonder they have such a different standard of living. Most peoples salary is near to the cost of living so they struggle to save even just a few thousand per year.
John Swift, London, England"

Also:

"None of these figures take into account regional cost of living. Not so long ago the BBC printed an article saying that Cardiff had the lowest percentage of wage left after taxes and bills for example.
Julian, Barry, S Wales"

Thrugelmir

carolt wrote: »

Reading the article in the OP, I found this comment very thought-provoking:

"Comparing total salary earned is very misleading due to the importance of taking into account the cost of living. For example, to keep it simple, say the cost of living is £20k per year. Someone earning £25k can then save £5k per year after cost of living is taken out of their salary. However someone earning £50k can save £30k per year. Therefore even though £50k is only twice as much as £25k, in terms of quality of life, £50k allows savings of 6 times as much per year. Now compare someone who earns £250k per year. That means they can save £230k per year, so it would take someone earning £25k per year 46 years to earn the same amount of savings. 46 years is a whole working lifetime, that the other person earns per year, so it's no wonder they have such a different standard of living. Most peoples salary is near to the cost of living so they struggle to save even just a few thousand per year.
John Swift, London, England"

There is tax and national insurance to be deducted. On £50k a year salary you would struggle to save £30k or £2.5k per month.

Though the principle is right.

Amassing a large of sum of capital is not easy. Unless you win the lottery or receive an inheritance or become a celebrity.

ess0two

How many earn 250k or a joint combination of that amount?

Really2

ad9898 wrote: »

It would be interesting to see a poll on this, I wonder how many women like putting their children into care and going out to work to service an overblown mortgage and those don't.

As far as I know people who rent are just as likely to work. Take NDG, some women work becuase they want to.
I don't think the only working women with children are mortgage holders, I would say it is a fairly equal split.

My wife works part time, but also if she did not I would still want my child to go to nursery 2-3 days a week so he got to interact with children.

HAMISH_MCTAVISH

ad9898 wrote: »

Agreed, however the last decade has skewed the reality. You haven't been here long so I will give a situation I once had, in '96 I bought a 2 bed semi in a nice semi rural area with drive, garage, front and back garden, it was a relatively new build (not LA housing at all by the way). I bought this house on a 3.5 x salary with 10% deposit, I was on way, way below the average wage at the time.

This same house in 2007 could only be bought by someone using the same criteria as me if they were on 40k a year.

I rest my case.

Fair enough, but 96 was at close to the bottom of a cycle, and 2007 at the top.

Neither are representative of the value of housing. The true value is at the long term mean. Which is where prices are today. But of course that mean has been rising throughout many cycles...... And will continue to do so until house building stops lagging population growth.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Fair enough, but 96 was at close to the bottom of a cycle, and 2007 at the top.

Neither are representative of the value of housing. The true value is at the long term mean. Which is where prices are today. But of course that mean has been rising throughout many cycles...... And will continue to do so until house building stops lagging population growth.

How is it where it is today on long term mean?

If you are going to use long term, you can't then choose to use recent couples both working.

Long time mean is one salary.

Therefore, 31k x 3.5 = £108,500

It's currently 4.9x the mean wage taking the figures on this very thread. And 6.1x the median.

That's no where near the average long term. It's ONLY near average long term if you change the way the long term average has been calculated to include a second full time earner, which let's face it, is NOT reality.

To be near long term average, even using the mean wage, the average wage would have to be approx 40k.

Explain away....