If you adjust inflation, do not forget in 1970s people didn't not have to buy all the nice stuff we are buying now? In 1970s, can they buy 32" flat screen LCD TV? in 1970s, can they buy 100MHz desktop?, let alone laptop? In 1970s, do they have hybrid cars? Just do not forget that we are enjoying a lot more stuff than 1970s. Back in caveman era, I guess also one breadwinner could support the whole family, and that caveman only needed to work 3 hours a week to hunt a deer. World just becomes more complicated now, so it is natural more people need to work. If all people are satisfied 1970s lifestyle, I guess one breadwinner is enough to support the family.
Where I lived in the south, most people worked in cottom mills and furniture factories etc. These companies paid the bulk of their employees minimum wage which was .90/hour. Many women worked. The Ossie and Harriet existence wasn't common place at all. I recall when the CIO came to town to organize the workers, the mill hands rallied against them and when they got sick, the doctors wouldn't treat them. Some resturants wouldn't even feed them. Kind of reminds me of the healthcare protesters now.
I like that compareison. In nominal dollars, the Model T cost around $850. Today, for the same nominal dollar, that $850 will buy a clunker that is in every meaningful way better than the Model T. Nominal dollars! The things we consume in society have never been better or cheaper. The poor quintile of the G7 today, eats and dresses better than Henry VIII, and have the waistlines to prove it. Agreed. In particular, non-manufactured assets. Because everything is so cheap to make, the real value lies in things that can't be made factory-fied.
I remember in the mid-80s doing cost of living comparisons with our (then) Jugoslav cousins. A loaf of bread cost them approximately 2 hours of work. As a minimum wage punk back then, it cost me ~15 minutes of work. Now, it costs some number of seconds. There are lots of problems in this world, yes, and they shouldn't be ignored. But by g-d, there are days I wake up and find myself bursting with gratitude that, all things considered, life is pretty freakin' amazingly good for us!
this was a great discussion. I have always been bothered by the question - have all these women who entered the workforce just uselessly carved up a slightly bigger pie. (not that I blame women for wanting to work - it might have been better if more men had stayed home.)
Per capita income (by household) was the same today (with two workers), than it was back in the 50's and 60's (with one worker). The inflation stats are obviously rigged. I'm surprised you even consider them valid. A better formula? Easy. No hedonics, food + fuel, no price substitution. A growing labor force cannot 'outspend' the deflationary effect it lends to CPI. Labor income and production offset each other. Income can't outspend production. Only private and Government debt can do that. Incidentally, a huge explosion in both punctuated the late 60's onward (Cold War spending, Viet Nam, Korea etc). Deflating prices from cheaper, more available labor, and technology/innovation, get destroyed by expansionary money supply and Government deficits. A close second, is the consumer debt market banks opened up in the 50's. Your argument that's its only consumer spending is false. Its consumer *Debt* spending AND, equally important, Government deficit spending. The standard of living being higher now is an illusion. Yes, we have better (and more plentiful) goods. But hasn't that always been the case? A horse and buggie to a model T. To oldsmobile. From a telegraph to the phone etc. Second, all this "wealth" is DEBT. Period. Nowadays, everyone is levered to the Tits, and all this perceived equity in shiny new cars, McMansions and electronics is almost entirely "consumer financed". Take a per capita equity graph comparing the 60's and present using REALISTIC inflation, and the 60's would blow us away. Guaranteed.
Take a per capita equity graph comparing the 60's and present using REALISTIC inflation, and the 60's would blow us away. Guaranteed. ----------------------------- Then check this out. http://tinyurl.com/yjm842
Hey Pabst, I agree with half of that. Consumer goods were more expensive. But people earned more. And in many cases, enough to support a family, mortgage and goods on one income. And a huge part of todays perceived wealth is paid for by workers mortgaging their future through debt. Yea, it looks great. But how much of that is Real Equity? Or surplus cash flow/income? The consumer debt market didn't really go mainstream until the mid 60's. So a lot of that 'affluent society', is just consumers putting themselves deeper in hoc, for a longer period. Which explains why asset prices went parabolic from 60's onward. More money/debt chasing fewer assets.
Don't feel bad your grandparents dined on soup and crackers while mine ate sirloin. Its the free market, bud.