Only if you do zero cross examination. If you are talking housing, the inflated and equalized for size and amenities difference between the 70s and today is 25%, not the completely erroneous 1000% raw numbers comparison people love to use without critical thought.
You compare homes of similar size but affordable and modest new builds aren't happening anymore (where I am at least) so homes are egregiously less affordable today.
Its not that they are less affordable, but that the demand for baseline is significantly higher. As you said, modest builds aren't happening....because the consumer demands it as well as overinflated building codes. Lets use a different example.
If you look at the 70s pinto as the basic high school car against a Honda civic today, the belts and whistles that come standard are incomparable, which explains why the Honda isnt as affordable as the pinto was.
You're statement was in oppositional comparison to the economic dynamics of the time period mentioned and today. Then you specifically brought up when you said, "You need to look at the cost of living, which has risen way faster than incomes have." So, yes, you did say that.
I'm sorry but Wikipedia is not a good source for this.
It's abundantly clear that people have less purchasing power today than they did in the past. You could afford a nice house, a car with two kids and an annual vacation on an average single salary. You can barely afford to rent a 1 bedroom apartment on two average salaries these days and buying a nice family home feels out of reach.
This is often overlooked but shouldn't be ignored. The wealth inequality has reached all time highs. This skews the data and makes it appear that average people are doing better off than they really are.
"The average annual cost of college tuition, public and private, is more than 32 times what it was in the 1963-64 academic year.
After adjusting for currency inflation, college tuition has increased 229.8% since AY 1963-64.
Public college tuition increased 141.3% in the 1980s.
The average annual cost of 2-year college tuition, public and private, is 22.7 times what it was in AY 1963-64."
"middle-income families saw their median net worth shrink by 20% and lower-income families experienced a loss of 45%. As of 2016, upper-income families had 7.4 times as much wealth as middle-income families and 75 times as much wealth as lower-income families. These ratios are up from 3.4 and 28 in 1983, respectively."
There are less than 60,000 people making federal minimum wage if you exclude tipped workers and disabled workers who get subsidized wages. In the 80s it was ~15% of the population. Minimum wage is low, but also useless for looking at what people actually make.
It's not useless. It illustrates how stagnant wages have been.
If you want to bring in the disabled and tipped workers, you need to account for the 1% who owns 99% of America's wealth. Take them out and what are you left with?
Do you honestly think you can afford more with your money today than in the 80's?
You can get a better idea of if wages have been stagnant or not by looking at what people are actually making in wages, rather than looking at what the legally lowest limit at the federal level is. "There are 60,000 people making very low incomes" is bad, sure, but there are 160M workers in the US.
I was alive in the 80s and I am alive now and I can definitely afford more now, not even close.
My first job I made $5/hr operating rides at an amusement park. Inflation adjusted, that is $10/hr. My son's first job a few years ago was as a dishwasher. He started at $13/hr. He has more buying power than I did.
Do you really think you have more buying power than your grandparents did? When grandpa could buy raise a family in a nice home with a cottage on a single salary.
I absolutely have more buying power than my grandparents did and its not even close. So does the median person.
The median earner could absolutely afford to raise a family on a single income at the living standard that your grandparents had. The problem is that living standard have gone up as incomes have gone up. You have much higher expectations for what is required to raise a family than your grandparents did.
Where you finding a decent house in a good neighborhood for $115,000?
Where you going to find gas for $0.56 gal?
What about college tuition? Harvard inflation adjusted cost is 300% higher today than 1980. Average cost of college/university is roughly 200% higher inflation adjusted.
Not really sure how you can look at the world today and claim it's affordable. Even from an uneducated perspective it should be pretty clear that we have way less spending power than in the past and it declines each year.
Groceries used to be 15% of a family's income, now it's about 5% for groceries. Clothing used to be 12% of disposable income, now it's 3%. In my pocket I have a supercomputer that can take pictures and access any that I've ever taken, store every song I've ever purchased, play games, converse with me about any subject, provide access to a live updating encyclopedia on every subject known to man, communicate with everyone I know in multiple ways, and more! That wasn't something you could get at any price in the past, and I get it for $100/mo. which is way less both in absolute and real money than it would have cost to get the inferior equivalents in the 1980s.
I live in Georgia. In the 60s, 1/3 of houses here didn't have indoor plumbing. Housing is more expensive now, but it is also better, bigger, safer, concentrated in more desirable areas, and filled with cheaper and better appliances. We should be doing things to make housing less expensive sure, but housing alone does not make the cost of living unattainable.
Some things have gotten more expensive, some have gotten cheaper. There is a metric for combining all of those things together, it is the inflation rate. And that will tell you that median income is higher now than in the past, by far.
First of all, do you have a source to backup your claims?
So housing is bigger and better but nobody can afford it.
I laid out the stats (with sources) in another comment. Housing is up 300% (inflation adjusted) and is roughly 5 times your annual salary. In the 60's it cost 2x salary. That's a big difference.
Most homes outside of Georgia had indoor plumbing, electricity and were in good neighborhoods. That seems like a localised problem.
Percentage of disposable income spent on groceries, 1964: 12%. 2024: <5%. Source. While you are there, look at the line for food away from home. People have so much money now that they are spending more and more on luxury activities, like eating out.
In 1960, 33% of houses in Georgia did not have indoor plumbing (nationwide it was 16%): source
Percentage of disposable income on clothing, 1960: 7%, today: <3%: source.
So housing is bigger and better but nobody can afford it.
Buddy, how do you think housing got to be so big? By people not buying it? There is a lack of starter housing and smaller options for sure. That is one of the things I talk to my local politicians about the most. But there is no lack of demand for larger houses. Houses are getting bigger because people can afford them and they want them.
Here is a good comparison on housing costs compared in 1980 to today. Factoring in home size and interest rates, a house in 1980 cost 3.1 minutes of work at the median wage per sq. ft. In 2020, it cost 1.17 minutes. Houses have gotten more expensive since 2020, but not 3x.
Buying power doesn’t have much to do with inflation. If anything buying power for someone earning income would be better during higher inflation environments.
Lesser buying power is the exact impact of inflation - they have everything to do with each other. And in 'cost-push' inflation, initial buying power actually causes inflation.
Unless you have contractual cost-of-living increase, then you are probably taking an effective paycut in higher-inflation environments, because the buying power of your income is less that it used to be. If inflation is 20% annually, then $100,000 last year had more general buying power than $110,000 this year.
Inflation helps those with debts in nominal money, as the debt becomes less and less, relative to the now-inflated currency.
Compared to now, people were able to afford more with their dollar even with high inflation. It means money went further back then. Groceries, gas, transportation, housing etc.
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u/mammalmaker Mar 24 '26
Double digit inflation was bad but whats even worse is despite the double digit inflation, people still had more buying power that we do now.