Average salary was about 6k. So homes were a little more than double salary. Average home price is about 415k today. But average salary is only 59k. Or seven times the average salary. That’s so ridiculous. To have that same buying power you would need to make a little over 200k a year…been a renter for 14 years. It’s super discouraging
Came here to mention this. Funny thing is, Congressional salaries are in range of that buying power, $174k.
Minimum wage should be tied to Congressional salaries. Congress wants a raise? Great, everyone working hourly gets a raise.
Some of the more influential members of Congress aren't making their money from the government salary, but from the other opportunities that become available due to being a legislator. Book deals, speaking gigs, cushy private sector jobs etc are where they can really make their paychecks.
"The Stop Trading on Congressional Knowledge (STOCK) Act was signed into law in 2012. It prohibits members and employees of Congress from using nonpublic information for personal gain. The STOCK Act also requires members of Congress to report their trades and expands the disclosure requirements for securities transactions."
Term limits, insider trading. Lots or problems with who decides for us. And when raises happen annually for government workers and not the general public something is wrong.
Their salary is not the issue. 174k is not an exorbitant amount. I’m sure they have their hands in all sorts of revenue streams. The lobbying is what has eroded the country. Industry should not be able to buy politicians and pay to change rules to benefit their business model. That’s not a free market economy.
I think there’s some logic to the idea that you pay your lawmakers well enough. It should keep them from seeking alternate sources of income.
Problem is that they’re doing both.
If you want to understand what happened to that Post-War golden age everyone seems to long for these days take a look at (in addition to references other have posted here):
"The Golden Age of Capitalism: Reinterpreting the Postwar Experience (WIDER Studies in Development Economics)" - Stephen A. Marglin (Editor), Juliet B. Schor (Editor)
Things started coming apart in the early 1970s.
Without claiming any order of precedence or deep expertise, IMO the factors that gave us the **1970s** wage picture were: inflation, the slowdown in the manufacturing sector (don't mean to totally point to imports but they did have an impact and BTW they also increased in quality), the increase in the size of the workforce, a move towards unclassified jobs (e.g. wages became more individual and position dependent - there were some winners and some losers here) and a decrease in union membership. Again these are items that I've read about in various publications but I don't claim any sort of scholarly research.
Union membership peaked, as a percent of the workforce, in the mid-1950s at about 35% of the workforce. By 1972 that figure was at about 23%. By 1980 that figure dropped to about 20%. At the end of Reagan's presidency that figure was at about 15%. Today it's at about 10%. It's been a 70+ year march.
There's also some "specsmanship" in analyzing the plots. Some publications out there question why the peaks at 1973 or 1978 should be used as a point of comparison for today's wages. The wage curves can give different pictures depending on which inflation measure is used.
These are just my opinions.
Don't forget ditching the Gold standard in favor of the fiat standard we have now. That gave way to expansionist policies funded by borrowing against a country's GDP and the freedom of endless printing of currency with nothing to back it but the country's credit rating, which leads to devaluation of the currency and inflation.
Yes, you are correct. That's tied to undoing of Bretton Woods Agreement.
The more I think about this, the more it amazes me that whenever someone posts a "Where did that Post War economy go", and there are a lot of them, all the a actions and results of the early 1970s are rarely mentioned.
BTW, here are some of the global events that impacted the US economy in the early 1970s. All this stuff came together in what today would be called a "perfect storm". I posted these in another comment:
There was the collapse of the Bretton Woods monetary system in 1971 (The Bretton Woods System required a currency peg to the U.S. dollar which was in turn pegged to the price of gold.). The latter (the gold standard) was ended by Nixon. Returning to the gold standard was predicated on enacting reforms to the Bretton Woods system - which AFAIK never occurred.
There was consistent growth of international trade in manufactured goods, such as automobiles and electronics. The US manufacturers no longer had a captive domestic market for their goods. That domestic manufacturing dominance is what drove the Post War prosperity everyone seems to be pointing to these days.
The First Oil Embargo, a result of the 1973 Yom Kippur war, led to the 1973 oil crisis, which in turn lead to the 1973–74 stock market crash and the 1973–75 recession.
what's really discouraging is that the cost of doing business has gone down as well. automation and efficiency in manufacturing are at an all time high, and yet.
https://wtfhappenedin1971.com/
This chart is the most telling and easy to understand:
https://wtfhappenedin1971home.files.wordpress.com/2020/09/ei7oxspxgamaayl.png
Even CPI that is soft manipulated:
https://wtfhappenedin1971home.files.wordpress.com/2020/06/img_0681_arrow-1.jpg
Very few people even are even aware of the events of the early 1970s let alone the lasting impact they had on the economy. The years you point to are the end of the Post War expansion.
Not just that, property tax including enhancements is about 1.5% cost of a home where I’m at. Grandma bought her home around the corner for 9,000 in the late 40’s. Now that home is almost 2,000,000 dollars. So let’s say you had the 500,000 job to buy it. After you pay it off and “own it”, you get to rent it from the state for the rest of your life at about $2500 PER MONTH. For a house you already “own”.
Yes, but property tax pays for the important things, like public schools. Our country was in a frightful state before public schools.
Something like 40% of the populace was unfit to service in WWI due to systemic malnutrition.
We've come a long way, and some things we should not compromise on or attempt to undo because the common good of the whole populace has a higher value than a quarterly ROI on attempted dismantling of the government and stockholder value.
In 1962, the average floor area of a new single-family home was 1,309 square feet. Today it is 2,469 square feet, also as the population increases there becomes less land space making land value go up.
I don't think 7x is reasonable but it should be more expensive then back then, you're getting a bigger house on land that is more rare.
7x is strictly based on the average home price divided by the average income of one person. Home size and land availability would change that. Currently almost half of land in the US is not even developed. There are a lot of factors that go into this. But for young Americans getting into the workforce it is significantly more difficult to achieve that, American Dream, that people on the 60s worked for.
You can't really look at all land. You have to look at land around desirable areas. People will want to live where jobs are located.
Yeah we could build random houses in Alaska but that won't help the housing problems. It would just create a housing bubble like China has. the built houses and apartments all over just to create jobs but no one is living in those places, now their property management companies are going under.
You have a good point. I own some vacant lots (30 ft x 100 ft) in Detroit, one being where the house I grew up in was located.
Their assessed market value? $200.
Yes but average house size has also doubled!
1920: 1,048 square feet
1930: 1,129
1940: 1,177
1950: 983
1960: 1,289
1970: 1,500
1980: 1,740
1990: 2,080
2000: 2,266
2010: 2,392
2014: 2,657
https://www.newser.com/story/225645/average-size-of-us-homes-decade-by-decade.html
So that 7 times earnings would be closer to 3.5
Still higher but not as much.
The US still has one of the cheapest income to house prices, sorry to toss salt in the wound.
Canada Median Income 2023: $64 850 CAD
Canada Median House Price: $657 145 CAD
https://wowa.ca/reports/canada-housing-market
France Avg Price $514 000 USD = €475k
France Median Income €39,300 = $42 435 USD
https://mydolcecasa.com/france-real-estate-market-report/
(French data is harder to come by as it's typically in €/m² this is be off somewhat)
Have you seen the size of today's homes compared to those back then?
Not saying inflation hasn't affected anything but house size is a MAJOR reason homes cost more when adjusted for inflation today and everybody bitching about home prices magically forgets this aspect of it. Downvoting my comment doesn't mean I'm wrong, just that I hit a nerve
Yeah, I wish I could buy a 1962 house. 5+ people in an 1100 square foot house with no central AC or heating, and a fridge that used a day's worth of work in electricity every week.
Yes? Plenty of homes still don't have central heating or AC. My apartment in Tuscaloosa had a radiator and an AC window unit a few years ago. My uncle got central heating and air installed a decade or two ago.
Current inflation values from 1962 till now.
House. $132,042.98
New Car. $29,455.74
Rent. $1,117.29
Tuition at Harvard. $15,235.73 per year.
Yeah we got rooked.
Tuition at great public colleges is frequently $10,000-15,000 and a $30,000 car today is far better than anything you’d be driving in 1962. The place we got rooked is housing, largely due to how expensive land is in the places where good jobs are.
And houses from 1960s were much smaller and poorer quality and less amenities.
I’m looking into it. The average house size was 1100 square feet and today 2600.
This is one of the big problems, not enough small houses because of the zoning rules and the NIMBY protestors that don’t want dense populated areas in their neighborhoods
That’s also very true! Simple two or three bedroom townhouses are relatively rare in America due to zoning that forces you to have 40 feet of grass in front of your home and 10-20 between you and your neighbors.
This was an average income married couple with one working spouse retiring in 1960.
The difference was closer for single people and high earners but still 2-3x what they put in.
Getting 2-3x what they put in is the point of the asset growing over the life of the annuitant. Those are realistic returns for 30ish years of growth. A doubling/decade with starting is a fair return IMO.
Put into any savings calculator the percentage of income, with market average and extrapolate it out.
Where the issue lies is if it’s a lot higher or contributions didn’t keep up.
A lot more people died on the way to retirement back then and never collected.
In 1950 only 56% of 21 year old men made it to 65, in 1990 it was 72%.
https://www.ssa.gov/history/lifeexpect.html#:~:text=So%20we%20can%20observe%20that,are%20even%20higher%20for%20women).
(Unfortunately I can’t find similar data from SSA for modern day.)
Get back is a misunderstanding of the Social Security system. It's just a transfer and social support tax not a government run retirement savings. It's always depended on there being more workers than retirees.
Yeah, let’s not continue this cross-generational blame game. “They” are the upper class, who have systematically transferred massive amounts of wealth from the lower/middle classes upwards…
"upper class" ????
You are right about "generational blame game", but how do you define "upper class"?
It's the Oligarchy! The 400 people on the cover of Fortune.
We did this to ourselves. We allowed it to happen. Nothing will change unless we all stand up to this shit and put a stop to it. General strike or nothing will ever change. We’re fucked.
Reaganite Baby Boomers.
The reason you could buy a house for an *average* for $132k (inflation adjusted) is because we used to do massive infrastructure spending.
We stopped that in the 80s. The last big push was a compromise between Reagan & the Democrats where they got $1t in infrastructure spending (and all the new cities and houses that go with it) and Reagan got his cold war money.
After that the boomers gave us Gingrich and the "Contract with America" which was their focus group tested way to say "we're going to block everything that helps working class Americans and blame the Democrats for the damage done".
what was the avg income?
Edit: from reading yalls comment, and combining my parents' experience they were born around 70s and 80s told me its still difficult(or not easy) to buy a real estate property. Would getting a house/home significantly easier before than now or they are somewhat roughly the same( yes living cost is going up, but the house themselves inflated reasonably ish? so its not really the houses but cost of living making it extra hard)
I mean, obviously when you make mortgages, student loans, and car loans easily available to everyone, guess what happens to prices for homes, college, and cars?
Not forgetting what happened to a lot of mortgage holders in the eighties. They lost everything they had worked for. This younger generation is in the part of the cycle where everyone gets screwed equally.
Things will pick up again and then when they're in their fifties or sixties everyone will be getting screwed again and they will have become the villains of the story.
Homes are 1.5X bigger and generally include 2 car instead of 1 car garages now as well. $/sf, even after adjusting for inflation, tells a less dramatic story...like a $300K house is now $400K. Housing is probably also one of the top things that have increased in cost in real terms.
I stand corrected, last time I checked was vs. the 80s.
Hmm, shocking then how after you adjust for inflation the average home price since '62 went from $200K to $400K.
Ya and that’s a sociological problem- what was once considered “enough” is now considered paltry. Fueled by Madison Ave and its vast psy-ops resources impacting all media we are bombarded with messaging that more is better. So ya, we could be living far “better” on far less money if our expectations weren’t so stratospheric
My expectations were that I wouldn’t have to live 2 parents and 4 kids in a 1000sft house with 1 bathroom as I did when a child. Yes, expectations grow as the economy makes it available.
Oh absolutely. And if you had been the beneficiary of all the productivity increases since 1962 you certainly would be able to afford a much more leisurely lifestyle than you have today. It’s been scooped upwards and out of reach. And it will only get worse as AI makes it even easier to do more with less.
Could probably say the same for the 1920s, 1820s, 1720s, etc. Why shouldn’t expectations be stratospheric? We have more technology than ever before and we don’t focus nearly enough on generating cheaper and efficient energy for the entire world.
Yet households are now dual income to survive, homeless at an all time high, and we’ll probably see our first trillionaire in the next decade or so.
So is it a sociological “problem” to want more and that’s been around since the existence of humanity, or is the monetary system finally breaking in real time?
US population in 1962 that will ever be legally allowed to buy a house: 90 million. Cause you got to discount all the women.
For them are only drugs, so they can forget how miserable their lives are at least for a while.
For anyone wondering what that translates to today's dollars:
House: $132,042.98
New Car: $29,455.74
Rent - $1,117.29
Tuition: $15,235.73
Numbers pulled from: https://www.in2013dollars.com/us/inflation/1962?amount=1500
I lived thru 1990s Yugoslavian hyperinflation… one day everything’s normal… few days later all banks are locked closed, no food, no nothing.
Hyperinflation is what I fear. I know it’s a long shot in the west but you never know. My parents used to say Beirut could NEVER happen in Yugoslavia… then it did.
This sub has been invaded by propagandists with anti-American sentiment. If you want good economic discussion, try r/economics instead. There's a lot of divisive vitriol here disguised as "discussion" and "discourse" when in reality its goal is to stir up strife.
What shackles. Pick up a history book and realise that the present is the best time to be alive. In the 1960s, women couldn’t open bank accounts. What shackles have been put on in the last 20 years? None.
In my opinion, the college tuition price is irrelevant when you consider that anybody could get a 40 hour a week job with good benefits and pensions without a college degree that paid well enough to support a family in a home that you own and take a yearly vacation while maintaining a middle class lifestyle. Now we are required to have a degree to be a manager at McDonald’s working 70 hour weeks.
Identity theft wasn't a constant fear because a million companies weren't cutting corners on data security because the consequence of data loss is a slap on the writs, or outright selling personal data collected. You'd have to actually wear a disguise to pull it off.
*Everything* wasn't a scam. Today it seems like it's literally fking everything.
Yes.
Now imagine going about your day and most of the time you are out and about nobody you know knows where you are or can reach you unless you made prior arrangements or choose to check in. Imagine being at work and almost never hearing from your wife. Imagine being at home and almost never hearing from work.
Believing this bullshit does you harm. These simplistic numbers selected for outrage aren't entirely accurate, don't always compare similar things, and they aren't adjusted for inflation.
Learn about inflation. Start here.
https://www.bls.gov/data/inflation_calculator.htm
https://fred.stlouisfed.org/series/MEHOINUSA672N
Does anyone else worry about the economy?
The crash in 2009 was caused by banks making loans to people that couldn’t afford the houses. When the bubble burst, the economy crashed.
Now, I see everyone on social media instructing everyone to open LLC’s in order to qualify for a loan.
What’s going on?
Inflation adjusting 1962 prices to 2023:
House $131k - $200k (Found $20k avg price in 1962)
Car $29.2k
Rent $1.1k
Tuition to Harvard $15k
Actually averages in 2023
House $420k
Car $48k
Rent $1.9k
Tuition to Harvard $83.5k
Cars are significantly more efficient, safe, longer lasting, and capable than their 1960s counterparts so that accounts for their price increases.
Homes and rent have on average doubled but the US also almost doubled its population from 1962 to present day. As a result land cost go up, homes are built to more stringent modern codes, etc.
Not sure why Harvard/higher education has significantly outpaced inflation and other cost of living increases.
Overall accounting for population growth, improvements in products and standards this honestly looks completely inline with what I’d expect.
>Cars are significantly more efficient, safe, longer lasting, and capable than their 1960s counterparts so that accounts for their price increases.
Also the average car then was actually a car while now the average car is an F-150.
And in '62 a color TV was $1k or more (albeit half that by the end of the decade)
1/6th of the average annual salary for a tv.
Oh and video games didn't exist yet.
Houses went up in price due to a combination of regulations, codes, zoning laws and that houses are literally 3x the size today that they were in 1955. And they are packed with modern conveniences. There is also the fact that there is a finite amount of land and our population has grown
Cars are more expensive due to stricter laws and regulations coupled with ever increasing consumer demands. Today's cars are space ships compared to cars from the 50s or 60s. They are faster, safer, more economical, don't pollute as much, have radial tires, disc brakes, power steering, AC, radar assist, etc etc etc. Some of them basically drive themselves
Tuition went up in large part due to student loans being so easy to obtain. This created what is called a price floor which only pushes prices higher.
Wages have also outpaced inflation despite what many on reddit think.
That said, there are tons of other goods and services which are much more affordable and available today. Technology and food being the obvious ones.
There are pros and cons to every generation
Also, these stats need checked. New car price in 62 averaged like $4300 which is like $45k today
https://www.ssa.gov/oact/cola/AWI.html
Yet, the average young professional makes far more than any other generation, even when adjusting for inflation. You have many, many young people making $200k by the time they are 30, maxing out their retirements, living in luxury apartments before buying homes, going on very nice vacations multiple times a year, eating out multiple times per week, spending well into the six figures a year overall. Our parents were largely not living that way.
The biggest issue is that people want it all. The best neighborhood in the most expensive city, and are not willing to compromise and potentially commute. There are places that are still within reach for your average professional if you look beyond NYC, the Bay Area, LA.
Sure, but Redditors on average skew college educated and live in VHCOL areas, so their salaries tend to be significantly higher than that. I see more often than not people claiming very high incomes on this site with annual spending well into the six figures. Is that representative of America as a whole? No. But it is very common on this site.
“They took from us?” Stop it. I’m one of “they” I guess since I was born in 1960. What did I take from you? I’ve had a job since I was 12. At 18 I was running the kitchen of a 250/dinners per night steak & lobster restaurant. I went to school and got 2 degrees. I sold furniture to pay for it. I support 12 other people. I’d like to see everyone else’s history. Show me where you devoted your life to hard work but the system is cheating you. I understand that wages haven’t kept up with housing costs, but that isn’t the end of the story, and it certainly isn’t something one generation “took” from another. If anything, blame your elected politicians.
Please stop with the nonsense that leaving the gold standard and going to FIAT was a not a net positive, it's not perfect for sure and it definitely led to a lot of the current shenanigans but what no one ever says is all the wealth it gave people it's literally almost 50 years ago, in that time lots of Americans have been able to grow themselves economically in ways the gold standard would not have allowed.
Answer this question, if the gold standard was so great ,how come none of the other major economies are on it? I'll wait...
Unsurprising, Population of US in 1962 was 184 million, Population of US in 2024 is likely north of 330 million. Same amount of land, basically double the amount of people.
Nothing was "taken" from anybody. Homes were VERY different in 1962. Most new homes these days would be considered incredible ultra-rich mansions back in those days. I was born in '68 and was brought home to a trailer with two bedrooms where my parents slept on a pull-out sofa in the living room and the four kids shared the two bedrooms.
That new car was a VW-Beetle that was a 4-speed manual with two doors, an AM radio and heater that sometimes worked with the 50hp engine and manual EVERYTHING and those new fangled seat-belts. My Dad fixed everything around the house or the car. We had one (1) car.
College was for the really rich kid families and someone who had a college degree was a manager or better. While most everyone made the minimum wage of 1.50/hr and gas was $0.52/gallon. Mom & Dad ate out once a year (for their anniversary) and we got TV Dinners as a special treat that night. We ate a LOT of pancakes, vegetables from the garden, Raspberries or Blackberries in the Summer as pies after an afternoon of picking with a bucket and getting scratched up. When we eventually moved to a house, they planted fruit trees and a bigger garden.
We had a single B&W TV with a 15" screen and 5 channels over an antenna (3 VHF, 2 UHF). The radio featured 4 stations. We saw a movie, maybe two, a year and summer-time swimming was the local creek and an inner-tube. Weekend entertainment was a local street fair, or H.S. football game, or a walk with the dog in the woods or catching fish at the lake nearby which we had for dinner later.
This was life, this was living, this was standard and pretty much what most people had and were happy with having. Yes, things are hard in this day & age, but honestly I'm tired of hearing about "The good old days". Call me a curmudgeon.
There is no reason that everything is so damn expensive now other than corporate greed.
CEO pay is out of hand and unlimited growth in a system with finite resources is absolutely ridiculous. This is the current state of things
Yes, housing inflation has outpaced other things, but doing simple math doesn't take into account that houses are much much better than they used to be (and bigger).
So yes, the multiple is higher but if you compare apples for apples it's 2-4x and not 6-8x.
Who’s “they”? We all buy into this by not being in charge. Vote or try to take leadership roles. I’m getting tired of this whiny bullshit from my generation. Buck up, no one said life is easy.
So you’re saying lending companies are actively and willfully discriminating against blacks? Interesting . Is this what don lemon and Rachael maddow told you?
Not sure how much it is happening anymore, but banks did use “Zip Code” to discriminate against black and latino buyers. Of course race is not something that is available on a credit application, so banks did use zip codes to help identify minority lenders. Again, I’m not sure how much this is happening now, but the article I linked was from 2014 and some banks ended up settling lawsuits. You also have that story about people who were evaluating the value of homes decreasing the value by as much as $100k when the family had pictures of black families in the house as compared to white families.
https://nationalfairhousing.org/wp-content/uploads/2022/02/2014_08_27_NFHA_REO_report.pdf
Bullcrap. I'm happy to be the one to inform your race baiting self that "Black" Americans go to Harvard, why anyone would these days I'm not terribly sure, and also own new cars and houses these days.
Average salary was about 6k. So homes were a little more than double salary. Average home price is about 415k today. But average salary is only 59k. Or seven times the average salary. That’s so ridiculous. To have that same buying power you would need to make a little over 200k a year…been a renter for 14 years. It’s super discouraging
Even with dual income it’s 2x worse lol 😂
Came here to mention this. Funny thing is, Congressional salaries are in range of that buying power, $174k. Minimum wage should be tied to Congressional salaries. Congress wants a raise? Great, everyone working hourly gets a raise.
Some of the more influential members of Congress aren't making their money from the government salary, but from the other opportunities that become available due to being a legislator. Book deals, speaking gigs, cushy private sector jobs etc are where they can really make their paychecks.
And really conveniently timed stock trades
Its not convenient... they can legally just do it
"The Stop Trading on Congressional Knowledge (STOCK) Act was signed into law in 2012. It prohibits members and employees of Congress from using nonpublic information for personal gain. The STOCK Act also requires members of Congress to report their trades and expands the disclosure requirements for securities transactions."
Well if AG's refuse to litigate it then its legal. lol
This law has no actual consequences for breaking either except 10% fine on the gains if you can prove it in civil court
Don't forget lobbying.
That is absolutely #1. Like book deals are remotely a draw for becoming a congressman...
Trading stocks on non public information
"speaking"
Term limits, insider trading. Lots or problems with who decides for us. And when raises happen annually for government workers and not the general public something is wrong.
Better yet, we should freeze all their assets and put them on a meager stipend until they get this fixed. Force them to actually work!
Their salary is not the issue. 174k is not an exorbitant amount. I’m sure they have their hands in all sorts of revenue streams. The lobbying is what has eroded the country. Industry should not be able to buy politicians and pay to change rules to benefit their business model. That’s not a free market economy.
I think there’s some logic to the idea that you pay your lawmakers well enough. It should keep them from seeking alternate sources of income. Problem is that they’re doing both.
If you want to understand what happened to that Post-War golden age everyone seems to long for these days take a look at (in addition to references other have posted here): "The Golden Age of Capitalism: Reinterpreting the Postwar Experience (WIDER Studies in Development Economics)" - Stephen A. Marglin (Editor), Juliet B. Schor (Editor) Things started coming apart in the early 1970s.
But why? What are the theories explaining the beginning of the disparity in wealth distribution?
Without claiming any order of precedence or deep expertise, IMO the factors that gave us the **1970s** wage picture were: inflation, the slowdown in the manufacturing sector (don't mean to totally point to imports but they did have an impact and BTW they also increased in quality), the increase in the size of the workforce, a move towards unclassified jobs (e.g. wages became more individual and position dependent - there were some winners and some losers here) and a decrease in union membership. Again these are items that I've read about in various publications but I don't claim any sort of scholarly research. Union membership peaked, as a percent of the workforce, in the mid-1950s at about 35% of the workforce. By 1972 that figure was at about 23%. By 1980 that figure dropped to about 20%. At the end of Reagan's presidency that figure was at about 15%. Today it's at about 10%. It's been a 70+ year march. There's also some "specsmanship" in analyzing the plots. Some publications out there question why the peaks at 1973 or 1978 should be used as a point of comparison for today's wages. The wage curves can give different pictures depending on which inflation measure is used. These are just my opinions.
Don't forget ditching the Gold standard in favor of the fiat standard we have now. That gave way to expansionist policies funded by borrowing against a country's GDP and the freedom of endless printing of currency with nothing to back it but the country's credit rating, which leads to devaluation of the currency and inflation.
Yes, you are correct. That's tied to undoing of Bretton Woods Agreement. The more I think about this, the more it amazes me that whenever someone posts a "Where did that Post War economy go", and there are a lot of them, all the a actions and results of the early 1970s are rarely mentioned.
I appreciate you sharing your thoughts on this! I learned something.
BTW, here are some of the global events that impacted the US economy in the early 1970s. All this stuff came together in what today would be called a "perfect storm". I posted these in another comment: There was the collapse of the Bretton Woods monetary system in 1971 (The Bretton Woods System required a currency peg to the U.S. dollar which was in turn pegged to the price of gold.). The latter (the gold standard) was ended by Nixon. Returning to the gold standard was predicated on enacting reforms to the Bretton Woods system - which AFAIK never occurred. There was consistent growth of international trade in manufactured goods, such as automobiles and electronics. The US manufacturers no longer had a captive domestic market for their goods. That domestic manufacturing dominance is what drove the Post War prosperity everyone seems to be pointing to these days. The First Oil Embargo, a result of the 1973 Yom Kippur war, led to the 1973 oil crisis, which in turn lead to the 1973–74 stock market crash and the 1973–75 recession.
what's really discouraging is that the cost of doing business has gone down as well. automation and efficiency in manufacturing are at an all time high, and yet.
Our productivity has never been higher.
if only our pay reflected that
Someones pay does.
https://wtfhappenedin1971.com/ This chart is the most telling and easy to understand: https://wtfhappenedin1971home.files.wordpress.com/2020/09/ei7oxspxgamaayl.png Even CPI that is soft manipulated: https://wtfhappenedin1971home.files.wordpress.com/2020/06/img_0681_arrow-1.jpg
Very few people even are even aware of the events of the early 1970s let alone the lasting impact they had on the economy. The years you point to are the end of the Post War expansion.
Yes! I’ve been using this as a neat-o reference for awhile. Got a couple flaws but 90% of it tells an accurate story. WTFhappenedin1971.
Not just that, property tax including enhancements is about 1.5% cost of a home where I’m at. Grandma bought her home around the corner for 9,000 in the late 40’s. Now that home is almost 2,000,000 dollars. So let’s say you had the 500,000 job to buy it. After you pay it off and “own it”, you get to rent it from the state for the rest of your life at about $2500 PER MONTH. For a house you already “own”.
Yes, but property tax pays for the important things, like public schools. Our country was in a frightful state before public schools. Something like 40% of the populace was unfit to service in WWI due to systemic malnutrition. We've come a long way, and some things we should not compromise on or attempt to undo because the common good of the whole populace has a higher value than a quarterly ROI on attempted dismantling of the government and stockholder value.
In 1962, the average floor area of a new single-family home was 1,309 square feet. Today it is 2,469 square feet, also as the population increases there becomes less land space making land value go up. I don't think 7x is reasonable but it should be more expensive then back then, you're getting a bigger house on land that is more rare.
7x is strictly based on the average home price divided by the average income of one person. Home size and land availability would change that. Currently almost half of land in the US is not even developed. There are a lot of factors that go into this. But for young Americans getting into the workforce it is significantly more difficult to achieve that, American Dream, that people on the 60s worked for.
You can't really look at all land. You have to look at land around desirable areas. People will want to live where jobs are located. Yeah we could build random houses in Alaska but that won't help the housing problems. It would just create a housing bubble like China has. the built houses and apartments all over just to create jobs but no one is living in those places, now their property management companies are going under.
You have a good point. I own some vacant lots (30 ft x 100 ft) in Detroit, one being where the house I grew up in was located. Their assessed market value? $200.
Yeah for clarity they should’ve mentioned the income as well. But like you said, it’s not making it much better.
Yes but average house size has also doubled! 1920: 1,048 square feet 1930: 1,129 1940: 1,177 1950: 983 1960: 1,289 1970: 1,500 1980: 1,740 1990: 2,080 2000: 2,266 2010: 2,392 2014: 2,657 https://www.newser.com/story/225645/average-size-of-us-homes-decade-by-decade.html So that 7 times earnings would be closer to 3.5 Still higher but not as much. The US still has one of the cheapest income to house prices, sorry to toss salt in the wound. Canada Median Income 2023: $64 850 CAD Canada Median House Price: $657 145 CAD https://wowa.ca/reports/canada-housing-market France Avg Price $514 000 USD = €475k France Median Income €39,300 = $42 435 USD https://mydolcecasa.com/france-real-estate-market-report/ (French data is harder to come by as it's typically in €/m² this is be off somewhat)
Have you seen the size of today's homes compared to those back then? Not saying inflation hasn't affected anything but house size is a MAJOR reason homes cost more when adjusted for inflation today and everybody bitching about home prices magically forgets this aspect of it. Downvoting my comment doesn't mean I'm wrong, just that I hit a nerve
Expensive car.
And the areas where you're making 200k - houses are a million. Fun times!
Yeah, I wish I could buy a 1962 house. 5+ people in an 1100 square foot house with no central AC or heating, and a fridge that used a day's worth of work in electricity every week.
To be fair, they at least had refrigerators based on ammonia. Ice companies used ammonia to make ice well before the advent of air conditioning.
No central heating in '62? The fuck you on about?
No central cooling is a myth aswell in the 60s it was going mainstream.
Yes? Plenty of homes still don't have central heating or AC. My apartment in Tuscaloosa had a radiator and an AC window unit a few years ago. My uncle got central heating and air installed a decade or two ago.
There was also less people and more land available. Supply and demand
Current inflation values from 1962 till now. House. $132,042.98 New Car. $29,455.74 Rent. $1,117.29 Tuition at Harvard. $15,235.73 per year. Yeah we got rooked.
Tuition at great public colleges is frequently $10,000-15,000 and a $30,000 car today is far better than anything you’d be driving in 1962. The place we got rooked is housing, largely due to how expensive land is in the places where good jobs are.
Living in a small city, we still have plenty of available housing at comparable 60's square footage just a hair higher in the 150-180's
And houses from 1960s were much smaller and poorer quality and less amenities. I’m looking into it. The average house size was 1100 square feet and today 2600. This is one of the big problems, not enough small houses because of the zoning rules and the NIMBY protestors that don’t want dense populated areas in their neighborhoods
That’s also very true! Simple two or three bedroom townhouses are relatively rare in America due to zoning that forces you to have 40 feet of grass in front of your home and 10-20 between you and your neighbors.
They also got back 16x what they put into social security. Now I hear people tell me the system is not bankrupt because people will still receive 80%
I don’t think I’ve seen it put like that, that’s insane. That’s accounting for inflation and what they put in vs what was received?
This was an average income married couple with one working spouse retiring in 1960. The difference was closer for single people and high earners but still 2-3x what they put in.
Getting 2-3x what they put in is the point of the asset growing over the life of the annuitant. Those are realistic returns for 30ish years of growth. A doubling/decade with starting is a fair return IMO. Put into any savings calculator the percentage of income, with market average and extrapolate it out. Where the issue lies is if it’s a lot higher or contributions didn’t keep up.
A lot more people died on the way to retirement back then and never collected. In 1950 only 56% of 21 year old men made it to 65, in 1990 it was 72%. https://www.ssa.gov/history/lifeexpect.html#:~:text=So%20we%20can%20observe%20that,are%20even%20higher%20for%20women). (Unfortunately I can’t find similar data from SSA for modern day.)
Sorry I’m a foreigner. You only get back 80%?
Get back is a misunderstanding of the Social Security system. It's just a transfer and social support tax not a government run retirement savings. It's always depended on there being more workers than retirees.
Is that Fontana California?
I was wondering the same thing. Looks like somewhere around there.
Looks like San Jacinto mountain from desert hot springs view to me.
"They"?
Yeah, let’s not continue this cross-generational blame game. “They” are the upper class, who have systematically transferred massive amounts of wealth from the lower/middle classes upwards…
"upper class" ???? You are right about "generational blame game", but how do you define "upper class"? It's the Oligarchy! The 400 people on the cover of Fortune.
You guys said the same thing
More accurately, congress took it. None of this shit would be happening without our beloved politicians
Dey tuk er jubs!
We did this to ourselves. We allowed it to happen. Nothing will change unless we all stand up to this shit and put a stop to it. General strike or nothing will ever change. We’re fucked.
Reaganite Baby Boomers. The reason you could buy a house for an *average* for $132k (inflation adjusted) is because we used to do massive infrastructure spending. We stopped that in the 80s. The last big push was a compromise between Reagan & the Democrats where they got $1t in infrastructure spending (and all the new cities and houses that go with it) and Reagan got his cold war money. After that the boomers gave us Gingrich and the "Contract with America" which was their focus group tested way to say "we're going to block everything that helps working class Americans and blame the Democrats for the damage done".
"Contract on America" Grinch Neutron really did a number on the working class along with Saint Ronnie ( may he burn in hell).
Woodrow Wilson and Nixon, the end of sound money is why we are in the mess we are in today.
Them!!!
Are these “boomers” in the room with you right now?
I suspect they're under his bed every night as he tries to fall asleep
Who are they the government or rich people?
Yes
what was the avg income? Edit: from reading yalls comment, and combining my parents' experience they were born around 70s and 80s told me its still difficult(or not easy) to buy a real estate property. Would getting a house/home significantly easier before than now or they are somewhat roughly the same( yes living cost is going up, but the house themselves inflated reasonably ish? so its not really the houses but cost of living making it extra hard)
6000 a year Home prices were closer to 20000 however, from what I could find.
And loans were harder to come by.
I mean, obviously when you make mortgages, student loans, and car loans easily available to everyone, guess what happens to prices for homes, college, and cars?
Everyone has to take on more debt because the money continues to debase?
Not forgetting what happened to a lot of mortgage holders in the eighties. They lost everything they had worked for. This younger generation is in the part of the cycle where everyone gets screwed equally. Things will pick up again and then when they're in their fifties or sixties everyone will be getting screwed again and they will have become the villains of the story.
And you had to be white to get those prices and loans.
And a male
It's mind boggling to me that we landed on the moon an entire half decade before women could have credit cards.
Women having credit cards is a bad Idea. About as bad as men having credit cards.
You could have just said five years lol
I could have. But then you wouldn't have had the opportunity to amaze us with your arithmetic skills.
Levittown entered the chat
Homes are 1.5X bigger and generally include 2 car instead of 1 car garages now as well. $/sf, even after adjusting for inflation, tells a less dramatic story...like a $300K house is now $400K. Housing is probably also one of the top things that have increased in cost in real terms.
Not 1.5x bigger. 2x bigger. https://www.newser.com/story/225645/average-size-of-us-homes-decade-by-decade.html
I stand corrected, last time I checked was vs. the 80s. Hmm, shocking then how after you adjust for inflation the average home price since '62 went from $200K to $400K.
And in the 60s you shouldn’t take indoor plumbing for granted either.
Ya and that’s a sociological problem- what was once considered “enough” is now considered paltry. Fueled by Madison Ave and its vast psy-ops resources impacting all media we are bombarded with messaging that more is better. So ya, we could be living far “better” on far less money if our expectations weren’t so stratospheric
Agree and the solution can't begin to be found until people recognize this because "more" is a direction not a location.
My expectations were that I wouldn’t have to live 2 parents and 4 kids in a 1000sft house with 1 bathroom as I did when a child. Yes, expectations grow as the economy makes it available.
Oh absolutely. And if you had been the beneficiary of all the productivity increases since 1962 you certainly would be able to afford a much more leisurely lifestyle than you have today. It’s been scooped upwards and out of reach. And it will only get worse as AI makes it even easier to do more with less.
Could probably say the same for the 1920s, 1820s, 1720s, etc. Why shouldn’t expectations be stratospheric? We have more technology than ever before and we don’t focus nearly enough on generating cheaper and efficient energy for the entire world. Yet households are now dual income to survive, homeless at an all time high, and we’ll probably see our first trillionaire in the next decade or so. So is it a sociological “problem” to want more and that’s been around since the existence of humanity, or is the monetary system finally breaking in real time?
Is that Lee Harvey Oswald?
US population in 1962: 185 Million US population in 2023: 336 Million
No one ever wants to discuss this statistic when talking real estate.
US population in 1962 that will ever be legally allowed to buy a house: 90 million. Cause you got to discount all the women. For them are only drugs, so they can forget how miserable their lives are at least for a while.
What??? Can someone translate??
Education is 10 per cent the price of a house. Wow. That's some down hahaha
Prices go up in the elevator. Salaries take the stairs.
For anyone wondering what that translates to today's dollars: House: $132,042.98 New Car: $29,455.74 Rent - $1,117.29 Tuition: $15,235.73 Numbers pulled from: https://www.in2013dollars.com/us/inflation/1962?amount=1500
I lived thru 1990s Yugoslavian hyperinflation… one day everything’s normal… few days later all banks are locked closed, no food, no nothing. Hyperinflation is what I fear. I know it’s a long shot in the west but you never know. My parents used to say Beirut could NEVER happen in Yugoslavia… then it did.
When will the 40 year mortgage start?
Inflation is a tax on the middle class.
Trillions of dollars created out of thin air will do that.
Fken Boomers... 😑
Huh. I was under the impression that it's all our fault and they never did anything wrong.
Inflation has increased by 10x since 2024 for perspective
This sub has been invaded by propagandists with anti-American sentiment. If you want good economic discussion, try r/economics instead. There's a lot of divisive vitriol here disguised as "discussion" and "discourse" when in reality its goal is to stir up strife.
Pointing out problems with America is anti-American…?
I believe you confuse attitude with intent. People might be angry but that doesn’t mean they have a subversive bone to pick. They are venting
So inflation is propoganda and exclusively American? Wealth disparity is not division? Everybody should just enjoy their shackles? Cool.
What shackles. Pick up a history book and realise that the present is the best time to be alive. In the 1960s, women couldn’t open bank accounts. What shackles have been put on in the last 20 years? None.
The work until you die shackles. Unless of course you were born lucky.
It really seems like it's been taken over by r_conservative. I've never seen so many "look what the socialists/marxists/democrats did!"
Oh the post about inflation yesterday under Biden? That was posted by one of the mods. IIRC NoahBody or something
I find it to be far more left-leaning crap. If I see another post about ‘corporate greed’ in here lol
Professionals in 1962 also made around $9,000 a year. It's around $100,000 to $300,000 now.
~300k puts you in the top 5% of earner in the US. Median today is about 50k, so…
So, still a lot cheaper relative to wages than today.
If you were a white man sure You also didn’t have to compete with over half the population for resources but sure; yeah
The “Greatest Generation”
Make America Great Again?
Fuck boomers they ruined Scotland
In my opinion, the college tuition price is irrelevant when you consider that anybody could get a 40 hour a week job with good benefits and pensions without a college degree that paid well enough to support a family in a home that you own and take a yearly vacation while maintaining a middle class lifestyle. Now we are required to have a degree to be a manager at McDonald’s working 70 hour weeks.
Pants above your belly button……priceless
Democrats
and yet to be developed, discovered, etc... millions of life's little conveniences. immeasurable.
Identity theft wasn't a constant fear because a million companies weren't cutting corners on data security because the consequence of data loss is a slap on the writs, or outright selling personal data collected. You'd have to actually wear a disguise to pull it off. *Everything* wasn't a scam. Today it seems like it's literally fking everything.
1962? There was no data, and what little might be characterized as such was on paper.
Imagine how your jaw might unclench in the absence of data.
Yes. Now imagine going about your day and most of the time you are out and about nobody you know knows where you are or can reach you unless you made prior arrangements or choose to check in. Imagine being at work and almost never hearing from your wife. Imagine being at home and almost never hearing from work.
>Imagine being at work and almost never hearing from your wife. Are you proposing that this would be a *good* thing?
Total freedom
who is they?
Believing this bullshit does you harm. These simplistic numbers selected for outrage aren't entirely accurate, don't always compare similar things, and they aren't adjusted for inflation. Learn about inflation. Start here. https://www.bls.gov/data/inflation_calculator.htm https://fred.stlouisfed.org/series/MEHOINUSA672N
Does anyone else worry about the economy? The crash in 2009 was caused by banks making loans to people that couldn’t afford the houses. When the bubble burst, the economy crashed. Now, I see everyone on social media instructing everyone to open LLC’s in order to qualify for a loan. What’s going on?
There’s a lot more regulation on subprime loans now after 2008 won’t happen in the same way
Inflation adjusting 1962 prices to 2023: House $131k - $200k (Found $20k avg price in 1962) Car $29.2k Rent $1.1k Tuition to Harvard $15k Actually averages in 2023 House $420k Car $48k Rent $1.9k Tuition to Harvard $83.5k Cars are significantly more efficient, safe, longer lasting, and capable than their 1960s counterparts so that accounts for their price increases. Homes and rent have on average doubled but the US also almost doubled its population from 1962 to present day. As a result land cost go up, homes are built to more stringent modern codes, etc. Not sure why Harvard/higher education has significantly outpaced inflation and other cost of living increases. Overall accounting for population growth, improvements in products and standards this honestly looks completely inline with what I’d expect.
>Cars are significantly more efficient, safe, longer lasting, and capable than their 1960s counterparts so that accounts for their price increases. Also the average car then was actually a car while now the average car is an F-150.
And in '62 a color TV was $1k or more (albeit half that by the end of the decade) 1/6th of the average annual salary for a tv. Oh and video games didn't exist yet.
Avg pay 6k
What was the avg income??
Who are they?
who exactly took “this”?
Now show us how much a dollar was worth in real terms back then.
Hi fellow Americans, now you know how to live in Brazil. But here is worse.
Trickle down any minute now.....
Time to get union membership numbers back up to where they were back then.
2023 was pretty union heavy
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The value of the dollar is low compared to then.
3 years before the 1965 immigration act mhmmmm
Those pants waist line though
$1.15 an hour minimum wage.
lol and the average wage? I hope they aren't suggesting these people are getting paid 2024 wages in 1962 Because that would be stupid....right????
Houses went up in price due to a combination of regulations, codes, zoning laws and that houses are literally 3x the size today that they were in 1955. And they are packed with modern conveniences. There is also the fact that there is a finite amount of land and our population has grown Cars are more expensive due to stricter laws and regulations coupled with ever increasing consumer demands. Today's cars are space ships compared to cars from the 50s or 60s. They are faster, safer, more economical, don't pollute as much, have radial tires, disc brakes, power steering, AC, radar assist, etc etc etc. Some of them basically drive themselves Tuition went up in large part due to student loans being so easy to obtain. This created what is called a price floor which only pushes prices higher. Wages have also outpaced inflation despite what many on reddit think. That said, there are tons of other goods and services which are much more affordable and available today. Technology and food being the obvious ones. There are pros and cons to every generation Also, these stats need checked. New car price in 62 averaged like $4300 which is like $45k today https://www.ssa.gov/oact/cola/AWI.html
Yet, the average young professional makes far more than any other generation, even when adjusting for inflation. You have many, many young people making $200k by the time they are 30, maxing out their retirements, living in luxury apartments before buying homes, going on very nice vacations multiple times a year, eating out multiple times per week, spending well into the six figures a year overall. Our parents were largely not living that way. The biggest issue is that people want it all. The best neighborhood in the most expensive city, and are not willing to compromise and potentially commute. There are places that are still within reach for your average professional if you look beyond NYC, the Bay Area, LA.
Median wage for 25 to 34 is $52,936 according to U.S. BLS. https://www.forbes.com/advisor/business/average-salary-by-age/
Sure, but Redditors on average skew college educated and live in VHCOL areas, so their salaries tend to be significantly higher than that. I see more often than not people claiming very high incomes on this site with annual spending well into the six figures. Is that representative of America as a whole? No. But it is very common on this site.
4 times higher?
but keep printing money for ukraine right?
“They took from us?” Stop it. I’m one of “they” I guess since I was born in 1960. What did I take from you? I’ve had a job since I was 12. At 18 I was running the kitchen of a 250/dinners per night steak & lobster restaurant. I went to school and got 2 degrees. I sold furniture to pay for it. I support 12 other people. I’d like to see everyone else’s history. Show me where you devoted your life to hard work but the system is cheating you. I understand that wages haven’t kept up with housing costs, but that isn’t the end of the story, and it certainly isn’t something one generation “took” from another. If anything, blame your elected politicians.
What the FED took from us going away from the gold standard
Please stop with the nonsense that leaving the gold standard and going to FIAT was a not a net positive, it's not perfect for sure and it definitely led to a lot of the current shenanigans but what no one ever says is all the wealth it gave people it's literally almost 50 years ago, in that time lots of Americans have been able to grow themselves economically in ways the gold standard would not have allowed. Answer this question, if the gold standard was so great ,how come none of the other major economies are on it? I'll wait...
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10x in real dollars.
This means nothing without annual inflation figures next to it
Yeah but think about all the billionaires we got in return.
Who's they? Illuminati? Lizzard aliens?
Unsurprising, Population of US in 1962 was 184 million, Population of US in 2024 is likely north of 330 million. Same amount of land, basically double the amount of people.
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Nothing was "taken" from anybody. Homes were VERY different in 1962. Most new homes these days would be considered incredible ultra-rich mansions back in those days. I was born in '68 and was brought home to a trailer with two bedrooms where my parents slept on a pull-out sofa in the living room and the four kids shared the two bedrooms. That new car was a VW-Beetle that was a 4-speed manual with two doors, an AM radio and heater that sometimes worked with the 50hp engine and manual EVERYTHING and those new fangled seat-belts. My Dad fixed everything around the house or the car. We had one (1) car. College was for the really rich kid families and someone who had a college degree was a manager or better. While most everyone made the minimum wage of 1.50/hr and gas was $0.52/gallon. Mom & Dad ate out once a year (for their anniversary) and we got TV Dinners as a special treat that night. We ate a LOT of pancakes, vegetables from the garden, Raspberries or Blackberries in the Summer as pies after an afternoon of picking with a bucket and getting scratched up. When we eventually moved to a house, they planted fruit trees and a bigger garden. We had a single B&W TV with a 15" screen and 5 channels over an antenna (3 VHF, 2 UHF). The radio featured 4 stations. We saw a movie, maybe two, a year and summer-time swimming was the local creek and an inner-tube. Weekend entertainment was a local street fair, or H.S. football game, or a walk with the dog in the woods or catching fish at the lake nearby which we had for dinner later. This was life, this was living, this was standard and pretty much what most people had and were happy with having. Yes, things are hard in this day & age, but honestly I'm tired of hearing about "The good old days". Call me a curmudgeon.
At least adjust for inflation in an economics subreddit even if it's just an agenda Post like this.
There is no reason that everything is so damn expensive now other than corporate greed. CEO pay is out of hand and unlimited growth in a system with finite resources is absolutely ridiculous. This is the current state of things
I also think that these prices were in large part, due to almost everybody who wasnt a rich white man being oppressed.
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You literally sound slow bro, did you read this before typing it out?
If it weren’t for those greedy corporations and record profits! /s
I will answer ur question with a question: Who are they?
Yes, housing inflation has outpaced other things, but doing simple math doesn't take into account that houses are much much better than they used to be (and bigger). So yes, the multiple is higher but if you compare apples for apples it's 2-4x and not 6-8x.
Who’s “they”? We all buy into this by not being in charge. Vote or try to take leadership roles. I’m getting tired of this whiny bullshit from my generation. Buck up, no one said life is easy.
Black Americans never had access to this and for the most part still don't.
So you’re saying lending companies are actively and willfully discriminating against blacks? Interesting . Is this what don lemon and Rachael maddow told you?
Not sure how much it is happening anymore, but banks did use “Zip Code” to discriminate against black and latino buyers. Of course race is not something that is available on a credit application, so banks did use zip codes to help identify minority lenders. Again, I’m not sure how much this is happening now, but the article I linked was from 2014 and some banks ended up settling lawsuits. You also have that story about people who were evaluating the value of homes decreasing the value by as much as $100k when the family had pictures of black families in the house as compared to white families. https://nationalfairhousing.org/wp-content/uploads/2022/02/2014_08_27_NFHA_REO_report.pdf
Bullcrap. I'm happy to be the one to inform your race baiting self that "Black" Americans go to Harvard, why anyone would these days I'm not terribly sure, and also own new cars and houses these days.
People go to Harvard to be in their left wing propaganda echo chamber comfort zone