You may wonder why it seems so much more difficult to make ends meet these days than it was in previous decades. Well, in short, because it is. Although earnings have risen they haven’t kept up with the cost of everyday necessities.
If you have been anywhere near a television, radio, computer, or newspaper in the last couple of months you know that there is a housing crisis in California, and every other metropolitan area of the United States, in fact. According to a CNBC report home prices have rises 73% (adjusted for inflation) from 1960 to 2000. Even rent has gone up, 43% (adjusted for inflation) from 1960 to 2000.
Let’s look at some household items you might need now as then.
Price of a gallon of milk – 1960 $.49; 2019 $3.50
Loaf of bread – 1960 $.22; 2019 $5.00 – in 1960’s dollars, adjusted for inflation, that price of bread would be $1.89
$20 worth of groceries – 1960 $20.00; 2019 $171.74
Gallon of gas – 1960 $.31; 2019 $2.65
A new car – 1960 $2,752.00; 2019 $36,843.00 – in 1960’s dollars, adjusted for inflation, that price of that car would be $23,642.00
Single Family House – 1960 $11,900.00; 2019 $250,000.00 – in 1960’s dollars, adjusted for inflation, that price of a single family home would be $102,231.00
Median Household wage – 1961 $5,700.00; 2019 $63,688.00
More Ends to Make Meet
While it may seem as if we are better off now wage-wise the above comparisons may not illuminate our wage stagnation in this country of the last 15 years. Not only are normal household expenses more expensive, there are just more of them! Television was three networks and a couple of local channels if you had the reception to get them, and in black and white for most of the 60s, but it was free.
Four out of five households on average had a telephone line in their house. Emphasis on “a”. There was no such thing as having multiple phones, or one for each family member including children. Compare that to your cell phone service now – one (expensive) phone for each family member, which you are probably financing, and several hundred dollars a month for the service.
Internet… ah, what was that? Of course, there wasn’t any back then. But can you imagine not having access to WiFi now?
More Americans were covered by health insurance through their job back then than now, so less out of pocket for premiums and deductibles.
Most of us didn’t have credit card debt. Sure, in the 1950s some people had a Diner’s Club card, which was impressive back then. But folks did not carry debt month over month. It wasn’t until the 1970s (see our article on Credit Bureaus for a brief history of credit) that carrying over debt became common.
Retirement was probably funded, at least in part, by your job. Now you are lucky to have an employer matched 401(k) contribution. We Americans are now working longer into our retirement than ever before.
Feeling the Pinch
So, if you have been feeling the pinch and feeling bad and thinking it was you, don’t. We as a society are all in the same boat, higher cost of living, shrinking wages, and increasing number of necessities, and some ‘wants’ that look like necessities. There may be not much to be done about these circumstances but you can do something that may be considered “old fashioned” but very ‘60s – budget. Living within your means may not be as fun as getting those cool shoes by charging them, but it can provide you with peace of mind over the long haul.