Flutterby™! : Are you better off today than you were 40 years ago? 2011-09-29 17:01:51.286236+00

Are you better off today than you were 40 years ago?

2011-09-29 17:01:51.286236+00 by Dan Lyke 7 comments

John Cassidy in the The New Yorker: Rational Irrationality: Poverty and Income in America: The Four Lost Decade

To me, what is really, really alarming is this: a typical American male who works full time and still has a job is earning almost exactly the same now as his counterpart was back in 1972, when Richard Nixon was in the White House, O. J. Simpson rushed a thousand yards for the Buffalo Bills, and Don McLean topped the charts with “American Pie.”

Via Rebecca's Pocket.

The biggest change is the percentage of net income spent on telecom/internet/media/cell-phone...

Forty years ago I was getting my drivers license and working for $1.65/hr. I lived in a two bedroom 1 bath 900 sq/ft house with my parents and my one brother and I ate well. Today I live in a house three times that size, five bedrooms, 1 and 1/2 baths, my wife and I are the parents and I have one grown son living at home, I make way, way, way much more money and I still eat well.

Anecdatally, I'm also doing better now than my father was then, but I'm definitely part of the "techno-elite" or whatever you want to call us, and he was blue collar. Then again, measured in constant dollars, a gallon of gas has doubled in price, as has a gallon of milk. I'd probably be scrimping like he had to if I had a wife and kid to feed, and there's no way I'll be able to afford to buy a 160 farm in four years. While I pay other people to do things for me (remodeling on the house, for example), he did such things himself. Overall, it feels to me as though the apples and oranges aren't all that different.

Comparison of individual lives between now and 40 years ago has relatively little meaning. Presumably one settles into a career, learns to handle money, fulfills needs, and acquires working capital. I think its far more appropriate to compare classes as they were then, and are now. The most obvious group is the minimum age earners. I had a summer job at the minimum wage in the mid '60s at $1.50/hr. Today it is $7.25/hr. Inflation adjusted the $1.50 is about $11.25 -- far more than the $7.25 of today. A ride on the NYC subway was $0.15 or 6 minutes worth of work. Today it is $2.50 or more than 20 minutes worth of work. A Kaiser roll was $0.03, now $0.65. A loaf of industrial sliced bread was $0.19. I don't know what bread costs today because I make my own, but I will bet it costs more than the rise in the minimum wage.

Today I live much better than I did when I was working my way through college -- yes you could do that with out any debt when you graduated if you hustled, even at a private school. But I am not so sure that the average kid getting out of school lives as well now as I did when I got out of school (and for me the draft.)

But people at the lower end of the economic ladder seem to be in far worse shape. The only thing that has really improved for them are their entertainment and communication equipment.

I have been writing and blogging for years that we're inexorably moving towards a bi-modal distribution of wealth in this country.

I agree, but I must add one caveat: It's not going to be the rich and the poor, it's going to be the connected and the hoi-polloi. When the dust settles anyone who made their money actually doing work is going to wind up losing everything, unless you can get an in with one of the many organizations in government. The kleptocracy will be complete.