How has the buying power of working-class American individuals changed over 50 years?

[AlongCameJones]

Individual prosperity is measured by how much material things one individual can acquire and upkeep vs one's individual net earnings. I exclude prosperity by independent wealth because most of us are not in the wills of rich uncles nor super-lotto winners. It's true many Americans acquire/have acquired/will acquire money and property through family inheritance but many also don't. We just can't always wait for people to die and be handed something. The majority of American adults have to work to achieve some level of prosperity. The lower the percentage for the cost/price of things vs our take-home pay PLUS any employment benefits, the greater our buying power.

Let's consider now vs 25 years ago vs 50 years ago. 2021 vs 1996 vs 1971

Let's also consider for each time in history:

1. average annual NET income for one individual W-2 American employee who works for a living based on a 40-hour work week
2. average price for new-construction fenced 3-br suburban subdivision home with 2-car garage and complete landscaping
3. average price for new automobile (excludes exclusive brands like Ferrari, Mercedes-Benz, Maserati, Jaguar and Roll-Royce)
4. average annual food/grocery bill (store-bought groceries, eating-out bills)
5. average annual clothing bill (includes shoes, hats, gloves, etc.)
6. average annual out-of-pocket dental costs
7. average annual out-of-pocket healthcare costs
8. average annual cost to keep large pet dog (feed, treats, paid training, vet bills, leashes, toys, grooming, pest control)*
9. average annual out-of-pocket utility bill costs (TV, telephone, Internet, power, gas, trash, water, sewer)
10. average annual automobile upkeep costs (gas, out-of-pocket repairs, out-of-pocket car rental for repairs, towing, roadside emergency services, DMV fees, insurance, auto detailing)
11. average annual property insurance costs
12. average annual costs of entertainment: TV, radio, books, newspapers, magazines, recorded music, Internet, going to movies, home video, shows in performing arts, theater, opera, zoos, museums, amusement parks, watching, spectator sports, carnivals, circuses, concerts, romantic dating costs, hosting parties, having guests for company, etc.
13. average annual property taxes
14. average annual home upkeep costs (repairs, yard care, cleaning costs)
15. average annual clothing/linens upkeep costs (paid laundry services, dry cleaning, laundry supplies)
16. average price of a complete set furniture, both indoor and outdoor, and appliances for a 3-br home
17. average price for complete set of home maintenance tools and equipment: includes, lawn mower, wheelbarrow, dolly, common hand tools, garden tools, sheds, common power tools, weed-eater, garden sprayer, lawn spreader
18. average annual costs of recreation: includes camping, hobbies, fishing, photography, hunting, bicycling, playing and learning music non-professionally, fitness, boating, playing leisure sports, vacationing, etc.
19. average annual cost of personal security: includes guns, ammunition, security dog training, alarms, paid security services, safes, deadbolts, locks and chains

*I've included one pet dog because that's always been a common household fixture in America.

It's true the price/cost of virtually everything has gone up over the years but has our take-home pay kept pace with rising costs of things in general?

In general, are/were working American individuals on national average more prosperous now, in 1996 or in 1971?

American = legal citizen of the United States

 

[AlongCameJones]

My opinion is Americans now may have to give more in terms of hours worked and/or investing in higher education now than historically.


I quickly dug up some numbers off Google as follows:


1971 median new home price: $25,200
1971 median annual income: $10,290
1971 average new car price: $3,742
number of median annual incomes to cover combined average car and median new home price: 2.81


1996 average new home price: $118,200
1996 average income: $36,300
1996 average new car price:$16,300
number of average annual incomes to cover combined average car and average new home price: 3.71


2021 median new home price: $374,400
2021 median annual income: $66,004
2021 average new car price: $40,000
number of median annual incomes to cover combined average car and median new home price: 6.28


You can clearly see that working America's buying power for the traditional two big-spend items has significantly shrunk over the past 50 years. You have to work more than double 1971 years on the job now to cover the combined cash price of a new house and automobile. Having to work more to achieve the same thing is a reduction in buying power.


Bottom Line: take-home pay has not kept up with inflation

 

[Hodrod]

When I was in high school in the 60's my family of 5 would bring in hamburger's for $1.00 on Tuesdays nights.....20 cents each.....Oh the Good Old Days.....

 

[AlongCameJones]

When I was in high school in the 60's my family of 5 would bring in hamburger's for $1.00 on Tuesdays nights.....20 cents each.....Oh the Good Old Days.....

Back then, American working class had more personal time to go hunting, camp, fish, hike with the dog in the woods, or whatever and much less time on the boss's clock was needed to achieve a serviceable car or pickup truck and human shelter. We should be able to play as hard as we work. Our sole existence on earth should not be to make our employers rich, pay for his new Corvette, bass boat or corporate jet so only he can go play.

 

[swampratt]

Oil boom money was rolling and people would trade up cars every 2 years and thought they needed larger and larger homes.

The people with nicest cars and houses usually could not afford to fix a broken air conditioner.. but credit cards would save the day.

Fools and their money will soon be parted.
I always bought used.
First house for me was bought in 1990 for 22,500 and sold it in 1999 for an in pocket of 47,500.
The new people paid 67,500.
I just bought another used house last year $10,000
Turned down one really good deal for $7,500 in Shawnee and let my friends kid buy it.
He was looking for quite some time.

There are deals out there but you can't be picky.

People today want nice shiny things and that will cost ya.

I live well below my means and have time to hunt and fish.
Never had a new car and newest one was 5 years old and I paid 6K for it cash.
I will never pay that much for a car again unless it is to flip it.

I will add taxes and insurance are ridiculous and keep going up.
At least in this county.

 

[cowadle]

easy credit has changed the face of consumption.

 

[retrieverman]

This is an interesting topic.

I look at people all the time that I know where they work and about what they make and wonder how they have the things they do (big houses, new high end vehicles, etc) and do the things they do (eat out almost every meal, take big trips, travel all over with their kid’s year around sports teams, etc), and I’ve concluded they must be in debt up to their eyebrows. Yes, some of them could have family money or trust funds, but I don’t think that’s the majority.

 

[AlongCameJones]

If you buy a car too new, it's too pricey and modern vehicles are loaded with way too much geeky crap that have not squat to do with getting to Walmart to pick up milk and eggs but they are under full automaker warranty. If the car is too old, it will cost more to upkeep and might be hard to get parts for. The last time I checked, a new clutch can cost $700 to put in and a new automatic transmission might be a couple grand. Same with a house, brand new, high price but under extended warranty. Too old, needs new roof, paint, furnace, water heater, plumbing, fence, sod, wiring, dry wall, carpet, woodwork and all that jazz. One has to be careful not to buy too new or too old.

 

[RickN]

I know I can not buy as many guns now as when I was single. Does that count?

 

[JR777]

Don't forget to factor in shrinkflation and loss of overall quality.