As I recently noted, despite the plethora of ‘Back in My Day…’ memes wistfully yearning for the days of supposedly lower prices, in fact most consumer items are much more affordable than they ever were.
A KFC box cost $1.35 in 1970: adjusting that price to 2025 dollars would make it $5 more than it actually costs – and today you get more in it. A 20-inch colour TV cost about $6000; today, a 75-inch, 8K smart TV costs just over half that. A basic family sedan cost over $50,000 in adjusted dollars: the price of a luxury car today.
And so it goes.
But what about housing? Here’s where affordability has definitely worsened. In Australia, housing affordability is lower even than it was at the peak of the 1980s recession. In the US, though, housing affordability is only slightly lower than during the late ’80s recession – but still higher than in 1980. And unlike Australia, it’s projected to improve dramatically in coming years. It’s also true that generational wealth is grossly disproportionately distributed: the Boomers own more wealth than all the other living generations put together.
Still, according to economist Norbert Michel, the meme that ‘A family could own a home, a car and send their kids to college, all on one income,’ is a fantasy. Today, far more Americans and Australians own their own homes than in 1950. And the homes are much bigger and twice as likely to have what were the perks of the very rich in 1950: central air conditioning, dishwashers and, of course, those massive smart TVs.
Today, Americans actually spend a smaller percentage of our money on food, clothing and housing than we used to, according to Bureau of Labor Statistics survey data.
“We have a lot more things and we don’t have to work as hard to get them,” says Michel. “Now it’s the norm to go out for dinner.”
Americans and Australians could only dream of flying on regular vacations. Nowadays, the climate-obsessed millennials travel overseas more than any other generation.
But not everything is more affordable. Besides housing, education has become much more expensive. In the US, adjusted tuition fees have more than tripled (so, an institution micro-managed by government – education – has spiralled in cost even while nearly everything else got cheaper). Even so, hardly anyone went to university in the ’50s and ’60s. Half of the workforce didn’t even finish high school. And unemployment in the 1980s was twice what it is today.
What has changed dramatically are expectations. In my youth, eating out was a rare treat. Today, on average Australians eat out at least once a week. Younger Australians even more often: at least two to three times a week. And that mega-expensive McMansion better come with a dishwasher and a games room, or they might as well be living in the Dark Ages.
So, why is the ‘we’ve never had it so bad’ meme so popular? Why were young people so incensed at the eminently sensible suggestion from economist Saul Eslake that they stop spending money on fripperies like smashed avo toast at their local cafe multiple days of the week and save instead?
It’s part of progressives’ campaign for socialism. They tell young people: Not only does capitalism foster greed, inequality, etc, but it doesn’t even deliver the goods […]
“The idea that nobody had to work hard, that everybody had job security,” replies Michel, “is absolutely ridiculous. My dad would’ve laughed at that and should have. Income is definitely higher, jobs are more plentiful, opportunities are more plentiful.”
So, sure, ‘in our day’, families could and did live on one income (though my mum went back to work as soon as I reached school age). And they lived in small houses, with no aircon and a piddly black-and-white TV, and holidays were driving somewhere in the family car.
Maybe, then, it’s less a case of a worse-off world than dramatically higher expectations.
