4chan @lemmy.world

12mo ago

cost of living 86 years ago

154 comments

$1,731 in today's USD is $37,392. That new car would be $18k, rent was just over $500. There's places in the US where average rent is close to that, and I bet if we removed NYC and the Bay area the national average wouldn't be super far off.
Education and staples are where you're getting drilled on a daily basis. Harvard costs many times the average national income rather than being a fraction of it.
- Someone's overlooking the low low cost of buying a house back then. Essentially 2 years of salary. Housing where I live is now 20 years of median salary and about 19 years of average salary, and far more once you consider a loan.
  
  Didn't overlook it, I simply didn't comment on it. You also have to be careful about comparing where you personally live and the national average. Because the national average includes a lot of places that are shockingly poor.
  
  House sizes have also ballooned. The average home size in 1949 was ~900 sq ft, whereas a new home now is ~2500 sq ft. It was still cheaper, but those homes prices are for a lot less house than people are imagining.
- There’s places in the US where average rent is close to that, and I bet if we removed NYC and the Bay area the national average wouldn’t be super far off.
  Sorry but I think you're mistaken or several years out of date. I live in a midwestern city that overall has pretty reasonable cost of living. I also used to be a Property Manager for one of the bigger national companies. Our class B properties here were ~$800 for a 1 bedroom up until Covid, $1050 for a 2 bedroom. Now they're 1300 for a 1 bedroom and 1600 for a 2 bedroom. House prices around here have done the same thing. I think it's 800+ to be in a trailer park.
  
  Not to mention people saying, "just ignore every major metro in the US which happens to make up a majority of the population" in response to housing being expensive is ignoring that most people are dealing with housing being way too fucking expensive. Like sure if I go buy a plot of dirt with a house 2 hours from a major population center then of course it'll be affordable. Too bad there's 0 jobs out there and 0 reason to live in the sticks for most people.
  274 million people live in or near population centers, with only ~57 million living in rural areas. We can't just ignore that the places with most of the people are becoming unaffordable due to draconian zoning policy and lack of government push for more housing.
  
  Yeah the small town (less than 15k population) I live in is getting close to $1k/mo for a 2br apartment and just 5 years ago it was about $500/mo for a 2br apartment
  
  2br in Austin are around 1500 rn for decent ones. 775/mo per person is doable
  
  I bet if you looked at the average in your area, it'd be below $800. Now, whether any of those units would ever become available without the current occupant dying? That's another question entirely. I think COVID was an excuse for the entire economy to go stupid, but the utter lack of new housing everywhere has a lot to do with why costs are nuts. Especially in cities. Here on the east coast if you're in literally any city, you're paying out the ass. But the second you leave the city you can find decent places at decent prices still.
- I avoid the official income averager for just that reason. It skews to make things look like they aren't as bad as they really are.
  If you just look at the prices of houses and labor, you get a much different story.
  Back in 1960, minimum wage was $1.00/hour and the average house was $11,000.00. A high school grad could buy a house.
  Or, think of it this way. The 'offical' rate tells us that $1 million in 1960 would be $10 million today.
  In 1960, $1 million meant a Beverly Hills mansion, a half dozen luxury cars, and enough left over to buy a block of businesses.
  Today, $10 million will get you a condo in Manhattan.
  
  Certainly the effectiveness of a dollar has decreased, which is why this post is interesting. It includes several elements of normal life to contrast against that average income per person.
- The average income, according to a quick search, was $975. Comparing this to the current US median wage of $32k (and keep in mind the 1937 figure is arithmetic mean, the median was likely lower), incomes went up at a rate far beyond inflation as well. Not everything is affected equally. Though without living in the US and mostly guessing from prices here I'd guess many things on the list went up even more, like movie tickets.
  The same search also suggested that the 1937 average wage was 25% lower than the 1932 one, so it seems 1937 was actually a pretty shit year.
  
  We owe the last two generations a big thank you for the absurd cost of housing right now. They made it a major portion of their wealth, and they prevented new housing from being added. People my parents' age were able to buy a house while waiting tables and being teachers. You couldn't even afford a down payment on a house where I live with that kind of income.
- I'd like to smoke whatever you're smoking.
- Yeah and that 18k car in 1938 was a fucking death trap. Now u can get a newer car for price that that is 1000x safer.
  No one wants to pay for progress
  
  Not all of this is down to progress. Look at the cost of that college education. Look at the cost of a house. Manufacturing has also made vehicle production massively more efficient.

To be fair, this was in a recession during the great depression. The unemployment rate was 19% in June 1938.
- To add to this, a new car in 1938 was $860 according to this, but essential information was left out. What that actually converted to in today's money $18,709.33 which is a lot less than what I'm paying today but only by about half. I don't disagree with wanting to get back to this point or better. But the picture seems to assume the reader already knows this?
  
  More important, some quick googling says that the average per-capita income for 1938 was $515 (new york per-capita was $822, Mississippi was $205), which another search says was just under $11k. That car would cost an atomic family close to 2 years' wages.
  
  my Corolla was less than $18k so I don't even think that's unreasonable

Honestly big ups to the Milk industry for keeping milk inflation down relative to the rest.
but uh… curse them for their awful practices and ruining the environment etc etc
- Well..it's heavily subsidized, so you pay for it in taxes and then pay for it at the store.
  
  Jokes on you, I don’t pay taxes.

Average income of $1,731/yr is equivalent to $37,393 in present dollars. Current average wage is $63,795.
- Yes but a house would only cost $84,240 in todays dollars. It's all relative.
  
  Which begs the question, is $1,731 really equivalent to $37,393? Because it sure sounds like we aren't using the right metric for that conversion.
  
  I live in a house built before the year in question and paid not too much more than that price for it (~$95,000) in 2018. For reference the house is in a working class suburb of a small city in the Midwest, so it's not a housing hotspot but not out in the middle of nowhere.
  There's no insulation in the exterior walls, I had to rebuild the dangerously steep basement stairs, and I've spent about five grand on asbestos abatement so far with more in the near future. Those are just problems with the original construction, I'm excluding issues caused by age or mistakes made by previous owners.
  Cheap housing from that era doesn't meet even the most basic safety related modern building codes (to say nothing of energy or environmental codes). Modern housing is more expensive because cheaper housing is a goddamned death trap.
  
  A house may have been more affordable, but food was fucking expensive. A gallon of milk was more than $10 in today's dollars.
- I wonder what median wage is like. Average, which I assume is mean, would be greatly skewed by high wage earners since the lowest you can go is zero (if that even counts as a wage), but the highest you can go is much higher and far more people are closer to the lowest wage than the top.
  
  Income inequality has risen above 1938 levels after a huge decrease after WW2.
- Unwittingly you have just pointed that the officail Inflation Rate indices that are used to calculate the equivalent amount in todays' money are not only complete total bollocks but consitently understate the real inflation, which is why those maths produce an amount today for that past salary which is according to those indices worth twice as much and yet buys way, way less that the supposedly equivalent amount bavk then.
  If the Inflation figures are telling us two amounts at different points in time are worth the same yet the present day amount buys a lot less (i.e. is worth less when you try and buy goods and services with it) that means those inflation metrics have been understating inflation.
  I'll even give you the reason why: the lower the official inflation figures, the higher the official GDP, because in its calculation those inflation figures are used to deflate the nominal GDP (i.e. the dollar amount) to create a supposedly inflation-free GDP that can be compared with other years. If the official inflation understates real inflation politicians get to claim as GDP growth something that's just the Matematical outcome of that inflation figure being lower than reality.
  
  Sure vast conspiracy across decades of civil servants is one option, or inflation as an overall number is an average and some things increase in price faster while some go slower.
  You can always look at a price as a percentage of average income if that's what you're interested in, nobody is hiding these numbers.

Funny they don't also post the median salary.
- The median was about $1200, or about $26,000 today.
  https://www2.census.gov/library/publications/decennial/1940/population-families/41272167ch7.pdf
  
  They do post the average income under living expenses for some reason, at about 1700 dollars in the picture
- This is the one that always gets me. When we're specifically talking about the middle class, median means a whole lot more than the mean of the national wage.
- Im betting most people dont know what you mean because they see average income and dont know what the difference would be
  
  Are people not taught mean, median, and mode anymore?

Felt like nerding out on this.
You can use the rule of 72 to figure compounding inflation (or interest) in your head. Just take 72 divided by your inflation rate and you get how long it takes for a price to double. Example: Assuming 3% yearly inflation , It would take 72/3 or 24 years for the price to double. Then, just double the starting price for each 24 year period. So assuming a car was 1,000 in 1950, it would cost about 2,000 in 1975, 4,000 in 2000, and 8,000 in 2025 if inflation for that product was exactly 3% yearly.
A couple percentage points difference makes a huge difference in how long it takes for a price (or investment to grow). The stock market has an average yearly interest rate of like 8%. That translates into a investment portfolio doubling every 9 years instead of the 24 years it would be for 3%. So 45 years in the market would turn an initial 1k investment into a ~$32k investment.
Of course, you could also use an online compound interest calculator(simple one here), but I like to know how to do the calculation myself personally.
- But then you get greedflation periods (maybe never before like the past four years?) where you see some brands raising their car prices 50% since 2020 (inflation over that period an already high 21%).
  
  Yep it doesn't stay at the same rate. Best you can do is base it on the average. 3-4% is probably the most realistic average to go with for a rule of thumb.
- Yeah, that tracks with my experience, but I didn't realize there was a reasonable easy to remember rule of thumb. I figured out last year that the value of the dollar had reached 50% of what it was when I started working. That was 25 years at the time.
  That realization really helped me re-ground my price expectations.
- What's the explanation for the 72 magic number?
  
  Maths :). I don't know well enough to explain but my good friend wikipedia has an explanation.

As pissed as I am about the current state of afairs, violent revolutions tend to turn into a total shit show real quick.
- Revolutions are a response to material conditions. Typically it was already a shit show, then the revolution happens and it gets even shitter very briefly, before working itself out over time.
  
  Usually over pretty long time. Hard to tell if nothing except for revolution would work (and it's different in each case, I guess)
- It would be kinda funny if, in like two hundred years, historians refered to this time period as "The Total Shit Show."
  
  It would be good if there we historians at that time. I'm turning a bit pessimistic as of lately 😞
  
  Most wellbeing metrics are better than almost any other time in history, including lifespan and hunger. For history, we’re living in a golden age. It’s just a bit rough for us younger people because I believe we’re doing worse than our parents, and we are the first generation to experience that.
- Unlike the current state of affairs?

Damn, that's a lot of sugar. Everything else seems to be sold in "reasonable" amounts, why is the sugar so out of proportion?
- Poundful of sugar helps the medicine go down
- I'm assuming that's the wholesale price. I can't imagine a single family buying 10 lbs at a time.
  
  I can, given that most families did a hell of a lot more baking/cooking themselves instead of going to restaurants, buying processed food, etc.
  Edit: plus, I forgot about making their own preserves and canning food, both of which require a fair bit of sugar, too.

TBH food and postage appear to have been hella expensive.
- Kurt Vonnegut's book 'Mother Night' takes place around 1965. There's a line where a shut in almost swoons when strawberries come back in season. Today you can get fresh fruit any month.
  
  Even when I was a kid fruit was seasonal. Strawberries, blueberries, watermelon, pineapple, kiwi, etc. were all seasonal.
  I remember being excited when my favorites started showing up in stores through the year. Watermelon was the big one and seedless wasn't the normal, it was great.
  
  You can't get good strawberries out of season.
  
  My mom still talks fondly of the first time she ever saw a mango in the supermarket. Nowadays I literally don't even know when mango season is.
  
  You can get fruit out of season, but they're definitely not fresh.

I love the fact that guiotines have become a part of normal conversation.
#KILLTHEBILLIONAIRECLASS. #HEDGEFUNDSSHOUKDBEILLEGAL #DERIVATIVESCANTBEWORTHMOREASTHEORIGINAL
- Thanks Trevor!
  
  Have you ever been to church "on weeeeed", man?

yeah guillotine the whole economy fuck it
- Nuke the fuckin world. That's my motto.

How about degrowth?
- Just build more houses.
  
  We need so many more reasonable houses with strong public transit and micro mobility access
  
  I wonder what is total houses / total population ratio

We need a cool guide with values adjusted for inflation.
- Be the change you wish to see in the world !coolguides@lemmy.ca

i don’t know wages then, so this doesn’t tell me anything except hey, prices go up.
- You can tell by the average income (2nd line), it being almost 50% of the price of a new house says pleeenty
  
  Min wage was 25 cents an hour, about $500 a year.
  
  Homes were much smaller then and homeownership rates were lower.
  Avg Size of homes: 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
  Historical Homeownership Rate in the United States: 1940: 43.6% 2023: 66%
- It says average salary
  
  ok thx
- It easily tells you that an average salary could buy about half of a house or two cars, per year.
  An important thing to note, though, was that single income families were commonplace. Nowadays most (traditional in-tact) families have both parents providing at least one income stream. Worth mentioning that the millenials that are settling down and starting families, even though doing so later, are also sticking together at a much better rate than our boomer parents. Millenials have a significantly lower divorce rate, especially millenials with kids. Partly because…we can’t afford it lol. We could totally hate our spouses but there’s no way we’re both affording a home suitable for our kids to be spending a night at.
  There’s also a lot of other factors than having a higher percentage of people active in the workforce. Some have a significant impact on the costs of these things, but even with that in mind, the shift in ratios is huge.
  That said, we can compare modern median individual income to 1938 individual income. In my state of Massachusetts, median income is about $40k.
  We can then compare the price:income ratio of modern medians to the 1938 prices/values.
  New house in 1938 was 2.25. Median home value in MA is $570k, modern ratio is 14.25. Counterpoint is that average homes (and lots) are larger, and there’s less undeveloped land. 1938 was scantly over a couple dozen years after the US finally manifested its destiny and claimed the lower 48. There’s no way in hell that accounts for a nearly 7x jump in the ratio, but it is a component.
  1938 car ratio 0.49. 2023 average car price $66k, ratio 1.65. Counterpoint, cars are car more technologically complex, and infinitely better engineered. Aside from the creature comforts, you’re still comparing almost a century of development in safety, aerodynamics, and efficiency. Does that mean the ratio should increase more than 3x? Doubtful.
  1938 rent, 0.015. Median 1BR in MA is $2500, ratio 0.062. Counterpoints are roughly the same as homes, since rental properties are, essentially, homes.
  1938 year at Harvard, 0.24. 2021 (before aid) a year (incl books and room and board), $83538. Ratio 2.08. I guess you could say there’s a lot more to learn? I’m not seeing how that gets to be an 8x relative jump though.

https://i.imgur.com/Tupqjrv.png
- Get outta here with yer "math"! We want coins back, damnit! That's all!
- Those houses are cheap as hell. I guess they are built cheaply as well.

Chasing lower prices? How about higher incomes?
NYT: "Per capita income in 1938; Average Figure Was $5l5, Compared With $679 in Boom Year and $376 in 1933 NEW YORK STATE HIGHEST Yearly Earnings Show a Mean of $822, With Mississippi Lowest With $205"

We could use submarines too

Tuition to Harvard...nice 😏
- 🌿
- Harvard casually nailing the cost of higher education....

Bolsheviks

holy shit that the price of a car is way more than the rent cost. Nowadays a car is 4-5x a months rent the price on the chart is lile 20x

What can we do to shrink our economy and progress by 90 years?
What an asinine post.
You guys act like that system was even good back then because things were "cheaper".
Want to affect prices? Then literally stop buying shit.
No Nikes no coke no mcds no chips. They charge you as much as they do because U LET THEM!
- Agreed with the first part of your post, but you completely loose me at "stop buying shit" being a solution.
  Any meaningful massive change requires systemic and legislative frameworks that companies, political organizations and government entities have to abide by - and this framework basically modulates popular behavior. Ex: what's available for purchase (ex: only things meeting certain profit margins or environmental criteria), who you advertise to and what you can advertise (ex: not to children, not for medication, etc), etc etc
  If we expect and hope people to "wake up" and change their behaviour en masse, it's simply never going to happen, and the large corporations and lobbies keep rubbing their hands, happy we're guilt tripping each other rather than vote in people with clear legislative and regulatory agendas focused on actual human well-being...
  Sry for the rant
  
  It's like an engineer imagined a perfectly spherical consumer: it makes only rational decisions and, once that decision is complete, it retreats into a hermetically sealed box to wait until it is time to make the next perfectly rational decision.
  
  Yeah, I've totally stopped buying houses because fuck them builders (sure, its not because I can afford like a few square meters of a house at best)
- No Nikes no coke no mcds no chips.
  I've been doing this for years and years. Economy still broken.
  
  Do it harder!

How much was the average income ?
- It literally says that on the picture
- Line two
  
  Tldr
  
  Good ol' days! I feel for millennial and Gen Z but seriously worried about Gen Alpha. One of the important skills for them to survive would be stealing.

154 comments