U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 09-18-2017, 02:49 AM
 
983 posts, read 514,449 times
Reputation: 1580

Advertisements

I have been using an inflation calculator and it really amazes me how different things were in comparison to now. But is it really just like it shows in its equivalent? According one, living in 1970 $10,000 would cost $62,795.05 in 2016.

Is that right? If you lived in 1970 and were making $10K a year you would be looking at living solidly middle class with a decent home, car, family etc.?
Reply With Quote Quick reply to this message

 
Old 09-18-2017, 02:57 AM
 
71,977 posts, read 72,020,102 times
Reputation: 49554
depends where you live . you may need 2x to 3x that in nyc vs phoenix or atlanta .
there is no actual definition of middle class ,especially what makes up a middle class lifestyle . so what you expect as a lifestyle varies too . middle class income and middle class life style may have nothing to do with each other .

in some areas middle class income is defined as allowing you to buy a home with 2-1/2 times yearly income

you can never house a family here in ny with what that would buy . you may get a studio apartment that houses 1 in a decent area if you are in manhattan .

those between 60k and 250k consider themselves middle class here in ny . but they buy very different lifestyles .

you are asking how long should a rope be?
----------------------------------------------------------------------

as the ny times said in their study :

There is no single, formal definition of class status in this country.

Statisticians and demographers all use slightly different methods to divvy up the great American whole into quintiles and median ranges. Complicating things, most people like to think of themselves as middle class. It feels good, after all, and more egalitarian than proclaiming yourself to be rich or poor. A $70,000 annual income is middle class for a family of four, according to the median response in a recent Pew

Research Center survey, and yet people at a wide range of income levels, including those making less than $30,000 and more than $100,000 a year, said they, too, belonged to the middle.

By one measure, in cities like Houston or Phoenix — places considered by statisticians to be more typical of average United States incomes than New York — a solidly middle-class life can be had for wages that fall between $33,000 and $100,000 a year.

By the same formula — measuring by who sits in the middle of the income spectrum — Manhattan’s middle class exists somewhere between $45,000 and $134,000.

But if you are defining middle class by lifestyle, to accommodate the cost of living in Manhattan, that salary would have to fall between $80,000 and $235,000. This means someone making $70,000 a year in other parts of the country would need to make $166,000 in Manhattan to enjoy the same purchasing power.

Using the rule of thumb that buyers should expect to spend two and a half times their annual salary on a home purchase, the properties in Manhattan that could be said to be middle class would run between $200,000 and $588,000.

On the low end, the pickings are slim. The least expensive properties are mostly uptown, in neighborhoods like Yorkville, Washington Heights and Inwood. The most pleasing options in this range, however, are one-bedroom apartments not designed for children or families.

It is not surprising, then, that a family of four with an annual income of $68,700 or less qualifies to apply for the New York City Housing Authority’s public housing.

Last edited by mathjak107; 09-18-2017 at 03:51 AM..
Reply With Quote Quick reply to this message
 
Old 09-18-2017, 09:10 AM
 
Location: WA
5,399 posts, read 21,428,666 times
Reputation: 5914
The Inflation measurement tells you in very general terms how much the currency was worth from a consumer point of view.

Prices and salaries vary greatly from one part of the country to another so comparisons are not all valid.

I am currently selling my mother's old house and it will sell very quickly for 225,000 but was purchased in 1958 for 16,000. I made 5,200 a year in 1968 and managed a modest existence for a family of three.
Reply With Quote Quick reply to this message
 
Old 09-18-2017, 12:56 PM
 
7,982 posts, read 5,070,972 times
Reputation: 13648
Class-identity is at least as much social and cultural, as economic. Hyperinflation in banana-republics can readily impoverish the “middle class”, but even if they’ve lost their savings and end up resorting to soup-kitchens, they have nevertheless retained their class-identity, and aren’t to be confused with the working-classes, who might now easily out-earn them.

As for inflation and purchasing-power, my personal feeling errs in the opposite direction from that of the OP. My daft and cartoonish impression is of a late 1960s, before rampant inflation, where sandwiches at lunch-counters cost a nickel, where the corner barbershop will do a full cut-and-shave for $0.25, and Henry Ford sells his cars starting at $500. In reality, I’m off by 40 years. In reality, my favorite car of the early 1970s – the Datsun 240Z – sold for something like $3000 or $3500 in 1970. Leafing the other day through a National Geographic from 1964, I found ads for tours in Europe (airfare, hotel, bus, etc.), aimed at Americans… for $1000 - $2000. $2000, 50 years ago! Such a tour might be – oh, not much more than $2000 today, depending on level of opulence.

What’s gotten so expensive is professional services: chiefly, healthcare and higher education. But stuff – quotidian, retail stuff – be it cars or corn or cardboard – has risen in price LESS than the quoted factor of 7 or so. The typical example is a color-TV… a modest one in 1980 cost $300… which is more than it costs today! And never mind the enormous leap in picture-quality and features.

What about houses? Totally situational. In the small-town Midwest, prices have stagnated since the 1990s.

Then there’s the leap in wages. Yes, wages! I know, I know, wage stagnation and all that. But actually, no, I don’t. I’m not talking about steel-workers and cab-drivers. I’m talking about tenured engineering-professors at Caltech, or executives at Lockheed. Ben Rich, the celebrated second director of Lockheed Skunkworks, wrote proudly about how he earned $60,000/year in the mid 1970s – already 5 years after the OP’s example. Now Ben’s counterpart can earn $600K – a far higher gain than the nominal rate of inflation. We have to remember, that not everyone in America was born in a log-cabin or attended a one-room schoolhouse. Not everyone mops floors, dials-in for remote IT support, or mows lawns. Some people actually do score above 1500 on their SATs and actually do get a scholarship to Harvard and actually do get a PhD from Stanford and actually do get inducted into the National Academy of Engineering… and for those people, today’s opportunities are enormously better, than they were in 1970. Oh, and taxes are a lot lower, too.

In sum, generic stuff off of store-shelves hasn’t much risen in price. It’s hospital-stays and college diplomas that have so sharply risen in price. Oh, and real estate in Manhattan.
Reply With Quote Quick reply to this message
 
Old 09-18-2017, 02:53 PM
 
Location: Florida
5,287 posts, read 3,044,463 times
Reputation: 9631
A couple of hours ago I was looking at a site that reported that a particular house sold for $190,000 last year. I sold that exact same house for $16,000 in 1972. Inflation means your dollars are diminishing in value and will buy less, consequently you must spend more for the same purchase.
Reply With Quote Quick reply to this message
 
Old 09-19-2017, 07:18 AM
 
Location: East of Seattle since 1992, originally from SF Bay Area
29,918 posts, read 54,650,353 times
Reputation: 31312
Quote:
Originally Posted by Marleinie View Post
I have been using an inflation calculator and it really amazes me how different things were in comparison to now. But is it really just like it shows in its equivalent? According one, living in 1970 $10,000 would cost $62,795.05 in 2016.

Is that right? If you lived in 1970 and were making $10K a year you would be looking at living solidly middle class with a decent home, car, family etc.?
In 1970 I was in college, working full time at $3/hour. That was almost double minimum wage, and about $5,760/year. Double that to $10,000+ and I still can't imagine even renting an apartment on that never mind having a car or house. My parents were making about $40k then and did have a house and 2 cars, but were at about the median for the time.

Median Household Income: 1970-2006 | Pew Research Center
Reply With Quote Quick reply to this message
 
Old 09-19-2017, 10:01 PM
 
Location: Myrtle Creek, Oregon
12,325 posts, read 12,555,838 times
Reputation: 19583
Quote:
Originally Posted by Marleinie View Post
I have been using an inflation calculator and it really amazes me how different things were in comparison to now. But is it really just like it shows in its equivalent? According one, living in 1970 $10,000 would cost $62,795.05 in 2016.

Is that right? If you lived in 1970 and were making $10K a year you would be looking at living solidly middle class with a decent home, car, family etc.?
In the days of 9% inflation, money lost half its value in only 5 years. Inflation compounds. If you were making $62,795 in 2016, you better be making $64,000 today or you are losing ground, and that's with our tiny 2% inflation rate.
Reply With Quote Quick reply to this message
 
Old 09-20-2017, 12:20 PM
 
8,911 posts, read 3,954,030 times
Reputation: 1729
Quote:
Originally Posted by Marleinie View Post
I have been using an inflation calculator and it really amazes me how different things were in comparison to now. But is it really just like it shows in its equivalent? According one, living in 1970 $10,000 would cost $62,795.05 in 2016.

Is that right? If you lived in 1970 and were making $10K a year you would be looking at living solidly middle class with a decent home, car, family etc.?
In 1976-7 as a medical intern I made $13K. My daughter was an intern 3 years ago and made $52K. About the same relative salary.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top