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When you exclude advances in technology there are some very noticeable signs that America's purchasing power has declined.
Here are some noticeable signs:
1) In the 1950's a housewife that didn't have to work outside the home was very common.
2) In the 1950's one male income could support a housewife and children.
3) As the years went by, the male income steadily declined. To counter this balance women started entering the workforce. Now you need two incomes to support raising a family.
4) Studies have shown that as male income has declined, women's income has gone up.
5) In recent years, many airlines have gone bankrupt or have reduced routes. This is because American's cannot afford to fly as much.
6) In recent years, the automakers have had financial trouble. This is because American's cannot afford to buy such expensive cars as they used to.
7) From 1950 to 1995 the savings rate was a steady 5-10%. Now it is negative.
My predictions for the future on the decline of the american standard of living:
1) Healthcare will become a luxury as more fall in the uninsured category.
2) Retiring will become a luxury. Not everyone can afford it.
Back then gas was less than a dollar for a gallon, bread was less than a quarter, people owned ONE car, owned ONE house without the frills, owned a radio (or a TV if they are "lucky" enough), and took LOCAL vacations... we have people buying 2-3 cars, buying too much of a house they could never really afford, own multiple TVs and radios, took exotic vacations... we live now in a DEBT society and the government WANTED it that way cause it made "progress" faster and gave them more power and money... unfortunately Americans are too short-sighted to see the problems they created when they made an economy based on debt... they are complaining about high costs... it was SUPPOSE to come when you live in a debt society... if we continue this road it WILL happen again... things unaffordable because it is truly a house of cards.. paying debt WITH debt and someone will be left holding the bag...
1) In the 1950's a housewife that didn't have to work outside the home was very common. A typical home had three beds and one bath. Much more affordable than today's McMansions.
2) In the 1950's one male income could support a housewife and children. No cell phones, no cable, smaller homes to heat, most families only had one car to maintain and pay for. Generally, the "ideal" life was much cheaper than it is now; vacations were more reasonable, kids were cheaper to entertain, and much less tech and subscriptions to waste money on.
3) As the years went by, the male income steadily declined. To counter this balance women started entering the workforce. Now you need two incomes to support raising a family. See above
4) Studies have shown that as male income has declined, women's income has gone up.
This is really the same point that was made in the first three
5) In recent years, many airlines have gone bankrupt or have reduced routes. This is because American's cannot afford to fly as much. The number of flights, and americans flying, is substantially higher than it was in the 50s, 60s, and 70s
6) In recent years, the automakers have had financial trouble. This is because American's cannot afford to buy such expensive cars as they used to.
No. This is due to foreign competition, inferior domestic products, and pension obligations.
7) From 1950 to 1995 the savings rate was a steady 5-10%. Now it is negative.
True. We're not saving enough, or as much, but the savings figure doesn't consider 401ks as savings, which is a relatively new investment.
My predictions for the future on the decline of the american standard of living:
1) Healthcare will become a luxury as more fall in the uninsured category.
2) Retiring will become a luxury. Not everyone can afford it.
Despite my above arguments, I do think that we're financially retarded as a whole and need to reevaluate our needs and save more. Too much debt has been used to "keep up with the Jone's" and for instant gratification.
It is so easy to see in south Florida. In 1960 you could buy a new home for 15,000.00 while the average family income was around 5,000.00 In today's overinflated world the same home, with almost 50 years of wear and tear would cost 300,000 and the average income is around 40,000. Look at automobiles, in 1970 a good car cost 4000 and today a similar car is 40,000 which is a year's income for many people. This despite continuing advancements in manufacturing and cost savings by using cheap plastics instead of beautiful electroplated chrome. Inflation is underreported, and as industry left the unfriendly US regulatory climate incomes have declined.
Home prices have outpaced income but that is Americans fault... their "greed" for a home has left them with more debt than they SHOULD have... ala the "debt" society as I mentioned above... Look at home prices now, they dropping like a rock and its because people said NO to buying a house... the price of a home is based on demand and when people got greedy and bought a home and got too much in debt, problems were created... This was all driven by the U.S. government when they told lending institutions to lend more and let more people be in greater debt... everything was fine until the government got involved... they created this whole mess... and now they are asking to solve the mess with more government... great...
Value for your money has improved in some areas due to technological improvements.
In 1990 or 91, I bought a middle of the line 27" TV with my Arby's wages. It cost over $600 and wasn't too great. In 2008 I can buy a 32" widescreen LCD HDTV for under $500 and it looks great.
You can now buy a $23K car with 300 HP, rear wheel drive, a six speed manual, six airbags, ABS, stability control, eight speakers, 18" wheels with sticky tires, modern interior and exterior design, etc. That's an incredible value.
Everything from all-inclusive vacation packages to ultra-cheap airfares to online trades is a better value...
Is that right?? That makes the savings figure seem pretty useless and inaccurate.
I wouldn't count 401K as savings..it's replacing defined pension plans.
While you do have to "save" for it, it doesn't replace a normal savings account where you can put in or take out as much as you want.
America's purchasing power has been on the decline for the past 95 years, not 50 years.
95 years ago, the Federal Reserve Act was passed by an almost-empty Congress about to leave for Christmas recess. In the 95 years since we have been saddled with this abomination of a private, for-profit bank, our dollar has lost purchasing power.
The phrase "purchasing power" is one you will never hear uttered by the Federal Reserve.
And in the 1950s, people didn't spend half of their grocery budget on soft drinks and snacks. When I shop with my parents I'm floored by the assortment of fizzy waters, sodas, regular water, etc., etc., etc. They buy cases of the stuff and need help out to the car with it. They think of them as being a "staple" items. People in the 1950s drank plain water, coffee, and tea, and only had an occasional soda as a special treat. This also explains the fact that two average people these days can't comfortably pass each other in a hallway.
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