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Life was ALWAYS better in the past. Everybody knows this. ;-)
I don't think anyone is saying this. Things were undeniably less expensive back then. It's not just "looking back through rose-tinted lenses" nostalgia. A lot of things have improved since then as well.
It's nearly impossible to compare costs of things between different eras. There are several different ways to attempt to convert value. This website explains the difficulties pretty well: Measuring Worth - Relative Value of the US Dollar.
They show $100K in 1970 being anywhere from $460K to $1.5 Million as of 2012.
Intuitively to me your comparison cant work cause there are so many more variables than just inflation. Like…how much of a person's income was typically spent on housing back then versus nowadays? How important was owning a home? What was the average relative cost for other important things (like vehicles)? What were interest rates and how easy was it to obtain loans? Even home-building techniques and costs of materials have likely changed drastically. It's possible that back then a very nice home on average cost just 50K…so spending 100K was being very extravagant. For example…how much money do you think the average family spent on communications technology per month? Nowhere near the equivalent of today's average family cell phone plan. One last issue: real estate prices are vastly different throughout this country. Today if you spend 500K on a home in FL you're probably being extravagant. In CA that's quite modest.
I wonder if part of it is too that we didn't have to pay for much back in the 70's. No Cable, no internet, no netflix, no cell phones. Those eat up a good chunk of change, and are necessities now. You just had to pay rent and utilities in the 70's
Home values seemed to have been a heck of a lot lower even back in the 90s. My parents' home has more than tripled in value since they bought back in '93. I'm not sure how so many people in Jersey can afford to purchase $500k-$600k 3/4 bdr. ~2k sqft. homes considering the median household income in Jersey is around $70k and only a little over 4% of households make over $200k a year.
Intuitively to me your comparison cant work cause there are so many more variables than just inflation. Like…how much of a person's income was typically spent on housing back then versus nowadays? How important was owning a home? What was the average relative cost for other important things (like vehicles)? What were interest rates and how easy was it to obtain loans? Even home-building techniques and costs of materials have likely changed drastically.
Another factor is that the United States has 110 million more people today than it did in 1970.
It would be interesting to see how that figures into supply/demand for housing - especially in the nation's largest cities.
I paid in-state university tuition in Washington state from 1976 - 1980. I remember tuition was about $200 a quarter - so tuition was about $600 a year (I worked in the summers.)
Back in the 70's I paid $125 a month for a beautiful one bedroom apartment in Chicago. Heat was included in the rent. I only had to pay gas for cooking which was about $3.00 a month and electricity was came to maybe $5.00. I earned around $8,000 a year. I lived very well. I took trips, had nice clothes and ate out occasionally. I had all the entertainment I wanted. As someone mentioned, there were not as many gadgets to spend money on as there are today. I was never in debt and had a savings account.
I remember the S&L's being closed by the government for over extending themselves in loans (sound familiar?). People talked about inflation then. If you watch reruns on the show "All In The Family" which was made in the '70's they discuss that subject a lot.
I also remember interest rates on CDs hit 12% ca. 1980, due to inflation, which was VERY bad that year. It's now known as the "super inflation" period, worse than the past few years. I graduated from U in 1980 during that super inflation when jobs were VERY hard to find. But we didn't seem to whine as much as kids do now - I guess because the technology for mass whining hadn't been invented yet.
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