American living, then and now (1975 vs 2005)

[Russell]

Got an interesting birthday card with the following statistics in it:

                     1975                       2005

Population           214,931,000                292,598,693
3-bedroom house      $33,300                    $195,000
Avg Income           $14,867                    $43,417
Price of new Ford    $4,238                     $28,625
Gas, 1 gallon        $.57                       $2.70
Bread, 1 pound       $.40                       $1.12
Milk, 1 gallon       $1.39                      $2.93
1st class stamp      $.13                       $.37

[Fern]

Re: American living, then and now (1975 vs 2005)

I'd say postage stamps are one of the best values around!

[robex]

Re: American living, then and now (1975 vs 2005)

Wow! Have things ever changed in 30 years...imagine what another 30 will look like!

[Russell]

Re: American living, then and now (1975 vs 2005)

I thought it was interesting to see some of the numbers. For example the house price to income ratio.

In 1975, you could've bought a house for twice your annual salary. Now its 4.5 times your salary.

Re: American living, then and now (1975 vs 2005)

Let me know where you can buy a 3 bedroom house for $195k That is more my price range! Mostly dumps are available for that (if you're lucky) in Jersey.

[Russell]

Re: American living, then and now (1975 vs 2005)

Let me know where you can buy a 3 bedroom house for $195k That is more my price range! Mostly dumps are available for that (if you're lucky) in Jersey.

That's exactly what I was thinking, home prices in CA are off the charts, I mean $600k+ for decent areas.

However, I showed it to my office mate who was in high school in 1975 and she said that the home prices in california back then were actually more in the $60k range in nicer areas. So I think the prices given in the statistics above are median home prices in the US.

There are many areas in TX where you can buy a nice house for under $200k in decent areas...

[Snoopy2645]

Re: American living, then and now (1975 vs 2005)

Well I live in IA & the average house here is about 70k we paid 60k for our 3 bedroom 2 bath house 6yrs ago & we live in a ok neighborhood we dont live in bad part but we dont live in the rich areas either. Its just average.


200k would buy about the best house here in fact we dont have any for probably 400k so houses here are cheap however finding a good job here is another matter

[jmjj215]

Re: American living, then and now (1975 vs 2005)

Milk is more affordable now than it was back then

[BAGAGT1]

Re: American living, then and now (1975 vs 2005)

Milk is more affordable now than it was back then

Bread is looking pretty good too.

[VJW]

Re: American living, then and now (1975 vs 2005)

Inflation from 1975 to 2005 rose by a factor of 3.75, therefore:

* The ‘3-bedroom house’ that cost $33,300 in 1975 should only have cost $124,875 today, so the $195,000 is quite high.

* The ‘Price of new Ford’ that was $4,238 in 1975, should only cost $15,892 today, so the $28,625 is almost DOUBLE.

* The price of ‘1 gallon of Gas’, which was $.57 in 1975, should only have cost $2.13 today, so the $2.70 is high (Yeah, I know you ALREADY know that one !)

* The price of ‘1 pound of Bread’, which was $.40 in 1975, would be $1.50 today, so it’s a bargain at a $1.12 (This is even more dramatic from the 1950s, when bread was a merely a nickel a loaf, but in inflation adjusted dollars would be something like $2.00).

*The price of ‘1 gallon of Milk’, which was $1.39 in 1975, would be $5.21 today, so another bargain at $2.93 (However, we recently saw the largest increase in dairy prices since the 1940s).

* The price of a ‘1st class stamp’, which was $.13 in 1975, would be $.49 today, so at $.37 it’s cheap.

Now to REALLY put this all into perspective, the ‘Avg Income’, which was $14,867 in 1975, would need to be $55,751, so the $43,417 comes up woefully short. This comparison would be even more dramatic if expressed in Median Income instead of Average Income, as Median Income more accurately reflects reality.

Also, keep in mind that the bulk of the loss in inflation-adjusted income in America between 1975 and 2005 occurred during the 12 years of Reagan/Poppy Bush (When wages went backwards by almost 20%), and the last five calendar years (When wages have fallen every year).

AH, failed RightWing economics at it’s finest !

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[cercis]

Re: American living, then and now (1975 vs 2005)

I'm glad you mentioned median vs average. I think this bears elaborating some.

Median is where all the numbers are listed and then the middle number is selected. It's also been referred to as a "weighted average". It's a way to keep extremely high or low numbers from skewing the results.

Average (or mean) is adding all the numbers together and then dividing by the number in the population. This is subject to major skewing, especially in the US where CEO, actors and sports figures make insane salaries that are many, many, many times more than the average person will see in their lifetimes.

An example of this would be a "typical" small business. You have an owner and 4 workers. The workers make minimum wage and the owner makes 6x that amount (just for an example, I don't know the actual numbers). Based on 2,080 hours in a year (since most minimum wage workers don't get vacation or sick leave) each worker will make $10,712/year. The owner will make $64,272. So the average would be $21,424. But the median would be $10,712 - half the average. The one salary skewed the results that much.

[PRICEPLUS]

Re: American living, then and now (1975 vs 2005)

The problem with statistics is that they can be skewed to support many arguments. Averages have a mean, median, and a mode. YOu need to know how they were compiled and how reliable and valid they are.

In the words of Mark Twain, "there are lies, there are damn lies, and then there are statistics!"

[VJW]

Re: American living, then and now (1975 vs 2005)

As I’ve posted in another thread, if I earn one million a year, and you earn a dollar a year, our average income is $500,000 , which does not accurately reflect either of our incomes. That's the problem with the stat "Average Income".

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[cicy33]

Re: American living, then and now (1975 vs 2005)

An example of this would be a "typical" small business. You have an owner and 4 workers. The workers make minimum wage and the owner makes 6x that amount (just for an example, I don't know the actual numbers). Based on 2,080 hours in a year (since most minimum wage workers don't get vacation or sick leave) each worker will make $10,712/year. The owner will make $64,272. So the average would be $21,424. But the median would be $10,712 - half the average. The one salary skewed the results that much.

Sadly enough the owner after all the bill payments and taxes probably doesn't make much more than his people.

[VJW]

Re: American living, then and now (1975 vs 2005)

That would be WILDLY wrong.

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