My last post in this space demonstrated that the Middle Class in America has gotten larger, not smaller, over time.
I made the point that more and more people are making more and more money even as we keep the dollar values locked into 2008 values:
In 1967 [earliest data available] 83.7% of the families in America made less than $75,000 in constant 2008 dollars.
That percentage in 2008? 59.7%.
In other words, 16.3% of Americans were making $75k or more in 1967. In 2008, better than 4 in 10, or 40% of Americans were making that same money.
And the mean income in 2008? $79,634.00 compared to $49.606.00 in 1967. Not only has the median income gone up, but the % of people making it has gone up as well.
But how does it FEEL today vs. yesterday? Are we able to enjoy a standard of living that is significantly better now than it was then?
Well, I think so:
Let’s take a look at things that might be considered Middle Class living. Compare them to the price then and the price now. Now, some of these things are literal prices, things I took out of catalogs in 1967. Others are CPI valued “baskets of goods”. The point is the same:
Let’s look at the price of a new car. In 1967, the price of new cars was indexed at $49.1. That is, if a car in 1983 had a price of $100.00, that same car in 1967 had a price of $49.1. However, that price isn’t adjusted for inflation. In other words, that 1967 car would cost $316.51 in 2008 dollars. The indexed price of a car in 2008? $135.00! And the car is safer and more luxurious than that car in 1967. The price of a car fell almost 60%!
In 1967 “Food at Home was indexed at $35.1. In 2008 dollars that’s $225.00. The price of food in 2008 was really $215.00. Food has gone down over time as well.
Laundry equipment? In 1978 [latest data available] it was indexed at $71.00. In 2008 dollars that’s $234.46. The 2008 index? $117. Laundry equipment has gone too.
Now, let’s look at some toys:
Legos in 1967 – $15. In 2008 money that’s $96.69!
Slot car racing set in 1967 – $100.00. In 2008 money, that’s $644.00!
Tape recorder? $59.95 then. That’s $386 in 2008 money.
No folks. It’s better and cheaper to be alive now than then.
More people make more money AND that money buys more things. Things that are luxuries and things that aren’t.
The Middle Class has both grown AND is better off. Recession or no recession!