How 40 Years Makes A Hell Of An Economic Difference - Wages & Cost Of Living

SO lately I've been having chats with folks about the cost of things and how much purchasing power one person had over another etc..

In doing a little bit of research, I've come to some interesting ideas/conclusions.

You are worth less than you were worth 40 years ago.

In 1970 average Minimum Wage was between 1.15$ and 1.50$ depending on where you lived.

A gallon of milk was about a dollar.

Today the average minimum wage is 10$.

A LITRE of milk now costs between 1.99$ and 2.75$. Which means the gallong would be about 6$ on average.

Can somebody explain to me how they've managed to cheat you out of your wages. How did they manage to pay you less, by a factor of almost 3, while increasing the cost of living exponentially?

Any thoughts?

~Tenth

reply to post by tothetenthpower


using your numbers... And $1.50 an hour minimum wage for 1970...

The milk cost 67% of the person's income per hour 40 years ago and now costs 60% of the persons income per hour...

Would this not mean the person, and their TIME is worth more now? Not then?

As far as buying power it does seem like we are getting screwed hugely, just not based on the numbers you posted. I remember buying cokes at the vending machine for 20 cents outside walmart, and at that same time minimum wage wasn't much lower than it is today in America. Cost went up about 500% and minimum wage maybe went up 25%...

reply to post by tothetenthpower

Ahhh, yah.

Unless youve been living under a rock, Ron Paul has been screaming about this for 30 years, most vocally over the past 8.

I could post a hundred videos about Ron Paul explaining how inflation is a "tax on the Middle Class", how inflation is theft. Heres one to start:


Know why Ron Paul got into politics? Of-course you dont.

It was because in 1971 Nixon removed us from the gold standard. Instead of the US dollar being backed by gold, it was instead backed by nothing, I mean the "full faith and credit of the US government", hahaha.

A Medical Doctor by trade but a self taught economist, Ron Paul, knew then that without restraints, the government would borrow and spend the people into oblivion. He knew it would result in the destruction of America and has been trying to do something about it ever since.

reply to post by tothetenthpower


We taught certain groups of workers / people to hate and fear other groups of workers / people. The natural progression of anarcho-capitalism in a closed loop environment is fewer "winners" and "more losers" over time. This buys us a few moments to debate over how we should rid ourselves of the "losers" until the next iteration.

Unless we start asking fundamental questions about the system, instead.

reply to post by Dustytoad


Yeah, I'm terrible at math, but look at the price of bread as well, that's perhaps a better indicator.

All I know is that back when I was a kid, people in their mid twenties were buying homes and having them paid for in 5 to 10 years. There was hardly any need for credit because we had good paying jobs and one parent could afford to raise a whole family.

~Tenth

Yes, it's most easily noted in every day impulse buys like candy bars and soda. Not that long ago, ok, well maybe 7-8 years ago, a candy bar was generally 50 cents anywhere you went. Then it jumped to 59. 69. I think a candy bar runs about 89 cents to a dollar these days.

When I started working, the min wage was $6.75 I think it's $8. I make $10. I can honestly say it *seemed* like a got alot more for my money back when it was $6.75, as in even though I was making less money, I got more for my money.

Today the average minimum wage is 10$. A LITRE of milk now costs between 1.99$ and 2.75$. Which means the gallong would be about 6$ on average.

minimum wage is only 8 dollars around here. Not sure your stat about the average being 10 is correct.....
and a gallon of milk is only 3 dollars....
I'm not sure where you're getting your averages.....


But you're missing the KEY statistic.....
How many people(as a percentage of the population) are earning minimum wage now, as opposed to back then?

reply to post by Ghost375


Canada btw.

Is where I'm getting these stats.

A gallon of milk here is abotu 6 bucks.

Minimum wage on average is about 10...except some richer provinces like BC it still holds at about 6 I believe...

ACtually I"m wrong about that.

en.wikipedia.org...

It's pretty much 10 everywhere now.

~Tenth

Originally posted by tothetenthpower
reply to post by Dustytoad

 

Yeah, I'm terrible at math, but look at the price of bread as well, that's perhaps a better indicator.

All I know is that back when I was a kid, people in their mid twenties were buying homes and having them paid for in 5 to 10 years. There was hardly any need for credit because we had good paying jobs and one parent could afford to raise a whole family.

~Tenth

I know this all too well.
For me gas is another indicator.
Cereal... When I was a kid it was at least half as expensive so a 100% increase, while and again, minimum wage went up only hardly...

I can't afford much and I'm living with my girlfriend who makes 1.5 times minimum wage, while I have money that = about half minimum wage after college expenses..

We don't buy anything except food really. We don't even go out except once every couple months which is just sad. We are always broke before the next paycheck comes.




BTW where I am at on this issue is where Ozzymando is at in his post above... That's all that needs to be said at this point. The game in place is not workable by changing rules around to manipulate numbers of winners positively. We need to play a whole different game. I made up many games for me and my siblings to play when I was little. Sometimes rules could not be changed enough to make a playable game no matter what. I think we are at this place in modern society right now.

1990 I worked at Arco and gas was .76 cents a gallon.

A bean burrito was .19 cents at Taco Bell

This was southern California.

Minimum wage was $3.35

Us debt was 3.2 trillion

----

2012 - Gas was between $3.50 and $4

bean burrito is .99 cents at Taco Bell

Minimum wage was $7.25

Us debt is $16 trillion

That is a 5 x increase in cost of product and debt.
Or more specifically a 5 x decrease in purchasing power for consumables.
Housing has increased to the tune of 3x.
Pay has increased 2x


Inflation drives devaluation of currency and is the result of more FIAT debt currency being added to circulation.

Minimum wage here is $7.25 and a gallon of cheaper brand milk is about $4, the people who think there's a noticeable taste difference, I wouldn't know because I can't afford the "good stuff," pay about $6 for their milk. I'm not old enough to know how it was 30 years ago, almost 5 years before I was born, but if what all of my family keeps telling me is true then it would seem that the average blue collar worker was very capable of owning a nice home within 10 years. I don't think that could be done nowadays when someone is bringing home less than 30k.

There is a provable 22 year rhythm (approximate,varies 1 or 2 years),as established throughout history.

40 years is within two years error,....

See saeculum.

Whats happening is history repeating itself,no one lives long enough,people change through their lives.Eventually because of lifespans and peoples' attitudes changing throughout their lives some things that would normally not be acceptable come to be.

Don't worry though,another generation will come along and fix it.

you may not live to see it happen though,oh well.

It's all quite meaningless.

It is impossible to compare the 70's to today.

Hell, I spend more on cell phones today than my father did on mortgage...as a percentage of income per year...which, incidentally, is about the same as my current mortgage as a percentage of income.

Now, how do we relate that to the 70's?

If we wanted a true comparison, we would first need to identify how much of our income is being spent on things that didn't even exist then, and remove them from the equation...not a very reasonable task.

Can somebody explain to me how they've managed to cheat you out of your wages. How did they manage to pay you less, by a factor of almost 3, while increasing the cost of living exponentially?

They snuck it up slowly, like boiling a frog.
They do it on necessities like food staples, and gas.
Now we go out a lot less, make our clothing last longer, shop at bargain stores more.
Our budget is on a spreadsheet to track every dollar in and out.

I've even found my math skills improving, just by putting a dollar sign in.

Hello ! (also in Canada)...don't forget about the TAXES!
Income tax, home tax...15% tax on nearly all goods (and services)....
If you look at your pay cheque and see how much you grossed....then how much you are allowed to keep....it's worse if you work any overtime!
I read an article a few years ago in MacLeans's Magazine....they said we had more 'disposable income' in 1973 then the present year (around 2003 I believe).
A person could leave high school....get a job....and afford to buy (and maintain) a car, save up for a house....and live pretty much self-sufficient.
(A starter home (first house) was $40,000.....now it's closer to $200,000)....
We are working more and earning less....while the cost of everything is sky-rocketing....
Not good.
jacygirl

Originally posted by peck420
It is impossible to compare the 70's to today.

Hell, I spend more on cell phones today than my father did on mortgage...as a percentage of income per year...which, incidentally, is about the same as my current mortgage as a percentage of income.

Now, how do we relate that to the 70's?

If we wanted a true comparison, we would first need to identify how much of our income is being spent on things that didn't even exist then, and remove them from the equation...not a very reasonable task.

For people like me it is.. (a reasonable task)

I buy food and pay bills. My bills except internet are the same as the 70s... I have a cell phone for 30 bucks a month, but I do not have a home phone. We have one car, one tv...

I'm not even 30 yet and I sound like my grandpa used to sound. "When I was a kid... "

Looking at the numbers it is quite obvious I would be doing much better in the 70s

If you want your wages adjusted to the average cost of living, have your worker representatives, employer associations and the state work together in close partnership to ensure appropriate wages.
Works pretty good here.

I agree with you here...just 15 years ago starting out at work, earned a mere 30% of what I do now, yet I still paid my rent, bills, bought my food, paid for a car, ate lots of takeaways and went out drinking or drank beer at home ALL THE TIME. Yes, not proud of it, but I was a young bloke and it was what we did.
Now - earn so much more, pay rent, pay bills, buy food, pay for a car, wont go out drinking because a night out "up town" is £100 easily. To me £100 just "seems" a lot of money, and hard to justify spending on a night out!
I used to spend £30 and that was cabs, bars, clubbing and a doner kebab to finish the night off!
Chocolate bars - used to be 30p, now nearer 90p.
Petrol. Wow what can you say - I recall paying 67pence a litre, now at 139 pence and its been higher than that too.

We are being slowly squeezed on everything so we all have a little less each year...

I can give it a shot for how.... Here is a snapshot of 1961 for a bit longer comparison on trends.

Source

and here is what $100 in your pocket in 1961 is/would be worth today if held all this time. $100 sure isn't what it used to be.

Source

It's a fine mess we've gotten ourselves into, isn't it? That first site has all kinds of statistical data for the UK and US on things like the consumer price index, gold, inflation, GDP and many other things to compare. It was a good reference for my budget thread and figured it would come in handy here too.

Originally posted by tothetenthpower
reply to post by Ghost375

 

Canada btw.

Is where I'm getting these stats.

A gallon of milk here is abotu 6 bucks.

Minimum wage on average is about 10...except some richer provinces like BC it still holds at about 6 I believe...

ACtually I"m wrong about that.

en.wikipedia.org...

It's pretty much 10 everywhere now.

~Tenth

edit on 11/24/2012 by tothetenthpower because: (no reason given)

Minimum wage is lower in the US. In some states it's considerably lower.

I remember when I started driving (this is the mid to late 90's) gas was around 89 cents a gallon-- less than a dollar. Right now it's around...what, $3.50 give or take?

What about housing costs? Rent?

Kinda makes you