The Average American: 1967 And Today

[rlg94086]

Interesting comparisons…
forbes.com/economy/2006/10/16/demographics-income-population-biz_cx_tvr_1017median.html

It’s true that the wealthy have grabbed up a larger share of the growing economic pie over the past 40 years. Census Bureau stats show that the percentage of pay collected by the middle 60% of wage earners dipped to 46% in 2005 from 52% in both 1965 and 1975. That figure doesn’t include income from investments, which would make the gap even larger.

But the overall pie is much larger too. A near quadrupling of the Gross Domestic Product since 1967 means that today’s Americans share $12.5 trillion in wealth, or $41,579 per capita, compared to the $3.8 trillion, or $18,951 per capita, enjoyed by 200 million people back then.

The fact is that in real terms, the Medians are doing great. Mr. Median makes 25% more than his father did 30 years ago, even after holding for inflation. Mrs. Median is a lot more likely to work in the professional ranks than her mom was, and to be paid about three times as much doing so. And though she still makes only 77% of what her male counterparts earn, this is up from 33% in 1965. They dote on the same number of children (two), but waited longer to have them, until both careers are well under way. They also pay less tax to the federal government and have 8% more purchasing power than they did 20 years ago, including 5.7% more than they had just ten years ago.

 

[Al_Masetti]

1967: no computers*

2006: computers

*people did stuff in their heads and for complicated multiplication and division used slide rules and logarithyms.

 

[rlg94086]

1967: no computers*

2006: computers

*people did stuff in their heads and for complicated multiplication and division used slide rules and logarithyms.

Yep. And in addition to the financial boom computers have created, they have added to our gloominess regarding our financial states according to the article…

And because people generally judge their fortunes not in absolute terms, but by comparing themselves to others, the super-success of the top 1% can make Mr. and Mrs. Median feel relatively poorer. Take CEOs–the $19 million that Wal-Mart Chief Lee Scott raked in last year was 410 times what Mr. and Mrs. Median made, as opposed to the $469,000 a year earned by Exxon’s Ken Jamieson in 1975, which was a mere 40 times more.

It’s the same with celebrity athletes. Those who worshipped Joe Namath in the 1960s could at least identify with the $142,000 a year he made ($848,000 in today’s dollars). But how many can identify with the $87 million Tiger Woods took in last year? And not only are the elite making much more today, relatively, than the Medians, the rise of cable television and the Internet assures that they know all about it.

"It’s now easy for us to see how other people around the world live, not just how our neighbors live," says Barry Schwartz, a professor of psychology at Swarthmore College. Schwartz also argues that the plethora of consumer choices today, while generally a good thing, can be a catalyst for bringing people down. Not everyone can have a new flat screen television with both a 60 inch screen and premium sound.

 

[rlg94086]

1967: no computers*

2006: computers

*people did stuff in their heads and for complicated multiplication and division used slide rules and logarithyms.

And, they helped this guy tremendously…

Of course, the super-rich have done even better. When the first edition of the Forbes 400 hit newsstands in 1982, the top-ranked person was shipping magnate Daniel Ludwig, with an estimated net worth of $2 billion. That was about 20,000 times the net worth of Mr. and Mrs. Median at the time. There were only 12 billionaires on the list that year.

The top person on the 2006 edition of the Forbes 400, Microsoft (nasdaq: MSFT - news - people ) Co-Founder Bill Gates, had a net worth of $53 billion, or 133,741 times the Medians. That means that while Mr. and Mrs. Median have seen their net worth rise 130% percent since the first Forbes 400, the richest man in the country is worth 1,225% more. Oh, and every member of the list is now a billionaire.

 

[Al_Masetti]

1967: low end cars with manual transmission and no air conditioning

2006: low end cars with automatic transmission and air conditioning.

The pernt I’m tryin’ to make is that the average joe and jane now routinely have “stuff” of a quality that only the “rich” could afford back in 1967.

In bringing us average folk computers, so that we all can enjoy their “benefits”, Bill Gates became a wealthy man. If there were similar people to Bill Gates in medicine, energy, finance, and other fields, they would “effortlessly” (to me) raise my standard of living to unimagined heights.

 

[Al_Masetti]

1967: no computers*

2006: computers

*people did stuff in their heads and for complicated multiplication and division used slide rules and logarithyms.

I lied.

There were computers back in 1967. Although there were no PERSONAL computers back in 1967.

The Air Defense Command back then had a computer … something called SAGE (cute name) with computers that filled a four story building. (Each floor had about a 20 ft ceiling.) Actually there were two computers in the building (and there were several buildings around the country). The machines had been built around 1958 and had huge banks of tubes to do the computing and the memory system was this block of copper about six feet on a side that I’m told had a capacity of … 8K.

Actually, two computers took one floor. The telephone frame took another floor. The scopes took one floor. And the admin offices took a floor. And out back there was a powerhouse with six 1000HP Nordberg diesels and two cooling towers about 40 feet high for the air conditioning.

For all that, the displays allowed a one second refresh rate, integrated ALL the radars onto one screen, and had hard wired switches that allowed the display to change, expand or contract in one second. In one second you could flip from one sector to the whole United States. Each airplane had a dot (not a blip) and a vector showing the speed and course. And a little tag with data and a side screen with more data. They used light pens; you touched the screen and the detailed data for that particular plane would be displayed. Of course the major focus was air traffic off the coasts, since this was air defense.

The guys on the central platform could shoot down planes. Back in those days we had missiles and interceptors.

Power for the system was two 1000 HP Nordberg diesels driving generators and power converters and air conditioning. We had four more engines for backup power.

The replacement system was already in operation and fit in a station wagon. (We don’t have station wagons anymore, either). It was called BUIC (another cute name).

And the replacement for the replacement fit in two suitcases.

By the way, the fancy stuff we had in 1967 that was designed in 1958 … with the neat displays … the FAA will get a similar system in 2008.

1967 and 2006…

 

[rlg94086]

Absolutely…to all your points:thumbsup:

1967: low end cars with manual transmission and no air conditioning

2006: low end cars with automatic transmission and air conditioning.

The pernt I’m tryin’ to make is that the average joe and jane now routinely have “stuff” of a quality that only the “rich” could afford back in 1967.

In bringing us average folk computers, so that we all can enjoy their “benefits”, Bill Gates became a wealthy man. If there were similar people to Bill Gates in medicine, energy, finance, and other fields, they would “effortlessly” (to me) raise my standard of living to unimagined heights.

 

[Al_Masetti]

Oh, and I forgot to mention… the air defense SAGE computer(s) of 1967 also had something called Data Link.

The interceptor controller in the block house could actually transmit and receive data from the interceptor without talking on the radio to the pilot.

Very sophisticated.

Pretty nifty.

 

[MikeinSD]

In 1967, a middle class family with just one breadwinner could afford to buy a house on a 1/4 acre lot in the suburbs.

In 2006, a middle class family with just one breadwinner can afford to live a 2 bedroom apartment in a “transitional” neighborhood.

In 1967, a worker in most industries could look forward to a pension in his old age.

In 2006, pray your 401K is wisely invested and the stock market stays up. Otherwise, spend your golden years skipping meals and medicine and work at Walmart.

We’ve come a long way.

 

[Al_Masetti]

1967 vs. 2006

The NY Times had an article on the op-ed page (or ed page) a few years ago by Torricelli and Coverdell, then U.S. Senators on the opposite side of the aisle.

As I recall, they wrote that if the tax code of back then (they used an earlier year) applied to people today, the average family today would have $16,000 more spendable income.

 

[Al_Masetti]

Size of homes:

2006 Average new house: 2500 square feet

1973 Average new house: 1660 square feet

1967 Average new house: 1500 square feet (based on estimate)

So, since 1967 the average size of a home has increased by two-thirds.

 

[Richardols]

So, since 1967 the average size of a home has increased by two-thirds.

And the prices have increased far far more. When my wife and I returned from Thailand in '72, we bought a house with 2100 sqft in San Bernardino, CA for $24,000. We sold it for somewhat more two years later when I was transferred to Little Rock. That house in California sold for $450,000 three years ago. My brother’s house in San Jose that he bought for $40,000 at about the same time now costs some $800,000.

Based on Cost of Living, those houses cost disproportionaltely more than they should have.

Things are not better these days. Just 20 years ago, 80% of American workers were entitled to a company pension - today, it’s more like 20%.

 

[rlg94086]

I think on balance things are better, but that doesn’t mean they are perfect. Housing is a good example. On the one hand, houses are, on average, bigger than they once were and home ownership is up. On the otherhand, the entry level in some areas, especially San Jose where I couldn’t afford to buy after being gone for 6 years, are much higher.

I remember having this conversation with a fellow cantor on a trip in the 90s. He owned a home worth $1Million in Saratoga, CA. I can’t remember his purchase price, but it was also quite low. He argued that incomes had also gone up, so I asked him what his income was at time of purchase and it was 1/2 of the purchase price, so I said “and you make $500k/year now?” Of course, he didn’t.

However, this is one of the most expensive areas in the US. It doesn’t necessarily work that way in other places…I just moved to Camas, WA and bought a home for 2.5x my annual income.

The other thing is that more spouses have to work today to keep that better lifestyle, so I think that skews the numbers.

And the prices have increased far far more. When my wife and I returned from Thailand in '72, we bought a house with 2100 sqft in San Bernardino, CA for $24,000. We sold it for somewhat more two years later when I was transferred to Little Rock. That house in California sold for $450,000 three years ago. My brother’s house in San Jose that he bought for $40,000 at about the same time now costs some $800,000.

Based on Cost of Living, those houses cost disproportionaltely more than they should have.

Things are not better these days. Just 20 years ago, 80% of American workers were entitled to a company pension - today, it’s more like 20%.

 

[rlg94086]

Oh…and it should be noted that those lucky Bay Area homeowners who have $500k equity in their homes because they stayed put for 10-15 years, have more money than any corporate pension would have given them in the same time period.

And the prices have increased far far more. When my wife and I returned from Thailand in '72, we bought a house with 2100 sqft in San Bernardino, CA for $24,000. We sold it for somewhat more two years later when I was transferred to Little Rock. That house in California sold for $450,000 three years ago. My brother’s house in San Jose that he bought for $40,000 at about the same time now costs some $800,000.

Based on Cost of Living, those houses cost disproportionaltely more than they should have.

Things are not better these days. Just 20 years ago, 80% of American workers were entitled to a company pension - today, it’s more like 20%.

 

[rascal_one]

No its the worst economy since Hoover! Isnt that what we are told?

The DOW hits 12,000! We are in a depression!

Unemployment is what 4.6 percent? Just awful!

 

[Richardols]

Oh…and it should be noted that those lucky Bay Area homeowners who have $500k equity in their homes because they stayed put for 10-15 years, have more money than any corporate pension would have given them in the same time period.

Yes, the “lucky” ones in the Bay Area. What of the rest? And how is that equity going to help them when they retire? Land rich, cash poor. Reverse mortgages?

Or consider those who must move to California from places where a decent home cost them 95-200 large and they’re faced with paying twice as much for the same they had before.

 

[Listener]

I can remember our house payment back in 1967. It was less than $100 per month. That included interest and real estate taxes. I was a stay-at-home mom. We could make the entire house payment with less than one week’s worth of my husbands pay check. This was after Social Security Tax and Income Tax were withhheld. Although really nice houses were $20,000 and even $30,000, you could buy a house in a big city for less than $15,000. I don’t think we realized just how good we had it back then.

 

[rlg94086]

Yes, the “lucky” ones in the Bay Area. What of the rest? And how is that equity going to help them when they retire? Land rich, cash poor. Reverse mortgages?

Reverse mortgages or they move when they retire. That’s what most of them do, and then they drive up prices in Boise, Miami, etc. If they do decide to stay and their house is paid off, they benefit from Prop 13 (property taxes don’t go up in California after you purchase, unlike most other states).

Richardols:

Or consider those who must move to California from places where a decent home cost them 95-200 large and they’re faced with paying twice as much for the same they had before.

They get back out of California as soon as they can…like I just did. I hated renting my 3BR townhouse there for $2000/month, but I couldn’t afford to buy it for $750k. BTW…who is forcing people to move to California? Is it at gunpoint?

I know some people who took a transfer from their company and didn’t do their homework beforehand. One of my wife’s VPs moved from Texas and went from owning a mansion to renting a dump. His wife was not amused. You should always thoroughly research before you make a move like that.

Oh…and good luck on twice the amount of 95-200k in the Bay Area…you can’t even get a condo for 400k, unless you want a really long commute.

 

[Al_Masetti]

Defense spending as a percentage of GDP:

1967 9%

2006: 4%

Defense spending as a percentage of federal outlays

1967: 46%

2006: 19.8%

Source: Office of Management and Budget, historical tables

as published 10/20/2006 Page A12 Wall Street Journal

 

[stanmaxkolbe]

I don’t know, I remember all the racism that was going on back then.:crying:

IMHO a lot of people today live beyond their means. I don’t know what the average is but just about everybody I know is in credit card debt.

I did the same thing when it came to credit cards. As I said on other threads:
I did surgery on my credit cards in 1998 none survived.

Why people think it’s worst today? Because they have the big house the two SUV’s and can’t afford that lifestyle that’s why both parents work.

Myself I have a house three bedrooms with a one-car garage that I made into a workshop. The house was built in the fifties it’s 900 sq ft. It’s a great house I just have to do repairs on it sometimes. It’s paid for. Today I’m totally debt free.

Take that back the wife keeps me in debt.:banghead: BTW she doesn’t work she don’t have too. Well she does work in taking care of the house and me.

That’s how come I can afford this luxury of high-speed Internet service I’m on now.

This guy at work told me [He’s mad about it] his wife paid $45 dollars for a Cheer Leading outfit plus other stuff that totaled to about $100.00 dollars for their five-year-old daughter. They sometimes have problems paying their electric bill.

IMHO that’s stupid!

I know my brothers (3) and myself are doing a lot better that our parents when it comes to lifestyle, income, and health.