No worries on the late response, I'm glad you enjoyed it. Anyways, that was a typo on my part, I meant to say that the salary covers about a third of the housing cost, which is actually very different than today. I'll use different examples to illustrate my point because the main issue comes down to largely the cost of living in purchasing homes and condos rather than the cost of other items.
If you divide the cost of a new house with the average salary in 1953 like so:
9,525 / 4,011 = 2.37
It amounts to roughly the cost of a house being 2.37 times greater than a yearly salary.
Let's fast forward 30 years to see the difference:
82,600 / 21,073 = 3.91
The cost of a new house in 1983 was 3.91 times greater than the average yearly salary, which is a noticeable increase from being 2.37 times greater in 1953.
Now, let's fast forward to roughly the present day, which is 35 years later to illustrate my point further:
Let's look at October 2018, where the average American household income was $63,220:
https://seekingalpha.com/article/423...usehold-income
Also, the cost of a new American house in October 2018 was $395,000:
https://www.census.gov/construction/...uspricemon.pdf
So if we do the math, it is:
395,000 / 63,220 = 6.25
The average cost of a house in the US in 2018 was 6.25 times greater than the average US household salary in 2018, which is a big difference compared to 3.91 times greater in 1983 and 2.37 times greater in 1953. It would be important to note that the difference is significantly greater between the average US home and the average US salary if you go to American cities with ludicrous housing costs like San Francisco, New York and Seattle. However, it's only fair that I use the average US housing cost of the nation as a whole and not the average housing cost of those US cities. So basically my point is that salaries are not keeping with the rising cost of inflation specifically with the purchase of homes and condos.
Salaries may be keeping up with inflation in terms of purchasing of other items, but I think it's safe to say that the most important factor for quality of life and standard of living is the homes and condos we are able to afford to purchase. In some cities, the cost of homes and condos are still reasonable, but unfortunately in other cities they are far too expensive. This shows how slowly over time, the poor and the middle class will find affordable housing to purchase more difficult to come by as time goes by as the slow increase of housing costs is not something that our salaries are keeping up with, which means our standard of living is slowly decreasing over time.
This only benefits the 1% that are easily able to profit off the increasing housing costs, for which they sell once the price increases or simply allow lower class citizens to rent. Let's not forget another important factor here. In 1953, it was typical of the majority of households to have the husband working with one salary to provide the income for the entire family, while the wife provided at home. In 1983, you were more likely to find women working to help provide for the household and family compared to 1953, but still not as much as today. Finally, in 2018 it is safe to say that the majority of women help provide an income for the family along with the men.
So not only have housing prices increased considerably compared to the household salary, we now need two incomes instead of one income like we did in 1953 to provide for the family making the problem even worse than it appears. Some say the income disparity occurred due to the increase of the labor market from women entering the workforce, but that is another debate in and of itself and this situation could have other factors contributing. Also, to be fair I used the household income in 2018 rather than a single income in 2018, which would of revealed a greater disparity between the average income and the cost of new homes.
Originally Posted by Raver
No worries on the late response, I'm glad you enjoyed it. Anyways, that was a typo on my part, I meant to say that the salary covers about a third of the housing cost, which is actually very different than today. I'll use different examples to illustrate my point because the main issue comes down to largely the cost of living in purchasing homes and condos rather than the cost of other items.
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