From Affordability to Unaffordability: The Economic Shift from the 1950s to the Present
It's often said that the United States has evolved from a period where a single income could support a family to a situation where even two incomes might struggle. This transition mirrors significant shifts in consumer expectations, lifestyle, and economic policies. Let's delve into the reasons behind this transformation, examining how America moved from the simplicity of the 1950s to the modern complexity of today.
The Past: A Simpler, More Affordable Lifestyle
Life in the 1950s and early 1960s was notably different from what we consider typical today. Back then, the average middle-class family could make it on a single income. Houses were smaller, with the average new home size in 1960 being about 1200 square feet, compared to the 2300 square feet in 2010. In those days, families typically had one car and a single television with only a few channels. Homes often had a phone and a television, but no internet or cellphones. Vacations were simpler, with a day trip to Washington D.C. being a standard family excursion.
Women in the Workforce
Women played an important role in the workforce during this period as well. While job options were more limited for women in the 1960s, they still contributed to their family's income by working in various fields such as nursing, teaching, and secretarial work. They were also involved in factory jobs, particularly in the garment industry, which was still thriving into the 1970s.
The Shift to Modernity
Several factors contributed to the shift in affordability:
1. Economic Growth and Competition
With the growth of the economy, there was a need for more jobs. However, the addition of more people into the job market led to a decrease in wages. This trend is similar to what we see today when low-wage jobs are taken by individuals willing to work for lower salaries. Even if migration patterns change, the sheer number of workers competing for the same jobs will lead to wage depression.
2. Rising Home Costs
Smaller families often desired larger homes, pushing prices up. In addition, the domestic market shifted towards a two-income household model. Higher income couples were willing to pay more for the same homes that lower-income families could not afford. This was particularly true in certain cities like San Francisco and New York City, where professional salaries far exceeded the average worker's pay, leading to a housing market beyond the means of many workers.
3. New Construction Costs
The construction of new properties also plays a role. For example, a 100-unit high-rise in New York City can cost between $35 to $100 million. This price includes the cost of the land, apartments, and ongoing expenses like taxes, maintenance, and utility bills. Subsidies, while well-intentioned, end up diverting funds from the pockets of taxpayers without substantial benefits.
Conclusion
The journey from a single income supporting everything to a situation where even two incomes struggle is a complex economic narrative. It involves a mix of historical changes, demographic shifts, and evolving consumer expectations. Understanding these dynamics is crucial for addressing the challenges of affordability in today's society.