Looking back in the 1970’s, it seems as if the times were simpler back then. Kids would still play outside after school, students didn’t have an option to join classes virtually and travel was definitely a luxury for the middleclass. But apart from taking a look at the technological advancements that occurred in the last few decades, it’s really interesting to take a look back at the cost of living in the 1970’s and compare it with how much common items would typically cost today.
Before you start blaming the rising prices on production costs and advertising, it’s good to keep in mind that the hands of inflation are at play. For one, the average household income was much lower back then. The minimum hourly wage in the 1970’s was at $2.10 and it is truly a far cry from what many of us are earning today, which is equal to or higher than $8.25 per hour. That being said, household items such as milk, coffee, eggs and bread increased proportionately to income. On average, they were all priced in the 1970s at $1.65 a gallon, $1.12 a pound, $0.84 a dozen and $0.28 respectively. Today, a gallon of milk costs $3.49, a pound of coffee costs $4.91, a dozen eggs cost $2.08 and bread costs $1.43 per pound. Unfortunately, these are just tiny line items on your monthly budget. What really spiked considerably from the 1970s are purchases that the American middleclass can then all afford namely a car and a home, as well as college education for the kids and basic healthcare without incurring a massive debt. For many Americans living today, these items are simply all getting out of reach. And for those that do purchase them, they are required to rake up a big credit card debt and pay high interest rates for their loans.
Back in the 1970s, you can buy a new house for approximately $50,000. While that figure has more than quadrupled since then, the median income also rose from an average of $13,000 to $52,000 in the same period. This is truly a direct result of inflation if you think about it. However, when it comes to purchasing a family vehicle, a new car would only have then cost $3,800 in the 1970’s but today it would cost approximately $31,200. If you were to look at the adjusted car prices after inflation, the price is pegged at $16,578, which is a true doubling of cost.
But, perhaps the biggest change in prices has manifested itself in the cost of college education. Public college costs are up over 150% while private college costs are up over 160%. What used to be an average of $1,819 for public college now costs ten times as much at $18,943 on average. For private college education, you would have to shell out $42,419 on average while it only cost an average of $3,776 back in the day. No wonder why a lot of young American no longer aspire to be homeowners. These prices are just getting out of control to the point that many have been fully employed for years to the end and are still paying off their student debts.