From some guy in Florida:
“If you look back to the Great Depression, the house was only three times the average salary. Now, it is eight times the average salary. The car was 46% of the salary [back then], the car today is 85% of the salary. And here’s the craziest part: [residential] rent then was 16% of the average salary, it is now 42% of the average salary.”
I’d love to see the same stats for groceries and electricity. On the other hand, maybe not.
How do we get to these things costing the percentages of our pay back in the 1920s and 1930s?
JQ
I would tell you, but I’d end up on some law enforcement agency’s Naughty List.
How? Return to the level of government control and regulation of the 20’s and 30’s.
Sure, cars cost more today than they did 50 years ago. However, they also go 2 to 3 times further than they did. 100,000 miles used to mean all used up, not so today. Also, they don’t require the maintenance that older cars needed. We go 100,000 miles between tune-ups now, and the tune-up is a simpler job.
Today’s houses are different, too. Nobody wants to live in a 1,200 square foot house these days. The average size of a new house in most states is 1,800 to 2,400 square feet, and square feet = dollars.
No doubt the current economic woes affect peoples’ ability to purchase these items. But, we should be careful about unsupported sweeping statistical statements.
It’s a choice. Last time I bought a house (corporate transfer to a new city), my wife and I are at the bank discussing loan approval for roughly a $200k house. That house would be about 2x my salary at the time. The loan officer looked over my application and exclaimed “oh my, I can get you approved easily for like $400k to $500k if you want!” I politely told her that I’d pass on the offer, as there’s no way I’d accept the monthly nut just to live in a bigger house.
We know a lot of people who are house rich, cash poor. People who go to the church Wednesday night supper and load up and take food home cause they damn near can’t afford groceries, but live in a half-mil house. Or live in an ultra-exclusive neighborhood but drive a 20 year old Nissan mini-van, It’s a choice and people used to be smarter about choices.