And tomorrow ain’t as bad as it seems”
Billy Joel, “Keeping the Faith”
We humans have a shared generational tendency to look back fondly to our youth and young adult days, romanticizing those times in our lives as “The Good Old Days”. Things just seemed better. Cheaper. Easier. Less strained. But, were they really?
You know you’ve done it yourself - maybe multiple times. Admittedly, I have also fallen into this, harkening back to “When I was your age, things were so much better” to my kids probably more times than I care to admit. Or they cared to hear. I heard my dad’s voice coming out of my own mouth, saying much the same things he said to me - only 40 years later.
So I thought it would be interesting to take a handful of data from 1960 and 1980, and compare them to today. Most of you were either kids or young adults during these years, so you’ll understand the frame of references. I could have done this for every 10 year period going back forever, but that would have sent most of you scrolling and peeking at your Facebook or Twitter feeds. And we can’t have that.
So, here goes. When you see parenthesis next to a particular dollar amount, it is showing within them the price in today's dollars. So, if you see $1… ($3.00) it means that the price back then was $1, which is $3 in today's dollars accounting for inflation. Now, into the Wayback machine we go.
1960: 69.7 YEARS 1980 73.7 YEARS 2021: 77.8 YEARS We’re living longer - progress!
1960: 5.5% 1980: 5.8% 2021: 4.6% This, after a two year tangle with a pandemic. It was even better, below 4%, before it arrived.
1960: $1.00 ($9.34) 1980: $2.95 ($9.73) 2021: $7.25 These represent the federal minimum wages standards; here in Florida, it is $10.00, which is in line in today's dollars with those from our two chosen years from the past.
MEDIAN HOUSEHOLD INCOME
1960: $5600 ($52,328) 1980: $21,020 ($70,557) 2021: $67,521 Our first peek at things not being better today than in the olden days. But that number is climbing and the gap is closing.
1960: $16,500 ($154,180) 1980: $76,400 ($256,450) 2021: $389,000 Whoa! Another example of things being better back in the day. Of course, we are living in the mother of all real estate bubbles, so maybe when some of the air comes out of it he numbers will realign a bit. Maybe.
1960: $2600 ($24,295) 1980: $$7006 ($23,497) 2021: $40,000 Whoa, part 2! While you may argue that cars are built better and have many more bells and whistles than their counterparts from yesteryear (like homes, perhaps, too) that’s a pretty big leap.
NEW 25 INCH TV
1960: $300 ($2803) 1980: $196 ($658) 2021: $149 They’re bigger, look better, sound better, and can hang on the wall. And over $2500 cheaper.
NEW REFRIGERATOR (15 CU FT)
1960: $258 ($2441) 1980: $786 ($2638) 2121: $848 Like the TV: better, more pleasing to the eye and almost $2000 cheaper. Cool (Get it? Nevermind).
GALLON OF GAS
1960: $.31 ($2.90) 1980: $1.25 ($4.20) 2021: $3.25 Prior to these most recent price hikes, we were considerably better off than in 1960. And are still considerably better off than in 1980.
1960: $.57 ($5.33) 1980: $.91 ($3.05) 2021: $1.48 Either the chickens have gotten much more efficient, or the farmers have.
GALLON OF MILK
1960: $.49 ($4.58) 1980: $2.16 ($7.25) 2021: $3.32 Either the cows have gotten much more efficient, or the farmers have.
But wait, you say: how can the tax guy never even mention taxes in all of this? Well, I have saved the best (or worst, depending on how you look at it) for last. Please have all small children leave the room - this is pretty shocking.
FEDERAL CORPORATE TAX RATES
1960: 30% TO 52% 1980: 17% TO 46% 2021: 21%, across the board. And they will not be going up in this new tax law package.
FEDERAL INDIVIDUAL TAX RATES
1960: 20% TO 90% 1980: 14% TO 70% 2021: 10% TO 37% These, too, will not be going anywhere soon.
So, the next time someone tells you that we’re being overtaxed and that things were better way back when rates were “low”, gently tell them that it ain’t so. Whether they should be higher or lower is a discussion for another day. This is merely to illustrate the trends over the past 60 years. And that trend is decidedly down.
When that great philosopher Billy Joel crooned those words at the top of this page, he had all of us in mind I think. So tell your kids and grandkids about how things were good back then because, in some ways, they were. But also, there are many things that are better today that they are the beneficiary of. But, alas, one day, they’ll be doing this same thing with their kids. It’s just the circle of life.
That’s what I’m talkin about.