I was fortunate enough to grow up in a solidly middle-class family. We weren’t rich by any means; there were many times when we were forced to really pinch pennies — but for the most part I never wanted for anything.
According to the US Census Bureau, last year the average household income in America was $67,520. Unfortunately, over time inflation has eroded the purchasing power of the dollar — and with increasing speed.
Several years ago, USA Today highlighted seven items that the middle class is finding increasingly difficult to afford: new cars, vacations, debt payments, medical care, dental work, emergency savings and retirement savings.
After reading the piece, I only had one question: “That’s it?”
Off the top of my head, I can think of at least ten other things financially responsible middle class families could afford in the 20th century — but struggle paying for today. I’m sure you can think of even more. Here’s my list:
A house. In 1962 my dad bought the 1700 sq. ft. Southern California house I grew up in for the inflation-adjusted equivalent price of $156,000. According to Zillow, my childhood home supposedly costs more than three times that much today.
Cigarettes. I worked at a grocery store as a teenager. I still remember packs of cigarettes selling there in 1983 for 81 cents; that’s equivalent to $2.23 in 2021 dollars. Good luck finding a pack for anything close to that today — which is why I say cigarettes are one of the four horsemen of personal finance.
Disneyland. Growing up, my folks took my sister and me to Disneyland at least once a year — sometimes twice. And why not? In 1983, you could buy a one-day all-inclusive ticket for $12. Today, the same pass costs $146 (plus tax) — three times more expensive on an inflation-adjusted basis. As a result, the typical family of four can now expect to spend roughly $600 per day when visiting the “Happiest Place on Earth.” And that’s just to get in the door. Incredible.
Concerts and sporting events. According to Forbes, Peter Frampton at the height of his ‘Frampton Comes Alive’ fame headlined for $10.50 — that’s $50.62 in today’s inflation-adjusted dollars. By the way, in 2019 I paid $150 per seat to see Frampton at the Los Angeles Forum — from the second deck. (And for those of you under 50 wondering who I’m talking about … ask Dad. Er … or Grandpa.)
Television. When I was a kid, we had less than ten channels, they were all free, and nobody ever complained about a lack of stations. Today, I pay about $2200 per year for more than 250 channels, and sometimes there’s nothing worth watching on any of them. I know.
College. When it comes to a college degree, the expected return on investment rarely makes financial sense anymore. According to USA Today, after adjusting for inflation, students now pay more than triple what they did three decades ago to attend a public, four-year university. I’ll say. It took me five years to earn my electrical engineering degree from Cal Poly San Luis Obispo in 1988. The total cost: $15,000 — and that included tuition, fees, books, room, board, and general living expenses.
Divorce. Okay, you got me; I have no idea what a divorce cost fifty years ago — but it certainly had to be cheaper on an inflation-adjusted basis than what it costs now. The average cost to litigate a contested divorce in California today is $17,000. And if you have kids the price can reach upwards of $30,000. Ouch.
Childcare. The average cost of center-based child daycare in the US is currently upwards of $16,000 per year. Wow. Before the 1970s, families like mine didn’t spend much on childcare because they had:
A stay-at-home mom. According to the Pew Research Center, 49% of American women with kids under 18 were stay-at-home moms in 1970; today, it’s just one in five. Sadly, despite more mom’s joining the workforce, real household purchasing power has barely budged.
Kids. In 1960, middle class parents in the US spent an average of $25,230 raising a child to adulthood. It takes $233,610 today — and I’m blaming it all on Disneyland.
Photo Credit: DonkeyHotey
I’m not sure if it is the same in the US (but I think it probably is), but I would add “a pint” or “a glass of wine” to the list.
Drinking in public places is now unaffordable for the middle class (or at least those interested in building long term wealth and achieving their main goals) due to the amount of tax and duty that is applied to each glass.
I personally think that many of these are a result of debt as well. Everything becomes a little less affordable when the first 20-40% of your paycheck goes on repaying student loans, credit card, car payments etc…
In fact, 40% is probably an underestimate for most middle class families these days…
Len Penzo says
Yep. Most households are tapped out, MS. Today, the goal is to just keep treading water.
Kit Kat says
If I knew that cigarettes were going to be so expensive today, I would not have started some three decades ago. Still now, I just find it so difficult to quit. Sigh.
Emily @ Simple Cheap Mom says
I remember reading that and thinking, are people in the middle class supposed to be going on fancy vacations all the time?
That being said, the purchasing power of the middle class does seem to be dropping. I think it’s mostly to do with the stagnant wages than increasing costs.
It’s hard for me to figure, because I was most certainly NOT middle class growing up. So I cannot say what was considered middle class then, and can people afford it now.
I think standards have risen though – vacations are fancier, not just road trips and camping. Many families have 2-4 cars, not just one.
And the stay at home mom thing – meh, I dunno. I never wanted to be one. So I can’t really judge that one.
I’d add traveling (not Disneyland, it’s too far for us, even the one in Paris). Most our folks would take their kids to at least 2 BIG vacations (about 2 weeks each) per year: winter / summer (so we’d have sea and skiing). Now, many families can barely afford a very cheap summer vacation (not more than 10 days).
Len Penzo says
Good one, dojo. Most years, my family took a vacation somewhere — usually a cross-country road trip that lasted three weeks or so. Boy, they were fun!
How To Save Money says
Darn, but what about the salaries? I think they go the opposite way lol.
Len Penzo says
Real household purchasing power stopped increasing around 1970 too. For awhile, Americans were able to offset the decline by putting moms to work — but today, I believe it has fallen back to almost par with 1970 (even though 4 in 5 middle class families are two-income households).
When I was a kid, my parents would buy season passes to Disneyland. We lived 30 mins away so it was easy to go. I think my mom said that a season pass was $100 at the time. Oh how things have changed!
Len Penzo says
When our kids were smaller we bought season passes for Disneyland too, Melissa. If I remember correctly, they were $99 per person. The thing is, it wasn’t that long ago! Maybe eight or nine years ago, at most. Now that’s the price for a whole day! Their rising prices are the reason I haven’t taken our kids to Disneyland in four or five years. It’s sad, really. Anyway, I refuse to pay their high prices on principle.
I’m amazed your childhood home is valued so low now since the Dollar Times inflation calculator says that $128,000 in 1962 would be $994,342 today. It was also a very expensive home for 1962, compared to the rest of the country. My in-laws built a 3600 sq ft very fancy home in 1964 for the princely sum of $40,000 in Texas. My sister bought her first home (a modest 1940s ranch) in 1970 and paid $12,000 for it.
Len Penzo says
Kari: You misread it — $128,000 is the inflation adjusted price. My dad paid just $17,000 for the home back in 1962. In fact, he told me he paid $2000 for the land, then $15,000 for the home, which was custom built.
Big time agreement on the concerts … what gets me is the fact that groups with meager resumes charge these ridiculous prices … I don’t mind paying top dollar to see Paul McCartney , Streisand , Springsteen etc… but Peter Frampton or some guy who had two disco hits in the eighties??? No thanks
Len Penzo says
Ya know, George, for what it’s worth, the first album (actually, it was an 8-track) I ever bought was Frampton Comes Alive!. I’d pay to see Peter — but not $225. A hundy, probably.
I just wish that every product cost just like it was before. Before, people were like more satisfied with what they had, like you not complaining the number of channels. But now, people want more than 10 channels. People really change.
Likewise, solidly middle class growing up, but can’t help notice the decline in financial power from my grandparents to my parents to me. I fear for my children…
One odd outcome of the general rise in costs over the years is that of daycare. Depending on your income, the cost of daycare has risen to the point where it can be a wash between a spouse working and a spouse staying home to care for children.
Not sure if that’s good or bad… I’m sure the children would prefer being raised by their parents though.
A good supplement to a stay-at-home parent would be running a small in-home childcare operation. My mom started doing this when it turned out she was spending all her income (as a social worker) on childcare.
Good stuff Len. Two things struck me:
1. A good number of items on your list are entertainment and accademia. Those two groups expect to make big bucks and do. (University professor wages is an interesting google).
2. It would be informative to research what it costs today to be “average” in terms of monthly expenses for phones, television, children’s clothing and technology versus yesterday year. I would guess the median cost in those areas is 10x the inflation adjusted cost of forty years ago
Len Penzo says
Thanks, Kev. Regarding point 1: You would think both education and, arguably, higher education would be highly elastic services — which makes me wonder why they are on the list. As for point 2 … I’ll have to look into that — I bet you are correct though!
Don’t have kids, and look at how many of those listed above you can eliminate..
Kids are the biggest drain on finances. Suck you dry.
Not having grown up middle class, I can’t say what it was like back then to be middle class, but I’ve seen a change in the middle class in my own adult observations. While many folks do have more tech toys and vehicles than when I was a young adult, I see more struggle to afford things like vacation, medical procedures, food, insurance, and utilities. Do we have our priorities wrong? Do we simply have less take home pay than our parents did, adjusted for inflation? Are we expected to have more stuff and therefore overload ourselves? Does buying on credit cause the problem? What is the cause, or are there lots of causes? This is a thought provoking article for me.
You’re younger than me, Len. When I was a kid, it was three channels on that antenna TV– ABC, NBC, and CBS.
Len Penzo says
Only three channels? Yep, JD, you are definitely older than me! LOL
Houses are definitely more expensive but depending on the part of the country you live in you can get an entry level house for less than $100,000. No, it won’t have granite counters, hardwood floors (well maybe it will if they are original), stand alone shower and Jacuzzi tub with a separate room for the toilet. How many times have you seen a young couple on those house hunter shows who barely have a couple thousand for a down payment and they are looking for a McMansion better than their parents ever dreamed of owning. It isn’t that the houses got so much more expensive but that people’s expectation of what they deserve has skyrocketed. They have champagne tastes on a tap water budget and then declare that the system is rigged against them.
You are so right. They are so blinded by the granite countertops and open concept living space, they choose a house on a tiny lot with a real problem, like train tracks or a freeway over the back fence. They never think of how that will come back to bite them when they need to sell.
I managed to get my whole family of six into Euro Disney (almost) free of charge by slipping the gate agent a $200 euro bill. It was still cheaper than paying the going rate!
Paul S says
Almost 20 years ago my son graduated high school and was casting about for a career. I urged him NOT to go to university simply because he had no firm plan at the time, instead look at electrical trade certification due to the nature of being able to transform all energy into electrical for transmission and and function. I believed it was the future and so it seems to be. He could always attend university later, if he wanted to go. Now, at age 37, he earns at least 200K per year working 2 weeks on and two weeks off with full benefits including a pension contribution paid for by the employer at $8 per hour…. (industrial electrician building and maintaining autonomous mining equipment). Plus, the employer will match what he also contributes. He owns 2 homes, one rural near me and one in ‘town’. He rents out both homes and lives in the basement suite of the town place with his nurse girlfriend and their two Labs. The renters pay the mortgage.
While I have a few degrees plus a trade and additional technical training, I have always believed university is mostly a scam and only exists as a class blocker for most careers. You want the job you need the entry ticket and the uni prints the ticket. You don’t go to university to find yourself or search out a career…..that should be done before even thinking about the commitment. Just my opinion. By the way, these days most training can be done online with minimal campus attendance. I did this in the 90s, working full time while supporting my family. It was not expensive. This has been commonplace for 2 decades now, and during Covid…….
Plan, it’s all about a plan and if it changes along the way so be it and great. Those first steps should be deliberate and focused. After that run with it and enjoy.
Len Penzo says
Great comments, Paul.
My son has gained a good deal of experience as both an auto mechanic and auto body specialist over the past few years, so I am happy he has those skills. Still, I’ve been pushing him to consider work as a plumber, or electrician, as I believe those two vocations will become even more valuable in the coming years.
Paul S says
I agree, Len. The great thing about a trade is so many skills are transferable. And your son will never have to pay someone to maintain a vehicle Hard to put a price on that!!
These larger homes have fancier finishes, and higher taxes. More use of electricity not only for the house but for all the gadgets people just have to have. The elevated lifestyles resulted in elevated rents. It makes it hard on struggling people.
Higher taxes are getting people. Every time you turn around, a new government fee or tax has been added. Part of the reason cigs cost so much is the extremely high taxes. If passed the latest tax on tobacco products is an increase of 100% up to over 2000% depending on the product. They want to price people out of smoking. In order to increase your property taxes, they don’t raise the tax rate, they raise the appraisal.
Medical and dental care is eating people up. If a provider is willing to accept X from a preferred provider insurance, they should accept the same from cash patients. The same goes for meds. I took a med for migraines. The drug became so inexpensive the pharmacies couldn’t make the level of profit they wanted, and quit carrying it.
Social Media has people foaming at the mouth to have the same or better than everyone else. I am not in Junior High, and I don’t care what you ate for lunch.
The loss of tens of millions of good paying jobs to NAFTA and the trade agreement with China, has just about killed what remains of the middleclass.
I will get off my soap box. They are super thin, and a fall would hurt.