Did you know that your grandparents were making just as much money as you in the 70’s? It may not seem like it but apparently it is true. A new study reveals that wage growth for the average U.S. citizen has been stagnant since 1970. We work more hours and for less money than our parents and grandparents did. How is this so when previous generations never made $30,000 or $40,000 dollars per year?
The United States economy may have grown during the 70’s, 80’s, 90’s, and 2000’s but the salaries of the middle class have not. The reason for this is inflation. Factor in inflation and wages have not grown in 40 years. The price of goods and services has been outpacing wage growth. Homes, automobiles, electronics, and food all represent a larger percentage of personal income today. A dollar today does not buy as much as it did in the 60’s.
Take a look at these statistics:
1970’s
- The average salary was $7,564.
- A quart of milk was 33 cents.
- A loaf of bread was 25 cents.
- A dozen eggs were 60 cents.
- A pound of ground beef was 80 cents.
2009
- The median wage was $32,390*.
- A quart of milk was $1.49.
- A loaf of bread was $2.00.
- A dozen eggs were $1.99.
- A pound of ground beef was $3.99.
Costs can vary for items depending upon your location and the food product. For example, premium breads can run $4 to $5 dollars. Eggs can get as high as $3.99 and leaner cuts of beef can run $5 to $6 per pound.
The point of this illustration is to demonstrate that wages have not risen at all when you look at their buying power. Individuals are making more money today than a generation ago but they are actually getting less for their dollars. As you can see, middle class Americans have struggled just to keep pace with inflation. The wealth that was gained over the past 40 years has trickled upward and not down to the average worker.
*The U.S. median wage was $32,390 per year, according to the most recent data from the Occupational Employment Statistics
