We have all heard and seen the stats…the nation’s working wages have not increased anywhere near equally to the rising costs of food, housing, medicine, transportation, or childcare. And all these items are what we clearly all agree are necessities, not luxury items. So what gives??
For those who don’t remember, our country had most families functioning on one income from the male member of the household back in the 50’s and 60’s – the ‘greatest generation’ was married and having families about that time, and the early baby boomers were graduating and right behind them. The minimum wage in 1965 was $1.25/hour. Men were working, women were at home generally. Got the picture in your head?
My father made minimum wage and my mother was a stay at home mom in 1965. His income was roughly $40/week AFTER taxes. The general loan guidelines at that time said spending on housing should not be more than 25% of your monthly income, which meant their house payment should be no more than $40/mth. Sounds ridiculous today, doesn’t it? But it wasn’t then. They were able to buy a very small 3 bedroom 1.5 bath home with a single garage for around $7,000 at roughly 6% interest. The monthly payment was about $42/mth.
Fast forward to today. That same $1.25 in 2020 terms, is equal to about $10.30/hour. https://www.dollartimes.com/inflation/items/1965-united-states-minimum-wage $10.30 is well above the current minimum wage, so we can now easily begin to see where the breakdown is taking place on our country having ‘living wages’…something our nation has always been proud to say we have had historically. Clearly, just doing simple math, and assuming the list above of food, medicine, housing, transportation and childcare rose equally to wages…we are still already in the hole with a $7.25 minimum wage. And to be clear – NOTHING on that list has risen in pricing equal to minimum wage. Most, if not all, have risen multiple times as much in the same time period as our wages have.
So let’s do the math, only this time, we have both the woman and man working at minimum wage jobs. That’s $290/wk BEFORE taxes – or $580/wk BEFORE taxes on TWO incomes! This does not include the possibility that they have 2 children like my parents did at the time. Childcare costs would make one of these working wages null and void, as childcare costs more than $290/wk generally.
And realistically, look in the paper or online to see what you can get for $600/mth – assuming you have a family member caring for the kids at no charge! IF you can find a 2 bedroom apartment or house for $600/mth, ask yourself if you would want to live in a place like that, in a neighborhood like that…IF you can find a neighborhood or place that is even available for $600/mth. And that’s if you have free childcare through a family member.
It just isn’t rocket science to do the simple math. Our nation has a huge problem and we MUST address decent affordable housing. In addition to the upcoming generations that need simple safe housing, as much as 24% of the population will be over 60 years of age by 2060, and they will also need safe simple housing. If you think affordable housing is a tough issue today, just wait until all those old folks on small fixed incomes hit the market in need. Sigh…