It Ain't Fair

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Cost of living politics wages fall behind cost of living

Were people better off financially in 1970 than they are in 2020?

To address this question, I made an informal study using newspapers from 1970 and corporate websites to compare the cost of living figures with incomes from 1970 to 2020. 

I’m not an economist or a politician, I’ve read articles from liberal and conservative sources that attempt to compare the different periods; the results  differ greatly. I decided that I was going to do it the old fashioned way.  I wanted to know, in each time period, how much money I have in my hand at the end of the month and what my expenses are. Simple enough?

I calculated income from the Bureau of Labor Statistics, and prices on consumer items from old Minneapolis Star and Tribune newspapers from 1970. I tried to make comparisons on the same products. Considerations, such as product improvements and differing sizes, made the task very challenging.  Therefore, I adjusted for different sizes, and I’m hypothesizing that Wheaties cereal is the same now as in 1970. Also, some areas of the country may have other brand names and different prices. I took sale prices if I could find them. They may not be exact, but I am confident I’m close.

The median household income represents take-home pay.  Every state has different rates and everyone’s filing status is different, although everyone pays 7.65%: FICA and Medicare, plus federal taxes of at least 10%. That would be at a minimum 17.65% deducted plus state taxes. My goal is to show how two incomes that were normal in the two time periods compare with the real cost of living.

Here are the facts

The Bureau of Labor Statistics says inflation was 571% from 1970 to 2020. In other words, what cost $1.00 in 1970 would now cost $6.71 If prices went up by the reported rate of inflation.

The median family income in 1970 was $ 9,870. The median family income in 2020 is $68,703.  If 1970 income went up by the inflation rate, it would be $66,227, so income went up more than the rate of inflation. So far, not bad.  

Median family income means if just one person works, it’s that person’s salary; if both husband and wife work, it’s their incomes added together. Median also means that one-half of families earn more and one-half earn less. In 1970 approximately 39% of married women worked outside the home; in 2020, the figure is about 76%. It appears that women in the workplace have helped more families get to the median income. It isn’t just an increase in a person’s wages.

Buying a house in 1970 versus 2018

In 1970, the average house in Minneapolis, MN sold for $ 23,600, and if you financed it at 7.23% for 30 years, your payment is $161 a month or 

$1,932 a year. If your median family income is $9,870, the house payment is 19.6% of your income. If your house had risen by the amount of inflation, it would be priced at $158,380 in 2020.

However, the average price for a house in Minneapolis in 2020 is $296,600. If you financed it at 3% for 30 years, your payment is $1,234 a month or

$14,808 a year. The median family income in 2020 is $68,703. The house payment is  21.5% of your income. Your income would need to be $76,000 for your payment to be 19.5% of your income, as it was in 1970.

Homes in 2018 built were larger and better insulated than 1970, but if you built a home in 1970 for $23,600 and put it on the market in 2020, you’d ask for a price around that $296,000 range.

Buying a car in 1970 versus 2018

If you purchased a new V.W. Beetle in 1970, your price was $1,839. Financed at 5% for three years, your payment is $55 a month or $660 a year. The median family income is $9,870 a year. The auto payment is 6.7% of your income. If the Beetle had gone up at the rate of inflation, it would have cost $12,340.

A V.W. Beetle in 2020 costs $21,700. Financed at 3.1% for three years, your payment is $632 a month or $7,584 a year. If your median family income is $68,703, the auto payment is 11% of your income. Your salary would need to be about  $115,000 a year to make the payment amount to 6.6% of your income.  

So, after a car and a house in 1970, you’ve spent 26.3% of your income, and in 2020 the same items cost 32.5% of your income.

Do college costs affect you; if you’re paying or helping to pay for someone’s college, or you’re sitting there with student debt? Nationwide, 44.7 million Americans have student debt, and the average balance is $28,650, with an average monthly payment of $393. There are around 45 million citizens that collectively owe $1.6 trillion in college debt.

In 1970, the University of Minnesota Twin City campus had a tuition rate of $399 a year. If tuition had gone up by the 571% inflation rate, tuition in 2020 would be $2,677. What was it for the 2019-2020 school year? $15,027. So in 1970, tuition was 4% of your income and in 2020 it’s 21.9% of your income.


1970 VS 2020
Strawberries (1 lb)$ 0.29$3.49
Heinz Tomato Catsup (20 oz)$0.38$1.60
Campbell’s Tomato Soup$0.10$1.00
Maxwell House Coffee (3 lb)$1.79$14.06
Ore Ida Tater Tots (2 lb)$0.39$2.99
Wheaties (18 oz)$0.49$4.14
Tropicana Orange Juice (1/2 gal)$0.39$3.64  
Kraft Miracle Whip (1 qt)$0.38$4.49 
Scope Mouthwash (24 oz)$1.17$4.24
Excedrin Extra Strength (100 count)$0.99$4.79
Pampers  box of 30$1.09$11.19
Pennzoil 20W (1 qt)$0.39$8.49
Lemon Pledge  14 oz.$0.99$7.19
Auto Lite Spark Plug$0.49$7.99
Dry Clean (2 pc suit)$1.49$19.30
Big Mac$0.40$3.99
First Class Stamp$0.06$0.55
Cigarettes (pkg)$0.38$8.89
Coca Cola. 8 pack of 16 oz.$0.49$4.35
Basic Taxes$5.00$79.99




If you had purchased one of each of these items in 1970, you would have paid a total of $17.15, but in 2020, the same items cost $196.37. If the above-listed items had risen by the rate of inflation, you would have paid $115.02, so the cost of items on that list rose over 1000%. 

It should be noted that there are consumer items that cost less in 2020 than in 1970, such as electronics, TVs and stereos. For example, if you spent $450 on a TV in 1970 and the price increase was consistent with the rate of inflation, it would now cost around $2,900. Of course you can spend that amount of money in 2020, but you can also buy a TV for $300-$400. 

Here are Some Entertainment Prices: 1970 vs 2020

A one-day ski ticket at Breckenridge, CO cost $6.00 in 1970; the same ticket in 2020 is $97.00 to $147.00

In 1970:

  • When Bob Hope played at the Mets Sports Center, the ticket cost ranged from $4.50 to $12.00.
  • Led Zeppelin concert tickets started at $ 4.50 and topped out at $7.00.
  • Van Cliburn Orchestra Hall tickets ranged from $ 3.15 to $ 6.65.

CEO Compensation:  1970 vs 2019

    1970                         2019

JP MORGAN                                  $276,250                   $31,500,000

BANK OF AMERICA                       $171,190                   $26,500,000

In 1970, a CEO made about 28 times the average median family income. 

In 2019, a CEO made 455 times the average median family income. 

According to census data, 37.1 % of American households made less than $50,000 in 2017.

So, were you better off in 1970? Your expenses in either period would also include medical Insurance, and from what I could determine in 1970, employees paid little to nothing for medical Insurance. In 2018 it could cost you from $200 to $1,500 a month. Add to that utilities, recreation, insurance, clothing, gas and auto expenses, student debt, credit card bills, and of course, food. Plus, in 1970, you had no cell phone bill, where the initial cost could range anywhere from a few hundred to a thousand dollars each, plus $35 to $50 a month per line, in addition to no cable bill for $50 to $150 per month, and no Internet bill, which could be $50 per month.

Wages, for a lot of folks, have not kept up with the cost of living.

It seems that you could afford a 1970’s house and a 1970’s auto with the median income in 1970. But doing the same in 2020 is much more challenging.

I understand that a 2020 auto is much safer than a 1970 automobile and has many more standard features; the same is true of a 2020 house. A new home in 2020 is larger, has more baths, and is better insulated.  However, if you tried to buy a 1970’s house in 2020, the price would be right up there with a house built in 2020. If you purchased a 1970’s home in 2020, the cost would not be $152,692.  In a nutshell, home prices in 1970 allowed a family making the median income of $9,870 to be able to have a decent lifestyle. In contrast, a family in 2020 making a median income of $68,703 (depending on where they live, whether or not they have children under school age, have college debt, or how much they pay for medical insurance) are not as well off as in 1970. In summary, this is because prices have increased more than the recorded rate of inflation.  

Here’s what stands out to me: While wages went up about the stated amount of inflation put out by the Bureau of Labor Statistics of 571% consumer prices went up much more. Houses and cars take much more of your budget in 2020 than in 1970. Then pile on cell phones, internet, cable bills, and college debt. Most households are not keeping up.

Are some households doing ok? Sure. A review of household incomes of Americans in 2018 follows:

A Fact Sheet for America

The U.S. population was 329 million in 2019, according to the U.S. Census Bureau. 

The Census Bureau estimates that about 7% (or about 23 million) are non-citizens.

According to the U.S. Census Bureau, there were 128,580,000 households in the United States in 2019. Here is a summary of their incomes:

9.1% or 11.7 million households made less than $15,000.

8% or 10.2 million households made $ 15,000 to $ 24,999

8.3% or 10.7 million households made $ 25,000 to $ 34,999

11.7% or 15.0 million households made $ 35,000 to $49,999

As such, 37.1%, or 47.6 million households made less than  $ 50,000

16.5% or 21.1 million households made $ 50,000 to $ 74,999

12.3% or 15.8 million households made $ 75,000 to $ 99,999

15.5% or 19.9 million households made $ 100,000 to $ 149,999

8.3% or 10.7 million households made $ 150,000 to $ 199,999

10.3% or 13.2 million households made $ 200,000 plus

About 34% of households earned more than $100,000 a year. That’s a good income, but what about the 37% who made less than $50,000 a year?  What about the 25% or 32.6 million households that made less than $35,000 a year? I don’t know how many of those households are seniors or disabled persons; or have had a temporary setback such as an illness; or have been laid off. My point is that some in America are doing fine, and many aren’t doing so well.


  1. Under “A Fact Sheet of America” you state the following, ‘According to the U.S. Census Bureau, there were 128,580 households in the United States in 2019. Here is a summary of their incomes:’. I think you are missing 3 zeros. FYI

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