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Are We Living In The “Good Old Days”?

by | Nov 27, 2023 | *Financial Awakenings, In The News, Life Aspiration Planning, Money Psychology, The Economy, Weekly Column


For anyone following current news, whether from mainstream sources or the more extreme corners of the Internet, it may seem that the world is spiraling into chaos. That same narrative is frequently echoed by politicians and political candidates.

Are things really that dire? Attempting to answer this question requires taking a more objective look at our current circumstances compared to our past. Let’s go back four decades and consider a few key indicators of wellbeing.

Numerous sources suggest that, in many ways, we are leading longer and more prosperous lives than we were 40 years ago. According to the research organization PRB (Population Reference Bureau), the average life expectancy in the United States stood at 73.7 years back in 1980. Today, despite a setback from Covid, that number has risen to 78.6 years, meaning Americans, on average, are enjoying nearly five more years of life than they were in the 1980s.

Another crucial measure of wellbeing is the poverty rate. In 1980, the US Census reported a poverty rate of 13.0% in the United States. Today, that figure has improved to 11.5%, meaning a smaller percentage of Americans are living in poverty than four decades ago.

A June 29, 2022 article by Timothy B. Lee on Full Stack Economics, titled “24 Charts That Show We Are (mostly) Living Better Than Our Parents,” conducted a comprehensive examination of various aspects of our current environment compared to 40 years ago. The data used in the article are transparent and come from reputable and respected sources.

Some results of this analysis might be surprising. For instance, consider the decline in auto accident fatalities compared to the 1980s. The death rate, when measured in fatalities per 100 million vehicle miles traveled, has more than halved. Factors contributing to this reduction include improved highway designs, anti-drunk driving campaigns, and the widespread adoption of safety features like airbags and anti-lock brakes in modern vehicles.

But what about long-term inflation eroding our lifestyles? The Full Stack Economics researchers compared real-world purchasing power with actual prices. They created a metric that measures how long a typical wage earner would need to work to buy common items. When measured in hours worked, prices have significantly decreased. For example, a hammer that cost $9.50 in a 1980 Sears catalog now goes for $13.98 on Amazon. However, back then, the typical worker earned $6.86 per hour, while today’s average wage stands at $27.33 per hour. This means that the hammer in 1980 required about 1.4 hours of work to afford, compared to just 30 minutes today—a 63% decline.

When comparing other items like televisions, it’s evident that a 25-inch TV today offers superior features compared to its 1980 counterpart, all for about a quarter of the price, even before adjusting for inflation. In 1980, only 70% of households had washing machines and only 61% had clothes dryers. Today, those percentages have risen to 84% and 83%, respectively. Dishwasher ownership has surged from 37% to 73%, and 66% of households now have central air conditioning, compared to just 23% in 1980. You can verify this data on the Energy Information Administration‘s “2020 RECS Survey Data.”

Certainly, in today’s world, we face real global problems that bring genuine hardships and challenges for many people. Those who came before us did the same. Yet evidence suggests that innovation and progress will continue to bring improvements, just as they have over the past four decades. An old joke points out that the main reason we look back so nostalgically at the “good old days” is that we were younger then. Which means that, for our children and grandchildren, these are the good old days.

 

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