Post Gen-X generations love to compare 2023 prices to 1980 prices and tell us how unaffordable things have become, and how hard it is to make ends meet. So, I thought I would index those costs and inflation to real numbers to see just how much harder it has become.
My results may surprise you…
Housing
The cost of an average home in 1980 was $98,000, skyrocketing 449% to $440,000 in 2023. However, in 1980 the average home was 1,500 Sq Ft, as compared to 2,400 Sq Ft in 2023. The size of the home has increased 160%, so when indexed to the cost per square foot the real increase in cost is 282%.
Family & Income
So, while the size of homes has increased 160%, the average family size has decreased 6%. In 1980 the average household income was $21,000, increasing 319% to $67,000 in 2023. With the average family size decreasing and the income increasing, the income per family member has increased $341%.
Education & Income
The cost of a 4-year college education was $11,000 in 1980, as compared to $36,000 in 2023, a 327% increase. However, the income of a college graduate did outpace the cost of education, increasing 392% from $15,200 to $59,600 in 2023.
The biggest bright spot is the increase in skilled trades income from $10,800 in 1980 to $101,000 in 2023, weighing in at a whopping 935% increase.
Results
The results tell a different story. The results tell us that when we index information to compare apples to apples, income per family member has strongly outpaced housing costs, as well as education costs. And when you consider the skilled trades, there is no comparison. Everyone just expects more and bigger homes, cars, salaries, and such in 2023 compared to 1980.
Statistically, the cost of living in 2023 is dramatically more affordable than it was in 1980. Salaries are higher, homes cost less, and education is a much lower cost. In 2023 people have simply come to expect a much higher threshold of living than 1980. The differences are not as much affordability as they are expected standard of living.
