At Surviving and Thriving, a reader named Grace posted an interesting comment on Donna Freedman’s latest gracefully written post about generosity and about keeping perspective on one’s own problems.
Perspective is such an important thing, and one that we so often lose in the face of our personal woes. While I am quick to whine about my financial state, I do try to keep in mind that my parents reared their children, bought a home and had a satisfying retirement on far less than I make. Naturally, they didn’t have my expenses, but truth to tell, I shouldn’t have my expenses!
Our parents brought up their families, paid for a home, and had an adequate retirement despite never earning much…. They didn’t have our expenses, but…maybe we indulge ourselves. Oh, God. I can’t resist:
Really? Is that so?
My parents rented all the time that my father was working — partly because we lived overseas for ten years, and partly because my father felt mortgage interest was the biggest rip-off known to humankind. When my father retired, he bought a house in Sun City with cash.
The house my parents retired to would sell for about $71,000 today. In 2004, it sold for $110,000, considerably less than Zillow thinks it was worth at the height of the bubble, in 2005.
My parents bought that house in 1962. Let’s go with the $71,000 figure as the value of the house, although, relatively speaking, it may have been somewhat higher when the place was brand-new. In 1962 dollars, that price would be $9,235. In 1960, the average price of a Sun City house was about $10,550 — and my parents’ house was one of the smaller models.
I think my father earned about $8,000 to $10,000 a year as a Merchant Marine deck officer with a license to sail any tonnage on any ocean. That translates to about $61,500 to $76,880 in 2013 dollars. And it’s probably low: today a tanker captain with an unlimited license earns between $120,000 and $200,000. However, toward the end of his career my father sailed, by choice, as first mate, because the job didn’t entail 24–7 responsibility for the ship’s operation and safety. So, the lower figures are probably accurate. My mother occasionally took office jobs, but she wasn’t paid much — in today’s dollars, probably no more than about 18 grand. By the time my father retired, purchased a new car, and put me through college, he had about $130,000 left in savings; that would come to about $999,400 in today’s dollars.
If that estimate is anywhere near accurate, he was doing a great deal better than his daughter is doing.
Is it true that they didn’t have our expenses?
Well, my father paid for my tuition, room, and board at the University of Arizona. He gave me $1,000 a year to cover all my bills for the nine-month academic period. That’s the equivalent, in 2013 bucks, of $7,868. I paid the tuition and dorm bills, budgeted $10 a week for all my meals, clothing, laundry, and other incidental expenses, and, at the end of spring semester, came out about even. Today, if you lived on campus, it would cost you about $24,744 to attend the UofA.
So: check! There’s an expense he didn’t have.
The four-door Ford Galaxie he bought cost $2,500: about $19,980 in today’s dollars. Not much difference there: that’s what I have budgeted for the purchase of my next vehicle.
In 1962, the cost of gasoline was about 25 to 30 cents a gallon: $1.92 to $2.31 in 2013 dollars: about 2/3 of what we pay today, adjusted for inflation. Some savings there, but not as much as one might have expected.
A Porterhouse steak cost $1.19 a pound; hamburger was 45 cents a pound; butter, 67 cents a pound; baby food, 25 cents for three jars; carrots, 9 cents a bunch; asparagus, 19 cents a pound; potatoes, 39 cents for 10 pounds; corn, 5 cents an ear; onions, 29 cents for 2 pounds; oranges, 89 cents for two dozen; bananas, 10 cents a pound; bacon, 79 cents a pound; Crest toothpaste, 50 cents a tube; Tide laundry soap, 59 cents.
How much would that market basket cost us today, if we paid the same amount in inflation-adjusted dollars?
• Porterhouse steak: $9.15 a pound (= $1.19 expressed in 2013 dollars) (Safeway has Porterhouse for $5.99 a pound just now)
• hamburger: $3.46 a pound (Bureau of Labor Statistics estimates average price of $3.055/pound for 100% ground beef in 2013)
• butter: $5.15 a pound (BLS estimates $3.37/pound in 2012)
• baby food: $1.92 for three jars (at Walmart, 98 cents for two; that’s $1.47 for three)
• carrots: 69 cents a bunch (BLS estimate: 55 cents a pound, which would probably be about $1.10 a bunch)
• asparagus: $1.46 a pound (on sale at Safeway in 2011 for $1.28 a pound)
• potatoes: $3 for 10 pounds (in 2011, the federal government estimated you’d pay about $6.50)
• corn: 38 cents an ear (in 2012, $1 for 6 ears at Safeway; 17 cents an ear)
• onions: $2.23 for two pounds — about $1.12 a pound (last week I bought onions at Safeway for 88 cents a pound)
• oranges: $6.84 for two dozen (today’s price: 88 cents a pound; for 24 that would probably be about $10.55)
• bananas: 77 cents a pound (55 cents a pound, Safeway)
• bacon: $6.07 a pound (BLS estimate, 2013: $5.23 a pound)
• Crest toothpaste: $3.84 per tube ($3.67 at Kroger; $1.67 with a coupon)
• Tide laundry soap: $4.54, unknown quantity (2013 price: Costco, $17.49 for 170 ounces, high efficiency)
Let’s compare. In the comparison, though, let’s drop the laundry detergent, since we don’t know how much that inflation-adjusted $4.54 bought and since the new HE version would wash many more loads than 1962’s Tide would.
What would they have paid, in the same dollars we use, for their products, and what are we actually paying for those products today:
I swear: I’m not making this up!
If you express the amounts they paid in 2013 dollars and then compare what you and I would pay for the same products today, the total is…just about the same!
So no. Their day-to-day expenses were not a lot less than ours.
What about utilities?
Well, the average residential cost of electricity in 1965 was 2 cents per kilowatt-hour; adjusted for inflation, that figure would come to 15 cents per kilowatt-hour. In 2010, the average cost for residential users was 11.53 cents per kilowatt-hour. No bargain for our parents there.
Most homes had no air-conditioning, although we did have swamp coolers and window air-conditioners, which, like heating systems, were inefficient and expensive to run. And of course no one had ever heard of a DSL connection.
Average cost for cable TV: about $50 a month; in 1962 dollars, this would have been $6.50. But it’s moot: there was no cable TV in 1962 — television viewing was free. There was less advertising, too, we might add.
After much Google and Yahoo searching, I haven’t found a reliable figure for the base monthly cost of a residential land line in the 1960s. Today’s basic cost for cell phone service of $30 to $50 compares favorably with the $45 landline cost claimed by Wiki Answers (there were no cell phones, of course), except…$45 would equate to $331 today, plus you had to pay extra for toll calls. Highly unlikely. If memory serves, I think the base residential cost was $8 or $10 a month, but any call to another area code, including one just a few miles away, would result in a long-distance charge, which could be pretty expensive. When we lived in San Francisco, my mother had to pay long-distance charges to call her grandmother in Berkeley, a 20-minute drive across the Bay Bridge. Assuming you rarely made toll calls, though, a $10 bill of 1962 would be $76.88 today — about what I pay Cox for a DSL connection and a landline.
If we moderns dispense with the land line, we can get cell service for a much more modest rate. We’ll have to pay for the phone itself — but that’s a one-time hit. And besides…the “phone” is not really a phone: it’s a tiny computer connected to the airwaves.
In 1968, a 23-inch color console TV cost $349; a quick conversion indicates this was the equivalent of $2,328. A 60-inch high-definition flat-screen color TV will set you back only 980 of today’s dollars at Costco. And you won’t have to deal with the recurring visits by the repairman that we enjoyed during the 60s.
The average salary from which our parents paid costs that were the same as or higher than the prices we’re paying today was $4,659 in 1965 — $31,082 in today’s dollars — and most households had only one salary: the man’s. Today’s intact families usually have two earners. In 2012 the average starting salary for new college grads (those who could get jobs…) was $44,259. For all earners, the average salary in 2011 was $42,980. But bear in mind: in many households today, two adults are working. In 2012, the average U.S. household income was $63,091 — twice what a typical married couple in my father’s generation could expect.
Think of that. They were paying the same or higher costs — sometimes much higher — for the same products and services we buy. But in many cases those products and services, such as automobiles that were unsafe at any speed and clunky hard-wired phones with extra fees for long distance and TV sets prone to snow, static, and spinning images, were decidedly inferior to ours. Overall the cost of living was not a heckuva lot less, when the monetary units consumers paid with are inflation-adjusted.
• Did our parents make far less than we do? Yep. In general.
• Did they have fewer expenses than we do? Not exactly.
• Should we have our expenses? Well, sure we should. Most of them buy the same services and products our parents had, only better in quality and lower in real cost. The only indulgence I can see in the expenses shown above is cable television — and many American TV fans have canceled that in favor of cheaper, less wasteful entertainment such as Netflix.
Maybe there’s a reason we live in bigger houses than our parents did, collect electronic gadgetry that would have been science fiction to them, and park two or three cars in the garage: we can afford them.