No, wages should not be higher. The cost of living should be lower. Productivity increases year over year. It should be much cheaper to have a decent life today than in the 60s. Plenty of people in other countries live a lot better than many Americans on a lot less money per day. We need to ask ourselves why.
It's not potato pahtahto. Many US jobs are in competition with third world wages. If you raise wages 1000 dollars and increase cost of living 1000 it isn't a wash, since some companies might choose to outsource.
Americans shouldn't be competing with workers in third world countries. That behavior leads to a race to the bottom to see what country is willing to offer the cheapest labor, lowering the standard of living for everyone except the business owners.
It doesn't necessarily have to lower the standard of living for everyone. Goods and services can get cheaper alongside purchasing power leading to the standard of living being approximately the same. It's not a problem for labor to be cheaper if the cost of living also becomes cheaper. It only lowers the standard of living if the ratio of income to cost of living drops.
Those at the bottom today have a standard of living that is in many ways better than the standard of living of a billionaire a century ago. Why? Productivity gains.
There have absolutely been productivity gains, but those gains haven't been going to the workers. Return on labor has dropped, with the corporations seeing the gains. In the 70's in America, a laborer in a single worker family could afford a house, car, and retirement. Can a laborer in a third world country do the same?
The gains on increases in productivity have gone to workers, just not the workers being replaced. The gains are going to the workers implementing the automation that has increased productivity. The gains are also going to the consumers in the form of cheaper goods and services. Why would those not responsible for the productivity gains be entitled to those gains?
I'm sorry, but this is the kind of low-effort response that I come here to avoid. There's no substance, nothing thought-provoking, just conjecture designed to illicit an emotional response.
You can measure a country's success not by how much its top-earners pull down but by how much those at the bottom make.
> It should be much cheaper to have a decent life today than in the 60s.
It would be if not for the problem of housing and transportation being vastly more expensive than they were in the 1960s. You could get a cheap suburban home back then for less than a year's salary. Try that now and you're living 300 miles from the nearest city.
> It would be if not for the problem of housing and transportation being vastly more expensive than they were in the 1960s. You could get a cheap suburban home back then for less than a year's salary. Try that now and you're living 300 miles from the nearest city.
You've now correctly identified the problem. Housing costs in the US are out of control and have been for a long time because we have policies that promote housing as an investment asset that should always grow in value. Many baby boomers have their entire net worth tied up in housing and have supported policies for decades that increase the value of that asset to support their retirement. Housing has become a vehicle for an inter-generational transfer of wealth from the young to the old.
It may be said that of this hard lot no one has any reason to complain, because it befalls those only who are outstripped by others, from inferiority of energy or of prudence. This, even were it true, would be a very small alleviation of the evil. If some Nero or Domitian were to require a hundred persons to run a race for their lives, on condition that the fifty or twenty who came in hindmost should be put to death, it would not be any diminution of the injustice that the strongest or nimblest would, except through some untoward accident, be certain to escape. The misery and the crime would be that any were put to death at all. So in the economy of society; if there be any who suffer physical privation or moral degradation, whose bodily necessities are either not satisfied or satisfied in a manner which only brutish creatures can be content with, this, though not necessarily the crime of society, is pro tanto a failure of the social arrangements.
"Is this improvement in the circumstances of the lower ranks of the people to be regarded as an advantage or as an inconveniency to the society? The answer seems at first sight abundantly plain. Servants, labourers, and workmen of different kinds, make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed, and lodged."
it's worth noting that housing has also gotten much bigger since the 1960s. A source worth looking at is the American Housing Survey, which is put out by the US Census Bureau.
What I find most telling is that average housing in 1970 is comparable to sub-poverty-line housing right now, in terms of total square footage and number of rooms -- and average housing in 1970 had considerably fewer amenities (fewer full bathrooms, less likely to have a full kitchen, much less likely to have AC or in-unit washer/dryer, etc.)
I won't attempt to tease out all of the issues that led to this, from changes in demand to zoning regulations to developer preferences. Just pointing out that "housing inflation" is a major driving factor in the cost of housing. As others have pointed out, there isn't a lot of affordable housing inventory, particularly not in big cities.
If those houses were less then houses available now, it would also be worth looking at how they compared to high income housing of the era. My guess is these changes have been societal and it's proper to assume that cost should decrease or stay the same while function improves.
you can see from the link malandrew provided about American spending habits (in a sibling comment to mine) that Americans are spending considerably more on housing, on average.
I don't believe the surveys cover "high-income" housing, but they do show median / middle-income housing growing by the mid 2010s to roughly triple the 1970s square footage. Inflation-adjusted, that means lower cost per square foot.
But it's certainly worth thinking about whether the shift to much bigger housing has been an entirely positive one, or whether it has drawbacks.
I'm from one of the countries where we live a lot worse than Americans for a lot more per day (New Zealand). What first world country is 'better' in that regard than America?
