Sometimes — ok, all the time — I wonder what the fuck is wrong with Kevin Drum.
That said, this chart probably understates Newark’s income growth anyway. It includes only ordinary wage income, not income from dividends or interest or capital gains or Social Security or any other government transfers. Nor does it include noncash income like Medicaid or CHIP. If you add in all those things, the life of the average Newark resident hasn’t gotten 50 percent better since 1975, it’s gotten more like 100 percent better.
Why is it so very difficult for Boomers to understand that even if (and Drum’s data is extremely flawed, but we’ll leave that for now) your income on paper goes up by a good bit, that if the essentials of life also vastly increase in price, then the income “increase” is just spreadsheet fuckery?
Drum, check this out.
In 1940, the median home value in the U.S. was $2,938. By 2000, it had risen to $119,600 and today it’s just over $200,000. Even adjusted for inflation, the median home price in 1940 would only have been $30,600 in 2000 dollars.
Yes, the quality has improved somewhat and also the size has increased, but that all means less than nothing when you can’t afford anything that exists in the market.
What about college expenses, though? Not the below increases are after inflation is already accounted for.
Education costs have risen at an alarming rate as well. College Board’s “Trends in College Pricing 2017” report examines changes in tuition rates over time, showing how much more the class of 2018 is expected to pay than their parents did.
It’s a lot.
Students at public four-year institutions paid an average of $3,190 in tuition for the 1987-1988 school year, with prices adjusted to reflect 2017 dollars. Thirty years later, that average has risen to $9,970 for the 2017-2018 school year. That’s a 213 percent increase.
If you go back even further, it’s far more. Drum went to college nearly free in the 1970s, as did many people of his cohort.
What about health care? Oh, look, same story.
On a per capita basis, health spending has increased nearly 29-fold over the last four decades, from $355 per person in 1970 to $10,348 in 2016. In constant 2016 Dollars, the increase was almost 6-fold from $1,762 In 1970 to $10,348 in 2016.
What about child care costs? It’s more difficult to find time series data here, but this seems pretty typical.
After their mortgage — which is about 20 percent of their combined take-home pay — child care is the family’s biggest expense. In fact, the cost of their youngest child’s day care alone — $660 a month — is more than half the family’s monthly mortgage payment.
In other words, all the important parts of life have gotten vastly more expensive, while the non-necessities (bigger TVs) have also gotten vastly cheaper. And Drum wonders why people feel downtrodden and despair of the future.
Not so hard to comprehend when you look at anything relevant for a single second, instead of living in Drum’s fantasia.