How much money would I need to earn today to live comfortably in 1960?

In My Humble Opinion
1

I was originally going to put this in GQ, but it seems half opinion.

I know that in the 1960’s, people could have a traditional family, house, car and 2 kids on what today would be considered a near-poverty level (by today’s standards,) salary. By today’s standards, I make “good money,” but there’s no way I could afford a house in this area and no way my wife could stop working and both of us couldn’t survive on my salary alone.

So, my question has two parts:

  1. If I wanted a traditional, Leave-it-to-Beaver type home and family today, how much would I need to earn in today’s dollars?
  2. If I took my modern paycheck (let’s say $40k, $60k, and $80k) and went back to 1960 (and my paycheck shrunk accordingly,) would I even qualify as above the poverty line?

I sure do feel poor, but I’m pretty certain I make double or triple what they made in the 60’s, going by type of job.

2

How Much things cost in 1960
Yearly Inflation Rate USA 1.46%
Yearly Inflation Rate UK 1.1%
Average Cost of new house $12,700.00
Average Monthly Rent $98.00
Cost of a gallon of Gas 25 cents
Average Cost of a new car $2,600.00
Can of Beef Ravioli 30 cents
Loaf of Bread 20 cents

Food prices have gone down relative to inflation. Ravioli and bread can be had for $1 in 2010. Cars are more expensive, but quality is much better.
Health care isn’t included, which sucks since that is one of the biggest cost growths people have seen.

But if you assume 15k for the house, $30/month for utilities & 3k for a new car your monthly expenses for housing, utilities, gas & a car would come to about $200/month.

no idea what food would cost, probably $50/month or so. No idea what health insurance would cost.

3

http://www.bls.gov/opub/uscs/1960-61.pdf

That’s a whole Census document on 1960. The median family income was $5,620, which equates to $40,258.63 in 2009 dollars.

But that doesn’t tell the whole story. In 1960 your typical middle-class household spent 24% of its income on food – a lot more than today. “Typically” there was only one car and a single black and white TV. The typical 1960 home didn’t have air conditioning, much less a computer. In fact, you were slightly less likely to even own your home.

So if you want to support June, Wally and the Beaver in typical middle-class style, your 2009 $40,000 paycheck can certainly do it. Just be prepared to live without air conditioning, cable TV, computers, cell phones and drive only one car.

4

I doubt I could do it with today’s prices for a house and a car. As your figures show, the dollar value is roughly 5:1. However, housing prices are much, much higher (as shown by Wesley.)

To restate my question:

If I wanted the same kind of house, car and the ability to support 3 other people today, how much would I need to earn?

5

Do you want to have all of the modern conveniences? Cell phones, TVs, internet, microwaves, dryers, dishwashers, central AC? Are you going to buy clothes at a 2010 rate, or a 1960 rate? Are your kids going to do organized sports or take lessons of any type? There are real differences in middle class 1960 consumption and 2010 middle class consumption.

BTW, suburban middle class houses in the 1950s and 60s were ~1200 square feet - that’s where the baby boom generation grew up.

You really don’t need to earn that much to maintain a 1960 standard of living.

6

A lot of that stuff couldn’t be had for ANY amount of money in the 1960s, or the things were not nearly of the same quality. TV sets almost needed to be in cabinets, because they had vacuum tubes, which took up a lot of room. I think that there were commercial dishwashers available, but not ones for the homes. AC was available, but what we and our friends had were swamp coolers, which are much cheaper but not nearly as effective. I remember that we did have a dryer, but we also had a clothesline out back, which got used much more often. We had phones WITH cords on them, and we rented those phones from the phone company. If we wanted a nonstandard phone, we paid extra for it. I don’t think that microwave ovens were commercially available back then, though I do think that people knew that microwaves could heat food.

I also remember that my eyeglasses back then were actually made out of glass, and were quite expensive, compared to my lightweight plastic lenses of today. And cancer was pretty much a death sentence back then. Today, cancer is still very serious…but we expect that we can treat and even cure most cancers, if we catch the disease early enough. Oh, and my baby brother was born around 1965, three months premature. He wasn’t expected to survive, and was widely regarded as a miracle baby when he DID survive.

The thing is, a lot of stuff that we take for granted today wasn’t even available back then. You’d have to scale your standard of living way, way back.

7

You’d have to spend a lot more on alcohol, what with all the drinking at work during the day.

8

Until recently I didn’t have a dishwasher or dryer - most of my friends still don’t (and we don’t gardens either) and aircon is for offices. I’m talking about office workers in London. You don’t have to scale your standard of living way, way back to live without those. Aircon would, of course, be more of a necessity in some locations.

The OP’s question is quite interesting, but it’s interesting as ‘what would you need to earn to live as a fairly financially-sound middle-class man in 1960.’ I thought that would mean having a mid-range TV and record player, not cellphones which don’t even exist.

Superhal, going on house prices, to have the same standard of living in most of London (excluding the best parts of Kensington and the West End) you’d need to earn about 20,000 quid in today’s money. That’s based on teacher’s wages then (somewhat less than now - I’m going off what people have mentioned to me because I can’t see any stats online) and their ability to get mortgages. House prices have changed rather a lot since then; it depends how much house prices have changed in your area, really.

9

I think that’s the point: it’s easy to say “Wow, a middle class lifestyle back then was so cheap! The world sucks now!” but what was considered a middle class lifestyle back then would feel like living in poverty now: 5 people in a 1200 sq ft, 2 bdrm, 1 bath house, one car, one small TV, no other electronics, a kitchen lacking about 10 things we consider essential, one phone bolted to the wall, never or rarely calling long distance, about 1/3 as many clothes as people have today, etc.

It was surprisingly cheap to live that way in 1960, but it’s surprisingly cheap to live that way today, as well. But people aren’t willing to.

10

Clarification: so we know that $40k in today’s money is equivalent to the median income in 1960. However, was the median income in 1960 enough? I think Ward Cleaver earned a lot more than the average. My guess would be that ~$60k of today’s money would be closer to what he earned.

We also agree that we are spending more today (although I could argue that even though they didn’t have cable TV back then, the relative cost of TV’s back then was much higher, but let’s ignore that.) How would today’s cost of living be adjusted to 1960 dollars? My hunch is that (based mostly on housing prices and inflation) you would need a lot more relative income today to live a similar lifestyle. In some areas, I would guess the number is around $120k.

I’m thinking that the buying power of wages didn’t keep up with the cost of living, but I’m wondering how large this difference is.

Also, as I’m following the links and looking around, there doesn’t seem to be any mention of income or payroll taxes and many of the sources seem to think that a 5k median income means that the entire 5k was available. While that might have been true in 1960, when I look at my 2010 pay stub, I’m paying about 35% in Social Security, taxes, retirement, and health insurance.

So while $40k might be the equivalent salary in 2010 as 1960, would I need to earn 60k to get that 40k?

Other comments:
House size: I think the Cleavers lived in an above average house. Iirc, it was 3 bedroom and had an upstairs, garage, and yard.

11

Because housing varies so widely, it really depends on where you are talking about. I think we live a “Cleaver” lifestyle, and we don’t make anywhere near 120k a year: in fact, we live entirely on my income (practicing–my husband will stay home if we have kid(s) and we want to prove we can do it) and that’s under 60K a year–and we manage to save quite a bit of that.

But I am in the Dallas area, where 120K gets you a 3 bedroom older house in a great school district.

12

Yeah maybe I just need to get out of this area. A place in tear-down condition with a 2 hour commute costs $200k.

13

Well to be fair you would also have had one or two radios, a record player or even a Hi-Fi system.

14

Taxes are one area I can’t make a reasonable comparison of the two eras.

As both pro and anti-tax folks like to talk about, the top federal income tax rate in the 1950s and early 1960s was an astonishing 91%:eek: What they don’t mention is that the 91% rate only kicked in above $400,000. Obviously families who earned <$6k weren’t paying that, but I can’t find out just how much they actually paid.

However, as this article points out, your typical family paid less in Social Security taxes and didn’t pay Meidcare taxes at all (that didn’t exist in 1960). Fewer states had any sales tax, and the ones that did were generally around one or two percent. On the other hand, excise taxes, which have virtually disappeared these days, were levied on things like tires, jewelry, and of course, your phone bill. This chart seems to indicate that the median family income tax burden today is actually less than in 1960.

Of course, I was just a kid in 1960, but we lived a pretty typical middle-class existence. We didn’t have a color TV or whole-house AC, but we did have two b/w sets, a hi-fi (which my father had won in a contest) and a couple of window units. Unlike many families on our street, we had two cars, but we also had a bus stop right in front of our house, so my sisters and I were expected to either ride the bus or walk – the second car was only used by my mother for hauling groceries from the store or far-off errands.

Also, let me figure out how to put this. When my father lost his job, there were a lot fewer luxuries we could cut back on to save money. It’s not like we could drop cable, cut back on cell phone service, turn up the thermostat, or even cut back on eating out (we were already eating at home along with everyone else.) Where we could cut back (e.g., clothes) it was pretty obvious.

A lot of my memories have been dimmed by age or filtered through nostalgia. But I’m pretty sure my middle-class existence today is better than my 1960 middle-class existence.

15

It depends on where you want to live, even in 1960. In a small town in Iowa, we were comfortable in 1960 on my stepdad’s $5K a year. Our house cost $3K. We had the usual amenities – TV, car, phone. Things would have been more comfortable if he hadn’t been an alcoholic – too much of his paycheck was spent at the tavern on Saturday night.

16

Can we stop using Ward Cleaver as an example? He’s a fictional character, and the house was a facade in a sound stage.

The most interesting thing in this thread (to me) is AuntiePam’s comment above - that her family’s house cost less to buy outright than her stepdad’s annual salary, which I presume from the tone of her post was modest for the time.

17

Was it a major award? It must’ve been Italian, right? Let me guess what the hi-fi box had written on it :smiley:

18

Neighbors have told me that the 1100 sq ft ranch style homes on my street cost $9900 in 1957.

One neighbor that recently sold regrets not getting the optional half-bath. It was $400 then. He’s lived in that house for 50 years with only a single bath. Made me feel lucky that mine has the extra half bath. I bought it in 1989 and hadn’t considered the extra half bath that much. I’m glad it’s there.

To add that half bath today (to an old house) would be at least 5 grand.

19

I think that the cost of a new TV (not plasma or hi def or anything) today is cheaper than they were back then, NOT adjusted for inflation. That is, I’m pretty sure that TVs back then cost at least a couple of hundred dollars, and they cost the same or less than that now. And our TVs are much more reliable. However, back then, if you knew a vacuum tube had blown, you just removed it yourself, took it down to the local hardware store, and got a new one, which you then installed yourself. Or at least, that’s how I remember my father doing it. Today, if the set goes out on you, you put it on the curb and buy a new set, because that’s cheaper than having the old set repaired, if you can even find someone who repairs TVs any more.

20

Well, that’s not quite true. A sub-$500 TV you toss out. A high end TV you get repaired (although it won’t be a vacuum tube, natch).

The difference is simply that they didn’t have the low-end stuff at all yet back then.