Shifts Through the Decades
By the 1970s, cracks were beginning to appear in this picture of prosperity. Inflation began to rise, and with it, the cost of living. More women entered the workforce—not always by choice, but often by economic necessity. The percentage of working mothers with children under 18 doubled to about 40%.
The beginning of deindustrialization meant that high-paying factory jobs were becoming scarcer. Income inequality, which had been decreasing since World War II, began to rise again.
The 1980s and 1990s saw America transform into a service and information economy. Computers entered homes and workplaces, changing how Americans lived and worked. The average American was now working about 47 hours per week, with both parents working in most families with children. Americans were commuting farther to work—about 22 minutes each way on average.
Housing costs increased to about three times the median annual income. College tuition at public universities rose to about $5,000 per year in today’s dollars. Credit card debt became a growing problem, with Americans carrying an average balance of several thousand dollars. Student loans were becoming more common and larger. Healthcare costs accelerated, with employers shifting more of the burden to employees through higher premiums, deductibles, and co-pays.
The personal savings rate dropped to about 7–8%, as Americans spent more on larger homes (now averaging 2,000 square feet), multiple vehicles, and the latest technologies. Retirement was still largely secured through a combination of Social Security, pensions (though these were becoming less common), and personal savings.
Life Today
Fast forward to today, and our relationship with work has fundamentally changed. I know countless friends juggling multiple jobs while checking emails at midnight. The standard 9-to-5 has morphed into what sometimes feels like a 24/7 obligation.
The typical American family today needs two incomes to maintain a middle-class lifestyle. The median home price nationally is about six times the median annual household income—and much higher in coastal cities. Americans are working about 47 hours per week on average, though many professionals work significantly more. The typical commute is now 27 minutes each way.
College tuition has skyrocketed to an average of $10,000 per year at public universities—and much more at private institutions. The typical graduate leaves college with about $30,000 in student loan debt. Healthcare costs have continued to rise, with the average family spending over $20,000 per year on premiums, deductibles, and out-of-pocket expenses. Medical debt is the leading cause of personal bankruptcy.
The personal savings rate has fallen to about 5% for most of the period, though it temporarily spiked during the COVID-19 pandemic. Nearly half of Americans report they would struggle to cover an unexpected $400 expense. Pensions have largely been replaced by 401(k) plans, shifting the responsibility for retirement savings from employers to employees. Many Americans worry they will never be able to retire.
Homes have continued to grow—averaging 2,500 square feet—even as families have gotten smaller. Americans own more cars, more devices, and more things than previous generations, but often with more debt as well. While technology has made many tasks easier, it’s also erased the boundaries between work and home life.
Housing and Transportation
Perhaps nowhere is the generational divide more apparent than in housing. My grandparents purchased their first home in 1958 for approximately $12,000—about twice my grandfather’s annual salary at the time. Their mortgage payment consumed roughly 25% of their monthly income. They raised three children in that house and paid it off completely before their fifties.