Thursday, April 14, 2022

The system is biased against wage earners

by Charles M. Lepkowsky, Ph.D

There are also flaws (intentional?) in 'the system' that keeps most of us 'down,' especially limiting upward mobility now vs. 50 years ago.

Wages have not kept pace with the cost of living. Even the very conservative US Department of Labor's inflation calculator indicates that $100 dollars in 1972 would buy as much as $687.81 today:

The median US income in 1972 was $11,120.

The median US cost of a home in 1972 was $27,571.86.

The cost of that 1972 home divided by the median 1972 income is 2.48. IOW, a house cost about 2 1/2 year of income.

That equation carried over to rental costs, which were commensurately affordable.

The median income in the U.S. in 2022 is $44,225.

The median US cost of a home in 2022 is $392,000.

The current cost of a home divided by the current median income is 8.86. IOW, a house today costs about 9 years of income.

That means that dollar for dollar, housing alone costs 3.6 times as much as it did in 1972 (an increase of 260%).

There are numerous other factors that keep most of us from improving our financial status, but everyone needs a place to live.

Charles M. Lepkowsky, Ph.D. 

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