Via the Center for American Progress comes this neat infographic showing how the economics of the countryhas changed over the past 45 years:

click for complete graphic

 

 

click for ginormous graphic

Source: CAP

 

 

Category: Digital Media, Economy, Employment, Inflation, Wages & Income

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

31 Responses to “USA: 2013 versus 1966”

  1. ConscienceofaConservative says:

    I looked at this and saw how inflation hurts those on fixed incomes and lower income wage earners. Yet the Fed believes inflation is beneficial and says it wants to sets inflation targets in stead of fighting for stable and flat prices.

  2. Ron Broberg says:

    Clean copy. Ranting leads typos!

    I know this isn’t Ritholtz’ fault – but I am getting tired of seeing statistical data misrepresented in “infographics.” Look at the SS check 1966 -v- today. The 1966 maximum check amount is 737/1845 -> 40% the size of today’s maximum. But the actual image of the check is shrunk 40% in both dimensions leading to an image of the check that is only 1/6th as large as the ‘today’ image. It should take only 2.5 1966 checks to equal a 2013 check – but the infographic image of the 1966 check is 6 times smaller!

    You see this everywhere in infographics: the conflation of 1-dimensional data with an inappropriately scaled 2-dimensional image that dramatically distorts the relation and magnifies the difference in the data points compared. A literal “blowing out of proportion.” Rant over.

  3. Frilton Miedman says:

    Observing the growth of COST per person for healthcare, and the fact that almost half of all healthcare spending is government subsidized, I can’t see how the U.S. can survive without doing something about the Supreme court’s “Citizen’s United”, “Money is speech” ruling.

    Any time we attempt to stop monopoly & fiduciary insurrection, said entities will invoke limitless “free speech” into mass propaganda (Fox network,) and manipulate the political system via campaign finance (bribery, political subversion). – Ala 2010′s “Death panels”, “Government takeover”, “Socialism”

    On a positive note, maybe Abe was right that “You can’t “fool all the people all the time”, as voter turnout showed this November, the only reason the house GOP still maintains a majority is redistricting, vote rigging.

  4. ilsm says:

    @Frilton,

    It will be interesting when the medical insurance compex goes after the military industrial complex’ 5% of GDP.

    @ ConscienceofaConservative

    Inflation ‘harms’ the creditor, deflation ‘harms’ the debtor.

    Through 2000 the fed fought inflation to save the creditor, from the little guy debtor. From 2000 to 2007 the fed blew the CDO bubble, but did not call it inflation, because the debtors were the “big guys”.

    When the music stopped the fed fought deflation among the wall st debtors whose hugely leveraged balance sheets were worth pennies against the notes they sold.

    Yes, the little guy has paid a price for inflation bailing out the big guys.

  5. S Brennan says:

    I agree with Broberg’s point,

    The graphics are highly misleading…it’s hard to believe that it is just stupidity, it’s so prevalent it has to be intentional.

    I know, I know…it had to be a lone gunman, Kenneth Lay didn’t commit suicide, but David Kelly did, the plane that hit the Pentagon completely vaporized, there really were credible reports of nuclear weapons in Iraq…to believe anything else is just CRAZY talk…it’s just that…no..never mind, I know the media always tells the truth..sorry for thinking otherwise.

  6. 873450 says:

    1966 – life expectancy = 70
    2013 – life expectancy = 78

    Big Government takes the lion’s share of credit for this major achievement. American senior citizens covered by Social Security and Medicare don’t have to live in dumpsters, eat dog food and die sooner when they get sick after exhausting Ryan’s healthcare voucher. Absent 2 unfunded tax cuts, 2 unfunded wars, and a Wall Street engineered, wealth destroying financial crisis, these programs would not be on the chopping block.

  7. A says:

    Most representative television program…

    1966: Ozzie & Harriet

    2013: American Greed

  8. Glen says:

    Federal minimum wage was LARGER in 1966?

    Wow, just wow.

    Or was that adjusted for inflation?

  9. Lyle says:

    Actually the Maximum Social Security benefit for someone who earned the max for 35 years and retires at 66 this year is $2513/month, according to the SS website: http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/5/~/maximum-social-security-retirement-benefit

    Now did they mean the age 62 benefit? It looks like they did because the 75% amount of the above number is $1884. (Close enough). One does need to be careful in specifying the amount by when you start SS for example if you wait till age 70 the top benefit is $3418/month.

  10. seth1066 says:

    @Broberg

    All the 1966 prices are in 2011 dollars. Perhaps the graphics size represent 1966 prices without the inflation adjustment.

  11. leeward says:

    since inflation is an average it is not hard to see what industries are benefiting and where deflation is pressing on the breathing.

    Longer term inflation cuts an asymmetric pattern and this graphic displays that…as well as the fact that two income households injected new generational life into an addictive social/political dynamic. It sounds so much more convincing to blame competition and technology than it is to examine the benefits and expectations that back up some of those tricky graphics. When’s the next tax holiday for “foreign” profits? It must be overdue. That’s no answer to the size of our problems but it sure is easy to change the dialogue these days.

  12. victor says:

    1) The Congressional Budget Office (CBO) has calculated the long-term budgetary impact of paths for federal revenues and spending specified by the Chairman of the House Budget Committee, Congressman Paul Ryan, Mar-2012: Revenues—from 15½ percent of GDP in 2011 to 19 percent in both 2030 and 2050.

    http://cbo.gov/sites/default/files/cbofiles/attachments/03-20-Ryan_Specified_Paths_2.pdf

    2) The assumed avg. inflation % should be stated up front. CPI? what data?

    3) % of # of people living in poverty to total population: 1966, r=14.72%, 2013, r=14.65%: coincidence?

    4) Avg. price of new home 1966: $23,000×7.09 (avg. CPI)=$163,000 vs. $248,000 in 2012 but unadjusted for Sq. ft., quality, etc.

    5) 1969 # of illegal immigrants approx. 500,000 vs. 2013, 11 million to whatever. Assuming that most live in poverty, looks like we’ve made some progress here?

  13. klbjcb says:

    In the year 1966 the price of gasoline was about $0.32 per gallon.
    Sources:

    IWannaGetThat.com – http://www.iwannagetthat.com/NewFiles/1966.html
    ThePeopleHistory.com – http://www.thepeoplehistory.com/1966.html

    Who are these guys – I remember gas at 25 cents in the 60′s- where were they shopping?

  14. CSF says:

    Well, Davy Jones is no longer with us. Otherwise, while Fed spending levels at 18% of GDP would be tough, there’s little in this graphic that supports the claim that “we can’t go back to the 60s.”

    Let’s hope we don’t go back to the 6os when it comes to Defense spending. That would require nearly a doubling of spending as a percentage of GDP.

  15. I think it’s Telling that they picked ’66..

    1946-1964 Roosevelt Dime $0.10 $2.1723

    http://www.coinflation.com/silver_coin_values.html

    but, hey, when it’s, merely, Currency, and Not Money..what’s the Difference?

  16. lotusblue says:

    If not mistaken terribly,the minimum wage for 1966 was not $ 8.86 and cost of gasoline was certainly not $2.22.Both of these were Much much lower.

  17. SecondLook says:

    In 1966 there were two levels of minimum wage, depending on what industry: $1 or $1.4

    Assuming a $1.20 average. you get an inflation adjusted rate of $8.38 (that is close enough to the graphs). So, someone earning a minimum wage back then had slightly more real income than now. In either time period, minimum wage was never close to being a living wage – the smallest amount you need to actually get by on your own.

    Regular gasoline was, according to the DOE, 32 cents per gallon at the average pump in 1966. $2.23 in current dollars.
    Some perspective on that. In 1966 it took about 8 minutes to earn enough to pay for a gallon of gas; based on average income. In 2012, it took roughly 9 minutes.
    For all the grousing about how high the price of gasoline is, the reality is that, again on average, we can afford it as easily as we did 60 years ago. The simplest explanation of why despite the price of gas more than tripling over the past 12 years, we cut consumption only very, very meagerly.

  18. NickAthens says:

    in 1965 I made 90 cents an hour part time. In 1966 At same job I made $1.10 an hour. Gas was 29 cents a gallon, 19 cents when a price war was on. I got on at general motors in 1967 at $4.10 an hour, and was rich!

  19. mathman says:

    so i’m rummaging around the intertooobs and see two things that strike me:

    Wrestling is being dropped from the Olympics! (WTF – it was one of the original sports?)

    Bitcoin seems to be making a comeback (it’ now worth about $26/Bitcoin) – srsly?

  20. tippet523 says:

    IBM 1500 Computer system 30,000,000 in 1966

    IPAD 499 plus 25 per month for data

  21. Kerim says:

    The dollar prices here have been adjusted for inflation:

    The minimum wage in 1966 was $1.25
    http://www.infoplease.com/ipa/A0774473.html

    so adjusted for inflation to 2012 that comes to $8.86
    http://www.bls.gov/data/inflation_calculator.htm

    Interestingly, Nonfarm Business Labor productivity (output per hour) from the end of 1966 has increased by 235.9 %
    http://data.bls.gov/timeseries/PRS85006092

    if minimum wage from 1966 was adjusted to reflect the value per worker value output in today’s dollars it would be 2.359*$8.86 = $20.90

    Interesting, no?

  22. W T F says:

    Folks, the dollar figures are inflation adjusted.

    Didn’t you see the teeny, tiny footnote in lower left corner of the larger graphic? The one that says “All figures are in 2011 dollars.”

  23. S Brennan says:

    Whenever I hear “heuristic” type arguments as it pertains to electronics, be it flat-screens, intertubes, or IC chips, I like to point out that retail prices is COMEPLETELY at odds with the REAL cost.

    This because without DoD’s early & lengthy support [read taxpayers] the development would have been much slower with the “early” adopter paying prices that would have been hundreds of times greater than they were. Without DoD/NASA willingness to pay almost any price for silicon transistors and later IC chips, Steve Jobs/Wozniak would never been able to build & play with computers as kids-young men…only the wealthiest sliver of America would have had that privileged.

    Do you guys really see Paris Hilton doing the work of Jobs & Wozniak? “Heuristic” type arguments, rely on cost externalization and should be left to “astrologers” like Greenspan.

  24. flakester says:

    Totally amazing (not) that so many didn’t even see the note about prices being inflation adjusted to 2011.

    Even better that Social Security recipients (living only on SS) today show a continuing drop in purchasing power. Don’t believe it? When’s the last time you heard them getting rich on SS payments with adjustments, let alone staying even?

  25. Scruffy says:

    As tippet523 says, trying to compare goods directly between these two eras is difficult – what we paid a premium for in the 60s is probably difficult to find anywhere but a landfill today. However, comparing commodity inputs is not. Everyone talks about how much energy costs have gone up since the 1960s, but in many ways, it’s the exception, not the rule.

    In terms of commodity purchasing power, the average American is further ahead on food, clothing and some industrial materials. The minimum wage earner isn’t doing too badly either on these measures.

    http://blog.tuhunga.com/inflation-and-personal-income—what-do-the-numbers-tell-us.html

  26. Joe Friday says:

    873450,

    Although I generally sympathize with the perspective of your rant, you are misinterpreting the “life expectancy” data.

    The increases in life expectancy are almost entirely due to decreases in infant mortality. Conversely, people who live to retirement age only live about two years longer. Men live about one year longer, women about three years longer.

    This is important to counter those who want to increase the eligibility age for Medicare and Social Security, based upon the false claim that people are living a great deal longer than they did previously.

  27. S Brennan says:

    “the average American is further ahead on food, clothing and some industrial materials.”

    great for those that sweat the small stuff but…on the big ticket items, health, housing & schooling, way, way, way behind.

  28. flakester says:

    “the average American is further ahead on food, clothing”

    The food and clothing quality is far from the same in the 60s as now. Try comparing how long average Levis or good dress shirts last, same with the taste of grass fed steaks or non GMO corn on the cob etc. etc.

  29. Scruffy says:

    SBrennan, schooling is definitely up from a purchasing power perspective. Though I’d suggest that perhaps some of the spending is unnecessary. I love reading and learning, and I would hope everyone else does too, but if you’re taking on mounds of debt in the hopes of leveraging a college degree into a high-paying job, it’s important to choose the field wisely. Learning is still as cheap as going to a library; a piece of paper with your name on it is more expensive.

    Housing, I really don’t see that. If you bought in 2006, you’ve got a problem. Buying today, you’re around the historical average on a real basis, and if you’re borrowing to buy, your 30 year mortgage is way cheaper. Doesn’t matter whether you’re using CPI adjustments or calculating using minimum wage purchasing power. If you’re an “average” worker, buying an “average” house, it’s most definitely cheaper.

    http://www.ritholtz.com/blog/2011/03/comparing-housing-prices-real-vs-nominal-1890-2011/
    http://research.stlouisfed.org/fred2/series/MORTG

    Healthcare – nope, not giving you that one either. You’re saying that prices are up way more than inflation without giving credit to improved outcomes. All kinds of things save and extend lives that didn’t exist in 1960. MRI, cat scan, cancer drugs, etc. First heart transplant happened in 1967. If you were able to exclude all of that, I’d bet costs are lower today than back then. Price out a bottle of penicillin or some other drug that was commonly available in 1960. Same goes fortreatments, e.g., cataract surgery is much cheaper now:

    http://abcnews.go.com/Health/Healthday/story?id=4508775&page=1

    I notice you didn’t mention cars. Well, you basically need the same number of working hours at min wage today to purchase one that you did back then.

    http://www.thepeoplehistory.com/60scars.html

  30. Scruffy says:

    flakester, I didn’t show up until the 70s, so I can’t comment on how long dress shirts lasted then vs now. I can tell you that the basic Charles Tyrwitt shirts I’ve got that are four years old are in fine condition. These are probably in the $50 range. Sears sold shirts in the $5-7 range back then, which to me seems like roughly the same wage-adjusted price. Though I’ve certainly experienced lower quality stuff too – but I probably paid less as well.

    http://www.wishbookweb.com/1966_Sears_Wishbook/images/1966_SearsChristmas_Page214.jpg

    Grass vs corn-fed beef? Well, I’m no expert in the steak field, but I do appreciate that I can go into a supermarket and find ~6 types of apples, ~4 types of oranges, etc., etc. that are all in good shape when back then you’d be way more limited. You can certainly buy grass-fed beef today, you’ll just pay more for it or buy in bulk. Bulk price of $6/lb doesn’t seem like it’s way out of line with inflation (from fox link) vs. 1960s prices at 45-49c/lb ground beef; 89c-$1.49/lb steak (from olemiss).

    http://www.foxnews.com/health/2012/11/23/drive-for-grass-fed-beef/
    http://pix.cs.olemiss.edu/econ/1960s.html

    Eyeballing the prices from the link above, I can find organic apples / bananas / oranges in my local store for ~10x what is listed here – and I’m sure these weren’t organic back then. Conventional is probably ~5-7x – growing at most at the same rate as minimum wage.

  31. Frilton Miedman says:

    Scruffy Says:
    February 18th, 2013 at 9:31 pm
    ” Healthcare – nope, not giving you that one either. You’re saying that prices are up way more than inflation without giving credit to improved outcomes. ”

    ~~~
    The W.H.O. ranks the U.S. 37th in the world for quality.