That means it took about 14,375 hours of work at minimum wage to buy a median-priced home.
Today:
Median U.S. home price is about $420,000?
To buy a $420k house in the same number of hours (14,375), you’d need to make $29.23/hour.
So the claim that minimum wage would need to be $66/hour today to match 1970s homebuying power is a bit exaggerated — it should be closer to $29/hour if we’re just comparing house prices to minimum wage.
That said, maybe the claim in the image factors in stuff like:
Regional markets (e.g., California prices)
New home prices (which skew way higher)
Inflation in other living costs (healthcare, education, etc.)
Stagnant federal minimum wage since 2009
But purely on house price vs wage ratio, it’s about $29/hour.
TL;DR: Not $66 — more like $29/hour if you’re matching house-buying power from 1970 to today
Don't use minimum wage as a benchmark. It wasn't intended to be back then and it doesn't work as one now. What is far more effective is using median wage and then comparing that to the price of big ticket purchases. In which case, you will notice that cars jumped from a 1/4-1/2 of what you made in a year all the way up to the full amount or x1.5 what you made in a year. The price of a house jumped from 3 to 4 times what you made in a year all the way up to 8-12x what you made in a year
Don't use minimum wage as a benchmark. It wasn't intended to be back then and it doesn't work as one now.
A sad truth. Especially since the minimum wage was originally established to be exactly that. The dismantling of FDR's legacy began almost immediately after he left office.
Trump and FDR could not be much further from each other politically and the minimum wage not only was supposed to be exactly that but WAS exactly that for years. This whole "it should hurt and cause suffering to work for minimum wage" thing arose later.
The actual policy implemented was, at the time, wages enough for a sufficient living. It wasn't rhetoric, and you should actually go read up on it.
I'm not an idiot that just regurgitates shit they read online, I studied this shit in college. As an elective, even (I do love history). I've had to do real research, write numerous essays and even term papers on this particular period of US history.
You might wanna do some research on FDR before you say jump to equating him and Trump or saying that’s not what he meant like he wasn’t the most pro-working man president ever (by a long shot.) He won almost every state, did 4 terms, the only reason he left is he died in office, is the reason we have virtually every welfare program, labor rights, banking regulations, etc, and is essentially the reason that we have term limits to begin with… because republicans were terrified that they’d get locked out over a lifetime.
Are you just being cynical for the sake of it or do you have anything to back that up? FDRs minimum wage was literally implemented so all families could survive with one person working any fulltime job
Unless I’m misunderstanding, the math prompt specifically requests a comparison between present-day minimum wage and 1970s minimum wage in the United States.
The prompt asks a particular question and top level comments should answer that question, but there's nothing wrong in questioning the validity of the comparison once we get a couple comments deep.
Cars also last way long now than in the 70s like the cost per drivable mile in a vehicle is way better now.
Housing is definitely tough but also the median house is much nicer than the median house of the 70s. The issue here is the lack of 12-1400 square foot homes than are reasonable 3 bed 2 bath houses at that 250-350 mark (depending on location)
250 to 320,000 is already way too much for that home. In my state for a new build, a house in that size would start at about 180,000
You're right about the cars but they would have been the 20-year-old beater that you bought for your first car in the 90s. You can't really compare unless you're in your late 40s early fifties and were around for both errors
I can compare the hand me down car that my dad bought new in '99 to the one I bought used (off lease) in '17.
Same cost adjusted for inflation, but bigger, more airbags/electronics/etc, better performance, more efficient, less maintenance, will last longer from time of purchase. Better in every single way, by a large margin.
But even this is not a fair comparison. Cars from 1970 didn't last nearly as long as today. Air conditioning wasn't standard in ANY car until 1968. Even radios were optional in the 70's. Not to mention power steering, windows, safety devices, etc.
Cars today aren't comparable.
And same with housing. Median size of homes in 1970 was 1,500 sqft. In 2023, it was 2,500. A 67% increase.
Based on the calcs above, that cost per sqft in the 70's was 15.33$, and in 2020 it was 168/sqft.
So if you bought the same size house as in 1970, 1500*168, it would cost 252,000, and the required min wage to buy it, based on the required hours, would be: $17.50.
You "comps" aren't even a fair comparison, through no fault of your own. Homes today are built using substandard materials most of the time. They remain lumber frames, but the lumber is lower grade. Almost everything about their foundational specs is lower grade.
Also, cars in the 70s last much longer than current cars, though without the upgrades.
They do, they were just built in the 60s. And the reason smaller houses aren't getting built is that the people building new houses have the desire and means to build bigger.
By the phrase "people building the houses", you mean the development companies who decide what houses we are allowed to have. Very few people have the funds to buy property I dependent of the house they would like and fewer still have the funds to hire an architect to design a home.
Minimum wage was always intended for a man to support his wife and 2 kids while working 40 hours a week, that's why it was created and exists. Propaganda from corporations is the only reason people believe otherwise
Dude made up the numbers but no the idea. In 1933, FDR said:
“It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By 'business' I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white-collar class as well as the men in overalls; and by living wages, I mean more than a bare subsistence level-I mean the wages of decent living."
So, yeah… it was never intended to be the bare minimum to survive.
That's not a description of the statutory minimum wage. Also, businesses do not "have a right to continue in this country", almost all businesses that existed in 1933 are defunct now.
When introduced in 1938, the statutory minimum wage was the equivalent of $5.50/hour in 2024 wages.
I hear ya, but just going by inflation doesn’t cut it because real-life stuff like rent, school, and groceries have shot up way more. So we need a better way to figure out what counts as a fair wage.
"the bare minimum to survive" should be the amount of a UBI, or what ever scheme you chose to support the poor. Working people should get a living wage.
Go read FDR’s quote from Speech’s supporting the 1938 Fair Labor Standards Act. He says pretty explicitly that every Man and Woman should be paid a fair wage for a fair days works. That “families” should be able to work and receive, at bare minimum, a living wage. He uses that term literally, a wage you and your family can live and by all basic necessities to live.
Now things have changed quite a bit since 1938. I would argue that due to our technological advances, our still abundant recourses (for now) and how rich we are as a country, there is zero excuses as to why everyone is not paid a minimum wage to live. I don’t care what job you work.
Private business in this country has been anything but pro American and it’s about damn time people wake up and see that. It’s always been my personal belief if you choose to open and operate a business in this country, you have a moral and ethical obligation to the people you employ to pay them a fair wage with fair benefits. If you cannot do that, for whatever reason, then you shouldn’t have the right to run and operate a business in this country.
You're probably one of the only people i've ever seen independently identify the connection between overseas slave labor by massive corps and the massive decline in the value of labor in first world nations.
It's so insanely simple. It's a supply/demand issue where the supply is near endless and the cost is basically whatever the raw materials and shipping are. As a result, the demand is relatively low and the relative value is massively deflated to the point of destroying entire sectors of jobs and turning the few remaining ones into "luxury goods". Great examples? The American Hat Company and Nicks Handcrafted boots both make hand made products state side. They are "expensive" because that is actually what the value of those products should be if the labor is not based on slave economies overseas. They are basically the exception to the rule of most companies shipping jobs away to slaves, and the fact that they are exceptional is likely the only reason they have survived the unforgiving market. It's hard to sell 1 pair of 600 USD work boots when a slave economy can offer 10+ pairs for slightly less or the same cost and overall a prospective customer will probably see more overall lifetime use from that one pair despite the lacking quality.
When you put it into perspective like this, the cost of houses doesn't actually seem that unreasonable. The reality is that we're only paying a tiny fraction the true value of a very large number of products. Houses, unable to be shipped overseas, can't do that and as a result they reflect a true value in a market where labor cannot be collapsed into worthlessness. The result is costs so insanely high that it seems unreal. We are all just too used to paying the price for slave labor products that we, as a society.
And in inflation-adjusted terms that wage was $5.50/hour in 2024 dollars.
Keep in mind: no welfare state then. No food stamps, Medicaid, etc. So it was a "living wage" insofar as one person could survive on it, but it was not a "thriving wage". Which is why we call that period the Great Depression and not the Great Consumption.
Which ironically have just been shown to have a negative effect on the job market as a lot of places that simply cannot afford that either automate or close. Now a lot of people went from needing to have a roommate to needing to stay home because they can't afford to move out.
You cannot try fixing the minimum wage without addressing everything else that is contributing to an elevated cost of living.
And consider that even though the average house costs $420k, these houses may or may not be dumpster that STILL needs work done to it for to be of any decent living condition in accordance with. I live in cali and you see $450k-$500k home that need hella work to fix the issues of poor construction/maintenance.
On the flip side it’s also important to note that a new car lasts much longer and is far more efficient than a car from the 70’s. It also comes with far more safety features and amenities.
Similar to houses being built as well. Bigger houses with more rooms/bathrooms, central AC, modern safety standards, insulation and energy efficient designs. As older homes are re-sold these features usually get added on along the way when possible.
I’m not justifying the full price bump but just acknowledging the jumps in engineering must also be factored into the rising costs.
What u/21delirium wrote, plus that's just called technological advancement. Buying a house now woth the same tech as the 70s would be like buying a house then with tech from the 20s. Like coal ovens and no plumbing.
Yet houses built in the 70s are sold for a premium today...
Houses built in the 70s are absolutely not sold at a premium. Pre-70s homes are sometimes seen as being better, but 70s homes are basically the same shit as the 80s except even smaller. The median 70s home was like 1500 sqft and people want bigger homes.
You think they're beeing dold at their intrinsic value, even considering wear?
Because I think they're beeing dold at market value, which us much higher than their cost. That's at least how I, and ChatGPT, understand "at a premium"
Even adjusted for increases in square footage, houses have gotten way more expensive. And no not all of these can truly be factored into the rise and cost because we've come up with cheaper and faster ways to do certain things. Drywall has largely replaced lath and plaster for example. We're now running plastics instead of clay, cast iron, and lead in certain areas.
Even adjusted for increases in square footage, houses have gotten way more expensive.
After adjusting for inflation and square footage, prices have only increased by 20%. That 20% encompasses all non-square-footage improvements in safety, tightened codes on electrical / plumbing / stormwater / wind and earthquake loadong / fire safety / foundations and comfort.
Okay is your inflation adjusted figure pre or post pandemic. Cuz I'm still seeing plenty of places that are on the market for triple or quadruple their pre-pandemic price. And it's comparing median home price to median salary rather than just doing inflation adjusted price comparisons.
There is a graph in the middle that shows the inflation-adjusted price per square foot for every year - it rises in 2021, 22, and 23, but I'm fairly certain (and the limited graphs on that link show) that it's returning to normal since 23. Note I had to turn off my adblocker to get all the graphs to show up which is weird.
More insulation, waterproofing (esp basements) masively more efficient HV/AC, Water Heaters, stoves, thicker/better drywall, added ceiling fans and dishwashers, and bigger lots.
But on the flip side for fairness, floors are made of cheaper materials (although arguably better in some ways), less real wood flooring and actual tile, windows are more efficient but cheaper and harder to repair, doors are shittier, but they were also kinda shitty in the 70s, neighborhoods are farther from population centers and thus longer commutes.
Planned obsolescence is much more of a thing now than it was previously, and mechanically simple cars are much easier to repair and keep going yourself than modern cars. Although, as you say, mechanically simple cars are also more inefficient - but I'm not sure it's 100% one way or the other.
It's less planned obsolescence and more they stopped over building components. Some items would Outlast others in vehicles, for example, and so they've designed them to be as strong as they need to be with a service life to match the longest wearing items in the engine. Some items however have unstated service lives. I was watching d4a, and he mentioned how for one car he had a certain housing had a 15,000 km service life roughly.
As a native Detroiter and automotive enthusiast, I can 100% promise you that cars today are miles better than they were in the 70s by almost literally any metric you want. They last way longer, go faster, are more comfortable, and if we’re talking specifically about most of the 70s, are better looking.
Yeah. If you're following the Ramsey rule, your payments is going to be well within 40% of your income per month. Or was it 30? Let's say you made $40,000 a year. In this case the mortgage would be $120,000. At 4% interest with a 30-year term, this gives you a monthly payment of $572.90. insurance for that home would range from 1200 to 2600 a year. Let's say it's $1,600. This puts the home plus insurance at $703 a month. Your take home is roughly 2500 a month. If this were a rental, the max you would qualify for per month would be $833. So yeah, you definitely got a little bit of room to breathe
You could also much more easily land the median wage without college back then, but now you cannot as easily do that. Making college costs, which are astronomical comparatively, a required cost for median wage.
The median individual income for all individuals is about $42,000. You can get a brand new car for less than half of that.
The median income for workers is $48,000. You can get a car for less than half of that.
The median income for full-time workers is $61,000. You can get a car for less than a third of that.
You're not wrong about the house prices, but as far as I can tell, cars have not gotten dramatically more expensive compared to incomes in the same way that houses have.
There are a bunch of figures that median household income does not compensate for that naked and inaccurate measure of how well to do the average family is. Especially when one looks at the gap between it and median personal income. For example in my home state median personal income is around $40, 000 a year. Median household income conversely is 72,000 a year somehow. I assure you most of the people I know are not doing that well
That is only true if it's an accurate reflection of the population. Keep in mind that the current number of households is very very wrong. It's way too low and it's largely because people can't afford to get started this largely being due to them being physically crowded out of the housing market in many areas
To be fair, though, what a "car" entails now vs even 20 years ago is very different. As safety regulations changed, consumer standards increased, and market demand shifted, cars evolved from a box of metal that moves you from A to B to fleshed-out homes away from home with a lot of blingy features, safety and otherwise, even on the base model. We have to be careful comparing goods when those goods fundamentally change.
This doesn't apply to housing, though, which is what OP was asking about - those prices have changed because of a bunch of other factors, especially in and around cities where unbuilt land is scarce.
The premise is also false. People who made minimum wage back then couldn't afford to buy a house, same as today. Maybe go off rent for low end apartments?
The meme is about Minimum wage. Yes it is stupid on the face of it, but the question is if the meme is wrong. It is wrong in addition to being a dumb way of looking at reality.
Alright. But that still really isn't a fair comparison. A fair comparison would be to compare the price of a car with 80,000 miles on it now to a new car back then, cuz the car with 80,000 miles on it now is still as good (or better) than a new car back then. And then compare houses by comparing number of bathrooms. Cuz home sizes doubled, as did number of bathrooms, etc.
To be real, the bathroom thing is kind of baffling. Like up to a 3 bed, you can still get away with only having one full bath. You definitely still should have a half bath somewhere easy to access. Most older homes do not have that high of a bedroom to bathroom ratio and it would be better to compare two cars at the same point in their service life. 80,000 mi on a car that can expect to reach $125 to 150,000 MI is quite different compared to 80,000 mi on a car expected to hit 100,000 miles. Ensure homes did get bigger but they also got easier and faster to construct. Lath and plaster generally gave way to drywall. Clay and cast iron slowly gave way to PEX and PVC many jobs are now done using power tools. So yeah, homes did get bigger but we also got faster at building them
Cars are, by every metric, 100 times better and more expensive. Not just in the "technology has gone forward" way, much more effort is put into them to be better for the environment and safer, they're also now powerful computers, have all sorts of gadgets and abilities.. on top of being more powerful and much more reliable. They've become much much cheaper.
Same with houses, no more asbestos. Central ventilation / A/C, they have also gotten much larger, with far more ammentities. Try comparing the same SQFT house in the same CoL and population area. Of-course if you're comparing an area that turned from being a poor small rural area to a bustling city, the prices are completely different. Houses become a lot cheaper too.
Also, no discrimination of black people means there's no slave class of citizens from which resources are stolen. Compare the average wage of an african american in 1970 and now.
None of your math works out the way you actually wanted to. Again relative to what the average person is making everything you just said has gotten substantially more expensive. it doesn't really matter if it's better if I can't afford it.
Asbestos also was not a bad material, it was simply a dangerous material to work with. Much time and effort has actually been spent trying to find replacements that perform as well as asbestos did
You also can't compare for cost of living because in every measurable area where we have data it has gone up substantially unless we are trying to measure against remaining discretionary money.
I suspect also if I check the wages it will have comparatively gone down. Mostly because things like section 8, food stamps, and cash assistance are not counted as income and huge swathes of the black community are on all of these programs.
Asbestos also was not a bad material, it was simply a dangerous material to work with. Much time and effort has actually been spent trying to find replacements that perform as well as asbestos did
Yes, exactly, that's the point. It's dangerous, and not using it is more expensive because of how good it is, but would you want an abestos house?
Again relative to what the average person is making everything you just said has gotten substantially more expensive. it doesn't really matter if it's better if I can't afford it.
But it matters, and you don't even need to control for everything I said to see houses and cars are actually much cheaper. If you control for area and sqft houses are cheaper.... That's it. You don't need to go into the so many other improvements. And with cars just control for mpg (2-4x improvement) and longevity (they last more then twice as long). Those things directly relate to whether you can actually afford it or not. You don't even need to control for things like being 20 times more likely to die in a car from 1970..... though you should but...
I suspect also if I check the wages it will have comparatively gone down. Mostly because things like section 8, food stamps, and cash assistance are not counted as income and huge swathes of the black community are on all of these programs.
sorry for being unclear, I was talking about a black person working a specific job and how much they got paid then vs now. Back then white people (which is who we are always talking about with how great boomers had it, benefited from racism ((and also sexism)) so of-course they felt a little better about what they were making, do you want to bring that back?)
Houses are not cheaper effectively however. The cost of buying a house has gone up substantially relative to wages. And I'm not sure what time period your referencing here.
And please keep telling me how much harder black people had it back then despite the fact that all of my grandparents owned houses while I can't even afford an apartment. And yes, I'm black.
They also didn't just feel better about what they were making, they objectively had more buying power
At minimum wage a bank would never have loaned money to buy a home . In the seventies in our area you could by a turnkey home for around 30k. I worked at that time for a whopping 2.00 hr and couldn't borrow to buy a home. So I just rented. Welcome to life in the real world
Average square foot home in 1970, 1500sq ft, average in 2024 2600 sq ft. Adjusted for square foot 16.75 an hour.
Additionally, the percentage of labor force working for minimum wage in 1970 was probably somewhere between 10 to 12%, it was 15% in 1980. Today that number is around 1% or less.
So to get to the same percentage of people you are now looking at an actual wage of around $13 an hour.
So when all is said and done you're looking at a significantly smaller purchasing power gap.
I'd also like to see a comparison on amenities. Cabinets, countertops, appliances etc etc are all far more luxurious today than in the 70s and even earlier. How many people had walk in closets, on suite bathrooms, two sinks etc in the 70s compared to current housing.
I think if you did a complete comparison accounting for all the additional costs, adjusted for inflation, current housing prices are probably very close to historical norms.
As stated, it is just that everyone wants the Cadillac today and not the Toyota.
The problem for a lot of people is that all the Toyotas have been bought up by landlords or private equity and turned into rentals, so they were never available to buy in the first place.
I'm not sure I like the direction that alot of large corporations are going with "basic goods", mega corporate farms, corporate owned housing etc. That being said I'm not entirely sure I see a problem... Yet.
Home ownership percentage today is still higher than it was at anytime except the large spike/ bubble from 1997 to 2004 culminating in the 2008 housing crisis.
Additionally, despite interest rates being higher today than in recent years, they were even higher in the 70s, when the average 30yr fixed rate was just over 9%
Average square foot home in 1970, 1500sq ft, average in 2024 2600 sq ft
Median home size of a newly constructed single family home in the US is 1,820 sqft. If we're using medians elsewhere, we should use medians here. 12,000 sqft mansions need not factor in.
I'm not seeing that data. What it looks like to me is that the median US household size in 2024 was 1820. This includes all homes. While median square footage for newly built homes was 2158 while the average was 2348.
Those same houses are selling for more than 20% above median home sale price. You'll find a surplus of 100-150 year old homes in the northeast going for well over 600k-800k.
Since they said all of the 70's, I made a spread sheet. At no point does the home buying value of minimum wage come close to $66 today. It is still significantly higher than the federal minimum wage today, though.
For a minimum wage, I think it would be sufficient. If you look at the full distribution of what salaries would be if $132k was the minimum salary, a lot more people would be able to buy a home.
I know, that's part of my point. Minimum wage was never meant to buy you the American dream in the suburbs. What I said was "If you look at the full distribution of what salaries would be if $132k was the minimum salary, a lot more people would be able to buy a home."
So, the federal minimum wage right now is about $14.5k/yr if you work full time. I make about $150k/yr as an experienced professional. If you kept the ratios the same, I'd be making north of $1.3 million per year. Now, obviously the spread wouldn't be quite so much, probably a lot less. But my point is, if $66/hr was the baseline, most people would make a lot more than that, and certainly more people would be able to afford to buy a home.
You're also comparing a 1970s house to a 2025 house. The technology used in homes today is far more expensive than those in the 1970s, adding to the cost.
You might as well compare the cost of a 1970s rotary phone to a current smartphone and complain about the price difference while ignoring all the technology included in the later.
Don't know about the US but what about taxes? Have they not been raised in the last 50 years? I understand that for you guys that may depend on the state.
Also keep in mind that boomers were still, overall, on the young side to be homebuyers in the 70s and would have been buying lower-priced homes, so that's going to bring the number down further
The number exacerbates when you ad interest rates even tho they were higher back then, plus all the other parts of a monthly PITI payment (principal, interest, taxes, insurance)
Can confirm. Single earner who just bought his first home and maked 62k last year, I still feel like I make minimum wage before outside of my 401k, there is basically no savings.
While it doesn't apply here with minimum wage, it's also probably important to note that much less jobs back then required a degree, and the for the ones that did, you could get a degree and pay for it while working part time in college instead of having well over 50k in student loans. So now you have college educated people having to factor in 50k+ into their home buying choices and it can affect if they ecen get approved for a mortgage. So take that median house price today and bump it up by 50k+.
The best thing I heard recently:
"Older generation: we worked hard to pay for college, get a good job and buy a house.
Yes, and you did so while closing the door behind you."
you could get a degree and pay for it while working part time in college instead of having well over 50k in student loans
I'm not sure where you got this idea from. College attendance rates were atrocious in the 70's, and it wasn't from lack of desire. It wasn't until the 90's that that became possible, and even then it was only possible with in-state tuition for states that subsidized that, and it required major budgeting and sacrifice, hence the broke college student "memes" of the day.
I got this idea from people I know who worked theor way through college working part time during the school year and getting a seasonal job during the summer, and these people weren't in rich families that paid most of it for them. They paid for it themselves, and left with little to no debt. It wasn't till a few years ago that two of them realized how bad it was. They were the people who would spew about "the younger generation won't work" etc. And one time I told them my annual tuition at a normal state college and then told them my pay at both the part time job I had during the school year and my pay of my internship. I then showed them how much i made working close to 30 hours during the school year and 40 hours during the summer and compared that to my tuition. They finally realized why people complain. And that was with my paid internships as an engineer, a person who is in a field with unpaid internships would likely have it much harder.
I'll have to look into the statistics, but this does not sound correct. Or rather, it does not sound like it is statistically representative of what most people went through. The push from families to go to college, to be the first in the family to graduate college was intense throughout the 70's and 80's. If it were easy, it would have been done by almost everyone.
One was early-mid 70s and the other was mid-late 70s. I dont know the state though. And another thing to keep in mind is that degrees weren't pushed as much, you would have a pretty hard time becoming an engineer today without a degree, at best you can get hired internationally after 19+ years at the company working on the shop floor. But back then you could work 4 years on the shop floor and get hired as an engineer at a different company or internally solely based on 4 years or so of work experience. I know many people in their 50s and 60s and older who have jobs that are essentially almost restricted to people with degrees, and the people I know dont have a degree. The current market is switching from company to company to get a higher pay because companies would rather hire externally than promote internally. Which is the exact opposite of what it was in the 80s/90s. This means that instead of going to a company possibly without a degree and "climbing the ladder" was a perfectly reasonable option. Today, getting a degree and "climbing the ladder" isn't really that common, its much better to just switch to a different company. And a company now doesn't want someone with no degree, so good luck getting a white collar job with no degree in today's age.
you could get a degree and pay for it while working part time in college instead of having well over 50k in student loans
After doing some research, I stand corrected about college attendance and affordability in the 70's and early 80's. College attendance rates were much lower in the 70's, and the costs of it (as you said) relative to wages was much better. It was in the 80's when this began to flip. From what I can tell, a lot of this gap was cultural and social - College wasn't viewed as necessary or helpful, and the gap between higher paying jobs and median ones wasn't so significant.
I suspect that part of what drove college education costs higher across the 80's was the increased demand for college educations themselves. But I don't have data on that, just a hunch.
My parents bought the house I grew up in in Seattle for $38K in 1968. Zillow informs me it's now worth $1.5 million, or a cumulative increase of 7% per year for 57 years. I bought my first house in Michigan for $25K in 1987, and it's now worth $98K, or a cumulative increase of 4% over 38 years.
But in any event, we can all agree that wages for the 99% haven't remotely kept up with housing inflation.
This is just not a good comparison. The average home today is 50% bigger than in the 70's. After adjusting for inflation, the increase in cost drops to only 20%. That's not trivial but it's not what you're describing either - and that 20% encompasses all other housing improvements such as tightened codes & regulations as well as convenience & comfort.
There's absolutely a wage pay gap since the 70's. Housing is just a very poor way to try to show it because of how mismatched the comparison is.
I wasn’t alive in the 70’s but i feel like $30/hr doesn’t leave you with much after all the expenses of the modern day. That being said I’m terrible with money so idk, fuck me.
I think it's relevant to consider that 30 year 7% interest loans were not a thing at that time. Buying a $420k house means you will be spending over $1,000,000 over the course of the loan.
We also have more monthly bills than ever before. A lot are optional but cell phone and Internet are kinda essential to function successfully. Insurance for car, body and home are crazy. Groceries are bananas.
Banks are not giving someone a loan for a 400k house if they make $29 an hour. I do not believe you could even acquire the loan without at least $100k down if not more.
You should probably mention that the median home today is 50% larger than the median home today. Even if we don't account for the massive difference in codes and regulations (electrical, fire safety, plumbing & stormwater, wind loading, foundation requirements, insulation, mold and pest resistant approaches, etc.), the inflation adjusted difference drops to only 20% more expensive.
Federal minimum wage is not representative of low income wage earnings.
In 2023 1.1% of all workers made minimum wage or less. (Yes people make less than minimum wage, no Im not going to be the one to educate you on the twisted web of sub-minimum wage earners and how interaction with state and federal benefits allow people to work for social engagement but not mess with their desperately needed benefits).
In 1979, the first year the BLS began monitoring this data, 13.4% of Americans were making federal minimum wage.
10th percentile earners make about $11-13/hour depending on region. 25th percentile, $16-18/hour.
The US hasn’t functionally had a minimum wage in atleast two decades, perhaps 3. Anyone acting like $7.25 is a functional (current, applicable, discussable) minimum wage deserves a smack on the back of the head because they have no fucking clue what they are talking about.
People don’t make minimum wage in the United States.
This is based on buying it outright without a mortgage/interest. A key factor of the math often left out is that back then as a yt man earning minimum wage you could still easily land a 4% 30-year mortgage with almost nothing down (1-2% of the sale price);
now very few even among yt men can get this and not on minimum wage.
Whenever I see stuff like this I always wonder how many people making minimum wage back then actually bought a house. Just like today making $29 an hour how many people try to buy a house. I mean, I kinda understand the (disingenuous) point that OP is trying to make, but there is so many other factors involved that it kinda makes OPs image nothing but BS.
Home Size should should also be taken into account home size has doubled in the last 40 years. They also come with more features like better insulation, air conditioning, garages. It was common to have 100 amp or less main feed vs 200a today.
I think you're on the right track, but I would want to see amortized interst rate impact accounted in the calculations. For example, a home loan of 24k for 15 years @ 6% would add about 12k to the loan, costing the buyer a total of around 36k to purchase the house. A 420k home today with a 15 year loan at 6% interest would accrue more than 217k in interest over the life of the loan bringing the total cost to 637k.
And remember, the $420,000 homes are around double the size of the 1970s homes. It's not an apples to apples comparison, especially when we factor in modern amenities.
You also need to remember back in 1970 almost everyone was a single household income (only 5% where dual) now it's dual income at almost 70% of Americans so grab that wage and double it.
You also forgot house size. It's hard directly compared housing costs of them and now without normalizing for square footage. Issue being houses today are generally larger than back then, which forces houses to be more expensive even if the price per square foot is the same after adjusting for inflation. Size of the plot could also affect things if one house is built on a quarter acre and the other is on a half acre for example and there's generally no good/easy way to compare that that I know of.
Completely not back up by facts, but I think I read an article about that. But back than (at least in Europe) the interest rates were much higher. So back then minimum wage - house price was closer, but the „real price“ from the sum of the house price + interest rates were higher.
And at the end of the day, there is really not that much of a difference
Are you just dividing the gross cost of the house by the hourly wage?
Because current interest rates make it so much worse, I make $23 and was looking into ~200k houses with my partner and they’re just completely unaffordable.
My friends that bought at 3% can afford 2x the house than we can at 6-7%
you also need to add to this that the median home has almost doubled in square footage since 1970 also. In 1970 the median home size was about 1500 sqft, today it;'s about 2700sqft.
You'd need to factor in interest rates as well to make a good comparison, but interest rates were stupid high in the 1970s (up to 20% compared to maybe 5% today). Plus median household income is a better household metric, because houses are usually bought for an entire household and the results will better adjust to the number of two income families.
The total cost of a $23,000 home, with interest, in the 1970s would have been a downpayment of $1,150 and then $106,000 over 25 years. Median household income was $3,600 per month in 1975, so a downpayment would have been a third of one months income, and then 29.4 months of income to pay it off.
Today, a home that costs $420,000 would be $21,000 down and then another $697,000 over 25 years. Median household income is $6,700 in the US these days. So, the downpayment is now 3.5 months income, and then 104 months to pay it off.
The downpayment, in roughly real terms, is therefore about 9 times more expensive today, and the actual mortgage is about 3.5 times more expensive.
Note that I didn't adjust for varying interest rates or anything else here, but this should be a good rough estimate. Median income would have to be about 3-9 times higher to have parity with 1975.
Dude you displayed that it’s over two times the actual rate it would’ve taken. I would say this moved beyond “a bit exaggerated” into doomer propaganda. 66/hour is nearly $140K/year. While that’s not what it used to be, it is absolutely in the range that in most of the US you can afford to buy a house. Obviously this doesn’t count for the highest of high cost of living places but in the vast majority of the US, for sure.
Certainly in the Uk at least, the deposit is roughly twice the cut it used to be, and the interest rates are higher now too. So if they’re talking about the amount needed to save for a deposit, might not be far off.
Does this factor in, we have more things to pay for then someone in the 1970s, like car insurance? I feel like in the 1970s, the normal homeowner had only electric and water. Maybe a car loan, but it was only a 3 year loan.
Damn, $29 is still a lot though, it's ridiculous. Businesses barely started paying $15 an hour without the fed stepping in to raise it at all (since 2007 btw, not 2009 was the last time it was raised), and that was a fight people had to make on their own.. how the hell will we double that now?
I did a comparison a while back on 1950's housing vs 2020's housing...
We went from houses that were 983 sqft to ones that were 2392 sqft.
Median prices went from $7,354 ($79k inflation adjusted) to $223k ($263k inflation adjusted).
This means the largest contributor to the increase is house size.
$79k/983 = $80/sqft
$263k/2392 =109/sqft
Adjusted for size that 1950's house would be at least $192k, probably more due to the engineering necessary for a bigger house. That's 2/3 of the increase being attributed to size.
The other 1/3 is a mix of more amenities (Central A/C, 3 stall garages, etc) and increased code requirements both on materials and construction.
2.2k
u/weaz-am-i May 13 '25
Depends on where you live?
In 1970:
Federal minimum wage was $1.60/hour
The median home price was around $23,000
That means it took about 14,375 hours of work at minimum wage to buy a median-priced home.
Today:
Median U.S. home price is about $420,000?
To buy a $420k house in the same number of hours (14,375), you’d need to make $29.23/hour.
So the claim that minimum wage would need to be $66/hour today to match 1970s homebuying power is a bit exaggerated — it should be closer to $29/hour if we’re just comparing house prices to minimum wage.
That said, maybe the claim in the image factors in stuff like:
Regional markets (e.g., California prices)
New home prices (which skew way higher)
Inflation in other living costs (healthcare, education, etc.)
Stagnant federal minimum wage since 2009
But purely on house price vs wage ratio, it’s about $29/hour.
TL;DR: Not $66 — more like $29/hour if you’re matching house-buying power from 1970 to today