Average family can't afford health care ($12k/yr cost for 60% coverage plan for 2 parents 2 kids according to Congressional Budget Office), housing and food on that income.
$1800 would buy you a 5 bedroom/2.5 bath/2400sf house in Houston.
A "small" house for a couple making $50K gross would run easily under $1000/mo.
While prices are higher, I'm not paying double over 2008 prices....otherwise I'd be paying $6 for a gallon of milk or $4 for a loaf of bread.
No, they are up 6.7% since Jan 1 2008.
http://research.stlouisfed.org/fred2/series/CPIAUCSL
So no, not "double inflation" either.
Wages and salaries went up 4.9% over the same period.
Alright, 163% of inflation, if you prefer to be pedantic.
Wages and salaries went up 4.9% over the same period.
As always, this only shows part of the story. This is the average for wages and salaries for private industry workers.
If you look at median household income, it's stagnated.
http://economix.blogs.nytimes.com/2009/09/10/a-decade-with-n...
Median household income in 1998 was $51,295 (adjusted). Median household income in 2009 was $50,303.
So we are seeing a stagnation of income, adjusted for inflation. On top of that, food prices are increasing 163% faster than inflation. Now you can post links to isolated stats, and attempt to handwave away the issue, but it is an issue, and each year that food prices eclipse inflation builds towards increasing social and economic problems for those in lower income brackets.
You have now changed the reference period, and you are also looking at a different quantity. Wages and salaries have actually increased 28% since 2001 (data doesn't go back to 1998). See my previous timeseries.
Household income is a separate quantity - it can be raised or lowered by a variety of factors. For example, it can go down as household size decreases or as per-household hours worked go down. That's not the same thing as a wage decrease.
Also, your time period seems a bit cherry picked - you are comparing the top of the last bubble to the bottom of the current bubble.
Also, you have to take certain factors in to account, such as the utility of the purchases in determining the effects of food prices eclipsing inflation. DVD players may have gone down in price, but that doesn't help much when you need to eat.
Also taking into account stratification in food quality (as mentioned above), availability, etc. is also important.
Food prices are an issue in developing nations, in North America it's just a political talking point designed to conjure up images of starving children used to justify 'farm aid' most of which ends up on Park Avenue.
http://www.newwest.net/index.php/city/article/farming_park_a...
Most malnutrition in North America is caused by diet choices and not the inability to afford food. Food prices are increasing because there was a huge bubble of cash which we are trying to reinflate, food is the new housing. Look at commodities which do not trade on a futures exchange, they haven't risen in price. It's pure speculation that people will pay more for food than they currently are. If it's really an issue then perhaps the US could stop putting 25% of it's corn production into the gas tank.
Also, the CPI is rigged to present the picture that massive inflation isn't an issue in the US. If you believe the CPI is an accurate reflection of inflation in America I've got a bridge to sell you.
Many health issues in the U.S. are caused by the inability to afford healthy food. Not the organic, grass fed stuff at Whole Foods, just even moderately healthy food.
Subsidies for ethanol aren't helping, but the problem is much greater than that.
Here's a great map outlining food deserts in the U.S., a major issue in nutritional health and related directly to poverty and health issues.
When I started my startup I went from 91K to ~20K, I've never eaten so healthy in my life. Why? Because frozen convenience foods are all out of my price range! I can't afford to go to McDonalds, etc.
What do I buy?
For meat? Whatever is on sale, I've learned to do miraculous things with cheap food, I downloaded a bunch of kitchen nightmares and watched how Ramsay showed them how to make great meals for cheap.
For veg? Concentrate on lettuce, carrots, frozen corn, peas, etc. Also, do local farmers markets. I can't say enough for buying in season. Lots of apples as well. I stay away from anything tropical as it doesn't seem to last that long.
Staples / Starches? Potatoes, rice, some pasta
I'm particular about how I spend my money and focus on finding the absolute largest sizes available. I'm buying whole pork shoulders for about half the cost on hamburger. Take it home, cut some of it up into a roast, some into steaks, all the stuff that doesn't look so great goes into the grinder. Ground pork goes nicely into chilli
Then I bought 20KG of flour and some yeast and have been making my own bread. A loaf of bread costs me something like 20 cents. Yes, there are labour costs but I'll take Sundays off and make a tonne of food for the rest of the week. Bread is especially good once you figure out how to par bake it and freeze it. In my fridge I've got shepards pie, beef barley soup, and chili, white bread, oat bread, whole grain, etc. Some of that mine, some of it cooked by my girlfriend. If you were to just make bread you'd kill your whole Sunday but I've got 3 or 4 things on the go at once. Chilli, soups, etc. It's also a great distraction and gives me time to be social.
The key is to buy in volume, make a lot of something all at once and put it in the fridge / freezer. Or buy foods that naturally keep for long periods of time. When I buy rice it's 25 KG, same with potatoes, I just put them in the cold part of my house.
I'd really like to eventually do a book called The Startup Diet.
In these areas, prices have shot up way beyond 6.7%. Onions and potatoes are easily up 100% or more since 2006/7. "Cheap" cuts of meat like chicken, roasts, pork chops, skirt/flank steaks and beef briskets are easily up 15-20%. Milk is up. Butter up 150% of more since 2006/7. Beer is up 10%.
If you eat processed stuff, those manufacturers can blunt price increases by using lots of subsidized commodities like corn and soy products.
I think this is an important factor to consider. In many ways, this stratification simply offsets the costs into health issues later in life.
Food prices have doubled based on the receipts I enter into Excel. Everyone should do this and find that the Fed's numbers are totally fraudulent. Knowing this, you can then make better business decisions, such as to get rid of cash as fast as you can.
This seems like the sort of thing they can only do once. Just curious, do you know when they did this?
As for my food expenses, month to month variation is bigger than any increase. Which is surprising, seeing as I've been actively trying to eat more for the past year. But I guess healthy food is cheaper than the crap I was eating two years ago.
Apparently it happened early in the Clinton administration.
Quoting: The Boskin/Greenspan argument was that when steak got too expensive, the consumer would substitute hamburger for the steak, and that the inflation measure should reflect the costs tied to buying hamburger versus steak, instead of steak versus steak. Of course, replacing hamburger for steak in the calculations would reduce the inflation rate, but it represented the rate of inflation in terms of maintaining a declining standard of living. Cost of living was being replaced by the cost of survival. The old system told you how much you had to increase your income in order to keep buying steak. The new system promised you hamburger, and then dog food, perhaps, after that.
I don't think you can judge comfort level or disposable income by raw income level very well regardless.
I have a friend who grew up in relative poverty. Her family had ten kids closely spaced together including twins. Her father made $150k/year with no benefits and her mother was a house-wife.
I had things a good deal easier just because my parents only had two kid even though their income was less.
$1800/month is a >$300k 30 year mortgage.
> Cars are expensive too, add $400 a month for payments on that.
That's absurd.
It's not hard to stay well under $20k new and used is even cheaper.
Keep it for at least 7 years and $400/month is two cars and change.