The Widening Gap: How Affordable Living Became Exclusive to the Wealthy

Ava King

Updated Tuesday, March 26, 2024 at 7:19 AM CDT

The Widening Gap: How Affordable Living Became Exclusive to the Wealthy

A Summer House Dream: From Affordable Retreat to Exclusive Getaway

Once upon a time, 50 years ago, a summer house on a picturesque lake was an attainable dream for many families. With a single income, a husband could work during the week while his wife and kids enjoyed the whole summer at the lake house, eagerly awaiting his weekend visits. However, in today's world, this idyllic scenario seems like a distant memory, reserved only for the wealthy.

The Growing Disparity: Living Standards Then and Now

The gap between the living standards of the wealthy and the poor has significantly widened over the past 50 years. In the past, reasonable living standards, including owning a home, working reasonable hours, and having leisure time, were more accessible to a larger portion of the population. Today, it has become increasingly difficult to afford even basic necessities in some places without a high income.

The Economic Anomaly: The United States, 1945-1975

What made the dream of an affordable summer house possible 50 years ago? It was the unique economic conditions in the United States between 1945 and 1975. During this period, the US held the position of the primary manufacturer for the world, with little competition and high wages. Blue-collar, low-education jobs provided enough income for families to afford houses and cars on a single income, a phenomenon unparalleled in history.

The Impact of Inflation and Deregulation on Wealth Distribution

However, the economic landscape began to shift in the mid-1970s. Inflation caught up with the high wages of the previous decades, eroding the purchasing power of families. Additionally, the deregulation policies implemented under President Reagan in the 1980s favored the wealthy, shifting profits towards them and leaving workers with less financial security. These changes contributed to the increasing wealth gap between the owner class, largely comprised of baby boomers, and the workers.

The Government's Role: Lack of Intervention

One might wonder why the government did not intervene to address the growing wealth inequality. The truth is that the government, particularly under Republican leadership, did not take significant steps to alleviate the economic hardships faced by the working class. The owner class, consisting mainly of baby boomers, held significant political influence as the largest voting block, allowing them to shape policies that favored their own interests.

The Rebuilding Phase: Post-WWII Prosperity

To understand the affordability of a summer house 50 years ago, we must look back to the aftermath of World War II. The 1950s marked a period of global recovery, with the US leading the way as the primary supplier of manufactured goods. This unique situation, coupled with high wages, allowed for a higher standard of living for a larger portion of the population.

Reagan-Era Deregulation: A Turning Point

The impact of Reagan-era deregulation cannot be overlooked in the context of wealth distribution. Deregulation policies implemented during the 1980s favored the wealthy, leading to a concentration of wealth in their hands and leaving workers with less financial security. This shift further widened the wealth gap and made it more challenging for the average worker to afford a comfortable lifestyle.

The Blue-Collar Miracle: Jobs that Provided Comfort

The affordability of a summer house 50 years ago was made possible by the unique opportunity for blue-collar, low-education jobs to provide a comfortable lifestyle. From 1945 to 1975, these types of jobs allowed families to afford houses and cars on a single income, an exceptional circumstance in US history.

The Boomer Effect: Wealth Accumulation

The baby boomer generation played a significant role in the accumulation of wealth. The owner class, largely comprised of baby boomers, benefited from economic policies that allowed them to accumulate wealth while leaving the workers with fewer opportunities for financial stability.

Inflation's Impact: Straining Affordability

The mid-1970s marked a turning point as inflation caught up with the high wages of the previous decades. This made it more challenging for families to maintain the same standard of living they had enjoyed in the past.

Changing Dynamics: Income Distribution Over Time

The period between 1945 and 1975 stands out for its unique income distribution dynamics. During this time, there was a narrower gap between the wealthy and the poor compared to the present day, allowing for a more equitable distribution of wealth.

Baby Boomers' Influence: Shaping Government Policies

As the largest voting block, the baby boomers had significant political power, which likely influenced the government's response to economic issues and wealth inequality.

Reagan-Era Policies: Impact on Income Inequality

The deregulation measures implemented during the Reagan era shifted profits towards the wealthy, exacerbating income inequality and making it more difficult for the average worker to afford a comfortable lifestyle.

Manufacturing Boom: Post-WWII Prosperity

The US's role as the primary manufacturer for the world after World War II played a crucial part in the economic prosperity of the 1950s. High wages and limited competition allowed for a higher standard of living for many.

Changing Economic Landscape: Then and Now

The period from 1945 to 1975 was marked by unique economic conditions, including high wages, limited competition, and a focus on rebuilding. These factors contributed to a more favorable standard of living for a larger portion of the population.

Inflation's Impact: Affordability in Decline

As inflation increased in the mid-1970s, it became more challenging for families to maintain the same level of affordability they had enjoyed in the previous decades.

Income and Housing Affordability: A Correlation

Fifty years ago, it was more feasible for families to own their own homes, whereas rising housing costs have made it increasingly difficult for many to afford homeownership in today's world.

Changing Nature of Work: Diminishing Opportunities

Over the past 50 years, the availability of reasonable income and working hours has diminished, making it more challenging for individuals to achieve a comfortable lifestyle.

Economic Policies and Income Distribution

Economic policies, such as deregulation, have contributed to a concentration of wealth in the hands of the wealthy, further exacerbating income inequality.

The Shifting Economic Landscape: Implications for Affordability

The contrast between the affordability of certain goods and services 50 years ago and the present day is striking. What was once accessible to a larger portion of the population is now only attainable for the wealthy, highlighting the widening gap between the haves and have-nots.

The dream of an affordable summer house that was once within reach for many families 50 years ago has become exclusive to the wealthy in today's world. The narrowing gap between the living standards of the wealthy and the poor, the unique economic conditions of the post-WWII era, the impact of inflation and deregulation, and the lack of government intervention have all played a role in this transformation. As we look back at the past and examine the present, it becomes clear that the economic landscape has shifted, leaving behind a legacy of increasing wealth inequality.

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