Quote:
Originally Posted by Innsertnamehere
Housing is basically the only good which has outpaced inflation. People either spend way less on items today or buy far more expensive versions than they did back then - food, clothes, furniture, etc are far smaller portions of people’s budgets these days. For cars, people spend similar amounts, but the cars they drive are far larger and more complex than in the past.
Part of it is much higher housing standards today coming from larger average dwelling sizes, lower occupancy rates in housing, higher build qualities (a 1950’s home would have been built extremely cheaply by todays standards and would be nowhere close to even being code compliant), but there is real cost increases too, particularly in supply constrained markets.
Places like Edmonton have real estate costs being roughly equal to what they were back in the day. Somewhere like Vancouver or Toronto are extremely supply constrained which has caused housing prices to skyrocket.
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Shelter costs have far outpaced inflation, particularly since the early 2000s. In the early 90s a typical one bedroom in West End Vancouver would rent for in the $500s. Adjusted for inflation the midpoint of $550 is $1061 in 2024 dollars. Well over double that today, perhaps even triple. This is why ads for hotbedding and looking for a 4th roommate for a one bedroom exist. Plus, almost all rentals included utilities except of course phone and cable. Many rentals now do not. Housing appreciation varies by region, but it has occurred everywhere in the country, but again it really started in the early 2000s. In some markets, like the GTA, housing in the early 2000s had just recovered to its late 80s values. Other markets were more stable.
The average household income in Canada in 2023 was $75,452 so multiply that by 3 (ie. mortgage affordability) and the result is $226,356. No major city in the country has house prices this low. Some rural areas might, but the problem is well-paying employment is exceedingly difficult to find in these areas. It was really quite unthinkable for most in the 1980s to still live at home by the time they reached their mid 20s. It was considered even a bit "weird". Some did obviously, esp. those in university, but certainly most of my peers were out not long after they turned 20. If you worked full time you could afford your own place, or you shared a house with a couple of roommates.
Don't think for a minute though that all people in their 50s and 60s are sitting pretty. I know many that have no savings, no employment pension plans to look forward to and substantial debt. I know many people who are in their late 60s and even 70s who are still working because they can't afford not to. So for the younger two generations it seems impossible for most, unless you have family that can help out, but many just aren't in the position to give their kids a down payment for a house, and nor can many kids expect any inheritance.
I disagree with you about build quality. While they may not be up to "code" or as energy efficient in many cases, the ubiquitous in suburban Canada 50s/60s ranchers have a far better build quality than the typical new home. I've talked with many builders who tell me that new builds are junk, ply board, covered with synthetic polyethylene insulation and then topped with vinyl siding. Vinyl windows. New apartment blocks are also of poor build quality compared with the concrete blocks of the 60s and 70s (outdoor pools were more common then too, but I suppose insurance and maintenance concerns) and even those three story walk up brick buildings from the 50s. Again, I am referring to average dwellings, not high end multi million dollar condos.
Compared with the 1980s, there have been marked decreases in prices for some items such as appliances, furniture and clothing. I'm referring to what the average people might buy, not high end. A washer/dryer pair in early 80s ran about $1000, not significantly less than now in-non inflation adjusted dollars. We'll save the arguments regarding efficiency and longevity for now, but suffice to say, when people bought a w/d they could reasonably expect 25 years of service. A pair of Levi's jeans were about $50 then and close to the same now. Electronics are much less expensive now. A TV was $500-700 in the early 80s depending on size (26" was a big screen) and a microwave oven was similarly priced This is about $2000 in today's dollars.
I think food is more expensive adjusted for inflation, esp. meat (except pork) and fruits and vegetables. I was shopping earlier this week and plums were $11/kg. Chicken is also outrageously expensive, we used to think of legs and thighs as "poor" food. . Restaurant meals are also more expensive, I can well remember $1.99 breakfast specials in the 90s, earlier this week it cost me $18 for a basic breakfast with coffee incl. taxes and tip. Again, I'm talking a very average diner, good but nothing fancy.
Vehicles are relatively more expensive, but the market is dramatically changed. Most new vehicle sales now are light trucks (incl. SUVs/crossovers). In the past they were mainly sedans and coupes. Vehicles are heavier now and better equipped. Most vehicles into the 80s in Canada had manual windows and did not have a/c. Power steering was still an option on lower end cars. I don't think there are any vehicles now that do not have these features. They are also safer and last longer. If you maintain a vehicle you should get at least 15-20 years out of it if you want to keep it compared with 10-12 years for the 70s and 80s vehicles. As for styling or interior design, that is subjective.
Gas prices have fluctuated dramatically over the years. Adjusted for inflation they were less expensive in the 60s and early 70s but spiked dramatically starting in 1973-74, which led to the downsizing (and power cuts) of vehicles for the next decade at least. Gas prices also vary by region, but on the Prairies in the mid to late 80s, gas was $0.399 to $0.499/L or $1.06 in 2024 dollars. Gas spiked in 1990 to over 70c due to the Gulf War or about $1.50 today, then declined and stayed mostly low for the rest of the 90s. I paid $1.179 at Shell on Monday, so prices are within the 80s-90s averages. Gas prices have been highly volatile in recent years, being well under $1 in 2020 and well over (at times) $2 in 2022.
After tremendous gains in the 50s and 60s, household incomes adjusted for inflation have been largely flat for close to half a century. Upper income earners, the professions and upper managerial occupations, have done well, but blue collar workers have seen wages decline. Anecdotally I can tell you that in 1980-81 my brother-in-law was making $11/hr as a milkman (That sounds so funny, a milkman, $40 now) and in the late 80s my friend was making about $20/hr working at Molson's ($43 now).
In my opinion the past few decades have been particularly hard on the working class (ie. the 3rd and 4th quintiles) and the degree of wealth inequality in this country is unacceptable. The first quintile are doing much better, the second likely a bit better, esp. those who bought houses years ago, the so called "paper millionaires" and the fifth, well, they were poor then and are poor now. Also anecdotally, it may just have been the fact that I was unaware, but I don't remember food banks in the 70s or 80s and nor do I remember homeless people. There were always skid rows in Canadian cities but nothing even close to what you see now in the Downtown East Side of Vancouver for example. Yes, I know that there are other reasons beyond just wages and housing costs.
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