In quiet suburbs white children played on the lawn with Hula Hoops and Slinkies. Teenagers visited the soda shop for a chaste night out. Mothers had dinner on the table when dad came home from work. Elvis Presley and Marilyn Monroe were the most scandalous influences in popular culture. Even terrorism was relatively wholesome, the near-exclusive preserve of good Catholic boys in Ireland.
The year 1957 is important for reasons that extend beyond our soft-focused nostalgia. It marked an empirical high point in the history of America’s Middle Class. That was the year when the percentage of national income taken home by middle-earners peaked. Since that time incomes in America have been relentlessly drifting toward the ends of the spectrum.
Were we better off as a country in an era of relative middle-income equality? Establishing some common ground for comparison among eras is as difficult as making comparisons across cultures. In the end, as in any assessment of values, subjective factors will tend to prevail. We can, though, establish a few empirical markers. One of the simplest comes from comparing our almost mythical imagination of 50’s middle class buying power to our present experience.
Looking at published prices and known typical incomes from that period we can establish a loose baseline against inflation. Here’s what common incomes looked like in inflation-adjusted terms from 1957.
In 1955 (it’s tough to get good data for one year in particular), average earnings in the nation’s most lucrative manufacturing center, Detroit (taken from the book Ford: Decline and Rebirth) were about $75 a week, or a little over $30,000 a year today.
The highest-paid blue-collar workers in the world in the 1950’s were Ford’s Detroit (actually Dearborn) assembly line workers. In 1955, his average weekly wage was $106, or about $45,000 a year in today’s terms, above the national median of about $40,000. Those relatively well-paid blue-collar workers were almost entirely white and male, thanks to government and union policies that kept them that way. Median incomes today come in around $52,000.
Most blue-collar families in 1957 took home earnings around $1.25/hour, a little less than $10/hour today. For reference, that’s what you’d earn as a barista, where you will never be run over by a fork lift or fall in a vat of boiling steel. And they generally had larger families than would be common today.
In the golden age of middle-income work, relatively few workers blue collar or white, earned as much in inflation-adjusted terms as a store manager at Chipotle today (about $55K). Your job was probably dirty, painful, dangerous, and shortened your lifespan while polluting the community around you.
But what about all the glorious things you could purchase with your modest earnings in 1957? Almost everything cost more than today, and in most cases cost vastly more. The first challenge is merely to find comparisons, since most of the things we take for granted now were not available in 1957 at any price.
Here’s a list of items available in 1957 with their present, inflation-adjusted costs:
$2,500-$4,000: A clothes washer and drier
$150: An electric can opener
$2,100-4,000: 24″ black and white TV (and you better know a good repairman, cause you’re gonna need him)
$600: An FM radio
$675: A record player
$7.50: A single record with a B-side track
$50: A pair of children’s shoes
$2.60: A gallon of gasoline
$125: A child’s tricycle
$1,700: A window-mounted air conditioning unit
$11: A mens haircut
$50: A ten minute phone conversation with Grandma in the next state.
$18,000: Base model of the most popular car in ’57, the Ford Fairlane. It had standard transmission, no power steering or brakes, no air conditioning, an AM radio and no seat belts. Interestingly, the price of a modest car is still almost exactly same as it has always been even though the value built into new models has skyrocketed.
Here are a few things you couldn’t have at all in 1957: a home with central air conditioning, a large library of recorded music, an affordable means to communicate quickly with people at a distance, accurate information about sex or birth control, effective treatment for almost any ailment not caused by bacteria or an accidental injury, a no-fault divorce or a safe, legal abortion.
If you were black or a single woman, there were a few additional things you couldn’t have, including a mortgage, admission to most universities, a job in most of the country’s unions, or a government job in any but the most menial or humiliating positions outside the military or the Postal Service.
There were a few notable things that were cheaper in 1957 than they are today. One of those pretty new homes in the suburbs would rarely cost more than $80,000. That house price hides some important financing details that help explain the low top-line cost. Mortgages were generally for 15 years with rates around 5%. More importantly, a buyer usually needed a cash down-payment of at least 25-40%. That helps explain why even at lower prices, home ownership rates were only just over 50%.
Also notable were the lower cost of health care and higher education. A year of tuition and fees at the University of Pennsylvania was only $17,000 and people spent barely a quarter as much on health care. There are a few obvious explanations for the cheaper price of both in the relative quality of what you were buying. There was almost nothing that your family doctor could do for you in 1957 that isn’t done by a nurse today. If you had any ailment more serious than a laceration, broken bone, or bacterial infection there was almost no treatment available at any price.
And as for college, there wasn’t a university in the country in 1957 that could teach a fraction of what a student learns in a decent modern high school. Comparing these activities across time is difficult, but that still doesn’t account for the most powerful cost differential between these eras.
What we notice most of all in the difference between what is cheaper or more expensive in comparison to 1957 is revealed in the price of one mundane item: a haircut. Your haircut is actually slightly more expensive on average now than it was then for reasons that explain most of the rest of sixty years of price shifts. What was cheaper in 1957 than now? People.
Everything that requires the skilled attention of a human being is more expensive now that it was at the peak of the middle class era. That extends from education through medicine down to your weekly trim.
What makes our economy now so much more promising than in previous generations is the value we have come to place on people, especially people who have developed a unique skill. That is also what makes this economy so much more consistently uneven in its outcomes.
As we grow more concerned about the impact of income inequality it is important that we not lose focus on the other side of the ledger. The same forces that have fed more dynamic economic outcomes have brought us a new world of value. Our products and services are cheaper, safer, of higher quality, and produced in a more environmentally sensitive manner than ever before. Our economy is also more open to the contributions of people who were excluded in the past. We have accomplished a great deal worth preserving and continuing.
In particular, whatever we do in address concerns about rising inequality should avoid stunting one of the most promising developments of modern capitalism – the ability to capitalize labor – using education and talent to earn capital-style returns on one’s work. Navigating this challenge might be easier if we could resist our urge toward nostalgia. Our past was not better than our present. When we glorify it, we imperil our future.
A few sources which are also endless fun for a history nerd: