Have you ever glanced at shows like "Leave it To Beaver" and wished you could retreat back to an age when families paid off mortgages on one income and with seeming effortlessness? Well, if you answered that question with a resounding "yes" you might be one of many million Americans who have become entangled by a sharp rise in what economists call the toil index.
This statistic tracks the number of hours the average worker must "toil" every month to afford a median-priced home and the good schools that accompany this amenity.
Between 1950 and 1970, this figure actually declined slightly - from 42.5 hours to 41.5 hours - as rising salaries kept pace with escalating home prices. However, Cornell University economist Robert Frank's estimates it had climbed to 70 by 2010.
To him the reasons for this uptick are obvious: Between 1970 and 2000 economic inequality become more marked as "almost all significant income gains in the United States have been confined to the top quintile of the earnings distribution, and most of the income growth has been concentrated near the top of that group."
And the super rich - possibly, the one per cent we have been hearing so much about lately - used their wealth to purchase ocean front mansions or Park Avenue Townhouses. Their spending spree set off a chain reaction as Americans positioned lower on the economic ladder tried to follow their example.
Thanks to easy credit, it even became affordable for families with moderate means to chase their dream homes, as they sought size and style. One pertinent statistic: Between 1970 and 2007, the median size of a new home jumped from 1500 to 2300 square feet. McMansions measuring 4000 square feet and replete with the latest and greatest became commonplace.
And despite the fact that things tapered off a bit when the housing bubble burst Frank suspects that this index has escalated at least somewhat since that point. So, how might people come to grips with our changed world where many Americans are working harder to afford essentials?
Well, look at it this way: Dental visits were not dulled by anesthetics to the same extent during the years folks liked Ike as they are today. Sure, there might have been more stability during the 1950s, but there is more to dull the pain both dental and otherwise today. Everything is, after all, a trade off.
Sources
Horsey, David, "Toil Index tells why average American feels poorer,"
http://blog.seattlepi.com/davidhorsey/2011/04/04/toil-index-tells-why-average-americans-feel-poorer-new-york-times/
Mankiw, N. Gregory, Christina D. Romer, Tyler Cowen, Robert H. Frank, Robert J. Shiller and Richard Thaler, "I Just Got Here, but I Know Trouble When I See It,"
http://www.nytimes.com/2012/01/01/business/from-6-economists-6-ways-to-face-2012-economic-view.html
Rich, Motoko, "The Toil Index,"
http://economix.blogs.nytimes.com/2011/01/07/the-toil-index/?ref=roberthfrank
What is the average home size in the U.S.?
http://www.infoplease.com/askeds/us-home-size.html
