At year's end , the Dow Jones average came in at 1004.65

[SoCalDem]

(this is something I wrote in Feb '07.. long before the crash, but many of us here were already worried..before the banksters seemed to be)




The year was 1977. I was 28, my husband, 34.

We were a young family of 4.( sons born in '73 & '77,,,the last would follow in Dec of 78)

What was life like then?

We bought our first house with $2500 down, for $39,900.00 in a new subdivision in a bedroom community of Kansas City, The house was a tri-level split with a basement, and came with the "designer upgrades". It was a DREAM-House for us. ( I have since zillow-ed it, and it had a whopping 1100 sq.ft.)

There was a 12x12 redwood deck with a built in gas grill ( no propane bottles or briquettes). The common yard where all the cul-de-saqs backed up, was a greenbelt to behold, and the neighborhood kids were in heaven. All the Moms could step out the kitchen door and see their kids playing.

We did worry a bit about how on earth we would be able to afford the $359.00 a month PITI.

We had two cars, one of which was a new Chevy Station Wagon .( The Chevy had a car payment of $118.00 a month, for 36 months)

My husband was the sole family wage earner and his gross pay that year was $19,800.00. We had FOUR credit cards.. Standard Oil gas card, JC Penney, Sears and a newfangled card called "BankAmericard" (it had a $500 limit)

We were not wealthy, but we also never had any late payments, we ate well, and we never worried about taking kids to a doctor or dentist.

There were NO malls, NO K-Marts, No Super-Duper-Warehouse markets. We bought shoes at a SHOE STORE, we bought tires at a TIRE STORE, the boy's clothes came from Sears or Penneys, or when we were feeling really flush, a nice downtown department store in downtown KC.

We took vacations, we had a (small) savings account , we ate out at nice restaurants, and we lacked for little that was important.

Life was simple then, and even though we were not rich, we felt that we were doing okay.

My husband was not in a union, but lots of our neighbors were union members, and worked in Kansas City.

Ours was a neighborhood of Y.U.M.B.ies, and their new families.

It was a whirlwind of kid-watching all week and barbecues & neighborhood "card-parties" all weekend. Dads mowed lawns, shoveled snow...Moms took care of the kids and did their own thing during the week.

No one we knew had ever "lost a job", or been unemployed for any length of time, or even worried about it.

The neighborhood was varied too. Across the street, Rob was a lawyer....next door, Ted was an employee of IRS...down the block was Sanj, who worked for the KC Royals... Dave worked for Western Auto...Johnny worked at Sears.

I don't know when things started to change for the worse... when people started to be afraid, but things were pretty good in 1977 for at least one family.

The "measure of things" was on how your family was doing...People did not tune in twenty times a day to see "how the DOW" was doing. There were no "money channels"..no "market-gurus" screaming at us all day, warning us of a fleeting opportunity to BUY BUY BUY... We did not have a president telling us to "shop shop shop" til we dropped.

We did not worry about being blown up by terra-ists...nor did we worry about being old, broke and sick. We did not even worry about our own parent's health or wealth back then.

My husband's widowed mother was 74, and did quite nicely on Social Security, some small pension his dad left her, and babysitting.


1977 seems like a long time ago, but it really isn't. It's only one generation & change.

gen·er·a·tionNoun/ˌjenəˈrāSHən/
1. All of the people born and living at about the same time, regarded collectively: "one of his generation's finest songwriters".
2. The average period, generally considered to be about thirty years, during which children grow up and have children of their own.

The DOW info came from the link below, and looking at those numbers blows my mind. I cannot figure out exactly what correlation there is, but there HAS to be one. In my simple mind, I keep thinking that the money in the (new) DOW came from somewhere, and I have a sneaking suspicion that it came from US...the middle class.

There has to be a relationship to it. When I see those numbers, I see greed from above.

I know that CEOs made a lot less than they make today.
People will say.. "Well, we've ALL got 401-ks today.. everybody's invested in the market" ..but I still don't think any 401-k (for the average person) will ever out-perform a guaranteed benefit pension..with guaranteed medical benefits..over the long term.

Companies that were around then don't even exist now..(maybe the plans for their extinction were in the works even back then).

I don't know when it all started to slide, but life was still good in 1977.(for us, at least )





Here's an interesting time-capsule look at what was worrying the "money guys" back then.

The Peevish Summer of 1977

Stats came from here

[banned from Kos]

1. 1977 was a great year. I watch 'Dazed and Confused' every couple of

years out of nostalgia (speaking of time capsules).

[MannyGoldstein]

2. Excellent post, thanks!

People don't generally understand how much things have changed.

[kentuck]

3. Jimmy Carter was President...

As I recall?

[n2doc]

4. If people's wages had kept up with productivity and growth

They would be making $90K, on average. I think, all other things being the same as they are now, America would be far better off with an average wage of that level. Average People could still afford an average house, car, etc, send the kids to college, etc.

[krispos42]

7. Here's an extrapolation for you

Done with me and Microsoft Paint. ;-)




Blue line and blue axis is the bottom 99%. Red line and red axis is the top 1%. PLEASE NOTE the different scales on the red and blue axes. The red (rich) axis is 20x the dollar amount of the blue (everybody else).


If the post-Vietnam slump, oil crises, and Reaganomics/NAFTA/globalization had not occurred you can see about where the two classes of people would have been... roughly.


Remember, this is me eyeballing a straight line in Paint!



But I don't think the bottom 99% making an average of $51,000 a year in 2002 (instead of $34,000) would be unreasonable, and I don't think the rich making $375,000 a year instead of $590,000 a year is a disaster.

[kentuck]

16. Here is another:

[PuffedMica]

17. I picked a correlation out of the graph

Sputnik was launched in October 1957, and worker's income start on an up slope.

Apollo Moon Program ended in 1972 with the last launch of a Saturn V rocket for the Skylab in 1973, and worker's income goes stagnant.

What we need is another Apollo program - only this time we need Apollo for clean, renewable energy.

[hfojvt]

11. I doubt if that is true

and the OP was not in an average family, they were above average.

In 1977, the middle quintile had an average income of $35,244 in 2001 dollars. In 2001, the middle quintile had an average income of $42,629 in 2001 dollars.

Now, let me break down the growth rate by quintiles, just for the fun of it, from 1977 - 2001 (why 2001? You ask. Because in 2003 or so, I looked up income stats and kept them in a file in Outlook Express where they are easier to retrieve than doing a google search and finding more current stats on the web.)

bottom 20% - 11.9%
next 20% - 19.2%
middle 20% - 20.95%
next 20% - 29.5%
top 20% - 61.4%
top 5% - 95%

Interesting, because I have seen charts showing more flat-line growth for the bottom 60%. It is an annual growth rate of only .5% and 2001 is probably a bad year to stop because it includes the booming 1990s but not the stagnant Bush years.

Productivity for me is a little bit tougher to measure. For my own job as a janitor which I have had for 9 years now, my wages have gone up faster than the rate of inflation, but I doubt if my productivity has gone up that much. For the 7% increase in my real (inflation adjusted) wage, amd I really doing 7% more work? Or accomplishing 7% more in those 4 hours? I highly doubt it. In fact, as I have gone from 40 to almost 50, and the job has taken its toll on my aging body, I may even be doing less work than that younger man did 9 years ago.

[SoCalDem]

12. you may be doing less, but you probably do it better

:)

[n2doc]

18. see charts at link

http://motherjones.com/politics/2011/06/speedup-americans-working-harder-charts

[hfojvt]

5. a little reality check though

your family made $19,800 in 1977. In 2001 dollars that is $57,864. In 2011 dollars that is $73,816. That makes you upper middle class.

In 1977, the limits for the quintiles in 2001 dollars were
20% made less than $14,986
40% made less than $28,100
60% made less than $42,617
your income was $57,864, meaning that you made more than about 75% than the rest of the country.
80% made less than $62,130
95% made less than $100,441

You lived in a neighborhood with your economic peers, meaning that everybody you knew made about the same, or more than you did. Many people were still struggling then, the unemployment rate was probably over 6% and the poverty rate was 9.3%. The difference is that those people were not on your radar then. You did not have the internet and DU to remind you of their plight several times a week.

Things are certainly worse now, because we are very slowly climbing out of a very, very severe recession, but just five years after 1977, in 1982 the unemployment rate was over 10% for several months and the poverty rate had climbed to 12.2%.

One thing that has changed significantly is the two income households. Back in 1977, those were not as common, as you illustrate. It makes a difference in the economic picture though as it more widely distributes the pain. Back then with a 10% unemployment rate, you had a ten percent chance that hardship would hit your household with only one breadwinner. Now, with two incomes, that gives you twice as many chances for a breadwinner to lose their job. You have a 10% chance and your spouse has a 10% chance. So now a 10% unemployment rate means 20% of households are hurting, having lost a portion of their income. That probably leads to a bigger drop in consumer spending, further weakening the economy.

Now people in the 75th percentile have two breadwinners, but if one loses their job, that knocks them down to the 50th or 40th percentile.

And it is worse than that, because the 10% unemployment rate hides the fact that many have lost their jobs and gotten new jobs, but their new jobs do not pay as much as their old jobs.

I also find it hard to believe that there were no malls in KC in 1977. KC is a major metropolitan area, and I fully remember that Madison, Wisconsin had TWO malls, an East Towne Mall and a West Towne Mall, and they were magical places when we were kids. In 1979, after years of fighting with the Chamber of Commerce, my own little town (of 14,000) finally got its own mall, including a Kmart. They probably starting building it in 1977.

Credit cards were rareer. I remember dad having to search for a gas station that would take a mastercard, because not all of them would. Plus, on our long vacation from SD to grandma's in NY, dad made arrangements with a bank in NY so he would have a place to cash a check and get more cash to continue the vacation.

[SoCalDem]

6. We were not IN Kansas City.. We were in Olathe

and I still recall how excited we all were when we got a Dairy Queen.. You'd have thought the Queen of England had arrived:)

and the major "shopping district" of KC back then was still the downtown.. Stix-Bayer-Fuller, Macy's, Emery-Bird-Thayer,

(here's an interesting list of stores: http://en.wikipedia.org/wiki/List_of_defunct_department_stores_of_the_United_States#Department_stores_involved_with_Federated_and_May

Country Club Plaza was the big deal back then (and still is).. "Malls" has not yet taken over.. I don;t recall even seeing any.., We shopped locally..,mostly at the SearsOutlet store:)

[hfojvt]

13. one of my least favorite places to drive

I call it "the land of 1,000 stoplights" http://www.youtube.com/watch?v=BWoQ_pZtXCY

Strip malls are kind of the thning now, but they don't really dominate where I am. Except that the new wal-mart sorta created its own strip mall.

I cannot remember shopping from 1977 because I was only 15 and didn't really do any of it, but mostly I still do not do much shopping. But I do remember the mall coming in, in 1979.

One other thing I remember from those days is that the news of the day didn't revolve around the stock market as much as it does today. My dad had some stock and watched Rukeyser's Wall Street Week, but the DJIA was not considered so central to America's well being.

[SoCalDem]

14. and back then most people did not "invest"

some people with money might invest with a family member or friend, but they did it because they really believed in that person and.;or their business..and did not dot it as a way to "retire someday"..

found this pic.. this was THE cool place to shop when I was at KU.. apparently it got turned into a Kmart and the closed up..

It was the only "mall" ish place I knew of back then

http://www.wtv-zone.com/dpjohnson/60sdiscountstores/page3.html

[SoCalDem]

19. The 2011 figure you quoted is pretty much dead on to what my husband's base salary is now..

So we have been treading water for 34 years...of course now our expenses have escalated too, and once he retires, many expenses go on, but the income drops dramatically..

At least we have managed to keep our heads above water, but millions of others have not been able to do that..stagnant, "real" wages have kept the largest portion of the population from much (if any) real advancement.. We've just been barely holding onto our "stuff" for decades in preparation of the fleecing by our superiors, at the time they deem appropriate.. Apparently, that time has arrived..

[BeFree]

8. What changed?

It's right there in your post:

"...newfangled card called "BankAmericard" (it had a $500 limit)"

Credit cards that allowed you to buy just about anything you wanted, when you wanted it.

Then you went home and prayed you could pay it off!

[SoCalDem]

9. $500 limit, pretty much kept things in check and back then you could

not have 5 or 6 of the same cards.. There was ONE..Bank Americard and then a few years later Master Charge came along, but many places would not even accept them.

[BeFree]

10. I know

But that was the change. Henceforth from that little invention, people ran up trillions of dollars in debt. Life then became a race to see who could get the most.

The American mantra became:
He who dies with the most toys wins

[dajoki]

15. K&R