Russ says that real (in economist-speak, “real” means adjusted for inflation) income for families in which there are two spouses and both work rose from $50,000 in 1970 to $74,000 in 2000 (presumably that’s in 2000 dollars). An increase of 48%, that doesn’t sound so bad. (I agree with Russ that comparing two wage earner families is the correct comparison to make.)
But let’s look at the price of housing. My parents bought a house in the Staten Island, one of New York City’s four outer boroughs, for $27,500 in 1968. Today they can sell that house for around $425,000.
Now let’s convert that to real dollars so we can make a comparison. According to the BLS, the CPI-U is 194.6 today, 172.8 in July 2000, and 35.3 in October, 1968. So my parents’ current house value in 2000 dollars is $377,390. But the purchase price in 2000 dollars is $134,618. That’s an increase of 180%.
So we see, during the time frame in which real income increased by 48%, the price of a house in Staten Island increased by 180%.
Considering that being able to afford a house is the key criterion that people use to determine how they are doing, the couple earning $50,000 in 1970 is better off than the couple earning $74,000 in 2000. The first couple can afford to buy a house, the second couple can’t.
(Of course this is only an anecdote, and the increase in prices of houses in Staten Island may not reflect other housing markets.)