Back to the 70s

A recent post on the Dollar Stretcher forums invited readers to flash back to the 1970s (presumably in a hot tub time machine) and compare their lifestyle and budget today with what they had back then. It shared an article by financial writer Liz Pulliam Weston in which she compared the homes, cars, and other trappings of 1970s life with what we have today. Weston points out that back then, people used to live "rich, fulfilling lives" without many of the things many modern Americans consider necessities, including microwave ovens, home computers, cell phones, cable TV, and in many cases, air conditioning. They also lived in smaller houses, drove smaller cars, and spent less on dining out, vacations, and entertainment. By dialing back to a 1970s lifestyle, she suggests, we could save lots of money and still enjoy the same quality of life we had back then.

It's an interesting premise that makes for an amusing article, but I see several problems with it:

1. First, happiness economics shows that quality of life isn't just about what you have; it also depends on you have relative to others in your peer group. So living without a home computer and an Internet connection back in the '70s, when no one else had these things either, is quite a different matter from living without them today, when all your friends and neighbors have them. It would be a bit living in the '70s without a home phone, and arguing that everyone got along just fine without them back before World War I.
2. Second, Weston's '70s budget focuses on all the things that were cheaper back in the '70s while glossing over the things for which we used to pay a lot more and get a lot less. Sure, back in the Disco Era no one had to pay for cable TV, but if you wanted to see a movie, you had to go to the theater and shell out two bucks for it. Today, by contrast, for eight dollars a month - only $1.76 in 1975 dollars - you can subscribe to Netflix or Hulu and have hundreds of movies at your fingertips, plus the complete runs of entire TV series. No one back then had an MP3 player - but a good 8-track stereo system cost $500, or $2,262 in today's dollars. Plus, it was big and clunky and you had to switch out the tapes by hand.
3. And finally, Weston doesn't mention the fact that a lot of the things we do spend more on today are things we can't simply scale back to '70s levels. Health care, for instance. In 1975, according to the Kaiser Family Foundation, the average American spent $170 out of pocket on health care ($601 in 2013 dollars). By 2013, that number had risen to $1,076. Even assuming that you would want to limit yourself to the type of health care available 40 years ago, you wouldn't be able to get it; that system no longer exists.

So I don't think it's fair to say that Americans in general live more extravagant lives than we did in the '70s; it's just that we spend our money on different things. As a reality check (and for the sake of nostalgia), here's a peek at the way we lived when I was growing up:

• The house we lived in was technically a 3-bedroom, though it also had a den that we used as a guest room; it just didn't have a closet. I can't honestly remember whether it had central AC, but I know we didn't use it most of the time. Instead, we had a big whole-house fan that made this really powerful WHOOOOOSH when you turned it on. (My folks still have it, I think, but nowadays they just run the AC all summer.)
• We had a washer and dryer; my mom experimented with a clothesline, but our back yard just wasn't well set up for it. I don't remember exactly how old I was when we got the dishwasher, but I remember it was a big deal. We pretty much had to reconfigure the whole kitchen to make room for it. I think we got our first microwave while I was in junior high or high school.
• According to Weston, the majority of US households in the 1970s didn't have two cars, but we did. The town we lived in was (and still is) quite small and isolated, and you can't get much of anywhere on foot. When my parents first moved to New Jersey they had only one car, but they quickly realized my dad needed one to get to work and my mom needed one to get to anyplace else while he was at work. (I remember she told me later how ridiculously bourgeois that second car made her feel.) The cars they drove throughout my grade school years - an old Ford Fairmont and an even older Plymouth Valiant - didn't have air conditioning. When the Valiant died, my mom got a "new" Mazda that came with air conditioning, but my dad replaced the Ford with a stripped-down Geo Prizm that didn't. That was the car I got my driver's license on at age 17, and 20 years later he sold the same car to us - badly rusted, but still running strong - after our old Honda met with an untimely death.
• I'm just old enough (my sister probably isn't) to remember when we had only one small black-and-white TV. When we got our first color TV, which was SO COOL, the smaller set moved downstairs, so for most of my childhood we had two. However, until my teen years (I think it was actually after I left for college), we didn't have cable. Instead, we used a rooftop antenna with an "antenna rotator" to reposition it. You turned the knob and it made this THUNK-thunk, THUNK-thunk sound as it reoriented itself to pick up either the New York stations or the Philly stations. And, of course, we also had a record player (which could play 33s, 45s, AND 78s) and a tape player, though we never owned an 8-track player.

So how does this compare to our lifestyle today? Well, our house is actually a product of the 1970s - as near as we can tell, it was built in 1971 - so it's much smaller than most modern homes, with just 936 feet above ground. However, since we've also finished most of the basement, it probably has about as much usable space as the house I grew up in. And with three bedrooms and two full baths for just the two of us, it certainly gives us more living space. We have a washer and dryer, but we generally don't use the dryer (except in the wintertime when clothes hung out on the line would freeze solid). We've never had a dishwasher, but we have a microwave that we use all the time - though we can also function with just our gas stove during a power outage.

Now that I work from home, Brian and I can easily get by with one car (which has AC, since that's standard these days). For us, a second car would be a luxury - but high-speed Internet connection is a necessity. But on the other hand, thanks to that high-speed connection, we no don't need cable (and I'm still a little embarrassed about having had it for two years, even if it was just to save money). We have just one TV set, a modest-sized flat-screen, but we have...let's see...four computers: my desktop, Brian's work laptop, the "media spud" that he built before Roku and Fire Stick became available, and a little Raspberry Pi that he fools around with, plus a tablet (with a nifty homemade case). We still don't own a smartphone, just one basic cell phone with a $3 a month prepaid plan, and one landline. We used to have a little SanDisk music player, but we gave it to my mom, and we haven't felt the need to replace it. Our car has a built-in music player that runs off a flash drive, and at home we listen to music on the computer. (Yeah, audiophiles can gripe about the sound quality, but I'm willing to sacrifice a little high- and low-end fidelity for the sake of being able to listen to any song in my collection, at any time, at the click of a mouse.)

So do we have more today than we had when I was growing up? Yes, definitely: we have the Internet, and that changes everything. (Without it, I wouldn't have seen this article in the first place...and I wouldn't have a blog to share my thoughts about it.) But is our lifestyle more expensive or more extravagant than it was then? Honestly, I'd have to say no. Sure, we spend more a lot more money on some specific things that we didn't have back then, like our broadband connection...but if you look at all the things it replaces, from movie tickets to newspaper subscriptions to books, I think you'll find it more than balances out.

So in short, I don't think the modern world is more decadent than the '70s; it's just different. And 40 years from now, assuming I'm still around then, I'll probably look back on the life we lived today and marvel just as much at how much more we have...and how much we no longer need.