We have new expectations for what our money should buy. Even higher ed is a necessity for today's middle class. For most people, a car has become necessary. In the last 100 years, we've added to the list. In 1900, the Bureau of Labor Statistics counted three categories as necessities: housing, food, and apparel. We are paying for health care with taxes, borrowing, and compensation that goes to health benefits, rather than wages. But the details of this squeeze elude the color-wheel above. In short, health care costs are squeezing Americans.

Government spending on Social Security, Medicare, and Medicaid has quadrupled since the 1950s in the most meaningful measurement, which is share of GDP. Employers pay workers' premiums and government foots the bill for the elderly and the low-income. One reason for the gap is that most medical spending isn't out of our pockets. economy, but only 6% of family spending, according to the CES. Health-care spending makes up more than 16% of the U.S. The other answer, which you can't see as clearly in this chart, is health care. was the making-stuff capital of the world, and our dominance probably felt indefinite. Apparel manufacturing would grow through the 1970s before collapsing in the last third of the decade. Textile manufacturing has never been higher and will never be higher. (The female labor participation rate is still below 20%.) Factory wages have grown by seven-fold since 1901, and they've nearly tripled since the Great Depression. Nearly half of working men are craftsmen or operators. Meanwhile, the 'making-stuff' economy is at its apex. At the same time, food has gotten much cheaper compared to wages, and its share of the family budget has declined from 43% to 30%. The economy's share of farmers has fallen from 40% to 10%, thanks to the mechanization of the farm, led by the mighty tractor. The population has doubled to 150 million. Compared to just five decades earlier, the United States is already a different country. Household income (unadjusted for inflation) doubled six times in the 20thĬentury, or once every decade and a half, on average.īut to appreciate the transition in full, let's first meet it halfway. Working women and computers, less reliant on working children and farms,Īnd, most importantly, much richer.

Percentages of a household budget