Question 1

Why is everything so expensive?

Accepted Answer

Since 1975, a growing gap between productivity and wages has made the basics of American life dramatically more expensive relative to what people earn. Housing costs roughly 4x what they did relative to income, healthcare costs 10x, and college tuition 15x. The productivity-compensation gap means workers produce far more value but take home roughly the same real pay as 50 years ago.

Question 2

Was it cheaper to live in America in 1980?

Accepted Answer

Yes. In 1980, the 'American basket' — a home, a car, college tuition, healthcare, and childcare — cost about 4.5 years of median household income. Today that same basket costs 7.3 years of median income, meaning it takes more than twice as long to afford the fundamentals of middle-class life.

Question 3

What is the $79 trillion wealth transfer?

Accepted Answer

A study by the RAND Corporation found that between 1975 and 2023, approximately $79 trillion in wealth was redistributed from the bottom 90% of earners to the top 1%. This happened through the growing gap between worker productivity (which kept rising) and worker compensation (which flatlined). If wages had kept pace with productivity as they did before 1975, the median worker would earn roughly $100,000 per year today instead of about $55,000.

It takes 7.3 years of median income to afford the American basics.

The Squeeze

Cost Breakdown vs. Income

The $79 Trillion Transfer