Ah, the eternal tug-of-war between "things were better back in my day" and "look how far we've come." Art Woolf's latest Substack dispatch, "Things Are Better Today, Really," offers a counterpoint to claims of wage stagnation since the 1970s by populists like Bernie Sanders. Woolf highlights a 34% real increase in median family income from $79,000 in 1969 to $105,800 in 2023 (adjusted dollars), and a 20% rise in median household income to $83,000 over that same period. He also emphasizes qualitative improvements — such as advancements in consumer goods and medical technology — which inflation metrics often understate, that lead to an improved quality of life.
While Woolf's analysis underscores measurable progress, a closer examination reveals that there is more to the story regarding whether wage growth has matched the actual cost of living and the distribution of income gains across the last several decades.
Spoiler Alert: Yes, things are better, but the "better" comes with an asterisk the size of a mortgage payment.
Let’s get into the meaty bits. Has this wage uptick kept pace with the actual cost of living? Woolf argues that real income gains, when accounting for unmeasured quality enhancements (e.g., safer vehicles or instant communication), suggest living standards have improved more than statistics imply. However, even adjusted for official inflation, wage growth has not fully aligned with key living expenses, particularly in housing, healthcare, and other essentials.
Housing affordability (or unaffordability, rather) perfectly illustrates this gap. In 1970, the median home price in the US was approximately 3.9 times median household income; by 2025, this ratio has risen to nearly 7.1. One analysis even showed that home prices increased 240% faster than inflation since the 1960s. This shift means a larger portion of income is devoted to putting a roof over your head, straining budgets despite nominal wage increases. Rent has followed suit: in real terms (adjusted for inflation), median rents in Vermont have increased by about 105% since 1970.
However, it is worth noting here that average apartment size seems to be increasing, as the cost per square foot is not keeping up with the total cost of rent. This does lend some weight to the argument that overall quality of life is better for the same dollar value. As a counterpoint, Ezra Klein and Derek Thompson in their book Abundance point to the increasing age of first-time homebuyers, which is now pushing 40, as a sign of how difficult it is to amass the resources necessary to purchase a home in today’s market. This increased age of families still in the rental market may necessitate larger apartments, as their needs and space requirements change.
Healthcare costs further exacerbate the disparity. Inflation-adjusted health expenditures per capita have risen by nearly 580% since 1970, with annual growth rates often exceeding general wage increases. Out-of-pocket spending per person, adjusted for inflation, grew from $703 in 1970 to $1,514 in 2023 (a 115% increase).
Even the cost of vehicles has increased, a necessary commodity for rural Vermont life. The Federal Reserve shows a 64% increase in the cost of new vehicles between 1970 and 2020 and then a 22% increase in the following three years. This growth far outpaced inflation.
These escalations in cost mean that, while overall real median household income has risen significantly since 1970 (34% in Vermont and 59% nationally), essential costs have absorbed much of that gain for many households (as shown above with housing and health care costs each increasing by 2-5 times the rate of wage gains). The patterns also show a concentration of real (inflation adjusted) income growth in the 1980s and 1990s, accounting for over half of the total real growth since 1970. Additionally, much of the income growth has been concentrated at the top of the income scale. Since 1970, real household income has increased 300% faster, on average, for the top 20% of income earners than for the bottom 80%, according to US Census data.
Thus, while Woolf is correct that conditions are "better" in terms of real income, the real cost of living has outpaced wages in critical areas for many Americans; leaving less disposable income in workers’ pockets at the end of the day. While I tend towards optimism regarding the economic prospects for Vermonters and continued improvements to quality of life for many middle-class families, the evidence suggests wage growth has not consistently matched rising living costs, and gains have been disproportionately clustered in earlier decades while likely favoring top earners.
Fortunately, these findings also give us a clear map for where to focus our policy-making efforts – which is reducing health and housing costs for Vermont families. We must get these under control in order for moderate wage gains to have any meaning.