Why’s it so expensive to live nowadays?
Like many folks in Texas, I grew up listening to Brooks and Dunn. I loved Red Dirt Road, Cowgirl Don’t Cry, and of course, a George W. Bush and Barack Obama bipartisan favorite, Only in America. Just before they split, Texas native, Ronnie Dunn, released a self-titled album. Its second song was “Cost of Livin”. It peaked at number 19 and then faded away, but it’s stayed with me all these years.
To me, these lines always stuck out:
I got a strong back, steel toes
I rarely call in sick, a good truck
What I don’t know I catch on real quick
I work weekends, if I have to, nights and holidays
Give you forty and then some
Whatever it takes
Three dollars and change at the pump
The cost of livin’s high and goin’ up
“Cost of Livin'”, Ronnie Dunn (2011)
I was in school at the time, but I remember that to most people, the Great Recession hadn’t ended – no matter what the Wall Street Journal might have said. You can see the official unemployment rate below.
Nowadays things are better, but as Dunn said, "the cost of livin's high and goin' up".
The cost of livin' keeps going up
For my second post (the first was on corruption), I wanted to talk about the cost of living. And I don’t mean just breathing air and eating food, I mean being able to raise a family, start a business, and help build your community. So let’s get into it.
Well, it’s probably not a surprise to anyone that for many folks, life really has gotten more expensive. Let’s just start with housing. It’s great that home prices are up since the end of the Great Recession, but that also means the first step of the staircase to savings is higher. According to the American Enterprise Institute, entry level homes cost 50% more than they did back in 2012.
And it’s not just the housing itself – cheaper housing is usually further away from the main job centers. So trying to save a few dollars on a mortgage just means living further out and paying more in gas, car repair (remember when you could do maintenance yourself?) and (especially in Texas) tolls to get to work. The US Census confirms it, average commute times are nearly 30 minutes, compared to 22 minutes back in 1980.
What about starting a company?
Something that made America different from Europe was that you could start with close to nothing and still have a chance at economic opportunity. Now I couldn’t find quick stats on the costs of starting a business, but check out the chart below. The number of new businesses, despite what you hear in Silicon Valley, never recovered from the Great Recession.
And I can tell you that even the Obama White House did a report talking about how expensive it is to get licensed for work nowadays.
As a Democrat, I know we focus a lot on the high cost of healthcare, childcare and education. And don't get me wrong - those are real problems. But let's not forget about some of these other costs.
If you're interested in reading more, Slate Star Codex, Marginal Revolution, and Annie Lowrey (The Atlantic) have some good long reads.