Inflation in numbers: How much harder are we working? Comparing 1970s and 2025

How things have changed since the 1970s in terms of how much we work to afford basic things like housing and rent.

Spoiler: We're working harder and earning much less for it!

1. Wages:

1970 Average Hourly Wage: ~$3.50/hour

2025 Average Hourly Wage: ~$25.72/hour (U.S. national average)

Now, $3.50/hour in 1970 should be equivalent to around $123/hour today, based on the money supply increase (M2), which grew by a 35x factor from 1970 to 2025.

In simple terms, to keep up with inflation and money supply growth, wages should have grown by about 35x times, not just 7 times as they have.

2. Housing Affordability:

1970 Average Home Price: ~$17,000

2025 Average Home Price: ~$374,900

Working Hours to Buy a Home:

1970s: 4,857 hours (at $3.50/hour)

2025: 14,580 hours (at $25.72/hour)

Home prices have increased by about 22x since the 1970s, but wages have only increased about 7x.

If wages had kept pace with the 22x increase in housing prices, wages should be around $77.18/hour.

And these are just averages, we're not even looking at the ridiculous cities like: Toronto, Vancouver, New York, Miami, SFC, London, Sydney, Ottawa.

3. Rent Affordability:

1970 Median Monthly Rent: ~$108

2025 Median Monthly Rent: ~$2,000

Working Hours to Pay Rent:

1970s: 31 hours/month (at $3.50/hour)

2025: 78 hours/month (at $25.72/hour)

Rent has increased by about 18x since the 1970s, while wages have increased by 7x. To match 1970s affordability, today's wage would need to be closer to $64.50/hour.

4. The Changing Nature of Work:

Today’s jobs are far more complex than in the 1970s, especially in fields like technology, finance, and engineering. For example:

Computer Engineers and Software Developers must not only possess years of education but also continually upgrade their skills to keep up with rapid technological change.

Stock Traders and Investment Bankers are under immense pressure to beat market returns and take on more risk to justify their pay. This requires constant analysis, long hours, and a high level of mental stress.

Many of these jobs have become headache-inducing as the demands increase and the pressure to perform is relentless.

These roles can often come with long working hours, high stress, and little downtime, but the pay doesn't reflect the level of education, output, or stress compared to the 1970s.

So for example, earning $55/hour as a Software Engineer, you are still making less than a Grocery Bagger in the 1970s, because you must work more hours to pay rent or buy a house.

Higher education vs. uneducated, high responsibility vs. no responsibility, and yet, you're working longer hours for less purchasing power.

Key Takeaways:

Money Supply & Inflation: The money supply (M2) has increased 35x from 1970 to 2025. If wages had kept up with that growth, today's wages should be about $123/hour.

Housing & Rent: While wages have increased by 7x, housing and rent prices have far outpaced that growth, making them much less affordable today than in the 1970s.

Working Harder for Less: Despite the increased complexity and higher educational demands in today’s jobs, we're still working harder, producing more results, and receiving less. Wages haven't kept pace with the mental and physical demands of modern jobs.

What is a Fair Wage? To compensate us for the higher complexity and greater output, we should be earning MORE THAN $123/hour today. The average salary should be closer to $250/hour to make all that education, experience accumulation, increased productivity and its related stress worthwhile.

So in conclusion, IF YOU ARE EARNING LESS THAN $250/hour, you are right to feel EXHAUSTED and CHEATED.

Considering that I'm a software engineer earning less than 1/5th of that, it explains and makes sense why I feel absolutely exhausted all the time, and can't even come close to owning a home or feel financially safe enough to start a family.