Enough to Live On

Everyone complains about “the cost of living”. Think about those words. “The cost of living”. It invokes images of just being able to survive. If the cost of living gets too high, we might perish. Is that what we really mean?

More likely we mean the cost of buying all the things we believe we are entitled to buy. We don’t mean the things we need to survive. The purpose of this post is to highlight how the things we feel we are entitled to have, has changed over time. I tried to find statistics from the 1960s but some of the data was not easy to locate so I am using a mix of data from different sources and over different time periods.

What are we entitled to.

I am not talking about food, a roof over our heads, and a few rags to clothe us. I am talking about what we in the middle-class western world see as the necessities of life. I know are many people who cannot afford, or struggle to pay for these services. I want to focus on the middle class.

  • Transport. At least one car per household, and usually more. The car is regularly updated every five to ten years. A car comes with access to toll roads, payment for maintenance and of course, fuel. We also expect public transport to move us around.
  • Communications. We expect to have more than one computer in the home, tablets, Kindle, and mobile phones for everyone. This comes with internet access fees, mobile phone plans and licenses for software.
  • Entertainment. Multiple televisions, DVD players, streaming services, gaming consoles and audio systems are all part of our expectations along with a range of streaming services.
  • Clothing. Wardrobes usually bulge with clothing and plastic bags of used clothes are regularly taken to charity shops. No longer content with three or four pairs of shoes, we have shelves stacked with footwear (ladies, I am looking at you).
  • Furniture and decorations. Furniture is no longer intended to last a lifetime unless you are measuring the life of a guinea pig. Pieces come and go and last as long as the next council cleanup. Interior decoration is a constant flow of goods from Ikea and Kmart. In one door and out the next the following year.
  • Restaurants. We all expect to dine at restaurants on a fairly regular basis. We buy our takeaway coffee and snacks and think nothing of it. It is what we expect, and what we believe we are entitled to do.
  • Holidays. No longer up the coast in a tent or caravan. Now it is Bali one year and Fiji the next. The backpacker trip to Europe which was a rite of passage in the 60s is now a fully organized trip to two or three countries taken every few years.
  • Power. Once electricity to the home powered a few globes, a two-bar heater, the hot water, maybe a few cooking devices and a fan in summer. Now it powers computers, TVs, air-con, a whole range of appliances and enough lighting to illuminate a street.

The Mega-trends

So, what changed in the last 50 years or so?

  • There was a change from goods to services. Whereas in the 1980s we spent just under a third of our income on services, it is now over half.
  • Services are things we used to do ourselves that we now pay someone to do. Either that or new services that were never available before. Examples of the former are lawn mowing, car servicing, beauty treatments such as painting nails, handyman jobs, personal trainers, etc. Examples of the latter are financial advisors, psychologists, tax agents, pet grooming and delivery services.
  • House prices as a percentage of income have grown. In 1966 the average price of a house in Sydney was $90k equivalent today. Today the average price is just over $1m. Of course, there is a difference in wages but the cost of housing has exploded.
  • Food prices have come down. A litre of milk at around $1 today would cost $3.80 equivalent in 1966. Eggs costing $7 a dozen today cost $12 equivalent in 1966. 500g of butter today costs around $5 but cost $11 equivalent in 1966
  • Cars have increased in sophistication and reduced running costs but are cheaper than in 1966. The equivalent cost of a new Holden at the time was $44k.
  • Women have increased in the workforce resulting in household incomes rising by a substantial amount – the two-income family
  • We mentioned this earlier, but goods are not meant to last. Many people have furniture and items bought 50 years ago that are still functional and operational. How much of what we buy today will be operational in 2070?
    Another other aspect is that items bought in the 1960s were usually able to be repaired. I knew a TV repair guy who had a booming business until the 90s when the throw-away nature of TVs, VCRs and DVD players meant nobody bothered to repair their device. They threw it away and bought a new one. He closed his business.
  • Making things has given way to importing things. Clothing is the example most people think of. Instead of people working in the garment industry in Australia, we use cheap labour in Asian countries to make the goods. There are two impacts. Firstly, the loss of all those Australian jobs in manufacturing, and second the drop in the price of clothing.

Range of goods

If you look at what we see ourselves as being entitled to spend our money on and compare it with the world of 1960, there are significant additions. The family car has given way to two or three in a household. The landline telephone to a collection of mobiles. The single black and white TV to multiple media devices and streaming. The occasional visit to a local restaurant to daily coffee and regular visits to a variety of eateries. The road trip holiday to a couple of weeks in a resort. All this takes money.

Wages have gone up in real terms. The average weekly wage in 1966 was $38 which equates to $670 today. Median weekly earnings in Australia are $1,265 so the real value of wages has doubled. Where did it go?

We have answered part of the question. All the things we didn’t buy in 1960 that we have decided we are entitled to today. No longer just food, clothing and a few luxuries like an annual road trip. Today it is a whole range of goods and services, some not even invented back then.

It is not only a doubling of real income that allows us to make all those new purchases. It is a big increase in household income because often two people are working. To help us expand even further, the consumables of food and clothing we predominantly spent our money on, are relatively cheaper today.

This website provides a grab-bag of comparisons between today and years gone by.


It is almost as if housing is the variable that expands to fill the gap. After buying what we believe we need, whatever is left over goes to housing. In 1960, the amount was not much. After paying for food and clothing (all relatively more expensive than today), a car if you could afford it, and a few other essentials, there was not much left. If that small amount is what people had to spend on housing, supply and demand determined the cost.

Today there are still the 1960 essentials to buy, but on top of that, there are many items we consider we are entitled to buy. From phones to holidays to $100 dollar tickets to a concert, we see them all as must-haves. Even doing that on a median wage we still have more dollars to put into real estate than in 1960. The number of people with the ability to buy a home pushes up the market until some sort of equilibrium is reached just as it was in 1960. The surplus wages that could just service an $80k mortgage in 1960 has become the surplus wage that services a $900k mortgage in the 2020s.

This is a perverse way of looking at it, but if wages were lower today, real estate would be lower. People would have less money to put into buying a house hence demand would drop, and prices would have to drop to sell those properties.


We have moved a long way from leeches and spells. Unfortunately, if we take a long perspective, we are still on the first few rungs of the ladder. There is so much we don’t understand and treatments that are state-of-the-art now will be considered primitive by the time 2050 rolls around.

Research is expensive and it feeds back into the treatment. The cost has to be recovered somehow and high prices for medicines and treatments are where it hits. The cost of medical services has been one of the costs that have gone up in real terms rather than down. It should fall into the essential rather than entitled category for personal expenditure, but unless the immediate implications are dire, it often gets traded off. “Should I have a thorough medical checkup, or would I prefer to spend that money on dinner at a good restaurant? Which will give me the most satisfaction.”


Driving the whole entitled thing is consumerism. Consumerism is the idea that increasing the consumption of goods and services purchased in the market is always a desirable goal, and that a person’s well-being and happiness depend fundamentally on obtaining consumer goods and material possessions.

In other words, if we keep spending our money to buy stuff, it keeps industries running and provides jobs for us to earn enough money to buy more stuff. If we stop buying stuff, companies cannot make or import stuff, so we lose our jobs and so don’t have enough money to buy stuff. The downward spiral continues.

To maintain an upward spiral, we need as a society to turn over stuff quickly hence the throw-away nature of what we buy. The concept of “fashion” is a marketing idea to convince us that the perfectly good thing we bought last year needs to be replaced. This reinforces the attitude of building it cheap and flashy but not to last. It is a loop.


There is no clear way to summarise the broad range of topics covered. If there is one takeaway, it is this. The cost of living is made up of lots of decisions as to what we are entitled to spend our wages on. Some are essential such as food, clothing, and shelter. Some are those we do for our own gratification like an overseas holiday. There is a whole spectrum of items between them.

Wages covered only some of these 50 years ago. Consumerism and innovation brought us a whole raft of things we feel we need to buy. Even after that, we have enough money that enough people can afford housing to a level where it inflates the price to be ten times what it was back then.

Are we worse off than in 1950? Probably not. Today we can buy lots of things that we couldn’t back then either because they were too expensive or not invented. Houses are the big standout in terms of price increases but there is enough demand to keep the price high. That means homeowners are as well or better off than home buyers in the past.

That is taking the long view, but if we take the short view – for example, three to five years – the situation has deteriorated due to a range of issues from supply chain to Ukraine. Costs go up. Global factors change and they will come down. The questions we really need to address are consumerism and our decisions about what we consider we are entitled to have. Are they needs or wants?

Do we really have enough to live on?

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  • One thought on “Enough to Live On

    1. Geoff

      An interesting reflection on what was and what is!
      I would like to add that as a society we have come to value possessions as a measure of success. The more more toys we have the more successful we are and everybody wants to be successful. So its off to work we go. It is this treadmill that is the basis of our capitalist system.


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