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by Ben Kinsley, for Campaign Vermont
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.
Author is Executive Director for Campaign for Vermont. Ben Kinsley has over a decade of public policy experience in Vermont. Working for non-profit organizations, he has shaped public policy in areas such as education, elections, and ethic
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Categories: Commentary
Here’s a simple exercise to determine how “better” wages are: whatever food or material item you wish to purchase, calculate the number of hours of labor needed to earn the money to buy that item. When you calculate your monthly net pay (after taxes, insurance, 401K etc) subtract all household obligations (including utilities, insurances, credit cards, monthly subcriptions, etc) what is left of your “expendable” income to do with what you wish – out of that, how much put aside in savings, if any?
When a person applies for a loan, there is debt to income ratio calculated. The kicker, it is calculated on gross income and doesn’t include utilities or insurance obiligations. Reports indicate auto loan delinquency rates, 90+ days at 5% Q2 2025. Repossession rates at all time highs. Mortgage delinquency rates at 4% Q2 2025. Credit card delinquency rates 90+ days an all time in 12 years Q4 2024. Where are they at now? No one really knows because the numbers are fudged, under-reported, books cooked, and banks don’t tattle on themselves.
The Truth is economists are working with old formulas with really bad data. There is only a handful who see the reality on a global scale, and screaming “red alert!” All the fraud and corruption is not calculated into the figures – they rather deny it exists and pontificate optimism over reality on the ground, on Main Street, in the bond markets or the inflated, way over-valued, casino royale markets. They also don’t talk about diminishing currency purchasing power – currency swamping, or liquidity crisis – what liquidity crisis?
The question that begs to be answered is what are the public policies that lead to better economic conditions on the ground. History has shown us clearly that command and control economies of socialist, Marxist, communist ilk fall far below capitalistic, democratic, free market economies such as we have here in the U.S. Like it or not the USA is the richest nation on this planet. Not perfect for sure, but way ahead of whoever is in second place.
For one example let’s look at the efforts of the climate alarmists who want cripple our economy with unreachable, illogical “net zero” policies. Right here in Vermont reasonable people are beginning to see that policies like the Clean Heat Standard and coupling our economy with California are leading us to a dead end cul de sac complete with black outs (Think Spain’s fragile solar/wind grid that failed spectacularly recently) and a stagnant economy unable to compete in an energy INTENSIVE AI world.
Remember, The art of the deal is really the art of how much you can steal. Comment from Richard Day.
“The key insight of Adam Smith’s Wealth of Nations is misleadingly simple: if an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.” Milton Friedman
The glaring deficiency in Woolf’s analysis is called statistical smoothing. ‘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.’
Using the median is deceptive.
Job growth in Vermont has centered on only three sectors. Government, Healthcare and Education. Incomes in these sectors have increased disproportionately to the other sectors listed by the U.S. Bureau of Labor Statistics. In fact, approximately 40% of Vermont’s workforce falls into these sectors. Thus, when 40% of the workforce realizes significant gains, it disproportionately raises the median wage.
Yes. Forty percent of Vermonters are doing very well. But 60% of them are falling through the statistical cracks.
Exacerbating the statistical smoothing, the taxes paid by that lower income cohort are financing the increased income of the upper 40% – not a proportionate increase in the upper cohort’s real productivity. If anything, the productivity of the top 40% is declining, while their wages and salaries increase disproportionately.
Example: The Agency of Education is Vermont’s largest employer (with more than 20,000 employees, plus independent sub-contracting NGOs, earning higher than average salaries and wages) – meanwhile student outcomes are in the basement.
And, with Act 73 and a dysfunctional healthcare system, the deficiency is going to get worse. Much worse. We might as well pop that champagne cork now and at least enjoy something while Vermont’s elite compel Thelma and Louise to drive the rest of us over the economic cliff.
You can totally remove Government employment completely, it is a fallacy considering it doesn’t add anything to the economy, just recycles tax money. Not that there isn’t a need for many Government employees, but when that sector is the largest growth area of employment, it is a ghost.
In 1982, I made a gross income of $36,000; an inflation calculator indicated I would have had to make $80,000 in 2009 when I retired. I can tell you I only made a little more that half that. If I were still working, I would need to make $121,000 today. Again, I’m nowhere near that on my retirement. Yet some of my taxes went towards someone well off getting a tax incentive to buy an electric car that I could never hope to buy. Where’s the Equity in that.
The only consumer good that has improved is cars, but the accompanying complexity and cost for the average owner has increased accordingly. Some hand tools developments have also improved, but the quality of the majority of hard goods and electronics have decidedly decreased. Name a single appliance that lasts much beyond ten years, back in the day a Maytag washer or dryer would run for decades, now I wouldn’t own one if you gave it to me. I just bought a 75 year old gas stove, why?….because it works, case in point!