American Standards of Living:1918-1988
Basic, Variety, and Status
The transformation of consumption norms encompassed
substantial improvements in basics for working-class families from
1918 to 1973, especially between 1950 and 1973, when homeownership,
car ownership, and a biannual vacation became an accepted part of
working-class life. (See Figure 8.4 and Table
8.2.) After purchasing basics, families mainly purchased variety
through 1950. In 1973, family spending turned toward status purchases.
In 1950, laborers spent 12% of their budgets on variety and 2% on
status; salaried families spent 25% on variety and 18% on status.
By 1988, laborers spent 11% on variety and 21% on status; salaried
families spent 25% on variety and 31% on status.
During the seventy years surveyed, laborer families progressed from
a situation of spending 100% of their budgets on basics in 1918
to spending 32% on variety and status in 1988. Still, laborers
ability to purchase variety and status in 1988 did not match that
of salaried families in 1935. In 1988, laborer families purchased
only one-third as much variety and status as salaried families.
Laborer families spent some of their savings to augment their status
purchases between 1973 and 1988, when they experienced a decline
in real income. Even without a decline in real income, wage-earner
families also spent some of their savings in order to expand their
purchases of status. The working class must have felt enormous social
pressure to purchase status in order to keep up appearances. The
meeting of basics, or the achievement of absolute social norms,
did not mitigate the coercion to purchase variety and status, or
the achievement of relative social norms. If anything, the attainment
of basics seemed only to intensify social conflict over who would
be able to buy variety and status.
Salaried families consumption included all the basics in 1918.
Wage-earner families were also able to buy the basics in all categories
except food and transportation, and basic consumption in these two
categories was attained in 1935. In 1918, laborer families did not
meet basic requirements in any major category¾food, clothing,
housing, transportation, and recreation and education.5 They made
great strides in 1935 when they purchased basics in food, clothing,
transportation, and recreation and education. They would not consume
basics in all categories until 1973, when they finally bought basics
Salaried families attained basic transportation that allowed car
ownership in 1935; wage earners attained basic car transportation
in 1950 and laborers in 1973. Salaried families met the housing
basics that allowed home ownership in 1950, and working-class families
attained basic home-ownership in 1973. Overall, 1973 was a watershed
year in that working-class families had finally achieved consumption
above basics in all categories. This achievement presupposed that
families were covered by an employer-sponsored health insurance
plan. Families without this important benefit could be denied basic
medical care. Even those with health insurance had to worry about
losing the insurance if they became unemployed.
Even though blacks economic position had improved considerably
by 1950, they met or exceeded basics in only four unimportant categories
¾ furnishings, energy, household operations, recreation, personal
care, and gifts. Their segregation from the white community allowed
them to create their own criteria for consumption norms. They focused
on less costly areas where extra spending could make life more pleasant
and foster a social life¾making inside their homes nicer and
more acceptable, having their hair styled, going to the movies,
and giving gifts.
In 1973, after a decade of the war on poverty, families living at
the government-defined poverty threshold consumed sufficient food
only if they participated in the food stamp program. They received
basic health care only if they were eligible for Medicaid. They
economized on personal appearances and did not purchase the basics
in clothing or hair cuts. They had to rely on public transportation.
By 1988, poor families were substantially better off in many ways,
but their housing situation had deteriorated. Their budgets allowed
them sufficient food and car transportation. They were able to consume
above the dependency level, and almost reach the basic level, in
recreation and household operations. They still were frugal in their
purchases for personal appearance. Poor families, however, were
no longer living in acceptable housing. This contributed to the
already difficult lives they led, since many were forced to live
in unsafe areas with inferior schools. At the extreme, they were
living on the streets as the phenomenon of homelessness reappeared,
reminiscent of the Depression. Just like the Depression, the homeless
are not represented in expenditure data in 1988.
For many immigrants from developing countries, being poor in the
United States provides an enormous improvement in the standard of
living along with the opportunity for their children to be educated.
For this group, improvements in living standards are hidden and
are not recorded in the standard of living index, which measures
only the modifications in living standards over generations of native-born
In the 1960s and early 1970s, as basics were being met by laborer
families in all categories, the economic growth and the ensuing
high standard of living appeared to facilitate the development of
a social consensus to distribute income in a more equal manner and
to shorten work hours. As income growth slowed after 1973, these
goals were quickly replaced by the objective of increasing private
spending, which led to the tax revolt in California in the mid-1970s.
The tax revolt quickly spread to the rest of the country. The publics
demand to lower taxes successfully diverted resources from public
to private spending. As families spent more on private goods and
services to obtain variety and status, public problems such as environmental
degradation, homelessness, and crime worsened. Even as traffic congestion
lengthened commute times and added to air pollution, the public
resisted using public transportation. The societal and market bias
against public goods and in favor of private goods was in full force.6
Within their private spheres, employed families were experiencing
a rising standard of living; outside their homes, however, the quality
of life was rapidly deteriorating in many ways.
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