It’s no secret that the cost of living increases over time. It’s happened around the world for many decades. In the United States, the last 50-odd years have seen a far more dramatic rise in the cost of living than past increases, with the consumer price index (CPI) surging by more than 500% between 1970 and 2022, from 38.8 to 172.2.
With the United States being such a big country, there is a rather large variance in the CPI across states. Some states, like New York, feel the rise in the cost of living more acutely than others—though no one is immune to the shift in costs. Below, we’ll explore the reasons behind the shifting costs between then and now, what the costs of living are today, and how these impact the lives of New York residents.
What Factors Increase the Cost of Living?
Many factors contribute to the increased costs of living in the US, but inflation is among the most significant. Inflation refers to the increasing cost of goods, which influences our dollar’s buying power. It’s tracked by the consumer price index, which measures the changing cost of goods over time, including daily essentials like housing, food, utilities, and transportation. Many influences, including climate disasters, government policies, production supply and demand, and average salaries, spur inflation rates.
A healthy inflation rate is considered around 2%; however, the last 50 years have seen several periods where inflation rates were far higher than this, largely due to factors that are difficult to plan for and control. This includes the Great Inflation of the 1970s, where rates soared to 13.30% in 1970, and in more recent years, the economy’s response to the COVID-19 pandemic saw inflation rates reach 9.1% in 2022. These factors, including other major economic events, have led to much higher prices for daily goods today compared to the 1970s.
We should also remember that inflation is the average cost for goods and services across the country, whereas the cost of living is specific to a location, so it’s far more variable. Living costs may significantly outpace inflation in some places, even when inflation is low.
How Do NY Prices Today Compare to 50 Years Ago?
Despite much higher inflation rates in the 1970s, the dollar’s buying power was much stronger than it is today, even in a more expensive place like New York. Here are the typical costs between 1970 and 1972 in the US:
- Minimum wage: $1.60
- House: $26,800
- Monthly rent, including utilities: $150
- Health care costs: $129
- New car: $3,690
- A gallon of gasoline: $0.35
- Public college tuition per year: $1,428.30
- Weekly groceries for the average family: $47
Now let’s compare these to the average costs in New York state today:
- Minimum wage: $16.50
- House: $479,976
- Rent: $2,616
- Monthly utilities: $410
- Health care costs: $10,124
- New car: $49,740
- A gallon of gasoline: $3.14
- Public college tuition per year (in-state): $10,423
- Weekly groceries for the average person: $85.75
Although costs were certainly expected to be higher in New York today than in the 1970s, many far exceed typical inflation rates. Take the average cost of a home. If the 1970s price were adjusted for inflation over the past 50 years, the average home would cost just over $187,600; instead, it’s more than double this amount at $479,976. The cost of a home isn’t the only shocking expense difference on the list either—the cost of healthcare that New York residents pay out of pocket far exceeds inflation and is also 18% higher than the national average of $8,331.
The current costs also vary drastically from region to region within the state of New York. Consider, for instance, the popular and densely populated New York City, where the average living costs are 77% higher than the national average and 41% higher than the state average. Even nearby villages of the city, like Sleepy Hollow and Tarrytown, have significantly higher costs of living, both of which are estimated to be 110% above the national average.
The high cost of living significantly impacts New York residents, not just those in major metropolises or villages.
How Does the High Cost of Living Impact NY Residents?
New York residents approach the high living costs in several ways, including careful financial planning and budgeting. By taking the time to carry out these tasks, they can find creative ways to cut expenses and increase savings, making living in the state more affordable.
These include living with roommates and living in more affordable neighborhoods. It’s also common for people to have multiple jobs or income streams. They may further reduce expenses by cooking at home, using public transit, and looking for more affordable entertainment options. For example, casinos.com will show you how to find online sites with $10 minimum deposits.
In some cases, costs of living become prohibitive for staying in the state, so residents move to areas where costs are more affordable, such as Florida, Idaho, South Carolina, and Texas. In fact, since 2020, more people have been leaving the state than ever, outpacing the influx of new residents from other states.
In general, there are also increasing rates of adults living with their parents into their 20s and 30s to help reduce the costs of living so that they can save for their futures or pay off debt. This phenomenon is seen nationwide, with the number of young adults living with parents jumping from 8% to 17% from 1971 to 2021. For many, the commonplace milestones in the 1970s, like buying a home or paying off student loans, feel more like a dream than an attainable goal.
