The High Cost of Living vs. The Cost of Living High
Based on a suggestion yesterday from a student in my MBA class (MGT 551 Business Economics), the graph above shows the declining share of disposable personal income (data) spent on food (data), clothing (data), and shelter (housing and household operation) since 1929. From a high of almost 59% in 1933, the percent of disposable income spent on food, clothing and shelter today has continually fallen, and today (2007) is only 33%.
Bottom Line: When people today talk about the "high cost of living," they’re usually talking about the "cost of living high" (see Dallas Fed), because they're certainly not spending very much on the basics: food, clothing and shelter - that spending is at an all-time low as a percent of disposable personal income.