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Inflation is technically calculated by looking at the cost of living so I assume your question really is "have wages kept up with inflation over past decades?" Unfortunately they have not; in 1967 median household income was $35,379(1), inflation adjusted that's $229,148(2) but the 2005 median household income was $46,326. So inflation has far outpaced wages. You are probably thinking, "I know may people who earn less than that per year and have great lives!" True, that is because many goods have decreased in price but cost of housing has skyrocketed because of the advent of things like 30 year mortgages. In the 60's it was not uncommon to buy a house in cash but today that is almost unheard of.

Your second question: "does it cost more to live because we are accustomed to all having cars, dining out at fast food, and other luxuries?"

Answer: Yes! we are all accustomed to having these "luxuries" but in the 60's you didn't need computers, cell phones, and other luxuries. Needs are largely based on relative expectations; meaning the only reason we need almost anything is because others have them. I'm sure you know plenty of Priests, Nuns, and Monks who live on almost nothing but without what can be considered luxuries functioning in society can be difficult and for many things like cars have become a necessity because most of us don't live off of our own farmed food.

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