Carole Owens: The plight of Jay USA


STOCKBRIDGE — As students of West High School in Madison Wisconsin, we were assigned the John Madison Project. John M. was meant to be an average American, and we students were meant to plan his economic life.

It was 1959.

Average John was married with 2.5 children. He earned $5,016 annually, a 6 percent increase from the year prior.

The average wage earner was male, head of household, and sole provider. The recommended division of income was: 25 percent taxes, 25 percent housing, 25 percent necessities including food, clothing, transportation, and medical, and 25 percent savings and discretionary income for entertainment and travel. If John M. spent his annual income in that manner, he could own a single-family home, a car, enjoy an annual vacation, and a decent retirement.

For perspective, here are some average costs and income statistics from 1959:

The federal hourly minimum wage was $1. The average yearly income was the above cited $5,016.

A gallon of gas cost 25 cents and a gallon of milk $1.01. A loaf of bread cost 20 cents, coffee was 77 cents a pound and steak was $1.09 a pound. Food expenses were $2,100 a year.

A postage stamp cost 4 cents. A man's top cost was priced at $42. A Ford went for $2,100 and a Cadillac $7,000. The average house cost $30,000

John's word was good, his handshake a contract; he believed in the efficacy of work, the trustworthiness of his government, and only buying what he could pay for in full. The year was 1959.

There were other social issues and concerns in 1959. The John Madison Project did not address them. The project was about the average American, just as this article is about the common man in America now and then.

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Sixty years later, we will call our common man Jay USA. He appears to have $46,500 at his disposal annually — that is the equivalent of $5,016.


According to "A Dose of Financial Reality" ( and "The Uncomfortable Truth About American Wages," (, Jay's problem is this, "The minimum wage in the United States has gone up 353 percent and average incomes have gone up approximately 500 percent. However, the cost of basic household goods has gone up 482 percent, the cost of a four-year education has gone up 994 percent, and the cost of an average home has gone up 917 percent."

What Jay USA faces is an income that will not cover costs. Given a flat rise in income and exponential rise in cost of goods and services, Jay USA is much poorer than John Madison and less sanguine about the government. Jay is divorced as are 51 percent of Americans. He is also older because, unless they are uninsured, people live longer than they did in 1959.

In 1959, when the average house cost $30,000, John M. bought a 3-bedroom house with den and 2 baths. He put 20 percent down, careful to keep the monthly payment under 25 percent, and calculated he would pay off the mortgage in 20 to 25 years. Like John, Jay lives in a typical single-family house with four-bedrooms and three baths in a neighborhood of similar houses. He goes out to eat, vacations, and sees the doctor regularly. If everything costs so much more, how does he do it?

Some economists believe if the credit card had not been invented, we would have had the equivalent of the French Revolution here, complete with guillotine. The credit card allows Jay to live as if he were middle class. He charges everything on multiple cards and pays a percentage of the amount owed each month. Like Jay USA, millions of Americans dine out, vacation, and buy necessities with credit.

Jay keeps careful track of his credit card limits and the amount spent on each. Sometimes he has a lapse of memory and the card is declined. He needs lots of cards. He never pays off balances, he pays the minimum each month. He is averaging out the disparity between costs and income with credit, and his credit rating is in the basement.

You may think Jay USA is unrealistic, an unreality, duplicitous or just doing the best he can. In any case, you may wonder how he has a house.

See Part 2 later this month.

Carole Owens most recent series of articles was about our government. This series is about our economy.


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