One of the truly great thrills of doing research on economic history is uncovering information on what the economy was like many years ago.
Frequently, some shocking - or unfathomable - data pops up that shows how the structure of the economy - and society for that matter - has changed in the space of 50 years.
This article shares that information and, as you read through it, your jaw will likely drop at many of the indicators, which are truly incredible.
Let’s start with house prices.
In 1970, the median Sydney house price was $18,700, while in Melbourne, prices were just $12,800. Perth prices were relatively high at $17,500.
The data base, from Peter Abelson and Demi Chung from Macquarie University calculated that in 1971, house prices were $11,900 in Adelaide, $18,000 in Canberra and $11,875 in Hobart. The earliest data for Brisbane is for 1973, when the median house price was $17,500.
These prices are quite remarkable.
Unemployment is always a hot economic and political topic. In 1965, the unemployment rate was 1.3 per cent, a rate today’s policy makers can only dream about. Indeed, for the period from 1964 to 1971, the unemployment rate was 1.9 per cent or lower.
It begs the question, if Australia could have an unemployment rate that low back then, why can’t we do it now?
Australia’s history on inflation shows some results unthinkable today. In both 1974 and 1975, annual inflation was over 15 per cent, and from 1973 to 1983, inflation averaged 11 per cent per annum.
The dislocation caused from this phenomenon was, in effect, a decade of rolling recessions, high unemployment and misery.
Australian Bureau of Statistics (ABS) data shows that average weekly wage and earnings in the March quarter, 1969 was $67.20, which is $3,495 per annum.
These data were “per employed male unit”, with data on female wages not included in the publication.
This level of average wages puts those house prices, mentioned above, in greater context.
The labour force participation rates were, like most data, extraordinary.
In 1966, the male participation rate was 84.0 per cent, for married females it was 29.0 per cent, unmarried females 50.3 per cent and all females 36.3 per cent. How quaint that the ABS thought it useful to disaggregate females into “married” and “unmarried” and that that bizarre split was not used for males.
For context, the most recent data show male participation rate is around 66 per cent, for females it is around 57 per cent. Data on whether the females are married or not are no longer published. Progress for sure.
The annual age pension in 1970 was $806.00 or $15.50 a week. Not that many people got it for very long, life expectancy at that time was around 71 years compared with over 83 years today.
In terms of educational attainment, the progress over the decades has been extraordinary.
In the late 1970s, just one-third of students finished year 12 and its equivalent. Today it is around 85 per cent.
Back in the 1970s, just 3 per cent of young people went to university, now it is around 40 per cent.
One of the reasons for looking at these facts is to contemplate how massively economic and personal finances can change in two generations.
Imagine being about to buy a house in Sydney for $18,700, but for wages to be around $3,500 per annum.
Imagine being one of the two-thirds of young people not finishing year 12, or the 97 per cent of people who did not go to university.
Imagine having 15 years where interest rates were above 10 per cent?
And the gender workplace participation rates have changed to the point where women make up a larger share of the paid workforce than ever before.
In 50 years from now?
For those who are around, it would not be surprising that the median house in Sydney will be $10 million, average earnings something like $2 million per annum, unemployment will be near zero and people will be living to 100 years.
And we will be debating whether the RBA should hike interest rates or not.