Augen said:
Actually when inflation is brought in little has changed. Sure, you make more, but when you spend more not really left with great deal more for discretionary funds. When I think about my peers and trying to get started while paying off student loans they actually live leaner than their parents did in the 70s/80s at same stage of life. Also, among all my peers only one couple has a child, to many of us having a kid in your 20s is financial suicide. I cannot imagine being able to spend a grand on gifts for a holiday and I am better off than the example outlined in the OP. |
I already considered inflation. The average wage from 1989 to 2011 is about $4,000 more (after considering inflation.) And also we must remember that inflation doesn't affect all markets equally. If we look at marginal differences, then it makes sense that a little bit extra money could be spent on preceivingly wasteful goods, just because everything else was already covered. Most orthodox (and heterodox) economists accept marginalism.
And your second paragraph supports my claim. People are having children much later in life, when they are much more financially stable, and they are not having multiple children. For that reason, they are more capable of spoiling their children.
Anyway, I went to an average lower middle class public high school, most of the students got $500-700 worth of gifts for Christmas, and $100-200 birthday gifts. That was between the years of 2009-2012. So it doesn't seem bizarre to me at all that the topic creator has seen kids get $1000 worth of gifts in a year.