Food, Clothing, and Shelter
The "invisible hand" of the market works wonders when it comes to food and clothing. So why does shelter demand more of what we earn every year?
December 9, 2017
Lindy Davies

Food, clothing, and shelter are some of our most basic survival needs. Once we secure food, clothing and shelter, then we can devote energy to nice things like education, storing up labor-saving tools and equipment, creating art and music, pondering our origins and our destiny...

You might be glad to know that economic progress has brought the cost of our material needs down considerably — especially in the richest countries. Only ten countries in the world today spend less that 10% of their household income on food. The United States is the lowest at 6.4%. And, Americans spend about a third of their food budget on restaurants. Indeed, the cost of basic sustaining food in the US today is astoundingly low. If one cuts back on meat, cooks at home, shops for bargains and eats leftovers (all the things our depression-era grandparents do without thnking) one can eat quite well for very little money.

Lynn Carpenter compared the cost of this basket of food: "one loaf of bread, one pound of coffee, one dozen eggs, three pounds of mid-price beef, one box of Corn Flakes or Cheerios, five pounds of potatoes and one Hershey bar." In 1938, a minimum wage earner had to work 9.25 hours to buy this food. Today it takes about 3.3 hours.

With clothing, the situation is similar. Clothing accounts for 3.5% of the average American family's spending, but if you don't have it to spend, you can get by on much less. Imported garments in big-box stores keep coming down in price — and if Walmart is above your budget, thrift stores will sell you very serviceable clothing for dirt cheap.

Food and clothing are bargains in this day & age. Shelter, alas, is not. Housing costs as a portion of income keep going up, up, up. Not only that — poor folks can eschew restaurants and designers, yet still eat and clothe themselves. With housing, the opposite is the case. The lower one's income, the likelier one is to rent, rather than own. The portion of income paid by renters for their housing is WAY higher that the portion that homeowners pay for mortgages and maintenance. And it's intensifying: over the last 19 years, housing costs for the lower third of US income earners have increased by over 50%.

People talk about the magic of the marketplace. And, indeed, the "invisible hand" of the market works wonders when it comes to food and clothing. So why does shelter demand more of what we earn every year?

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Lindy Davies

LINDY DAVIES was Program Director of the Henry George Institute and Editor of the Georgist Journal. He was the author of The Alodia Scrapbook, the fictitious story of how a struggling African nation used Geoism to set itself on the path to prosperity, and of the novel The Sassafras Crossing. He managed a successful campaign to get the Henry George Institute's distance-learning program approved by the National College Credit Recommendation Service. He passed away in 2019, and is lovingly remembered by the many people whose lives he touched.