In 1980, Americans were still reeling from the stagflation of the 1970s. And unfortunately, they didn’t get a break from economic turmoil at the start of the new decade. The cost of living in 1980 was still hard to afford due to rampant inflation. According to Investopedia, the year-over-year inflation rate was a whopping 12.5%. In an attempt to halt inflation, the Fed raised interest rates, which helped cause a six-month recession.
To better understand the cost of living in 1980, let’s take a look at the cost of everyday essentials that year.
Cost of Living in 1980
Although prices from the 1980s may make you green with envy, you have to put those expenses in perspective. The cost of living in 1980 was still challenging for families to afford due to lower salaries. The average annual income was only $19,170 according to The People History. High interest rates also squeezed Americans hoping to afford major purchases such as homes and cars. To give you additional context, here’s an overview of average prices from the 80s.
Cost of Groceries
Households in 1980 spent roughly the same percentage of their budget on food as we do today. Back then, food took up roughly 13% of disposable income, compared to 11% now. Although food costs varied depending on where you lived, here’s an overview of average grocery prices from the 80s, gathered from The People History. Today’s prices were retrieved from the Federal Reserve Bank of St. Louis.
Item | 1980s | 2024 |
| Ground Beef | $1.39/lb | $5.13/lb |
| Pork Chops | $2.49/lb | $4.25/lb |
| Tomatoes | $0.39/lb | $2.04/lb |
| Flour | $0.19/lb | $0.56/lb |
| Dozen Eggs | $0.84 | $2.52 |
| Loaf of Bread | $0.55 | $1.99 |
| Steak | $3.89/lb | $11.53/lb |
| Potatoes | $0.20/lb | $0.89/lb |
| Gallon of Milk | $1.59 | $3.89 |
| Bacon | $1.69/lb | $6.60/lb |
| Jar of Peanut Butter | $1.49 | $2.48 |
| Bag of Chips | $0.89 | $4.92 |
| Jug of Juice | $0.99 | $4.25 |
| Bananas | $0.08/lb | $0.62/lb |
Cost of Major Household Purchases
Due to the recession, the unemployment rate was about 7.5%. If you had a job, the cost of living in 1980 could still be hard to afford because of interest rates. The 30-year mortgage rate climbed to 13.74% according to Bankrate. The average new house cost a little under $70,000, which sounds like a steal. But becoming a homeowner was still out of reach for some as a result of sky-high mortgage rates and lower wages. A new home cost roughly 3.5X the average annual income of $19,170 per year, which wasn’t easily affordable.
Check out some of the other major costs households had to pay for below, gathered from The People History.
Item | 1980s |
| College Tuition and Board | $2,474 per year |
| New Car | $7,210 |
| New House | $68,714 |
| Gas | $1.19 per gallon |
| Bunk beds with mattresses | $148 |
Cost of Having Fun in 1980
Due to high interest rates, the recession, and soaring inflation, the cost of living in 1980 wasn’t easy to afford. Real disposable personal income was only around $5,000, compared to nearly $17,000 today. However, families still made do with what they had and managed to sneak in some fun here and there.
Pop culture during the 80s was memorable and exciting. In 1981, MTV debuted, making a huge mark on the music industry. Fashion trends from this time, like neon, big hair, and shoulder pads, have even come back into style today. Technological advancements made the video game industry take off, and blockbuster action movies like Star Wars and Indiana Jones kept moviegoers entertained.
To get an idea of the cost of having fun in 1980, here are the average prices of small luxuries, from movie tickets to Rubik’s cubes.
Item | 1980s |
| Rubik’s Cube | $1.99 |
| Movie Ticket | $3.55 |
| Big Mac Value Pack | $2.59 |
| Nike Air Force Basketball Shoes | $54.90 |
| Amiga 500 Computer with Color Monitor | $849 |
What are your thoughts on the cost of living in 1980 and how it compares to now? Let us know in the comments!
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Vicky Monroe is a freelance personal finance and lifestyle writer. When she’s not busy writing about her favorite money saving hacks or tinkering with her budget spreadsheets, she likes to travel, garden, and cook healthy vegetarian meals.