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Originally Posted by Oil Stain
My guess would be part of it being that the economical competitive advantage the developed countries such as North America and Europe enjoyed in the early part of the the Oil and Gas consumption era is shrinking. The USA is no longer buying resources from developing countries for a pittance, manufacturing goods and selling those back to the consumers at high profits. Developing countries are designing and manufacturing their own goods, so competition is driving up resource costs while at the same time the developed world loses manufacturing jobs.
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That might be part of it, but I don't think the pie has actually shrunk at all... just the section of the pie that the lower and middle classes used to share is disproportionately smaller now. The upper class has seen massive increases to their wealth during the same period. This is one of the reasons why the cost of living and property values continued to rise despite the middle class remaining stagnant for the most part.
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The other part would be changing expectations. If you don't care about having new cars, yearly vacations to tropical countries, eating out in restaurants frequently, designer goods, a family can probably still get by on a single income.
I don't think the average family went to Mexico every year, or even at all in the 1970's. My father never bought a new vehicle until he was in his 40's. My sister and brothers all had purchased new vehicles before they were 25.
I think people's perceptions of what they need to "own" in order to be middle class has changed greatly over the years.
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Some luxuries are more easily affordable (vacations) or accessible through credit (cars), but it's a façade and a trap for many people. It's not real wealth. Just curious, but did they buy the new cars outright or did they use credit? If they paid for them outright, then that is impressive and I wouldn't think the norm.