Looking Back to Understand Today

To understand where we are now, we need to look at where we’ve been. Lately, I’ve been reflecting on our country’s economic history and how dramatically life has changed over the past century. While our advancements are undeniable, they also highlight how much we still need to get a handle on—especially financially.

In 1916, less than half of the U.S. population lived in urban areas. Today, that number has skyrocketed to around 80%. This shift from rural to urban life was largely due to changes in employment. In 1916, agriculture was the dominant industry, employing 31% of workers. Other common roles included craftsmen, laborers, and operatives—many of which would be considered self-employed by today’s standards. By 1920, manufacturing had taken the lead, and today, the service sector dominates.

Interestingly, the largest employer in the U.S. today is not a private company but the federal government, with nearly 22 million employees. Walmart, the largest private employer, has 2.2 million—a distant second.

Then and Now: A Century of Change

Consider this: in 1916, only 14% of U.S. homes had a bathtub, and just 8% had a telephone. A three-minute long-distance call from Denver to New York City cost $11—a small fortune at the time.

Back then, the population was much younger. Over 52% of Americans were under 25, compared to just one-third today. Life expectancy was only 54.5 years, and fewer than 5% of the population was over age 65. Today, life expectancy is nearly 79 years, and 14% of Americans are 65 or older. There are now more than 72,000 centenarians alive in the U.S.—some of whom were around when Charlie Chaplin signed his first film contract.

The federal income tax, introduced in 1914, only applied to individuals earning over $3,000 per year (around $71,000 today). That same year also marked the rise of a new profession: certified public accountants.

It’s remarkable to think that many everyday conveniences we now take for granted—televisions, cars, indoor plumbing—were once luxuries or hadn’t even been invented. These changes reflect not just technological progress, but a massive transformation in quality of life and financial behavior.

Financial Impacts of a Changing World

With longer life spans come new financial challenges. Many people today can expect to live well into their 80s—and some past 100. That means retirement savings must stretch further than ever before. Yet pensions are increasingly rare, and personal savings often fall short. The responsibility to fund 20 or 30 years of retirement now lies largely with individuals.

At the same time, our improved standard of living has fueled a culture of consumerism. A century ago, luxuries like ice delivery or owning a car were rare. Today, many of us upgrade phones, TVs, and cars every few years. While these innovations have boosted convenience and productivity, they also make it harder to prioritize long-term financial goals like saving and investing.

As we look ahead, it’s essential to appreciate how far we’ve come while also recognizing the financial implications of this progress. Growth brings opportunity—but also responsibility. Let’s use the lessons of the past to better prepare for the future.

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