Tuesday, August 21, 2007

Time Cost of Goods: Yesterday vs. Today

Data in the chart above (click to enlarge) are from the Dallas Federal Reserve Bank, 1997 Annual Report, and show the significant improvements in living standards and purchasing power over time. Prices of various food and household items are stated in "time cost," i.e. the number of minutes or hours that the average person, working at the average wage, would have to work to earn enough income to purchase various items in different years.

It should be emphasized that this analysis is for the average person, earning the average wage, i.e. the middle class (not the upper class), and the increasing affordability of commonly purchased items means that the average, middle class household is living at a much higher standard of living now compared to previous generations.

The good old days are now. And things keep getting better all the time.


At 8/23/2007 10:56 AM, Anonymous Anonymous said...

That's a good table, except for the "Big Mac (1940)." The Big Mac was "invented" in the late '60s. Unless we're talking about two different things.


(Hmmm...this new version of Opera [9.23] won't let me log onto Blogger.)

At 8/23/2007 1:17 PM, Blogger Mark J. Perry said...

You are correct about the Big Mac. From the Dallas Fed article: "In the currency of work time, today’s 1/5-pound Big Mac costs a third of the McDonald brothers’ 1/8-pound burgers in 1940." Therefore, they are actually comparing today's Big Mac to the original, regular McDonald's hamburger, so it is not exactly comparing "apples to apples."

At 8/28/2007 2:38 PM, Anonymous Anonymous said...

Another table to tell us how well off we are now instead of years ago.

I wonder why they didn't include the price of aluminum? In 1854 it was worth more than gold...


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At 2/26/2010 12:25 AM, Anonymous Anonymous said...

Interesting concept, but this seems like something out of the movie 1984, basically a sham trying to show us how much better off we are. Well, people used to own their own farm land, not have credit card debt, or taxes on just about everything. I seriously doubt this chart shows that. When it says 5 minutes to earn oranges. It takes you more than 5 minutes to pick them up at the grocery market. I don't buy it. Why don't you show the chart in dollars back then vs dollars now so that people can get a firm grasp on how much we have been robbed by inflation at the hands of our leaders.


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