In 1973 $20 was worth $104.94
- Thread starter Merkava_4
- Start date
- Status
The one who bought a house in Irvine, Orange County in So Cal for $70k in 1970, that house is worth $1.3-1.5 mil now and the CPI shows it is $420k now. So housing price in So Cal went up in price about 3 times inflation.
I picked up some groceries tonight - the bill was $31.01.
Back in 1979, the bill would have been only $10.00.
Back in 1979, the bill would have been only $10.00.
Originally Posted By: Merkava_4
I picked up some groceries tonight - the bill was $31.01.
Back in 1979, the bill would have been only $10.00.
that's only 3.4% annualized. Doesn't seem extraordinary considering the high inflation of the early 1980s skews the results
I picked up some groceries tonight - the bill was $31.01.
Back in 1979, the bill would have been only $10.00.
that's only 3.4% annualized. Doesn't seem extraordinary considering the high inflation of the early 1980s skews the results
Under Kennedy I believe the dollar was still backed by an oz of silver.
That changed around 1970.
Rough rule of thumb; money devalues in half every 15 years (quarters in value every 3 decades). So, we're doing a little better thanks to the post 2008 slowdown, since $105 < 20*4*almosttwoish, where almosttwoish=exp(2/3 ln 2)~1.6.
The problem with the official inflation figures isthat things are a little fudged. They are still roughly correct; distorted only enough to remain plausible. The main fudging is done with the hedonic quality adjustment, which adjust the value of modern products pretty much always... upwards. I don't think that should really be so.
Sure $500 laptop now is a few times faster than one you'd have bought 5 years ago; cars now have all sorts of new features over a car bought 10 years ago, and we didn't have "supercomputers" we could carry in our pockets 30 years ago. However the "hedonic quality adjustment" are completely overdone IMO and are completely 'hedonic' in the sense that they seem biased to only act to understate the inflation.
Yet, are there ever 'hedonic' quality adjustments made to reflect the lower quality of produce and goods? 15 years ago you didn't have to worry about your food being lousy GMO produce. 75 years ago you didn't have to worry about GMO nor massive toxic pesticides in your food. Only a few decades ago you wouldn't have to worry that, if you ate meat, whether it was produced by factory farms.
A more accurate method would be to compare 1920s food to organic 2010s food (Organic is generally almost twice the cost of conventional.
And did you have to worry in 1960 that a television or radio you (bought, was made in a sweatshop where people are paid approximately nothing per day, in conditions similar to where iPhones parts were produced by foxconn---suicide nets in the dormatories...)
I guess hedonic adjustments just assume the price of our health and conscience is practically zero.
That changed around 1970.
Rough rule of thumb; money devalues in half every 15 years (quarters in value every 3 decades). So, we're doing a little better thanks to the post 2008 slowdown, since $105 < 20*4*almosttwoish, where almosttwoish=exp(2/3 ln 2)~1.6.
The problem with the official inflation figures isthat things are a little fudged. They are still roughly correct; distorted only enough to remain plausible. The main fudging is done with the hedonic quality adjustment, which adjust the value of modern products pretty much always... upwards. I don't think that should really be so.
Sure $500 laptop now is a few times faster than one you'd have bought 5 years ago; cars now have all sorts of new features over a car bought 10 years ago, and we didn't have "supercomputers" we could carry in our pockets 30 years ago. However the "hedonic quality adjustment" are completely overdone IMO and are completely 'hedonic' in the sense that they seem biased to only act to understate the inflation.
Yet, are there ever 'hedonic' quality adjustments made to reflect the lower quality of produce and goods? 15 years ago you didn't have to worry about your food being lousy GMO produce. 75 years ago you didn't have to worry about GMO nor massive toxic pesticides in your food. Only a few decades ago you wouldn't have to worry that, if you ate meat, whether it was produced by factory farms.
A more accurate method would be to compare 1920s food to organic 2010s food (Organic is generally almost twice the cost of conventional.
And did you have to worry in 1960 that a television or radio you (bought, was made in a sweatshop where people are paid approximately nothing per day, in conditions similar to where iPhones parts were produced by foxconn---suicide nets in the dormatories...)
I guess hedonic adjustments just assume the price of our health and conscience is practically zero.
My question is this: Are people's wages going up as fast as inflation?
Originally Posted By: Merkava_4
My question is this: Are people's wages going up as fast as inflation?
The U.S. median household income in 1950 was about $4,800/year. Using your calculator that translates into $46,000 in today's dollars. The 2012 household median income was $51,371, so median income has risen slightly faster than inflation. That doesn't account for the added tax burden, so disposable income may not be as much as it was in 1950.
Sounds like a good reason not to be average, doesn't it?
My question is this: Are people's wages going up as fast as inflation?
The U.S. median household income in 1950 was about $4,800/year. Using your calculator that translates into $46,000 in today's dollars. The 2012 household median income was $51,371, so median income has risen slightly faster than inflation. That doesn't account for the added tax burden, so disposable income may not be as much as it was in 1950.
Sounds like a good reason not to be average, doesn't it?
Or "minimum" if you're talking about wages...
Originally Posted By: Pop_Rivit
Originally Posted By: Merkava_4
My question is this: Are people's wages going up as fast as inflation?
The U.S. median household income in 1950 was about $4,800/year. Using your calculator that translates into $46,000 in today's dollars. The 2012 household median income was $51,371, so median income has risen slightly faster than inflation.
I think a 1950's household would be single income; I think a 2012's household would be at least dual income with both parents working and enough adult children to upset the statistic.
My Dad bought his first house when he was 19; my Grandpa built his house when he got out of the military at 23. Skip ahead: owning your own home by 23 would be impossible by today's standard of living.
Originally Posted By: Merkava_4
My question is this: Are people's wages going up as fast as inflation?
The U.S. median household income in 1950 was about $4,800/year. Using your calculator that translates into $46,000 in today's dollars. The 2012 household median income was $51,371, so median income has risen slightly faster than inflation.
I think a 1950's household would be single income; I think a 2012's household would be at least dual income with both parents working and enough adult children to upset the statistic.
My Dad bought his first house when he was 19; my Grandpa built his house when he got out of the military at 23. Skip ahead: owning your own home by 23 would be impossible by today's standard of living.
Originally Posted By: NHGUY
Originally Posted By: Merkava_4
My question is this: Are people's wages going up as fast as inflation?
I don't think wages have gone up 5x as much.That would put minimum wage in 79 at what..$1.50??
It seems like I was making $1.90 an hour after school in '76 or '77.
Originally Posted By: Merkava_4
My question is this: Are people's wages going up as fast as inflation?
I don't think wages have gone up 5x as much.That would put minimum wage in 79 at what..$1.50??
It seems like I was making $1.90 an hour after school in '76 or '77.
Originally Posted By: Gabe
...
My Dad bought his first house when he was 19; my Grandpa built his house when he got out of the military at 23. Skip ahead: owning your own home by 23 would be impossible by today's standard of living.
Depends on where you live. It would certainly be possible around here. I was 24 or 25 when I bought my first airplane.
...
My Dad bought his first house when he was 19; my Grandpa built his house when he got out of the military at 23. Skip ahead: owning your own home by 23 would be impossible by today's standard of living.
Depends on where you live. It would certainly be possible around here. I was 24 or 25 when I bought my first airplane.
Originally Posted By: Merkava_4
My question is this: Are people's wages going up as fast as inflation?
No, that is the problem. Inflation per say isn't a problem if wages grow at the same rate historically, which they haven't; median wages adjusted for inflation are the same as what they were in the 70s which has eroded people's ability to live in our consumer society and at the same time, save for retirement etc. now adays, to just keep up with the Jone's, we have 2 income households where everyone purchases the economic output of society via credit. It's the logical consequence of globalization and technology.
My question is this: Are people's wages going up as fast as inflation?
No, that is the problem. Inflation per say isn't a problem if wages grow at the same rate historically, which they haven't; median wages adjusted for inflation are the same as what they were in the 70s which has eroded people's ability to live in our consumer society and at the same time, save for retirement etc. now adays, to just keep up with the Jone's, we have 2 income households where everyone purchases the economic output of society via credit. It's the logical consequence of globalization and technology.
I went into the Army in 1965, using your calculator they were paying me $148 bucks a week in todays money, something doesn't add up here?
Last edited:
The big inflation is not here yet...but it's coming. You can't have $17 trillion in debt without massive inflation.
Who cares? What are you going to do with this information?
We can gripe about gas prices when they spike and compare them to the "good 'ole days" or gas shortages. What actionable knowledge has this thread presented?
Think of how many people have overpriced flat screens, smartphones, laptops, ipods, ipads, etc - what type of consumer product spending in the 1950s even came close to the amount of [censored] that people 'need' to own today? Sure you could live in a one-income household then - people were okay living simpler. One car. One TV, etc.
We can gripe about gas prices when they spike and compare them to the "good 'ole days" or gas shortages. What actionable knowledge has this thread presented?
Think of how many people have overpriced flat screens, smartphones, laptops, ipods, ipads, etc - what type of consumer product spending in the 1950s even came close to the amount of [censored] that people 'need' to own today? Sure you could live in a one-income household then - people were okay living simpler. One car. One TV, etc.
In 1972, I could buy a quart of beer for .50 and a single-stack box of saltines for another .50. Gas (I think; I wasn't driving yet) was still about .33/gal.
In 1982, my then wife and I could eat at Bennigan's for $20, no liquor but including the tip.
Look at it this way. If in 1972 gas was .33 a gallon, the price of a gallon of fuel has gone up about 10 times. Has the average yearly income of the average worker gone up 10 times? I doubt it.
In 1982, my then wife and I could eat at Bennigan's for $20, no liquor but including the tip.
Look at it this way. If in 1972 gas was .33 a gallon, the price of a gallon of fuel has gone up about 10 times. Has the average yearly income of the average worker gone up 10 times? I doubt it.
- Status
Similar threads
