Don Boudreaux has a fantastic PowerPoint presentation posted at Café Hayek: Stagnating Middle-Class? It is from a presentation he gave at Cato University.
He opened up a 1974/1975 Sears catalogue. He then calculated how many hours a person would have to work to buy something in 1975 compared to buying a similar item today.
To make the comparison he obtained the hourly wage of an average non-supervisory employee in 1975 and the same average wage today. Those average wages are $4.87 in 1975 and $19.00 today.
For example, in 1975, a 35mm SLR camera, pretty nice for back then, was $347. That is 71.3 hours work for an average worker. In contrast, a Nikon Coolpix 12.0 mp camera today is 4.8 hours of labor.
A drop from 71 hours to 4.8 hours.
So for 7 days work in 1975 you could get a really nice camera. Today an average-earning person could have enough money to buy one before afternoon break. That shows the impact of technology in 35 years.
A few other comparisons:
- AM-FM digital clock radio then vs. Sony digital clock radio now – 12.2 hours in 1975, 0.58 hours in 2011. Down from 1½ days to ½ hour.
- Least pricey turntable 8.1 hours vs. Sony 5-disk CD player 6.1 hours. Not a drastic drop in hours, but a huge increase in quality.
- 40K BTU 2 burner gas grill – 38.4 hours then, 6.2 hours now
- Top of the line, high-capacity washer from Sears vs. Wal-Mart’s most expensive high-capacity washer– 61.6 hours then, 39.3 hours now
- Bottom of the line washer, 41.1 vs 18.4
- Large tent (sleep 8 or 9 people) – 32.9 hours vs. 5.1 hours
- Polyester men’s slacks – 2.1 hours vs 1.6 hours
Check out the PowerPoint presentation for a lot more comparisons. Also worth looking at it as a tool for comparing the cost of products across time.
The first hand-held calculator I bought for my first accounting class way back when had about six or eight functions. It cost $45 when gas was about $0.50 a gallon. That makes that calculator equal to 90 gallons of gas. At prices today, that would be around $432. At Amazon right now, for $400 you can get a Toshiba laptop with 15.6” screen, 1.5 GHz speed, 2GB ram, 320GB hard drive, loaded with Windows 7.
Let’s see, would you prefer to live when 90 gallons of gas would buy you a basic calculator or a basic laptop?
In other words, a middle-class working stiff can buy far more stuff today than a middle-class working stiff in 1975.
I can’t think of a better time to be alive than today!