1950s televisionThe American Enterprise Institute has a fun little blog post you should check out that talks about the difference in shopping experiences from 1958 and today. A select few items from the 1958 Sears catalog are used to show how far we’ve come. The way it works is you compare how many hours you would have needed to work to afford the items in the catalog back then, and today. So in 1958 the average wage was $1.98/hr and today it’s $19.19/hr. Let’s see how long you’d have to work in order to afford a few things from the catalog.

Kenmore Toaster: In 1958 it was $12.95 so you’d have to work 6.5 hours to afford the thing. With a toaster today from Sears, at $25.99 you’d only need to work 1.35 hours. That’s a nice sign of progress.

24 Inch TV: Back in 1958 and heavy giant box that sat on the ground would take 136 hours of work. Now, a 26 incher you could put on your wall is as little as 13 hours of work. Progress.

Music player: Almost harder to compare but a “portable” record player would set you back 43 hours of work. A classic iPod which is infinitely more portable costs just 12.25 hours of work today. Progress indeed.

These are all great and no one can argue with the idea that comparing items from 1958 to today does show considerable progress. It’s great that these items have dropped in price. As have many other things that didn’t even exist in the 50s. Computers and cell phone are great examples. But is everything cheaper today? Maybe for Christmas shopping but we probably spend more of our income today.

The real kicker is that the American Enterprise Institute cherry picked a few items and it paints a rosy picture. Some things are considerably more expensive. Let’s look at doctor salaries as a proxy for all healthcare costs.

In 1958 a family doctor made $15k, today it’s around 173k. If we wanted to buy an hour of their time in 1958 that would take 3.6 hours of our work to earn it. Today it would take 4.3 hours.

Likewise a neurosurgeon in 1958 made about $29k. Today it’s $600k. So an hour of their time would set you back 7 hours of work back then. Today, 15 hours.

Now we don’t pay that much ourselves, but like I said just take their salaries as a proxy for all the costs related to healthcare and you’ll see the point. In many ways we have progressed. Certainly to a point where quality of life is better today than it was in 1958. But the cost of some things that provide that quality are much more expensive than they use to be.

Image: hartman045

Be Sociable, Share!
categories: economics, personal finance