March 7, 2005
NOTHING COSTS MORE THAN IT USED TO
Pat H pointed us to this selection from the 1978 Sears catalog, which Pat found by following a link from some other non-practicing lawyer's blog. I find the page a little hard to look at, as it threatens to disinter my suppressed memory of the purple leisure suit, complete with grape vine print shirt, I wore to my 8th grade prom. But leaving fashion to one side (please!), the products offered give us an interesting window into inflation and technological change.
In 1978, Sears is selling a beanbag chair for $26.95 (approximately $78.82 today). Amazon will sell you a beanbag chair for $19.99.
Sears: A "novelty" sweatshirt costs $5.99 ($17.52). Amazon: A SpongeBob Hoodie for $40.99.
Sears: Regular cut wide wale corduroy men's pants $17.99 regular cut, $18.99 full cut ($52.62/$55.54). Amazon: Regular cut pants for $27.98, "George Foreman" pants for $39.99.
Sears: A "Deluxe" in-dash am/fm stereo with 8-track or cassette for $168.99 ($494.25). Amazon: Trying to figure out the appropriate comparison here is somewhat arbitrary, but you can get a Pyramid am/fm cd player for $39.00, an Audiovox am/fm stereo with cd player for $50.99, a Sony cd/mp3 player (I think it's also a radio, but they don't really seem to care) for $119.99 or a Delphy portable satellite receiver for use at home or in the car for $349.95.
Sears: A Betavision VCR for $985.00 ($2880.88). Amazon: A Sylvania VCR for $49.99.
Sears: A telephone with memory for 10 telephone numbers for $149.99 ($438.68). Amazon: An AT&T corded phone with memory for 12 numbers for $11.99. To spend the same nominal amount, you would have to buy a Uniden TRU8866 5.8 GHz Digital Expandable 2-Line Cordless Speakerphone with Dual Keypads (Black).
Sear's finest 13" color tv, with 3 function remote control cost $419.95 ($1228.25). Amazon: Although you can get a Toshiba 13" color tv for $79.99, these TVs are now mostly children's playthings. You can buy the "Hello Kitty" tv for $119.99 or the Mickey Mouse tv for $99.99. Today, $414.84 gets you the "20" Triple Play TV/DVD/VCR Combo, Silver Cabinet."
Finally, in 1978, Sears sold a 20" kid's bike for $49.99 ($146.21). Amazon sells 20" kid's bikes for between $49.99 and $149.99.
NOTE: After reading the comments, I have changed the 2005 prices for the Sears' products using the inflation multiplier found here, although one of the take-home lessons of this exercise is how useless a concept inflation is. A more meaningful comparison is to consider how long a buyer would have to work to afford these items. In 1978, per capita disposable personal income was $7224. In 2004, it was $29,367. Assuming 240 work days in the year, in 1978 the average person earned $30 after tax every day. In 2004, the average person's daily after-tax income was $122. So, to buy his kid a bike in 1978, dad had to work a day and a half. Today, dad has to work half a day. A 13" television cost 14 days' work then. Now it costs about six hours of work. The SpongeBob hoodie, however, still seems overpriced.
Posted by David Cohen at March 7, 2005 4:57 PMFantastic post. Does anybody remember what one paid (and how long it took) for shipping & handling to Sears then? Even this category, which is heavily dependent on fuel costs (the infation Cassandra's bogeyman), is likely to be cheaper now in purchasing power terms. (Reflecting efficiencies of the Fed Ex's and UPS of the world.)
Now, taxes, may be another matter, but that is outside the realm of market economies!
Posted by: Moe from NC at March 7, 2005 5:33 PMDavid: You beat me to it. In '78 I was still trying to talk my mom OUT of buying me the Toughskins (tm).
I was working on a similar comparative list. Walmart has the Emerson 13" TV/VCR Combo for $96.64 (with "wireless" remote!).
Last year I wanted to replace the factory stereo in my noisy pick-up. I bought a Pyle 120W AM/FM/CD/CDR/RW/MP3 in-dash Player with 6/12" 2-way speakers and a 100W powered subwoofer for $170 delivered (via buy.com). It was here in 5 days via UPS.
Curious: What factor did you use to come up with today's dollars prices?
Posted by: John Resnick at March 7, 2005 5:34 PMThere's a site called The Iflation Calculator at http://www.westegg.com/inflation/
Posted by: jdkelly at March 7, 2005 5:52 PMThe SpongeBob hoodie, however, still seems overpriced.
Don't they list any plain ones?
Posted by: Robert Schwartz at March 7, 2005 5:56 PMSorry. That's The Inflation Calculator.
Posted by: jdkelly at March 7, 2005 5:56 PMNobody buys a Spongebob hoodie with their own money.
Posted by: Brandon at March 7, 2005 6:42 PMJohn: The link is at work, but it worked out to a 2.5 multiplier.
Posted by: David Cohen at March 7, 2005 6:48 PMTry:
http://www.shopping.com/xDN-Clothing-sweatshirt~V-grid
Over 14,000 sweatshirt Listings, 10,000 at less than $15.
Posted by: Robert Schwartz at March 7, 2005 6:49 PMDavid: Thanks. I found this one too just poking around: http://data.bls.gov/cgi-bin/cpicalc.pl
Amazon has a wide selection of plain sweatshirts for various prices, including a $9.99 crew fleece, a $5.99 women's sweatshirt on clearance and a bunch from $15 to $20. On the other hand, a Superman sweatshirt, which is what Sears was offering as a "novelty", goes for $34.95 on the site Robert posted. Apparently, only intellectual property is more expensive now and the title of this post should be "NO THING COSTS MORE THAN IT USED TO."
Posted by: David Cohen at March 7, 2005 6:59 PMDavid: I guess there is a lesson in there somewhere. That Superman sweatshit will be marked down and sold at $7.95. The fact that they try to charge the ridiculous prices for the silk screen. doesn't mean much. The question is what they can sell it for.
The problem is that the money has to go chase something. The prices of housing and healthcare have increased dramatically. College education has spiralled out of control. Last week we received a notice from Northwestern:
"Total undergraduate costs at Northwestern University, including tuition, fees, room and board, will increase 5.3 percent to $41,663 in 2005-2006 from the current year’s $39,582."
Posted by: Robert Schwartz at March 7, 2005 8:17 PMDavid - a more fair comparison than per capital disposable income is median family income. First, some of those items (e.g. clothes) are not part of disposable income. Second, the wealthy have a disproportionate share of per capital disposable income.
Nonetheless, it doesn't change the basic gist of your post.
Posted by: Bret at March 7, 2005 10:30 PMI suggest that a Spongebob hoodie would make a fabulous first (or second) prize for the next Brothers Judd Prediction Contest.
Posted by: Seven Machos at March 7, 2005 10:54 PMI think you have to put the celebrity factor into the equasion when you're talking about the Spongebob hoodie. I'm sure in 1978 the Tony Manero-Saturday Night Fever hoodie probably commanded the same mark-up above the logical retail price.
Posted by: John at March 7, 2005 11:42 PMReally, a single SpongeBob hoodie is all that need ever exist--countless multitudes will spend $40, $50, or even more just to NOT wear it. :-)
Posted by: at March 8, 2005 4:47 AMRobert,
Housing, health care and education all have inflated costs due to government subsidy. Housing costs, on a monthly basis, aren't really that much higher than before when interest rates and mortgage deductibility are taken into account.
If there were no Pell grants and other aid and loan programs, college would be a lot less. Medicaid and Medicare certainly push up health costs. Of course, health care costs are really inflated by the needs of practicing 'defensive medicine.'
Air travel is still a bargain, although OJ will never use it.
Posted by: Bart at March 8, 2005 7:53 AMTelecommunications are way more expensive than they used to be, but it's partly because of coercive marketing & monopolies than real cost. One used to be able to simply buy a dial tone; now it is impossible to buy one alone, you must take a plethora of other "services" with it.
Judd: What? Just 10 years ago, state-to-state long distance was an amazing bargain at 10 cents/minute. Today it's under 3. Granted, the federal taxes and access charges have risen at thrice inflation, but, even so, telecom is way cheaper.
Posted by: John Resnick at March 8, 2005 11:42 AMas I said, in real cost, but not in costs to the consumer.
Posted by: Judd at March 8, 2005 1:52 PM15 years ago, simple local service could be had for $10 per month. Now, it's a minimum of $40.
Judd,
Change your company. I pay $25 to Verizon every month for local.
Posted by: Bart at March 8, 2005 2:42 PMI use Verizon too. That's the cheapest they get here (Houston). There is no single other carrier in my exchange-- they have a complete monopoly.
Posted by: Judd at March 8, 2005 4:55 PM