August 14, 2015

NOBODY HAS IT HARDER THAN THEIR FATHER DID:

The 'good old days' are now: Home appliances today are cheaper and more energy efficient than ever before (Mark J. Perry, 8/14/15, AEI)

In 1973, the 8,000 BTU room air conditioner pictured above was advertised in the Sears Spring/Summer catalog at a price of $216.75. At the average hourly wage in 1973 of $4.15, the average American would have had to work more than a week -- 52.2 hours or 6.5 eight-hour days -- to earn enough pre-tax income to purchase the room air conditioner from Sears.

Fast forward 40 years to 2015. The Kenmore 8,000 BTU room air conditioner pictured below is available today for $219.99, so the retail price at Sears has barely changed in more than 40 years, even though the overall CPI has increased 5.4 times since 1973, and the average hourly wage has increased 5.1 times. At the current average hourly wage of $21.01, the work time necessary to purchase today's Sears 8,000 BTU room air conditioner is only 10.4 hours, or a little more than a day of work.

Measured in what is ultimately most important -- our time -- the cost of a standard room air conditioner at Sears has fallen by more than 80% over the last 40 years, bringing the cost of what was likely a high-priced luxury item in 1973 down to a price that is affordable by even low-income Americans today.

The hours worked surveys are a particularly good illustration of the deflation levels of the past 35 years. 

Posted by at August 14, 2015 1:40 PM
  

blog comments powered by Disqus
« REPUBLICAN LIBERTY...: | Main | ALL MEN ARE FRIENDLY; NO TWO WOMEN ARE FRIENDS: »