Money

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Ask the correct question. How many hours would the average worker have to toil to earn the money to buy a pound of meat. You will find this true price of meat (namely the labor necessary to trade for it) has not gone up at all.

The correct way of reckoning the cost of a good or service is to ask how long must one work to pay for it. Since a second is still a second and an hour is still an hour that gives a truer picture of costs. Time units cannot be devalued because of currency inflation.

The general standard of living has rise steadily since the end of WW2.

ruveyn

When I last left New York City a cup of coffee or a subway ride in 2001 was $2, or about that. In 1945 it was 5 cents. By your calculations a worker had to work 40 hours in 1945 to equal one hour's work in 2001. Is there something wrong with my math?

The average wage in the US in 2006 war roughly $50,000 / yr (actually it was a little higher, but I like round numbers). A U.S. worker works 2000 hours a year so his hourly wage is $25. See

http://www.nytimes.com/2008/08/26/busin ... ncome.html

for the stats.

Now assume coffee is $2.50 cents a cup. That is 1/10 of an hour or six minutes.

In 1940 workers made $50 a week. That comes to $1.25 cents /hr Five cents is
is 4 percent of an hours which comes to 0.04 * 60 or 2.4 minutes. So coffee is maybe twice as expensive time wise. But consider the price of a phone call. Now that has dropped markedly because of technological improvement. You can call anywhere in the world for three bucks. Back in 1940 an three minute long distance call to the opposite coast would have run over $5.00 1940 dollars or twenty times what it costs now, time wise. So it depends what one is buying. Some stuff has become more expensive and some less. Steak was about $0.30 cents a pound back then. Figuring a factor of 20 that is equivalent to $6.00 a pound but steak can be bought much cheaper than that. So coffee at a coffee shop has gone up but steak at the supermarket has gone down. That is because raising cattle is done much more scientifically now.

Here is a number that might interest you. A current dollar is about 1/12 the value of of 1960 dollar. In 1960 one hour of computer time on an IBM 7090 was billed out at $800.00/hr (this is 1960 dollars!). For $800 2007 dollars you can get a laptop which has 100 times the storage and nearly 100 times the speed. That works out to $65 1960 dollars (give or take) which is 1/15 what one hour of computer time cost back then. In short computers are much cheaper and better now than in 1960.

In 1960 I paid $0.25 a gallon for gas. Now I am paying $1.75 a gallon. That is a nominal 8 fold increase on a dollar that is worth 1/12 hence I am pay 8/12 (2/3) as much for gas now than I was paying then.

In 1960 it cost $0.04 to mail a first class letter. Now it costs $0.47 cents so my time cost for a first class letter is about the same. In 1960 there was no e-mail available to the general public. Now their is. So communication by the typed or written word is much cheaper now then back then.

The tax rate on a middle class person now is higher than back in 1960. For incomes under $10,000 1960 dollars the tax rate was under 30 percent. Now it is over 35 percent for the equivalent 2007 income. The government is taking a somewhat bigger hunk of our income now then back then. If you figure in state income tax and regulatory costs plus fees etc. we are more taxed now than back then.

Because of the tax differential, the women of the house have to work, as well as the men to make ends meet. Back in 1950, a white collar (white) male could make enough money per year to maintain his household and send 2.4 kids to college. Now this is pretty near impossible. It is not price increases that has put this out of the reach of a single wage earner, but taxes of all sorts. So in some ways things have not gotten better.

ruveyn

I'm very lucky to not have to think about money past budgeting it.

I don't spend much on anything other then food and shelter.

I do spend some but it is usually for something useful. I'm not very interested in "stuff".