It is difficult to compare the prices of consumer goods in, say 2004, versus the 60s and 70s for several reasons. First, inflation makes a dollar-to-dollar comparison impossible. A dollar today is not the same as a dollar in 1962. Generally speaking, in 2011 you needed $700 to buy what $100 would buy in 1962.
Second, a serving then is not a serving now. A can of Coke in 1962 did not exist; a bottle did, but a bottle of Coke that cost ten cents contained six ounces. A standard can of Coke today contains 12 ounces.
Third, you may not care how much the price of a refrigerator has risen, since you buy one only every 15 years or so. But a gallon of gas? Now, that is much more important, even if you take the bus.
Fourth, many things that we use every day did not even exist in the 60s. Cell phones, IPads, garage door openers, MP3 players, heated socks, cable TV, cordless drills... oh, hundreds of things.
Also, some prices now fluctuate greatly. How much did a gallon of gas cost in 2011, $3.00.... or $3.95? How much does a plane ticket from New York to Miami cost? And, of course, prices vary considerably in different countries.
Nonetheless, we're going to give it a try. The table below lists some common consumer goods, their U.S. prices in 1962, 1972, and 2004 in absolute dollars, and the inflation-adjusted prices:
|--- 1962 ---||--- 1972 ---||2004|
|Item||1962 Price ***||Price in 2004 dollars ***||1972 Price||Price in 2004 dollars||2004 Price ***||Notes|
|pack of chewing gum||.05||.28||.50||5 sticks per pack in 1962|
|candy bar||.05||.28||.25||1.05||.60||much larger serving today|
|ice cream bar||.15||.85||.25||1.05||.85|
|loaf of bread||.20||.90||.25||1.05||1.05||a loaf of bread is still a loaf of bread|
|Buster Brown shoes||3||16.80||20|
|movie ticket||.50||2.85||8.00||much lousier movies today|
|popcorn at the movie||.20||1.12||.75||3.15||3.00||much larger serving today|
|soft drink||.10||.57||.75||much larger serving today|
|fast food hamburger||.20||1.14||1.75||much larger serving today|
|pound ground beef||.35||2.05||2.00|
|45 rpm (single) record||1.00||5.60||6.00||much better music then|
|music album||3.00||16.80||16.00||much better music then|
|gallon of gas||.31||1.77||.36||1.51||1.50|| |
|1st class postage||.04||.23||.18||.75||.37||1st class now goes via air mail|
|pay phone - local call||.10||.57||.10||.42||.35||Long distance rates are much cheaper today.|
|color TV set||400||2,227||250||1,051||175||no remote control in '62 or '72|
|transistor radio||40||228||25||105||15||No FM or stereo in 1962|
|doctor's office visit||5||28||25||105||60||doctors usually spent much more time with patients in 1962|
|new home||15,000||85,400||40,000||168,227||145,000||new houses are generally much larger today|
|new car||2,500||14,235||4,500||18,295||21,000||many more standard features today|
|1000 kwh electricity||94|
|Some other interesting numbers:|
|median family income||6,000||33,600||14,000||58,800||55,000|
|minimum hourly wage||1.25||7.12||1.60||6.72||6.90|
|Federal/State/Local taxes||20%||N/A||30%||N/A||40%||government tries to do much more today|
Some prices are averages.
The columns marked with "***" are perhaps the most useful, for comparison purposes.
Burger Chef menu, mid 60s.
Woolworth's luncheonette menu, circa 1955.
So what does that tell us? Well, several things stand out when I look at this table:
The price of a movie ticket is way out of line. We all suspected that, but now we have the evidence.
The price of a basic office visit to a doctor is way out of line. I could provide several reasons for that, but there is not enough room on the Internet for my explanation.
The price of automobiles has risen much faster than the rate of inflation. Of course, automobiles have many more safety features and do-dads. (Did your 1965 Mustang have a DVD player in the pack seat?) But still... we are willingly spending much more money on cars. And that does not even take into consideration the fact that a quarter of us lease our cars rather than buy them. Whew! Wanna' talk about a ripoff!
The price of electronic gadgets has gone down. Can you imagine paying $228 for a small transistor radio with a 2-inch speaker? Well, in 1962, hundreds of thousands of us did.
We complain about the price of gas... perhaps because we buy so much of it. But compared to either 1962 or 1972, it has a bargain in the last decade. Hmmmm, there's some food for thought, huh?
But the item that stands out the most is the tax rate. In 1962, we paid about 20% of our income in taxes; today it is double that rate. If you do not like the price of a movie ticket, you can simply choose not to go to the movies. But no working, productive American can avoid the confiscatory tax rate.
Though there is something very significant missing in this picture: choice. If you wanted a soft drink in 1962, you could buy a Coke at a fountain in the drug store, or in a small cup from a vending machine, or in bottles at the grocery store. Generally, the price was about the same. Today you can buy a 12-ounce can, an 18-ounce bottle, a 30-ounce trough at a convenience store, or a 2-liter bottle. And the prices are all over the place. You can pay $1.00 for a 12-ounce can in a vending machine; or if you shop carefully where I live, you can buy 12-ounce cans in a 24-pack for 25 cents a can! Match that against anything in 1962! Today you can pay $15 for a pair of tennis shoes, or $125 for a pair of Air Jordans. Take your pick. You can buy a basic new car for about $21,000, or you can pay as little as around $10,000. We tend to take for granted the huge range of choices we have for consumer goods. And our kids have no idea of what it is like to have limited choices over consumer goods.
Items that involve technology are generally less expensive; or at least, their prices have gone up more slowly than others. Items that involve manual labor have generally gone up considerably more than others. This may explain why U.S. companies have been forced to rely on non-USA labor to remain competitive. U.S. labor rates have skyrocketed over the past 40 years.
The numbers on this page come from the Bureau of Labor Statistics, the Department of Labor, DePaul University, newspaper archives, the Tax Foundation... and our own memories.
This is a work in progress; we'll have more information as we dig up more numbers. What's missing? What can you add to our price comparison? Use the "contact us" link to help us complete this section at BBHQ.
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