Archive » August 3, 2007

Then and Now – Part I

 

Listening to the news and the constant complaints about how high prices are these days, especially gasoline, started me thinking about the cost of things in earlier years – and comparing the two.

My generation (I was born in 1928) has been something of a bridge between what Tom Brokaw has called the “Greatest Generation” (who grew up during the depression and fought in WWII) and the Vietnam era.

 

Life in The 40s

To give the current crop of young people a sense of what our lives were like when I was young, consider some of the changes my generation has witnessed:

We were born before television, before polio vaccine, before frozen foods, Xerox, plastic contact lenses, and Frisbees. There were no pantyhose, no dishwashers, clothes dryers, electric blankets, air conditioners, or drip-dry clothes.  We were also around before radar, credit cards, split atoms, the A bomb, computers, cell phones, DVD’s and DVR’s, laser beams, ball point pens, penicillin and jet airplanes. 

When I was in my 30’s it took 11 or 12 hours to fly from LA to Chicago in propeller-driven aircraft.  Today it takes about four hours to make the same trip in a jet.  And, the space shuttle and space station existed only in the imaginations of engineers and scientists.  

I saw Neil Armstrong, the first man to walk on the moon, on TV, in July 1969.  It was one of the most riveting and exciting moments of my life.  I’ll never forget it.  As a matter of fact, I can still see the images in my mind. 

Technology has progressed to the point today that everyone treats events in space more or less as commonplace.  But back then, nothing like it had ever happened, and most people thought they would never live to see it.  Landing on the moon was literally science fiction.  I’ve always loved science fiction stories, and still do - and seeing a man walk on the moon was like living a science fiction fantasy.

Although many people are still fascinated by space, they tend to take most of it pretty much for granted now.  How excited do you get today when the space shuttle comes back to earth?  Do you still watch the landings on TV or the Internet?  On the other hand, space exploration can still be fascinating, which was confirmed by the news coverage of the Mars landings some years ago.

 

Cost of Living

In the 30s, you could buy a new Chevy coupe for $600 . . . but most people couldn’t afford one.   

During WW II, a 1941 Convertible Chevy cost about $1,700.  That was the last year new cars were manufactured until the war ended in 1946, the year I graduated high school.  My first car was a 1936 Ford convertible, which I bought for $300. 

By the way, before the war, gas was only 11 cents a gallon, and during the war it was about 20 cents a gallon, if you had a ration card or stamps for it.  Comparing $0.20 a gallon in the 40s to today’s price of around $3.10 a gallon: that’s a 1,550% increase.  However, the Consumer Price Index indicates that prices in general today are 1,398% higher, so it appears that most of the increase over the 67-year period is related to the overall growth of prices.

And, speaking of rationing, how many people remember rationing?  A lot of things were rationed during the war, WWII, that is.  And, there was no nylon for women’s stockings.  It was used for parachutes.  You also couldn’t buy new box springs or mattresses made with springs.  There was very little steel available to make consumer products.  Most of it went into the war effort.  Now, even in the midst of the War on Terrorism that is raging today, we don’t have to get stamps from the government to buy basics like meat, butter, eggs, or gasoline. 

 

Prices Then and Now

Comparing the purchasing power of our money in the 60s to today’s prices, the dollar has depreciated to the point that, on average, in 2007 it takes $6.72 to buy what $1.00 bought 40  plus years ago.

A Nielsen’s Market ad for a Thanksgiving sale in 1963 offers some interesting price comparisons for common grocery items, then and now:

 

Considering that it takes $6.72 in 2007 to buy what we could get for $1.00 in 1963, a 672 percent increase, the grocery list above shows that, relatively speaking, turkey, eggs, yams, coffee and pies are all cheaper today than they were 44 years ago, while diet Pepsi and T-bone steak are more expensive.

 

Purchasing Power

Another example, gasoline, at 20 cents a gallon in the 40s required about 30 minutes of labor to buy, while at today’s prices (approximately $3.10 a gallon) it takes around 25 minutes of labor, at the minimum wage, to earn enough money to pay for it.  That still seems like a pretty good value, considering the amount of inflation since then.  Americans seem to overlook the fact that the price of gas in Europe is around $6 or $7 a gallon.  In Norway, it’s now $9 a gallon.  But, the primary reason is not inflation; it’s the high gas taxes that are imposed by their governments.

Looking at costs another way, how much labor did the $300 purchase price of my first car represent then and now, if we translate purchasing power into the hours of work that were necessary to buy food, an auto, etc.? The minimum wage in California today is $7.50 an hour, about $1,200 a month, vs. around $65 a month in the early 1940’s or $200 a month in the early 60s.  

In the 40s, people had to work about 20 weeks to pay for a $300 car.  Today, an equivalent used car at, say $6,000 would also require about 20 weeks of labor to buy, at the minimum wage of $7.50j per hour.   And, it would take about 50 weeks’ labor to pay for a $15,000 car.

Needless to say, there are other necessities that are not included in this simple analysis, such as clothing and housing and a wide variety of other products and or services.  But, all things considered, I’m not so sure it’s much more difficult for people to get by today than it was in the 40s or early 60s.  Perhaps we should stop listening to all the purveyors of gloom and doom about the economy that hold forth on the media these days.  Things ain’t so bad.  But, that’s just my opinion.

 

© 2007 Harris R. Sherline, All Rights Reserved