An Hours Work Buys More Today
April 9, 1998
The prices of many items consumers buy are cheaper now than they were in the 1950s, when measured in the amount of work time it takes to buy them. That is the conclusion of a new study by economist W. Michael Cox of the Dallas Federal Reserve.
Here are some examples:
- Although the average price of a new home has soared from $14,500 in the 1950s to $140,000 in 1997, the average factory worker has to put in 5.6 hours to pay for each square foot -- compared to 6.5 hours in 1956.
- To buy a new car, a worker had to spend 1,638 hours on the job in 1955 -- versus just 1,365 last year.
- Buying a pound of ground beef required 23 minutes of work back then -- but only 6 minutes in 1997.
- In the '50s, a gallon of gas required 11.2 minutes of work -- compared to 5.7 minutes now.
The amount of work needed to purchase 1,000 miles of air travel is now roughly one-fourth of what it was then. And the work time needed to buy a color television has dropped from 562 hours to 23 hours.
Medical care and a college education, however, require more work time.
The study doesn't take into account the increase in taxes. But increases in employee benefits aren't included either.
Source: Rich Miller, "Good Old Days Weren't Cheaper, Study Finds," USA Today, April 9, 1998.
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