Working for Sears Goods

by Don Boudreaux on January 30, 2006

in Standard of Living

I wish I had more time – or that my time weren’t so valuable.  I would spend more time perusing my 1975 Fall/Winter Sears catalog.

I checked out a few items from that catalog that are reasonably – though hardly fully – comparable to similar items in 2006. Then, I divided the average hourly nominal earning of production workers in 1975 ($4.87 in December of that year) into the price of each of these (more or less) randomly selected items.  I did the same for 2006 items found (with exceptions noted below) at Sears.com, dividing these prices by the average hourly nominal earning of production workers in December 2005 ($16.34).  My data are found in at this BLS site.

My aim – copying the method used by Michael Cox and Richard Alm in part of their 1999 book Myths of Rich & Poor – is to see how many hours this average American production worker must work to purchase each of these items.

Here’s what I found:

Sears’ lowest-priced 10-inch table saw: 52.35 hours of work required in 1975; 7.34 hours of work required in 2006.

Sears’ lowest-priced gasoline-powered lawn mower: 13.14 hours of work required in 1975 (to buy a lawn-mower that cuts a 20-inch swathe); 8.56 hours of work required in 2006 (to buy a lawn-mower that cuts a 22-inch swathe. Sears no longer sells a power mower that cuts a swathe smaller than 22 inches.)

Sears Best freezer: 79 hours of work required in 1975 (to buy a freezer with 22.3 cubic feet of storage capacity); 39.77 hours of work required in 2006 (to buy a freezer with 24.9 cubic feet of storage capacity; this size freezer is the closest size available today to that of Sears Best in 1975.)

Sears Best side-by-side fridge-freezer: 139.62 hours of work required in 1975 (to buy a fridge with 22.1 cubic feet of storage capacity); 79.56 hours of work required in 2006 (to buy a comparable fridge with 22.0 cubic feet of storage capacity.)

Sears’ lowest-priced answering machine: 20.43 hours of work required in 1975; 1.1 hours of work required in 2006.

A ½-horsepower garbage disposer: 20.52 hours of work required in 1975; 4.59 hours of work required in 2006.

Sears lowest-priced garage-door opener: 20.1 hours of work required in 1975 (to buy a ¼-horsepower opener); 8.57 hours of work required in 2006 (to buy a ½-horsepower opener; Sears no longer sells garage-door openers with less than ½-horsepower.)

Sears highest-priced work boots: 11.49 hours of work required in 1975; 8.26 hours of work required in 2006.

One gallon of Sears Best interior latex paint: 2.4 hours of work required in 1975; 1.84 hours of work required in 2006. (Actually, Sears sells no paint on-line, so the price I got for a premium gallon of interior latex paint is from Restoration Hardware.)

Sears Best automobile tire (with specs 165/13, and a treadlife warranty of 40,000 miles: 8.37 hours of work required in 1975; 2.92 hours of work required in 2006 – although, the price here is of a Bridgestone tire that I found at another on-line merchant.  Judging from its website, Sears no longer sells tires with specs 165/13 and a 40,000 mile warranty.

I realize that you can accuse me of bias – perusing the 1975 catalog and choosing those goods whose real prices have fallen most dramatically over the past 30 years. Certainly, a catalog of 1,491 pages has too many goods (and services, such as appliance installation) to count.

I avoided clothing (which is the first half of the catalog) because most of the clothing Sears sold in 1975 was made of polyester, or polyester/cotton blends – stuff that few of us wear these days.

And some other goods are simply incomparable across this time span. Take mattresses: Sears does sell today some mattress and box-spring sets that today are comparable to the very best set that it sold in 1975, but Sears top-of-the-line mattresses today are not comparable to its top-of-the-line mattress in 1975.  Likewise with photography equipment and audio-visual equipment: how do you compare a 2006 CD player to a 1975 turntable?

A more fundamental objection to such a practice would go like this: “Sure, prices of things sold in department stores are today much more affordable than they were in 1975, but what about health-care, housing, and education? These things require more hours of work. What does your little catalog exercise really prove about Americans’ overall standard of living?”

It’s a good question – and I believe that I have an answer.  But that answer will await a later blog post (for, unlike Sears, I don’t want anyone to say that this post “has everything!”).

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{ 47 comments }

ben January 30, 2006 at 5:43 pm

Interesting stuff. I'll add an obvious point, which is that your exercise doesn't control for changes in quality, particularly reliability. I'd bet a fridge-freezer today is more reliable than in 1975. So your figures probably understate the reduction in labor time per item.

liberty January 30, 2006 at 6:25 pm

I have been planning to do a similar test cross-national with eg America, Canada, England, France and Sweden, to see whether I agree with the usual PPP statistics. I lived in London for a short time and until Tesco, at least, the pound didn't go very far in many of the shops (except the cash and carry but they had very few items) and people earned a lower wage. To take the median wage in pounds and purchase certain basic items such as your typical grocery list (milk, bread, toilet paper, vegetables, chicken, beef, flour, sugar, eggs) and household items (sheets, lightbulbs, hardware) and then consider amount spent on rent or mortgage on a home in square footage and spent on medical coverage (which may be covered out of taxes and hence "free") and other costs; how well does the net median income cover these basic costs in each country?

Robert Cote January 30, 2006 at 7:34 pm

I'd go further and state a Sears Best fridge of 1975 was good for 5-8 years and today's 12-15 years. I'd even be remise to note that the fridge would use 1/4th-13rd the energy.

Fine. All the more reason I look forward to your following:

Taxes
Tuition
Insurance (non medical)
Medical
Housing (not imputed rent!)

Oh and make sure this is against individual wage earners and not households unless you also want to divide national child care expnditures by the number of households.

Hey, I know. Let's compare the original Star Wars. Budget and value versus Episode III budget and value. Then compare ticket prices.

I know, let's compare primary/secondary education outcomes and expenditures 1975 v. 2005. That should be a hoot. Better yet, since executive pay is such a hot topic let's look at total compensation for a 10. 20, 30 year public service employee for 1975 versus 2005.

asg January 30, 2006 at 8:31 pm

I think the most likely explanation for why things like health care and education have not declined similarly in work-price is just that government is much more involved with the production and distribution of those goods.

Robert Cote: You do realize that the whole point of comparing work time rather than just money prices is that work time corrects for inflation and other distortions of money prices, right?

Robert Cote January 30, 2006 at 10:56 pm

Robert Cote: You do realize that the whole point of comparing work time rather than just money prices is that work time corrects for inflation and other distortions of money prices, right?

But not all inflation nor productivity nor the changing nature of the job or…

Think about movies. Far cheaper to produce today but far more expensive to produce. Are the big star paychecks profits or productivity or what?

Work time is a liable to distorions as any other measure. i was pointing out some extreme measures to merely make that point.

Strophyx January 30, 2006 at 11:41 pm

Despite the ubiquitous concerns about rising health care costs, I suspect that 1975-quality health care would be less expensive today, not only in terms of hours worked but perhaps even in unadjusted dollars. The only problem would be finding a provider of that quality of health care who hadn't already had their license pulled for gross malpractice. Anyone out there interested in obtaining 1970's treatment for heart disease, diabetes or cancer?

Morgan January 31, 2006 at 12:19 am

In December of 1974, the median home (including land) cost $37,400. Mortgage rates (30-yr fixed conventional) were 9.615%. Assuming you financed 80%, your monthly payment was $254.10 (principal and interest). Hours to make the payment = 52.2.

In December of 2005, the median home (including land) cost $221,800. Mortgage rates (30-yr fixed conventional) were 6.27%. Assuming you financed 80%, your monthly payment was $1096.57 (principal and interest). Hours to make the payment = 67.1.

So you might think that housing has become more expensive.

However, the cost of the median home is sensitive to the income of the household as a whole, and median household income has risen more than the average hourly wage for a production worker. In 1974, it was $11,197, in 2005, about $44,389 * 1.03 = $45,720 (sorry, I don't have 2005 data yet, I've adjusted 2004 data for inflation).

Total annual payment on the 1974 home as a percent of 1974 median household income = 27.23, total annual payment on the 2005 home as a percent of 2005 median household income = 28.78. Roughly the same now as then.

And, of course, quality of the materials and amenities (and quantity of living space) have increased in the interim.

A little bit more (based on GDP/capita, rather than median household income) here:

http://yargb.blogspot.com/2005/12/housin-bubble-or-blowin-smoke.html

Robert Cote January 31, 2006 at 12:48 am

In 1975 the California budget was $11b and 21.5m population. $510/person. 206,000 employees. $53,400/employee.

2005 $116b 35 million people. $3300/person
330,000 employees. $351,500/employee. Productivity increases?

Running twice the rate of stated inflation. I don't even know how to compare the 2005 $18,000 in state tuition to Cal Poly SLO versus the several hundred dollars in fees in 1975.

Ivan Kirigin January 31, 2006 at 12:54 am

Don,

Can you clarify what a "production worker" is? I hope it isn't a sub-category of labor. I understand manufacturing takes up a very small percentage of jobs today.

Cote:
The obvious government intrusion today into certain areas has already been noted. Let me add that movies cost more because 1975 was pre-StarWars, aka the movie which woke up Hollywood. More money has been spent, and far more money has been made on movies since then. What a horrible example anyway, considering the immensely larger amount of inexpensive entertainment out there.

For health care, you can look at life expectancy, or the percentage of people that can get their cancer treated, or the availability of advanced surgical procedures. There are a number of measures to show meaningful improvement. Also, read this:
http://www.tcsdaily.com/article.aspx?id=013006D

For college tuition, perhaps you will be happy to note that far, far more people go to college today than 1975.

For housing, the rate of home ownership has never been higher.

Are you suggesting things aren't significantly better today? Is it a mixed bag?

Kevin January 31, 2006 at 1:12 am

Realistically the comparisons are even more favorable for today's shopper, because who the hell buys anything from Sears today? Sears was numero uno in retail 1976. Today it's a joke and people buy stuff cheaper at Wal-Mart, Sam's, Costco, Amazon, etc. Not to mention eBay fantastically greases the skids on buying used items as an alternative.

Re: your look at education … I hope you consider the real cost students pay after grants, scholarships, etc. No one pays the sticker price do they? Except rich foreigners?

Robert Cote January 31, 2006 at 1:25 am

Things are significantly better today. So much so that 1975 isn't comparable to 2005. Some things we pay more for and get much more for our money; autos. Some things we pay less for and get much more for our money consumer goods; tvs to toothbrushes. Some things we pay much much more for and get less; freeways even though the costs of construction are lower today inflation adjusted. It costs a lot lot more to get a bone set today not because the actual plaster costs more but because we have to pay fro the MRI for the indigent in the next room. See my previous post 1975 per capita California taxes in 2005 dollars; $1844. What we spent in 2005; $3300. Give me the 1975 any day; price or performance. Again the difference is one of charging the people who pay to cover those who don't. It's a gross overstatement/oversimplification but it seems the only inflation we've seen has been in the costs of expanding socialism. My particular annoyance is with the costs of public transit, not the fares, the costs. They've been running 3-4 times the rate of inflation for decades such that public transit now costs roughly 4 times per passenger mile what private transportation runs. That leads to another interesting wrinkle as most places in the US are more suburban than they were in 1975. There are some massive efficiences to be wrung from the lower costs of serving a dispersed population yet we've poured trillions in subsidies into the core cities over that same time period.

Kevin January 31, 2006 at 1:41 am

*** Anyone out there interested in obtaining 1970's treatment for heart disease, diabetes or cancer? ***

I think you're on to something, Strophyx! Instead of a high-deductible policy, let's offer a "Low-Tech" policy. No medicine, technology, or technique introduced after 1980 is permitted. No need for profligate over-testing every runny nose b/c lawsuits hadn't yet so much distorted the market.

This medical care will seem pretty barbaric but it must be better than having the dreaded "Uninsured" status.

spencer January 31, 2006 at 8:36 am

On education. the basic problem is that no one has been able to apply productivity to education. Both public and private, the best model is still some form of one-on-one teacher to student model with an upper limit of some 20 to 30 students per teacher.

Interestingly the percent of gdp we spend on k-12 education has remained esentially unchanged since the early 1970s at about 4.5%. but the share of gdp going to higher education has surged. don't remember the number off the top of my head.

If interested you can find it athttp://nces.ed.gov/

a great souce of data on education.

Slocum January 31, 2006 at 8:43 am

"Re: your look at education … I hope you consider the real cost students pay after grants, scholarships, etc. No one pays the sticker price do they? Except rich foreigners?"

Actually, I believe rather a lot of people pay 'sticker price' at state universities. Not many do a private institutions, though.

mike January 31, 2006 at 9:30 am

Actually, if you go to the IPEDS Peer Analysis System (and click to the Finance data) you can download financial data and you will find that even at the publics just about half of the students pay even the sticker price (there is of course great variation).

Further, if you look at the College Board's recent publication called "Trends in College Pricing" you will find that for the past 10 years, NET prices at publics have remained flat and have fallen at two year colleges.

Tom January 31, 2006 at 11:17 am

As to housing, a better scale might be cost per sq ft. Houses are huge compared to 1975, also add air conditioning, higher effeciency mechanicals, ect.

JABBER January 31, 2006 at 12:19 pm

What a great post and thread! I've enjoyed reading it immensely, as it squares with a question that I wish a talented econometrician would tackle, namely to compare the CPI "market basket" over time. What Don has done, augmented by many of the posters, is to essentially do this for 1975. Fascinating stuff, and a wonderful antidote to the "chicken little" economics of the (out of power) politicians.

save_the_rustbelt January 31, 2006 at 12:20 pm

In my long life I have bought 1 table saw and 2 freezers (2 of 3 from Sears and quite dependable).

So while your "Sears Index" is interesting I'm not certain it proves anything.

Bad news today on wage growth. Spectacular news on oil company profits. So who needs a middle class anyway?

(We learned about girls in the early sixties by leering at the underwear models in the Sears catalog. God bless Sears!)

John Pertz January 31, 2006 at 1:05 pm

I think Savetherustbelt is on here just so he can have a little fun with us.

Brian January 31, 2006 at 1:26 pm

Ben,

I can't say that a freezer is or is not more reliable – but (I work in manufacturing) the trend is that goods produced now will last longer, will be more energy efficient than ones produced thirty years ago.

triticale January 31, 2006 at 2:17 pm

I did a post a couple of months ago comparison shopping a 1980 Sears catalog I'd found. Being an observer of the economy and not an economist, I merely posted the dollar amounts, but my finding was similar.

As final proof things are getting better, I offered to scan and post the catalog page for Happy Mushroom Family kitchen accessories, but had no takers.

JR January 31, 2006 at 2:22 pm

Were the products in 1975 made in the US? Where are they made today?

Sure, we can borrow the money from the Chinese to maintain a high standard of living. What we're doing is mortgaging the productivity of our children in order to keep up a high standard of living for ourselves.

spencer January 31, 2006 at 2:30 pm

the use of medium family income to adjust housing costs biases the measure in the other direction because the medium family income should be adjusted for two income families — in 1975 that was just starting to become common.

Aaron Krowne January 31, 2006 at 2:39 pm

The objections to your analysis of course bifurcate along the goods/services distinction.

No one is arguing basic goods are more expensive. They aren't. That's one of our key incentives in this whole temporary US/China/Developing world imbalance arrangement.

Yet for all the benefits of cheaper goods, services have picked up the slack. I wonder if one can show that the dramatic drop in the goods portion of cost of living is a major contributor to permitting things like health care to inflate…

My point (as usual) is that we shouldn't single-mindedly cheer lower prices on DVD players (etc.) because (1) services are eating up nearly all of our savings, (2) many of these goods are being bought on credit/we have negative savings, (3) the arrangement, at least to the current extent, seems unsustainable, and (4) the current arrangment is the result of government interference in the form of short-sighted, politically-effecatious macro-economic policies.

liberty January 31, 2006 at 3:10 pm

>Sure, we can borrow the money from the Chinese to maintain a high standard of living. What we're doing is mortgaging the productivity of our children in order to keep up a high standard of living for ourselves.

Clearly you have no recognition of the fact that trade is what makes people prosperous. The Chinese can make plastics for relatively cheap – they only earn a few dollars but that is better than they had without the job and so they can sell them to us very cheap (because of this low cost of labor) and it will be *good* for them. If we made the products, we would not sell them as cheap because no Americans would do the work for less than, say, eight dollars an hour. So, instead, we build airplanes and write software, make 20-100 dollars an hour and then buy lots and lots of plastics from the Chinese. Guess who is better off? Both of us.

>the use of medium family income to adjust housing costs biases the measure in the other direction because the medium family income should be adjusted for two income families — in 1975 that was just starting to become common.

Economically or politically? A few things. One is that in 1975 many more young men, teenage boys for example, had to work and put it toward a household income. Women may have worked part time, but a big reason that they did not work much was because they were needed around the house using primitive cleaning tools (1970 dishwasher or no dishwasher) and taking care of the kids – they did not have a way to leave the household chores behind and get a job.

Today women can get a job – part-time or full-time if they want. Still many families have only one income or one primary earner, with another part-time salary. You can divide the income by the number of earners (divide by 1.5 if one is part-time) and you'll still find that today's income purchases more. But you must also ask whether its a bad thing that more women work today, whether its a choice not a necessity, and whether what the family is able to purchase goes even beyond the higher dollar value.

Owen January 31, 2006 at 3:19 pm

Things may well be better for the wealthy buyers of big fridges but struggling coffee-drinkers have fallen further and further behind. In 1975 you couldn't have paid more than 50c for a cup of joe — today it's $4 for a simple decaf vanilla non-fat latte!

Robert Cote January 31, 2006 at 3:48 pm

7-11 or Circle K have 12oz cups of coffee, real coffee for 69-99 cents. StarLeafWhatever is not the metric for coffee.

liberty January 31, 2006 at 3:54 pm

I followed up on my thought at the census site. I looked at family earners in 1975 compared with 2001 and household earners in 1980 compared with 2003 (those were the closest numbers they had). Interestingly there average *fewer* earners today, not more. I added up the number of households with each number of earners (0,1,2,3,4+) and multiplied by the earners (for four or more, I just used 4), finding the average number of earners:

in the 1975 family: 1.573
in the 2001 family: 1.569

in the 1980 household: 1.386
in the 2003 household: 1.312

So, rather than having more earners on the average contributing to the higher median incomes, we seem to have fewer.

http://www.census.gov/hhes/income/histinc/f12.html

http://www.census.gov/hhes/income/histinc/h12ar.html

Someone can tell me if I've made a mistake.

JABBER January 31, 2006 at 4:42 pm

Fascinating, Liberty. So, not only are we consuming more stuff, but it's taking us fewer people to do it? Imagine that…

Krowne makes a comment a few threads above that jiggered my memory. He wrote: "Yet for all the benefits of cheaper goods, services have picked up the slack. I wonder if one can show that the dramatic drop in the goods portion of cost of living is a major contributor to permitting things like health care to inflate…"

And, I would have to agree with him. But, whereas he SEEMS (and I may be wrong here) to think this is somehow a bad thing, I simply see it as people using that "excess" disposable income (vis a vis 1975) to purchase things they could never have dreamed of in 1975 like….Viagra! Can I get an "Amen!" :)

I think Krowne is right on…that disposable income has effectively translated itself into a rightward shifted demand curve in many services, including education (of all types) and healthcare, which has been exacerbated by gold-plated health coverage for most Americans, who then have NO incentive to do their personal part in reigning in prices. Econ 101, in other words.

But, rather than being "bad," per se (and much of it probably is bad to the extent that the incentives are wrong), think about what it brings us: improved health, quality of life, more leisure (as we hire others to do things we used to do ourselves in 1975, like clean our houses, etc). Meanwhile, think of all the cottage industries that have sprung up, such as the aforementioned house-cleaning industry (which, I'm convinced, would probably raise GDP by several tenths if it was all "on the books"!)

The memory Krown tickled was that, in the past month, I've had two people I respect a great deal tell me how hard it is to "make ends meet." I thought about that, and I realized that we ALL struggle to "make ends meet." Why? Because our consumption budget is like the proverbial goldfish…it grows to the size of the tank it's in. But that assuredely DOESN'T mean that "we're struggling"…that's just sheer human obliviousness to how good we really have it compared to…ourselves in 1975!

Thorn January 31, 2006 at 4:49 pm

How about noting the difference between a Sears '75 sale and a Sears '05 sale in terms of a dollar multiplier effect? That US production worker '75 buying a blender '75 was putting money in the pocket of a company that paid a US production worker '75 to produce something else for sale to a US production worker. Not so much the case for a US production worker '05 buying a blender '05 from Sears '05, is it?

liberty January 31, 2006 at 5:21 pm

>Not so much the case for a US production worker '05 buying a blender '05 from Sears '05, is it?

No, now you have an '05 US Software Developer buying a blender for much cheaper and far less out of his paycheck; that money goes to a Chinese man; then the remaining 99.99% of the US Software Devloper goes to buying a laptop, 2 airline tickets and trips to Disney World, seven nights out at a top-end restaurant and health insurance that will allow the Software Developer to realize that he has Carpal Tunnel Syndrome (so he can get a free massage) or epilepsy, using the new MRI machines and 5 day EEG monitoring.

liberty January 31, 2006 at 5:30 pm

And by the way, yes, disney world costs the price is does because they buy plastic from China too.

You see, we have a comparative advantage making MRI machines, airplane tickets and disney world. They have a comparative advantage making blenders and other plastics. We can spend our larger salary buying nicer stuff because we do buy a cheap blender and our companies – like Disney – buy cheap plastics from China too.

WOuld you rather spend 10% of your paycheck on a belnder made in the USA or 2% of your paycheck on a blender made in China and 10% on a trip to Disney?

You get much more for your money – and are in the end a bigger boon to the USA – if you use trade to all of our advantages.

Robert Cote January 31, 2006 at 6:05 pm

Somebody mentioned software. I'd posit (with no way to defend the assertion) that the sales price of all the software stolen by our trading partners exceeds the balance of payments we see in the trade figures. If the Fed merely accounted for those loses we'd be more realistic about our relative performance.

spencer January 31, 2006 at 7:36 pm

Liberty — you are confusing families and households. Family are related groups living together while households are unrelated individuals or groups living ogether. A freshman living in the dorm is a household but not a family. I will come back with the corect data.

spencer January 31, 2006 at 8:25 pm

Liberty this is where you need to go: to
quote——
The data in Table 3 also show that there have been important changes over time within household types. One change has been the increased labor force participation of women. Table 3 data for married couples show that, from 1969 to 1996, the proportion of wives working year-round full-time rose from 17 percent to 39 percent in households with children, from 42 percent to 60 percent in households with no children and a householder less than 40 years old, and from 31 percent to 46 percent in households with no children and a householder between the ages of 40 and 64 years. Material presented later in this report isolates the income effect of these increases in labor force participation by showing time series data on the median incomes of married-couple households both when the earnings of wives are included in the income definition and when the earnings are excluded.

http://www.census.gov/hhes/www/income/mednhhld/p23text.html

the table 2 they refer to is at

http://www.census.gov/hhes/www/income/mednhhld/t3.html

At the first reference be sure to look at this conclusion—

Although the median income of married-couples with children increased substantially between 1969 and 1996, the effect on this increase of excluding the earnings of wives from the income definition is striking. When the earnings of wives are excluded, the median income of these households showed a 2 percent increase over the period, rather than a 25 percent increase.

Married-couple households without children also had substantial gains in median income between 1969 and 1996, and again the increased importance of the earnings/income of the wife was very evident. Among households with a householder under 40 years old, median income increased by 34 percent over the period but only by 17 percent when the earnings of wives were excluded from the income definition. Households with a householder between 40 and 64 years old had an increase of 34 percent when the earnings of wives were counted, but an increase of 16 percent when the earnings were excluded.

The median income of households with a female householder with children and no spouse rose by 10 percent between 1969 and 1996, but the median income of households with a male householder with children and no spouse fell by 8 percent.

Note that this data is from Census, the same data source you used.

Moreover, if you go to the BLS you will find that the participation rate of females age 20 and over has grown from 46% in 1975 to 60% in 2005.

I think my original point about adjusting the data for the impact of wives working is
still valid.

la January 31, 2006 at 10:05 pm

Exactly what planet are you people living on? I remember 1975 quite well, and appliances,etc., were made to last for years. We had TV's for literally my whole childhood. Clothing was higher quality made with better materials. My Levi's 501's lasted for at least my whole college time and beyond. Nowdays, we have planned oblesence. Products are part of the throwaway society and they suck.

In addition, everyone in CA where I grew up could afford a nice home and Mom's didn't have to work. Almost everyone could afford to go to the doctor. People were able to fix their cars themselves, and they were made of stronger materials, so you could keep them running forever. The cars were also built in America by well paid Union labor. There wasn't as much prepared cardboard food, and people weren't as fat.

I'd take 1975 over 2006 any day of the week. It is hard to imagine how much better life was in so many ways then.

JABBER January 31, 2006 at 11:57 pm

Wow, "la." That's a nice planet you lived on! I wish I'd been there! How you can equate 1970s era TVs (!), health care, and cars (Are you kidding?! I know, I worked in the auto industry…the cars of the 1970s guzzled gas, were heavy, rusted out…in sum, they sucked!) is beyond me. And bell bottoms and polyester should utterly seal the deal!

Many moms work today, it's true, but more and more people are discovering that the incremental benefit of them (or their husbands…let's not be sexist) working is often negligible once you add in the incremental costs of childcare, work clothes, commuting (how many people in the 1970s had two or more cars, by the way?), etc., to say nothing of the intangible costs in terms of stress. But would I turn back the clock for that reason? Absolutely not, because women's human capital is being put to good use in the workforce, if not at home.

I think, "la," that your nostalgia has clouded your thinking.

Kevin February 1, 2006 at 12:13 am

Liberty: way back to your original comment. I work for a UK firm and travel there. Curious juncture right now: things seem (anecdotally) to cost the same number of pounds there as they do dollars, here. i.e, 80% more across the board (except hotel laundry, which is about 4000% more). My UK manager backs me up on this.

I'm pretty sure they do NOT get paid 80% more!

liberty February 1, 2006 at 2:29 pm

>Liberty — you are confusing families and households. Family are related groups living together while households are unrelated individuals or groups living ogether. A freshman living in the dorm is a household but not a family. I will come back with the corect data.

I'm not confusing them because I'm not comparing them; I provided both because the families went back further, but households is more appropriate.

liberty February 1, 2006 at 2:30 pm

And families are not necessarily living together – which is why it is less appropriate.

liberty February 1, 2006 at 2:35 pm

>I think my original point about adjusting the data for the impact of wives working is
still valid.

And I disagree because you've missed my point and the data that I gave you to prove it. Yes, women are working more. True. But if the number of earners in a household has actually gone down slightyly or is the same (and in a family too in case you think that households are like roomates or something and don't count) then what does it really mean?

I posit you this.

In 1975 it was difficult to make ends meet and very often teenage sons had to get a job and not go to college and be one of the earners in the family. In part this was because women were busy with the younger kids and there was not a lot of extra income to pay for a baby-sitter etc. By 2000 this had changed, incomes were higher, women were *able* to go to work and kids were able to go to college or move away from home and set up their own household, rather han help out mom and dad.

Hence, the same number of earners brings in more income now, but it is different earners – then it was dad and son, now it is mom and dad.

liberty February 1, 2006 at 2:41 pm

>I'm pretty sure they do NOT get paid 80% more!

No, in pounds they get paid a lot less, at least half. The median wage there is less than here even after adjusting for PPP. Kids get paid 3-5 pound an hour, instead of 6-10 dollars they are paid here, and the median wage when adjusted by exchange rate comes out only 80% of ours, meaning that if indeed a pound only goes about as far as a dollar, they actually only make 80% of 60% of what we make.

JABBER February 1, 2006 at 6:16 pm

What you say about wages in the UK is correct, Liberty. Their professionals are grossly underpaid compared to the US, which is probably why their economy is so moribund (as is all of Europe's), as their is little incentive to innovate due to onerous taxes and state socialism.

Anthony February 1, 2006 at 8:05 pm

"la" – cars of the 1970s are the reasons I only buy Japanese cars.

Houses here in California are more expensive now than then because local governments have made it so much harder to build new ones.

John Pertz February 2, 2006 at 2:21 am

Spencer

I was wondering if you have done any research on the effects of zoning laws on the price level. After all zoning creates ARTICICIAL scarcity within cities thereby razing values above their naturaly prevailing rate. I think this could be a significant reason why housing prices are up. Also, where I live, Winter Park, Florida, is a traditionaly planned city with grid street patterns and multi use development. People love the city because it is so unique for Central Florida. Most of Central Florida development is noted for its rather bland style of planning around big government roads and therefore people value land in Winter Park much more than they would under a naturaly occuring market order. I have a hypothesis that this current situation is one of the most severe causes of the impoverished peoples suffering. The only solution in my opinion is to restore development back to its normal market order.

Zach April 17, 2006 at 2:49 am

Interesting article, I wonder if the current online tools like Price History at price comparison sites like PriceComparison.com (http://www.PriceComparison.com) could provide us with exact data perhaps 10 years from now?

Just a thought.

Zach

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