The Future: Back to the Past

by Don Boudreaux on November 26, 2012

in Myths and Fallacies, Standard of Living

To be precise, back to 1956.

Lately, I’ve encountered with unusual frequency claims that the 1950s were a glorious economic time for America’s middle-class – a time so glorious, what with strong labor unions and high (above 90%!) marginal income-tax rates and all, that we middle-class Americans of today should look back with longing and envy on those marvelous years of six decades ago.

So on Saturday I bought on eBay this Fall/Winter 1956 Sears catalog.  I spent an extra $8-and-change to have it shipped to me overnight – a service that I could not have purchased in 1956.  My catalog arrived on my doorstep today.  I’m eager to explore it and to report my findings with some thoroughness.

But to give you a taste now, below is a sample of what I plan to do.

Having on hand information on the nominal average hourly earnings of nonsupervisory nonfarm private production workers in the U.S. in 2012 - that figure being $19.79 (as of October 2012) - I searched for the same earnings figure for 1956.  Thus far I’ve had no luck finding that number.  (Please feel free, I bleg of you, to help me find this figure, if you so desire.)  So, for 1956 I instead use average hourly manufacturing earnings of production workers, as reported in Table 1 here.  That figure is $1.89.

This nominal wage figure for 1956 isn’t exactly comparable to the nominal wage figure that I use for 2012, but it’s close enough, at least for this first-pass analysis. If the claim of many “Progressives” is true that manufacturing is the most princely sort of work that middle-class Americans can do, then presumably this figure of $1.89 is higher than the hourly earnings of all private, nonfarm nonsupervisory workers in 1956.  Anyway….

So let’s ask: how long did a typical American worker have to toil in 1956 to buy a particular sort of good compared to how long a similarly typical American worker today must toil to buy that same (or similar) sort of good?  Here are four familiar items: refrigerator-freezers; kitchen ranges; televisions; and automatic washers.

Refrigerator-freezers

Sears’s lowest-priced no-frost refrigerator-freezer in 1956 had 9.6 cubic feet, in total, of space.  It sold for $219.95 (in 1956-dollar prices).  (You can find a lovely black-and-white photograph of this mid-’50s fridge on page 1036 of the 1956 Sears catalog.)  Home Depot today sells a 10 cubic-foot no-frost refrigerator-freezer for $298.00 (in 2012-dollar prices).  (You can find it in color on line here.)

Therefore, the typical American worker in 1956 had to work a total of 219.95/1.89 hours to buy that 9.6 cubic-foot fridge – or a total of 116 hours.  (I round to the nearest whole number.)  Today, to buy a similar no-frost refrigerator-freezer, the typical American worker must work a total of 298.00/19.79 hours – or 15 hours.  That is, to buy basic household refrigeration and freezing, today’s worker must spend only 13 percent of the time that his counterpart in 1956 had to spend.

Kitchen ranges

Sears’s lowest-priced 30″ four-burner electric range, with bottom oven, was priced, in 1956, at $129.95.  (You can find this range on page 1049 of the 1956 Sears catalog.)  Home Depot sells a 30″ four-burner electric range, with bottom oven, today for $348.00.

The typical American manufacturing worker in 1956, therefore, had to work 129.95/1.89 – or 69 hours – to buy an ordinary kitchen range.  His or her counterpart today must work 348.00/19.79 – or 18 – hours to buy the same sized ordinary range.

Television sets

Sears’s lowest-priced television in 1956 was a black-and-white (of course) 17″ model.  (You can find it on page 1018 of the 1956 catalog.)  That t.v. set was priced at $114.95.  Sears today sells no 17″ t.v. sets.  The closest set I could find at Sears was this 19″ color (of course) model, which is priced at $194.00.

The typical American manufacturing worker in 1956, therefore, had to work 114.95/1.89 – or 61 hours – to buy this tiny black-and-white (with no remote!) television set.  His or her counterpart today must work 194.00/19.79 – or 10 – hours to buy a slightly larger, high-def, color (with remote!) television set.

Automatic Washing Machines

Sears’s lowest-priced automatic washer – it could handle loads up to a maximum of 8 lbs. – sold in 1956 for $149.95.  (You can find it on page 1029 of Sears’s 1956 catalog.)  Today, Sears’s lowest-priced washer sells for $299.99.  (It’s got 3.4 cubic feet of wash-bin space; I can’t find a maximum “pound-load” for it.  Presumably, this 2012 washer isn’t significantly smaller than – and might well be significantly larger than – the low-priced 1956 model.)

The typical American manufacturing worker in 1956, therefore, had to work 149.95/1.89 – or 79 hours – to buy an ‘inexpensive’ new washing machine.  His or her counterpart today must work 299.99/19.79 – or 15 – hours to buy an inexpensive new washing machine.

(Bonus point: Because the lowest marginal personal-income-tax rate imposed by Uncle Sam in the 1950s was significantly higher than it is today, hourly middle-class earnings today go even farther, for individual earners, than they did six decades ago.)

In the above I don’t adjust for quality – yet it is certainly true what they say: “They don’t make ‘em like they used to.”  They make ‘em better.  So the real-price reductions for these above four items are even larger than indicated above.

….

In follow-up posts I’ll go into more detail, using my lovely Fall/Winter 1956 Sears catalog, to gain further insight to how middle-class Americans’ economic fortunes today compare to what those fortunes were in 1956.  I am well-aware that no such ‘catalog’ analysis covers all fronts or can possibly tell a complete picture.  Yet I also firmly believe that such analysis does convey very useful information.

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