Economics

Got to Admit It’s Gotten Better

For those who have started shopping for holiday gifts this year, it might boost your holiday spirits if you realized that there’s never been a better time in history to be a consumer. When considering all of the relevant variables: retail prices, selection, quality, and average wages, there’s no question that today’s consumers have it much better than any previous generation of holiday shoppers.

One way to illustrate your good fortune of being a holiday shopper today is to measure the cost of goods by the number of hours it takes working at the average hourly wage to earn enough income to purchase typical consumer products at their retail prices, and then compare the “time cost” of goods from the past to today’s “time cost” for similar items.

For example, the retail price of an automatic Kenmore two-slice toaster advertised in the 1958 Sears Christmas Catalog (available here online, pictured below) was $12.95, or 6.54 hours of work at the average hourly manufacturing wage of $1.98 in 1958 (wage data here). Today you can buy a comparable Kenmore two-slice toaster for $27.99, and the “time cost” would be only 1.52 hours of work at the current average hourly wage of $18.39, for a reduction of almost 77 percent since 1958 in the amount of work hours required to earn the income necessary to purchase a toaster. Additionally, the Sears website today features more than 100 different toasters, compared to the Sears catalog in 1958, which only featured a few different models.

toasternew1
Next consider television sets, a fairly common holiday gift. In 1958, American holiday shoppers paid $269.95 for Sears’s “best 24-inch console TV” (see photo below), or 136.34 hours of work at the average hourly wage then. Today you can purchase a Sansui 26-inch widescreen LCD high-definition TV (see picture) on the Sears website for about $350 (or choose from the several hundred other TVs available), which would be a “time cost” today of only 19.03 hours of work, an 86 percent reduction in the price compared to the 1958 TV.

tvnew1
Finally, consider the “best stereo sound” equipment Sears had to offer in 1958, which was advertised for sale in its Christmas catalog for $84.95 (see picture below), boasting that “You’ll be amazed at the ‘living sound’ you’ll hear on this newest development in portable phonographs. Four tubes per rectifier. Hear every note, every shading of tone.”

I don’t think anybody today would be too amazed at the sound quality of that 1958 state-of-the-art stereo equipment, and nobody would trade his or her iPod for that system, especially considering that the time cost of today’s iPod (12.51 hours of work at today’s average hourly wage) is almost 71 percent cheaper than Sears’s best stereo equipment in 1958 (42.9 hours of work at $1.98 per hour).
stereonew1

These are just several cases of the many thousands of examples of how most goods today (electronics, clothing, food, appliances, and automobiles) are cheaper and better than ever before (see my related posts here and here), and are available today with much greater choice and selection than any time in the past. If you’re not convinced, spend some time browsing the old Sears, Wards, and J.C. Penney’s Christmas catalogs available here back to the 1930s, convert those old retail prices into their “time cost” equivalent using that year’s prevailing hourly wages, and you’ll quickly see that there has never been a better time to be a holiday shopper than right now. To paraphrase AEI president Arthur Brooks, “If you’re not grateful to be an American holiday shopper this season, you’re not paying attention.”

Comments are closed.