Carpe Diem

The fall in the ‘time cost’ of hundreds of common household products improves the lives of even the poorest Americans

blanketMuch of the nation has been in a bit of a “deep freeze” lately, as an Arctic chill has brought temperatures down to single-digits in many parts of the country. The WSJ ran a story yesterday with the title “Even for Midwest, It’s Chilly,” and reported that the wind chill fell to 50 below zero in northeast Minnesota.

The frigid winter temperatures got me thinking about a great invention – the electric blanket – which can be quite a luxury with these temperatures, and that then prompted a comparison of the “time cost” of an electric blanket fifty years ago to the cost today.

The picture above shows that a twin size electric blanket advertised in the 1962 Sears Christmas catalog (via WishbookWeb) sold for $21.74.  At the average hourly manufacturing wage in that year of $2.26, it would have taken a typical production worker more than a full day’s work – 9.62 hours – to earn enough pre-tax income to buy an electric blanket from Sears.

In comparison, the typical production worker today could earn enough pre-tax income before lunch – in only 2.75 hours – at today’s average wage of $19.26 to purchase a comparable twin size Sunbeam heated electric blanket.

Measured in time, the cost of an electric blanket has decreased by 71% over the last half century, and that’s just one example of hundreds of reductions in the time cost of manufactured goods consumers buy, including food, clothing, footwear, household furnishing, appliances, electronic products, etc.  As Don Boudreaux and I pointed out in yesterday’s WSJ:

1. The increased affordability of many of life’s “basics” – like electric blankets – means that even low-income households now have easier access to the good life than at any time in history.

2. Today, the quantities and qualities of what ordinary Americans can easily afford are closer to that of rich Americans than they were in decades past. For example, the electronic products that a teenager can afford today – iPhone, iPad, iPod and laptop computer (and electric blanket) – aren’t much different from, or inferior to, the electronic gadgets (and electric blankets) now owned by the wealthiest Americans. Or to paraphrase Jimmy P ”Paris Hilton and Bill Gates have iPads and electric blankets, and you have an iPad and an electric blanket.”

Thanks to the miracle of the marketplace, the affordable automatic electric blanket is also an example of a common household product that is available to even the poorest American today, but would have been unavailable to even the wealthiest Americans in the past.

Update: As Jon Murphy points out in a comment, you can actually get electric blankets today at prices even lower than the $52.89 Sunbeam blanket above, e.g. Walmart has Sunbeam electric blankets starting for only $24.88 (time cost of 1.29 hours) and Target has electric blankets for only $34.99 (time cost of 1.82 hours). In that case, the reduction in the time cost of electric blankets is even more impressive.  It’s amazing that the retail cost of an electric blanket today at Walmart (about $25) isn’t much more than the cost of basically the same item fifty years ago at Sears (about $22). During that period, average hourly wages have increased by a factor of 8.52 ($19.26 vs. $2.26), bringing the real cost down by more than 86% measured in hours worked (9.62 hours in 1962 vs. 1.29 hours today).

Update 2: In today’s dollars, the $22 Sears blanket from 1962 pictured above would cost $165.28, which is another way of capturing how affordable electric blankets are today. At $165, electric blankets would probably be considered to be quite a luxury item on these frigid, cold days, and unaffordable by many households.  But at the actual cost today of only $25 at Walmart, electric blankets are easily affordable by almost all households, and are considered quite commonplace, and nothing at all like a luxury item that only wealthy Americans own.

32 thoughts on “The fall in the ‘time cost’ of hundreds of common household products improves the lives of even the poorest Americans

    • The price has to be that low so that you can afford your outrageously expensive dwelling (which used to have to stretch to fit an entire family of 4) and the astronomical healthcare necessary to extend your worthless life.

      [Please don't drown in the quicksand of my sarcasm]

      • Aye, yes my life is worthless. All I do is consume consume consume and produce nothing of value. My boss just sends me paychecks to sit on my ass all day long.

        • I’ll bet if I do a blood panel and test you for 600 illnesses and allergies it’ll come back positive for something and, despite your lack of symptoms, I can at least prescribe meds that will make your life not worth living.

          • Methinks,

            I just had some gum work done. Couldn’t eat solid foods for 2 weeks. That alone was enough to make me want to kill myself :-P

          • I remember. Can you even look at scrambled eggs anymore? No? Definitely your life is worse.

            A couple of generations ago this periodontal surgery did not exist. You would have just lost all your teeth by the age of 30. Easy peasy. As a bonus, not having the option to spend money to save your choppers, you could afford your smaller wardrobe.

            We all know options are totally worthless.

      • And I do get such a warm feeling knowing the warm feeling of my blanket was made by exploiting the Chinese. I do so enjoy inconveniencing the lower classes.

        • Yes. They are WAY worse off having to make those blankets 12 hours/day instead of hanging out on the street corners causing various mischief.

  1. What about other items where technology is not as much of a factor? It used to be that one could pay for a good university education by working part time and in the summer. That education would guarantee a decent salary that would allow a man to support a stay at home wife and two kids while working around 40 hours per week and still have sufficient savings to pay off a home, health insurance, take vacations, and replace the car every two or three years. What was left over went into savings. Today an education requires a great deal of debt by the student and does not guarantee a 40 hour per week job that would allow one to raise a family.

    • Yeah….those were the good old days. When women were stuck at home, permanently dependent on men, as they gulped down barbiturates to deal with the demands and constraints of their claustrophobic lives.

      When gays were in the closet, well out of sight of sensitive eyes. When blacks had their own fountains and didn’t touch white women. When your whole family was stuffed into a house one third the size of today’s average home. When you had to save up for one black and white tv per family and if you got cancer you died. When a call on a rotary-dial wired telephone (remember when mobility was gained with an extra-long cord? Aaaah) to the next town resulted in exorbitant long distance charges. When you drove cross-country with no air conditioning or seatbelts to visit grandma, arriving smelly and greasy, because flying was only for the rich. When you had to drive from store to store to find the goods you wanted instead of having them delivered via prime shipping from amazon. When the range of goods you could buy was tiny. When clothing was so expensive your entire wardrobe would fit into that joke of a closet in your tiny house. When there was no way to listen to music while you went for a run. When you had to find payphones to call each other and nobody could touch the phone if dad was waiting for an important call from work and if your car broke down on a deserted road you had to walk to the nearest gas station and hope it was open to call a tow truck.

      Oooooh. I could go on. The good old days were awesome. Much more awesomer than today.

      • Yeah….those were the good old days. When women were stuck at home, permanently dependent on men, as they gulped down barbiturates to deal with the demands and constraints of their claustrophobic lives.

        I did not make a value judgment. I simply pointed out that it was easy to have one working parent who spent around 40 hours on the job and raise a family while paying for a home, vacations, education, health insurance, and still have cash left over for savings. That is not very likely today because most families require two working parents to make ends meet and still have little left over for savings. That is with a higher education level and more hours on the job.

        When gays were in the closet, well out of sight of sensitive eyes. When blacks had their own fountains and didn’t touch white women.

        This is not a part of the argument. We are talking about an average family and its living standards, not about social norms or welfare state programs.

        When your whole family was stuffed into a house one third the size of today’s average home.

        It is true that homes were smaller. Much smaller. But it was also true that more families used to own those homes outright and used to be able to put down 20% or more. Their property taxes were lower and their kids were better math and language skills.

        When you had to save up for one black and white tv per family and if you got cancer you died.

        Technology moves forward and improves our lives. That is not the argument. We expect progress on that front and should have seen cancer be treatable by now if government was a smaller part of the economy and did not get in the way of innovation.

        When a call on a rotary-dial wired telephone (remember when mobility was gained with an extra-long cord? Aaaah) to the next town resulted in exorbitant long distance charges.

        You can thank the markets and deregulation for that.

        When you drove cross-country with no air conditioning or seatbelts to visit grandma, arriving smelly and greasy, because flying was only for the rich. When you had to drive from store to store to find the goods you wanted instead of having them delivered via prime shipping from amazon. When the range of goods you could buy was tiny. When clothing was so expensive your entire wardrobe would fit into that joke of a closet in your tiny house. When there was no way to listen to music while you went for a run. When you had to find payphones to call each other and nobody could touch the phone if dad was waiting for an important call from work and if your car broke down on a deserted road you had to walk to the nearest gas station and hope it was open to call a tow truck.

        Yes, technology has improved our lives. But not as much as it should have. And if you look around at the essentials you have more people owning less of their homes, few people who have any savings that will help them in retirement, very expensive health care, education, tuition, high taxes, etc. The fact that my book buying is greatly improved or that I have access to great entertainment for very little money does not change the fact that to make ends meet most families need two parents working and access to student loans for the kids. And let us not forget that you are also sitting on close to $100 trillion in unfunded welfare state promises and are spending most of what comes in as income tax revenue on defence related expenditures. There is little hope of a material reduction in the deficit and hardly any chance of seeing a surplus in your lifetime.

        The simple fact is that Mark and Don use the improvements that came from technological progress to paper over the very real difficulties that face the working family in America today.

    • Yes, it still takes four musicians to play a piece of music written for a string quartet. Baumol’s cost disease explains those activities which are immune to productivity improvements. Which explains why symphony orchestras struggle to stay in business and depend on the kindness of strangers.

      A college education should still cost the same in real terms because of the fundamentals of Baumol’s cost disease but other factors e.g., the relative value of an advanced degree has grown in value, a campus building boom, a non-teacher campus hiring boom, improved student activities outside of the classroom, subsidies which skew cost decisions by administrators have combined to push tuition up at rates faster than the general rate of inflation.

      • Yes, it still takes four musicians to play a piece of music written for a string quartet. Baumol’s cost disease explains those activities which are immune to productivity improvements. Which explains why symphony orchestras struggle to stay in business and depend on the kindness of strangers.

        Symphony orchestras were always dependent on the kindness of strangers.

        A college education should still cost the same in real terms because of the fundamentals of Baumol’s cost disease but other factors e.g., the relative value of an advanced degree has grown in value, a campus building boom, a non-teacher campus hiring boom, improved student activities outside of the classroom, subsidies which skew cost decisions by administrators have combined to push tuition up at rates faster than the general rate of inflation.

        The value of an advanced degree has grown in value? I do not believe that this is true. You have plumbers and dog walkers with PhDs working for very little money. You have people who have masters in literature working at Starbucks. The price of education should have fallen substantially precisely because there are fewer physical resources required in a world where the internet can deliver content easily and cheaply. No. Prices have gone up outside of the technology areas because the currency has been depreciated by money printers and central planners. And if you do the proper accounting for all of the fees, charges, and taxes that we now pay you will see that more and more of one’s employment income is confiscated by the state than ever before. That is bad news for the middle class, which is not doing nearly as well as the two professors say.

        • The huge expansion of households making over $100k is testament to the increase in the value of a college degree regardless of the poor major choices of some who are overeducated and underemployed. But overall those with a college degree have a lower unemployment rate than those who do not. These two facts explain the increase in the value of a college degree and the increase in the cost of a college education.

          • The huge expansion of households making over $100k is testament to the increase in the value of a college degree regardless of the poor major choices of some who are overeducated and underemployed.

            Is it? I do not believe that the argument holds up to scrutiny because you do not account for inflation or the extra labour that has been added. Add the second parent working and income goes up. Add 30% to the hours being worked and the income goes up. Ignore the effect of inflation and you miss the true picture.

          • I also forgot to mention the effect of the transfer from ordinary workers to government workers. You want to see an income explosion? Go look at the suburbs around Washington. Who says that crime does not pay?

    • I grew up without that technology Vangel, and it was not great. Dad worked on that 40-hour job you speak about, and mom stayed home until the 1970s. We had one car, no air conditioning, a washer but no dryer, a black and white TV that picked up two stations you could see well without snow in good weather, an 800 sq ft house for five people with one bathroom, no boat or cottage, and vacation was a 24-hour drive from Michigan to Arkansas on backroads because there were few expressways to see the family with no teeth in a stifling hot house with no air conditioning and no screens on the windows so you had to swat swarms of flies and wasps while trying to eat. I’m sure there are other great things, but I am trying real hard to forget them.

      Yep, I’ll take now any day–rich or poor. You’ll have to excuse me now because I have to go back to work for a couple of hours sitting at home in my heated recliner with my laptop computer and wireless connection. Retirement and paid contracted work using technology is great!

      • I grew up without that technology Vangel, and it was not great. Dad worked on that 40-hour job you speak about, and mom stayed home until the 1970s. We had one car, no air conditioning, a washer but no dryer, a black and white TV that picked up two stations you could see well without snow in good weather, an 800 sq ft house for five people with one bathroom, no boat or cottage, and vacation was a 24-hour drive from Michigan to Arkansas on backroads because there were few expressways to see the family with no teeth in a stifling hot house with no air conditioning and no screens on the windows so you had to swat swarms of flies and wasps while trying to eat. I’m sure there are other great things, but I am trying real hard to forget them.

        As I have said above technology has improved our lives tremendously but that is what we expect to happen. My point is that things are not what Mark is saying they are. You now have nearly 20% of the population on food stamps, a crisis in educational loans, and a declining labour participation rate. The first wave of Boomers is beginning to retire but there isn’t enough savings to make that retirement a comfortable one. There is a growing gap between the wealthy and the middle class and a huge funding problem for health care and SS promises that those Boomers want kept. As Eric Sprott pointed out in a recent commentary seniors and Boomers were responsible for around 65 percent of the health care costs, but made up only around 40 percent of the population. This means that the demographic problem will have to be paid for by more taxes on the middle class and that means even more problems for a section of the population that has too little job security, too little in savings, and is drowning in debt.

  2. Some perspective from Johnny Cash:

    Harry Truman was our president
    A coke an burger cost you thirty cents
    I was still in love with Mavis Brown
    On the night Hank Williams came to town.

    “I Love Lucy” debuted on TV
    That was one big event we didn’t see
    ‘Cause no one stayed at home for miles around
    It was the night Hank Williams came to town.

    The ‘I Love Lucy’ show premiere was on October 15, 1951. At that time a Coke, which had real cane sugar instead of corn syrup, and a burger would cost a young man $0.30 at a sit-down restaurant. And his wage would not have the same effective tax rate as it does today.

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