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THE U.S. Department of Labor has provided us all with an entertaining and thought-provoking gizmo at www.bls.gov/data/inflation_calculator.htm. As its name suggests, the CPI Inflation Calculator uses the Consumer Price Index and its earlier statistical counterparts to compare buying power of one year with that of another.
Let’s take four years, 1914, 1931, 1951 and 1990, and see what the Bureau of Labor Statistics can tell us about the relative worth of things.
The year 1914 was an interesting one in the automobile business. Ford’s Model T had been on the market for six very successful years. In fact, in 1914 Ford produced more Model Ts than the combined output of the rest of the world’s auto industry.
Beginning in January of 1914, Henry Ford raised his assembly-line workers’ pay to $5/day, double the usual wage; at the same time, the work day was shortened from 9 to 8 hours. A typical Model T 4-seat Tourer cost $550. Gasoline in 1914 was 12¢/gal.
Let’s use the BLS Inflation Calculator to analyze these. Ford’s $5/day equates today to $115.70/day or $14.46/hour. The Model T’s $550 works out to our $12,727. Gasoline back then cost the equivalent of $2.78/gal. in 2012 dollars.
Jump to the depths of the Depression, 1931. A loaf of bread was 8¢. Ford’s Model A, in its last year of production, was around $400—for those who could even think about buying a new car. Yet there were also those—albeit very few—opting for a Duesenberg Model J chassis at $9500 and spending perhaps another $3000 in custom coachwork.
According to the Inflation Calculator, that 8¢ bread price equates to $1.22 in today’s money. The $400 Model A parallels a $6100 used car today. The custom-bodied Duesenberg Model J’s $12,500? A veritable Lamborghini, at $190,300.
The year 1951 has resonance with those of us of a certain age. Wife Dottie recalls her mother giving her a quarter and sending her for a loaf of bread at the Sunshine Market on 8th Street in El Centro, California. Her mother was irate when Dottie returned with the bread and only 6¢ in change. Bread for 19¢ in 1951? The BLS says this is worth $1.69 today.
Purely as a side note, her mother made out better than mine. At about the same age, I’d always return with only the purchase—and no change whatsoever.
“No, thank you,” I’d say when the grocer offered the change. I took mom’s “Never accept money from strangers” rather too generally; the grocer would save up the change for mom’s next visit.
Let’s close with a brief look at recent history (or at least “recent” to those of us still wearing outfits from then). First Class postage in 1990 was 25¢ (today’s 44¢, according to the BLS). Gasoline was $1.30/gal. (today’s $2.30). A movie theater ticket in 1990 cost an average $4.22 (today’s $7.47). And, working the Inflation Calculator backwards in time, that movie price would have equated to 49¢ in 1931.
The song Brother, Can You Spare a Dime came out in 1931. The Inflation Calculator tells us that one thin dime back then has the buying power today of $1.52, not much of a pan-handle. ds
© Dennis Simanaitis, SimanaitisSays.com, 2012