Living with Less continued; the Real Price of Things
Sep 17, 2013 at 3:00 PM
Last week I wrote about how to live with less money along with ideas about how to get a higher paying job. Many felt that I must never had been poor. Some felt my ideas on how to live with less were time consuming and they didn’t want to do them. Some said they felt that they should be able to enjoy the same things that rich people enjoy. Others felt that my ideas were good and useful and these people helpfully added other cost savers into the mix. Still others lamented the fact that while minimum wage has risen since the 1960s, that the cost of items has too, and therefore we are worse off financially now than in the 1960s and 1970s.
I first started to think about this when I read an article that compared not the actual dollars, but the number of hours needed to work in order to buy an item. Now this is really for thinking people, so take a deep breath and think with me. When I was first working in 1969, I made $1 per hour which I believe was the minimum wage for part-time workers. At that time if I wanted to buy a new pair of shoes, they cost me $17, so it took me 17 hours of work to purchase a pair of shoes. They were nice shoes, discount outlets were not available then or at least not where I was living. Now the federal minimum wage is $7.25 per hour and I can go to TJMaxx and find a nice pair of shoes for $30. So it would take me about 4.25 hours at the current minimum wage to purchase a nice pair of shoes. If I want a really nice pair of shoes that cost say, $100, I would have to work 14 hours at minimum wage. The conclusion that I come to is that it takes fewer hours of work to purchase a pair of shoes in 2013 than it did in 1969.
Here are some charts that I made up in 2011 to look at this. I used items that I could track the price of over the years, such as a McDonald’s hamburger or a Ford Mustang. I divided those prices by the then-current Federal Minimum Wage. Interesting isn’t it?