Living with Less continued; the Real Price of Things

Ruth Haag
Sep 17, 2013

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?

Comments

OSUBuckeye59

Ruth,

I think you might be missing a few variables in your example that are important when comparing wages, goods and services in one year vs. another.

Your example uses a gross wage calculation vs. net income. I don't know all the taxes that would have been taken out of your pay in '69 vs. today, but I would suggest using net income in your wage calculation. And speaking of taxes, it'd also be important to note the sales tax on those pair of shoes in '69 vs. today.

I found the following website that has cost comparisons between 1966 (close enough to 1969, I think) and today: http://www.ritholtz.com/blog/201...
As you can see, the federal minimum wage for 1966 in 2013 dollars is actually higher than today's federal minimum wage. What would be interesting to know is the cost of a pair of 1966 shoes converted into 2013 dollars. Still, I assert it would be important to convert 1966 numbers into 2013 equivalent dollars, then make sure to use net income figures to determine after-tax net income.

OSUBuckeye59

Found an even better website to help in comparing 1969 to 2012 (close enough for example purposes): http://www.buyupside.com/calcula...

Using the site's calculator, $1.00 in 1969 has a purchasing power equivalent in 2012 of $6.26. Since the website's calculator is pegged to the CPI, this would therefore seem to indicate the $7.25 wage in 2012 had more buying power when compared to 1969, which in turns supports your conclusion it would take fewer work time hours to purchase a pair of shoes today than in '69.

Sandusksquach

Anyone ever notice how every privileged white person over the age of 50 has a story about how poor they were way back when?

I bet her minimum wage job was answering phones at her dad's office. Then she went to a good private college without taking on debt because her dad paid for it then she got a good job through family connections.

SamAdams

Not every "privileged white person" has a story about how poor they once were, just the ones who actually had to get off their butts and work hard for their well-deserved success.

Sure, some of them are a lot more successful than others. But I'll bet they spent some serious sweat and tears getting there! And no, not everybody who deserves more success gets it. But on balance, you get what you pay for. And that goes for education, career, even family. Your envy is showing...

Sandusksquach

You sound like you've enjoyed a very privileged life.

SamAdams

It depends on how you define "very privileged." Have I ever had to sleep under a bridge? No. Have I ever had to go hungry for a few days? Yes. Have I ever considered applying for welfare? No. Have I ever had to buy clothing and other items at thrift stores because I couldn't afford retail? Yes.

In comparison with some people in some places in the world, you're right: I'm very privileged! But then in comparison with those same people, even the poorest Americans are very privileged! Maybe more of us should stop crying about how privileged we're NOT, start appreciating how privileged we ARE, and then work hard to become even more so! Oh, but wait, that might require effort...

OSUBuckeye59

Quite a few assumptions . . . Assuming the "privileged white person" you are writing about is Ruth, perhaps Ruth did indeed answer phones at her dad's office, but what if her "pay" was in the form of deferred payment where her father paid for her college education? And perhaps Ruth answered phones ever since she was a little girl. Even if her Dad did pay for her college, it was still up to Ruth to attend classes and do well in school. Perhaps she did well enough that she was then hired post graduation based on her skills and work output.

Sandusksquach, I have no idea how old you are or your life circumstances, but I would request you not envy others you consider "privileged" as you have not walked a mile in their shoes. Our lives are what we make of them.

Sandusksquach

Most of your life is a result of factors beyond your control. Being over 50 means you automatically have privileges I will not receive. Just admit you were lucky.

OSUBuckeye59

We disagree: I don't believe most of my life is a result of factors beyond my control.

As a 54-year old, I truly am interested in learning what privileges you believe I have automatically received that you will not.

Sandusksquach

A chance to be a young adult during the greatest economic expansion in world history, for starters.

Centauri

"A chance to be a young adult during the greatest economic expansion in world history, for starters."

I wish that the internet was around in the 1960s like it is today. The internet allows a person to get a great education. I don't waste time on Facebook, twitter and the other social garbage. Get to know the truth about this once great nation and try to make change. Stop voting in the rich ruling class into public office. You do really have a choice and a chance to make change to our country.

Use the internet to start a business from home. You could buy wholesale and sell retail. Start with an eBay store as a start. You never get rich working for somebody. You get ahead by saving, investing and working for yourself.

Work to change some stupid laws. Legalize hemp and start up new businesses. The farmers will grow the crop and you will sell the products online.

http://nutiva.com/hemp/
https://store.nutiva.com/hempseed/

Get started now to make change. Time will not wait for you.

arnmcrmn

Sanduskysquach...racist much?

Sandusksquach

Old white people were given everything and then they ruined the country. Is that racist?

Centauri

"Old white people were given everything and then they ruined the country."
Is that racist?

Yes, that is really racist. White people, now old, worked for civil rights in the south during the 1960s. Young blacks were given opportunities, sometimes more than whites. There was reverse discrimination against whites when it came to education and jobs.

http://www.nbcnews.com/id/304621...
"Does affirmative action punish whites?"

donutshopguy

Sandusksquach,

I'm white and over 50. Want to trade stories of jobs, education and sacrifice?

Sandusksquach

So you were given every advantage society can provided and you managed not to go bankrupt too many times. Way to go!

The Big Dog's back

The one thing about people coming from a privileged home is that they can afford to make career mistakes. The family has their financial backs. Just facts, nothing else.

LadyC

Too bad the federal minimum wage was paid mostly to kids back then, and was a starting wage. Now it is paid for many adult jobs, and there are a whole lot more things to pay for than a car and some McD's. I'm not complaining, I think Ruth gave a lot of helpful hints about saving money. I'm white and over 50 as well, and I'm neither rich nor poor. Those are relative terms. I am, however, feeling the pinch financially, as are a lot of us. Here is another point to consider: When you did buy something in the 60s or 70s, it normally lasted a very long time, because it was made here in the U.S. by decently-paid American workers, and if it broke, a repairman could be called to fix it. There were people who fixed your shoes and service stations where you could get gas, oil, air for your tires, and your car diagnosed and fixed. Doctors made house calls and charged very little. A lot of women stayed home with the kids. I'm not saying one era was better or worse than another, but I am saying that minimum wages are not going to stretch as far as they used to.

Nemesis

I buy broken stuff at garage sales and fix it all the time. I fix my own car. I don't want a doctor to make a house call, because he won't have the tools to do me much good.

LadyC

We had a family doctor, when I was a child, who would do house calls. He was the most caring person. My mom didn't drive, and a couple times I remember him coming over and bringing medicine for me. Of course it tasted horrible back then, and I didn't have the appreciation for it as a kid, but I do now. They don't make them like Doc Parker anymore. Again, being nostalgic.

starryeyes83

Good point, My mother had a electric skillet and other appliances which lasted almost 40 years! People in those days took much better care of their belongings. Everything, back then was made better.

Nowadays, it's a dinosaur after 6 months, I had a brand new microwave which didn't last much over one year before the motor burned up. It wasn't used that much or used hard, either.

Kottage Kat

In 1969 as a new graduate LPN I made 2.03 an hour. Working full time at Memorial Hospital

kURTje

Excellent fact Starryeyes. Witnessed 1rst hand with my father who was an authority with a company & their products from Detroit. (He was with a "branded" dealership). Further when replacing an axel seal on a 1989 Chevy, figured I'd replace rear brake shoes rather than de-greasing them. Purchased new brake shoes from NAPA. Went to install new shoes & noticed that about the same amount of brake material was equal to old shoes. Finished the repair, returned cores to NAPA & told them. Parts man stated that most companies put less new product on shoes & charge more. My point is this: years ago products were better. Now they are cheapened & cost more. Not to mention most vehicles & other related OEM equipment isn't meant to be readily serviced by individuals anymore. The non-service of products is engineered by manufactures that way. Read Ward's Auto World or consult S.A.E, Society of Automotive Engineers. That's one of the many differences today's people face compared to R. Haag's time.

4shizzle

The rich can't get enough money.

That's why they moved their businesses to foreign countries.

grumpy

"Not to mention most vehicles & other related OEM equipment isn't meant to be readily serviced by individuals anymore."

Many of the things on cars are required, by regulations from the gov't, to be controlled by the on board computer. No points to set and change, even the brakes on newer cars have to have a computer told to recognize that new parts have been added so the "idiot light" won't go on and such. Most people don't have the hookups to "talk" to the on board computers. One of the reasons you don't need a tune up every 12,000 miles, now the plugs last 100,000 miles. It is called "progress". Some people need to be dragged into the present from trying to hold onto the past. Struggling to hold onto the past in such things never has worked. You have to keep up with the new tech. Welcome to the present, quit trying to stay in the past.

Nemesis

Tires now last 80,000 miles, unheard of only 15 years ago. When was the last time you had to pump the gas pedal and coax a car into starting, a regular winter occurance back in those golden days of which you speak? How jaded people are by progress.

LadyC

Kurtje is right about the vehicles, too. Even as a young lady with limited mechanical skills, I could get the big Chilton's book (remember those?) at the library, and do a lot of my own car repairs. When I did need a mechanic, I had a great guy (who, by the way was black and owned a very successful service station) who would do the repairs, show me exactly what he was doing, and let me make payments. And fed me a plate of soul food! Now, you can't even begin to fix a vehicle yourself, or get decent parts. We also used to be able to buy re-tread tires and take them to Wassner's to have them mounted (all cheap)and get where you had to go on a few bucks worth of gas, even in a great big car with a V8 engine.

Nemesis

"Now, you can't even begin to fix a vehicle yourself"

Bull. I fix my own cars all the time. If anything, it's gotten easier. Take it to Autozone, they'll plug in a code reader and tell you what's wrong.

The price to drive a mile has actually decreased, IF you don't buy a status symbol car.

LadyC

I can just do the very basic stuff with mine, I don't want to screw things up even worse by trying to fix some of the things myself. I am a bit limited on vehicle repairs these days. However, I am a pretty good troubleshooter with home appliances and things like that, and do a pretty decent fix. I have a 10 year old SUV, and my ex once put a battery in, and everything went haywire. And he is excellent with the older vehicles. I did make my battery last a whole lot longer than it was meant to, but kept off interior lights, radio, etc. When the guy plugged it in, he said I was about 600 cold-crankin' amps short of what it took to start it. Yet it started, hesitantly, every day. I'm not super religious, but I think when I would say "Please God let it start" someone was listening...

Nemesis

You can do far more these days. For $35 you can buy an ODBCII code reader, which will read the diagnostic codes. Often, the googling the code will tell you exactly what to do to fix it, and odds are good someone has posted illustrated instructions or even a video of the procedure online.

And yet some whine about technology making it so you can't fix your own car.

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