Inflation or rather not

This post from JCW https://www.scifiwright.com/2022/09/prices-in-the-1930s/ appears to take most of its data from here https://www.thepeoplehistory.com/30sfood.html but draws a weird conclusion about inflation.

The basket of goods listed aren’t easy to compare with current prices except when they are fairly generic (e.g. “Kellogs Corn Flakes 3 Pkgs” doesn’t say the size of the packets). I picked four examples though (eggs, bacon, spinach, bananas) to do a rough comparison of the cost proportional to US average wage. Wright gives the 1931 average wage as $1,850 and I got the 2020 average wage as $55,628.60 from here https://www.ssa.gov/oact/cola/AWI.html. Median wage would have been better but I went with what I was given.

GoodUnit1930’s2020’s%of av wage 1930’s%of av wage 2020’s
eggsdozen$0.18$2.940.010%0.005%
bananaspound$0.19$0.640.010%0.001%
spinachpound$0.05$1.310.003%0.002%
baconpound$0.38$6.520.021%0.012%

All four were relatively cheaper now than then. Which isn’t surprising because they are all the kinds of goods produced at a more industrial scale now than then.

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8 responses to “Inflation or rather not”

  1. Relative prices over the course of decades is interesting for economic historians, but hardly likely to make most people feel better off now. If I could afford to put petrol in my car last month, but can’t now then I feel like my economic situation has gotten worse regardless of whether or not my gran could afford bananas.

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  2. It doesn’t look to me that affordability is of any great interest to them. As far as I can tell, inflation (especially if tolerated or managed as policy) is bad in and of itself.

    Store Of Value is one of the uses of money, so to an extent I can see where they’re coming from, but putting it above the various other concerns strikes me as quite perverse.

    I used to regularly see The Only Libertarian In Scotland down the pub. He has – or had, perhaps I should say, as I haven’t had this conversation with him in a while – a similar opinion on the terrible effects of Debauching The Currency.

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  3. We lived with extraordinarily high inflation in Brazil during the late 1980s. Since my salary went up in line with the latest figure every six months the immediate personal economic impact wasn’t that bad – although we very quickly lost all sense of ‘the value’ of e.g. a bag of oranges. Or a car. There was also an explosion of financial devices designed to help the likes of me preserve their savings, such as ‘overnight’ investments shifting our cruzados across time zones. What’s bad about inflation of course (or at least one of the things that’s bad about it) is the loss of purchasing power – such devices militated that, again when it came to the likes of me, but were not available for the less fortunate. In the end radical steps had to be taken to end the spiral.

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  4. JCW ought to be old enough to remember the worldwide stagflation of the 70s, plus the delightful scramble to get gasoline in 1973-4. Long lines, alternate days, and Mom bribed our local guy (who was named Nick [you guessed it] the Greek) with baked goods so we could get an extra gallon here and there, or sneak in when it wasn’t our day. A proud family tradition, since she and her mom had done that during WWII (though the baked goods were fancier in 1973).

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    • I particularly remember the last part, because I was in charge of keeping an eye on the cakes/pies/cookies as we sat in the line, listening to boring old peoples’ AM radio and doing homework, while smelling fumes and said baked goods.
      (Mom always had one for us at home, of course, but STILL!)

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  5. We have two factors currently causing inflation:

    1) Covid — supply chain problems continue, partly due to the loss of workers from covid death, covid illness, long covid, retirement and quitting dangerous work made worse by covid.

    2) Price Gouging — by the corporate heads to play with stock prices and tax evasion and rake in record profits, which they are hoarding, using for stock buy backs and not investing in improving the supply chain, improving salaries and work conditions to attract more workers, etc. They are quite happy to hike prices artificially and let people suffer in hopes of less liberal governments being elected in the countries where they do business and keeping the dependence on fossil fuels continuing. Then they blame it on workers wanting better salaries and benefits, etc.

    Whenever a government rattles a sabre at them for the price gouging, threatening legal action, the prices magically drop for a bit in that country and then they see if they can raise them again. Russia’s actions and the ensuing embargo also have had an effect on supply chains, but a lot of it is still companies using Russia’s war as an excuse to hike prices again.

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