Sunday, November 6, 2016

Family History in Perspective – Inflation

Old-timers may talk about way back when bread was 5 cents a loaf. I actually remember when
gasoline was $0.30 per gallon. Sounds pretty cheap.  BUT. I got my first part time job in 1958 making minimum wage: $1.00/hour.  My mother spoke about working in the late 1930’s for $0.39/hour.  Ahhh! The good old days!

When we look at our parents and grandparents in the 1930 US Federal census records, we see the value of their homes, or what they paid monthly in rent. The numbers look pretty small. Likewise, when we find information on wages and salaries, those numbers look pretty small. So, I’ve spent a little time comparing then and now.

Using the CPI (Consumer Price Index) Inflation Calculator from the US Bureau of Labor Statistics, I see that things may not have changed that much. It is also important to realize that the world of finance was much different in the past.  It was more difficult to get a mortgage or other kind of credit.  Savings were often kept at home rather than in banks. Only the well-to-do had checking accounts.  By contrast, creditors, today are often more than willing to extend credit to almost anyone who is breathing.

A home valued at $10,000.00 in 1930 is valued in 1916 dollars at just over $144.500.00. 

In 1938 in St. Paul, Minnesota, the average annual income was $600.00 for an individual and $1700.00 per household (multiple wage earners)[i]

1938                           2016
$600                           $10,200
$1708                         $29,200

That still doesn’t look like much in today’s dollars, but this was the Great Depression when very many were unemployed.

My 1958 $1.00 minimum wage would equal $8.35 today. 

Certainly there are many more factors to consider when trying to compare yesterday’s economics to today’s; but even this simplistic comparison is interesting.

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