If you make a salary of $50,000 a year, it sounds like you're doing OK, until you realize that the purchasing power of that money is far less than it used to be. If you're lucky, your salary keeps pace with inflation. We think of inflation as an abstract economic phenomenon, but it is really an economic pain in the ass! Let's look at what stuff cost back in the 1950's compared to what it cost today.
A pair of U.S. Keds sneakers cost around $8.00 in 1955 compared to $350.00 for the pair of 2009 Nikes pictured. By the way, the online store where I check the price was sold out of this particular model. Those Keds withstood everything we could throw at them during a hard summer's play. Unless these Nikes can give me the power of flight, they ain't getting my hard-earned money.
Percentage cost increase since 1955: 4275%.
How about a trip to the movies. For a weekend movie in the fifties, where by the way you saw two features, not one, the price was twenty-five cents. The same ticket today in NYC costs $12.00, and you get to sit in a crappy, freezing-cold, multi-plex theater instead of the magnificent movie theaters with the plush velvet seats.
Percentage cost increase since 1955: 4700%.
Want to talk gasoline prices? In 1955, regular gas sold for 23 cents a gallon. This past summer it reached $4.00. I remember pulling up to the pump and asking for $2 worth of gas. Politicians rant about cheaper energy every time oil prices rise. The good folks at OPEC, not being fools, temporarily drop oil prices and we fall right back into line like sheep. The result of this sad farce:
Percentage cost increase since 1955: 1639%.
That Chevy you put gasoline into cost $1,900 in 1957 compared to $27,000 today. The car was made mainly of steel and chrome, not fiberglass and plastic. Repairs to the engine were simple enough to tackle without a diagnostic computer, and it seated six comfortably. I had a new '61 Impala, but for the record, you won't find a cooler car than the '57 Chevy.
Percentage cost increase since 1957: 1321%.
You look a little shaky, have a cigarette. If it was still 1955 you could buy a pack for 24 cents. Last time I looked, Camels go for around $7.50 a pack. State governments found that taxing cigarettes was a great way to raise revenue. They could take the moral high road and claim it was for health reasons, but in reality, they just wanted the money. Smoking is not only hazardous to your health, but to your wallet.
Percentage increase since 1955: 3025%.
Let's go back to the house for a double Jack Daniels on the rocks. By the way, If you bought your house in 1955, you paid $22,000. In 2008 (in a declining real estate market) the average price of an American home was $244,000. In New York City it is higher. Not a bad place to invest your money if you bought in 1955. (I won't tell you how much your property taxes, or for that matter, Jack Daniels, went up!)
Percentage increase since !955: 1009%.
Suddenly that $50,000 a year doesn't look too hot. Interestingly, from what I can find, that number is about the average family income in the United States today compared to $4,680 in 1955. That means family incomes in America have risen 968% over this period, far less than the steep increases in many of the things we buy.
When I was around 12 years old, I found out that a cousin of mine made $10,000 a year, and I was in awe of him. If only I could ever make that much money, I would live like a king! Well I'm happy to report that my dream income was attained and considerably surpassed, but sadly, ten-grand doesn't go very far these days. Welcome to the new millennium where $250,000 is the new $10,000.
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