Tuesday, June 22, 2010

Would you buy this "sound system" for $2,327?

Would you buy this "sound system" to the left for $2,326?? (that is how much $379.00 is in 2009 dollars)

There are many ways to measure living standards--some measured on an explicit level and some more implicit.  For instance, the way we calculate GDP is a measure of social welfare (largely explicit) but so is GNH (Gross National Happiness) which includes implicit welfare (i.e.environmental degradation/enhancement)...Below is a simple comparison of a product(s) produced in 1964 and 2010 contribute(ed) to leisure and the number of hours  it took(takes) the "average" person to work to purchase that item.  Were the "good ol' days" so good? I wonder how this hourly wage relative to the price/quantity of a good/service holds up over a broad range of goods and services (food, education, health care, etc). This is assuming that things today had some semblance of something produced 40 years ago...(HT: Another GREAT and relevant post from Carpe Diem)
In 1964, here's what the average American consumer could afford after working 152 hours (almost a full month) at the average hourly wage then of $2.50: a "moderately priced, excellent stereo system" from Radio Shack on sale for $379.95.

In contrast, the typical consumer today working 152 hours at the current average hourly wage of $19 could afford this "cornucopia" of electronic goods:

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