Tuesday, October 29, 2013

If you like old pictures and ones that tell an economic story, then check this out!

I love old pictures like this one (found HERE with others of early American time periods) for a lot of reasons, but since I am an economics teacher I found the prices of Lemonade (10 cents), Peanuts and Oranges (5 cents) the most interesting.  (Photo is of Las Vegas, Nevada in 1905)

I wondered what those prices would be in current dollars (or cents).  While not a perfect measurement, I used  inflation calculator from HERE and  determined that peanuts and oranges that cost $.05 in 1905 would cost $1.26 in 2012 and a cup of $.10 lemonade would cost $2.54 as measured in current dollars!  Seems kind of expensive and I believe would be considered "luxury goods" in 1905.  

The average wage in 1905 was $.22 per hour.  It would take 23% of hourly income to buy and orange ($.05/$.22 X 100).  Today the average wage is about $20.00 per hour. An orange costs about $.20. A worker today would spend 1% of hourly income to buy an orange ($.20/$2.00 X 100).  Perspective.  Not a perfect measure of standard of living but a reference point.

Interesting to note these items look like they are being sold by the bank itself. Makes sense. That is where the money is, literally and figuratively.

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