The cost of living between 1980-2010 shows that nominal income rose more than overall consumer prices. When you look at the price tags on consumer goods, it would seem that costs have skyrocketed over the last 30 years. If you adjust for inflation, however, the relative cost of items such as food, manufactured goods, and energy has fallen since 1980, while prices for other necessities such as housing, education, and health care have increased significantly.
Article that compares prices of expenditures from the 1980s to now:
Computers: -80.8%
Coffee: -55.9%
Coca-Cola: -54.9%
Sugar: -50.4%
Tennis Balls: -43%
Movie theater ticket: +1.1%
Bread: +3.4%
Home Price: 3.4%
Household income: +8%
Man's haircut: +8.5%
Looking at the reality of of consumer prices we see a shift in the true cost of goods and how over time many of products we use today have gone down. While health care and education have been two major costs that have increased we see many products that we use in a daily bases have substantial decreases in costs. I would love to see data on public opinion polls to see if people felt they where better off in 1980 or today and see if the data would compare to the article's information.
ReplyDeleteI agree with Tim. Although health care and education have sky rocketed and keep increasing, many goods we use everyday have decreased. Does this mean that substituted goods are less valued now..or the opportunity of luxury goods etc etc? The only difference in the 1980s was there were more jobs, so in a sense, many were better off than today.
ReplyDeleteI read a book for class called The Progress Paradox by Gregg Easterbrook written in 2003. It talks about how life in the U.S. is getting better for people, but they still somehow feel worse. The author says the percentage of Americans who describe themselves as “happy” has not moved since the 1950s even though the typical person’s real income has more than doubled through that period. Also, the portion of Americans who call themselves “very happy” has declined from about 7.5 percent in 1950 to about 6 percent today. There are many statistics and facts in the book that the author uses to tell how Americans are so much better off today in terms of material goods and services, yet they do not feel any happier. Very good read.
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