While I don’t have time to flesh this thought out
completely, it is something I have been carrying around with me for years (like
old luggage).
We are constantly bombarded by today’s version of a
journalist writing stories (to motivate advertising spending) of high prices
that are used out of context. I recently
was sent an excerpt from a Montgomery Ward catalog circa 1932, which
nostalgically told of those cheap prices of yesteryear: $1.99 for a pair of ladies’ leather
shoes; 9 cents for a pair of ladies
anklets (those are socks, to you Millennials); and so on. But there is no context there.
The Going To the Sun Road was completed in 1932. A 50 mile stretch of highway built across the
vast remote wilderness of the continental divide within Glacier National Park
at the Canadian border, it is literally carved out of rock. And for the people who built it, minimum wage
was 10 cents an hour. Granted, this
period was during the depression era and no one wants to say they are merely
better off than being depressed.
Nevertheless, let’s put that in context and take it forward.
At 10 cents per hour, a pair of Montgomery Ward ladies shoes
cost 20 hours’ worth of pre-tax minimum wage work in 1932. And a pair of socks
cost another hour’s work.
The following is a chart I built from various sources of
data, and, like the Sodoku games in the airline magazines, I left blanks. Note that my home state of Illinois has a
slightly higher minimum wage than the national minimum wage.
Let's set aside tax considerations for simplicity. If we translate Federal minimum wage of $7.25 in 2011 to 20
hours of spending, that same pair of ladies shoes would cost $145.00. Clearly, the price of shoes in minimum wage
minutes has gone down since 1932, except for those purchased by my daughters.
This exercise can be repeated ad infinitum with prices of one’s own choosing. Let’s step away from Ward’s ladies shoes for
a moment and look at gasoline and milk.
Nationwide, a gallon of gas has not really increased in price since the
first “Arab oil shock” of the early 1970s, provided the price is denominated in
minutes of minimum wage work per gallon. Oh, sure, there were a few spikes, such as
2007 and 2008. But things have settled down in the retail gasoline market and
the price is about 20 to 25 minutes. By
the way, the box around the pre-1976 era denotes leaded gasoline prices.
Milk, unlike gasoline, has decreased dramatically in price
(again, minutes of minimum wage work per
unit, only this time the unit is a half gallon). The early data is for home delivery of a
bottle of whole milk. The latter data is
for store purchase of a gallon, divided by 2.
Despite the inconsistency in the data, note that the price of a half
gallon of milk has declined from just under an hour of work in 1940 (51.2
minutes) to about 13 or 14 minutes of minimum wage work. That is, in 2012 the price of milk is less
than one-third what it was in 1940, in terms of minutes of minimum wage work,
and less than half what it was in 1969 (31.43 minutes).
Ah, 1969. What a year
it was for those poor fans of the Chicago Cubs.
Setting that story aside to be told by a real Cubs fan, let’s look at Cubs ticket prices. In 1969, even a bum could afford to sit in
the bleachers for an afternoon game at Wrigley Field for $1.00 (not including
the cost of a glass of Hamm’s). That was
less than an hour’s worth of minimum wage work.
In fact it was 37.5 minutes, which was about the price of a half gallon
of milk. Looking at today’s bleacher tickets, which are now sold by section,
the dollar price ranges from $69 to $111, depending upon one’s bleacher seating
preference. Even using the higher
Illinois minimum wage rate of $8.50, the price of a Cubs ticket ranges from
just above 8 hours of minimum wage work to THIRTEEN HOURS of minimum wage work,
translating to an increase of 13 to 21 times (that’s 1300 to 2100 percent) over
the cost in 1969. Remember, milk is down
more than 50% and gas is only slightly higher.
So the Cubs/milk price ratio went from 37.5/31.43 to 487.06/12.78 (or
783.53/12.78 for the better bleacher seats).
This represents a Cubs/milk price ratio change of 1.19 to 38.11, or
increase of 3,200 percent! And at the higher
bleacher prices, it is an increase of 5,152 percent.
Professional sports are only one area of the entertainment
industry. Expanding our thoughts into other areas, rock n’ roll concert tickets
which were $3 or $3.50 in 1969 are frequently $100 or more in 2012 (Kenny Chesney
for $180?). What is that in terms of
minutes of minimum wage work? What about
a movie date for teenagers?
I keep thinking we have succumbed to higher prices for
entertainment (in terms of minutes of …).
But I think back to Ron Santo, Billy Williams, Ernie Banks, Don Kessinger,
Fergie Jenkins, Randy Hundley and the like, and I realize we not only have
higher prices, but we also have a different definition of entertainment. There was once a fandom that paid to be present
with a team that had a heart and a soul.
Now we pay huge prices to watch a jumbotron in person and other
expensive distractions, while the latest version of a roster is presented by
upper management. Yet my milk is
fortified and I get mileage additives in my gasoline.
Mike M.
Mike M.
