The Richwood Report

For those who enjoyed the post on the Consumer Price Index, here is a link to an article from a man who compiled his own. He consulted old magazines, catalogs, memory and other sources to compare current conditions with those in 1968. There are a lot of interesting comparisons and a discussion of what makes economic progress. For a really revealing comparison, look particularly at costs for education, food and housing. Here's a sample of his conclusions:

Let’s look at the data from the perspective of income growth. Total unadjusted US wages and salaries grew from $465 billion in 1968 to $5249 billion in 2004, a growth factor of 11.29. If we divide by the population growth factor of 1.48, we get a nominal per-capita wage growth of 7.62. This means that if we use the Freebuck.com inflation rate, real aggregate personal income was negative during the last 36 years because prices rose faster than wages.

The aggregate per-capita income figures stated above apply to the population in general, both working and non-working. We now have a much greater percentage of the adult population working as shown by the civilian labor force which grew by a factor of 1.91. This means that per-worker income growth (real individual wages and salaries) is in decline. In fact real wages have dropped substantially using the new inflation calculation. This result validates the widespread belief that two incomes are now needed to provide a family with an adequate standard of living.

I knew I should have bought that guitar in 1968!