Those of us who are older than your average Internet surfer made our associations of "what a dollar is worth" under different conditions than those occurring today. I've learned to divide everything I see by 10 to assess whether something is expensive or cheap, and that seems to be a slight overcorrection (the BLS inflation calculator says that $1 in 1951 money is equal to $8.47 in 2011, a 3.6% per year increase, compounded annually). So when I look aghast at movie admission prices of $10, I'm right. Those $10 tickets are $1.18 even deflated back to 1951, and that's a lot of money! (I remember that movie tickets were 40¢ for adults and 25¢ for kids back then.) So that's a good reason I haven't seen a movie in almost a decade. Stamps are another major increase — the 3¢ stamp of 1951 is now 44¢, which is more than 5¢ in 1951 money (almost double!) or putting it the other way, that 3¢ stamp should have only gone to a bit over 25¢ in 2011.
Still, making those conversions is hard on the mind, and I don't always remember to do it. I don't own a car, but $4 a gallon gasoline looks like a lot to me. I used to pass a gas station every day when I walked to school in 1951, and the price for gas was 27.9¢ for regular and 29.9¢ for hi-test. (There were only two grades of gas at most stations then, not 3!) Nowadays, that would be $2.36 and $2.53. Yes, $4 is expensive!
But I wish a dollar would stay constant. I guess that's the appeal the gold standard has for so many people. Prices stayed a lot more stable. A hundred dollars in 1913 (the earliest date the BLS calculator provides) equaled $131.31 in 1933 (the year we went off the gold standard), only a 1.4% annual increase (compounded). People in those days had no need to keep adjusting their psychology.
When I was a kid, my goal was to earn $100 a week. That was what a "good salary" meant. Now, I'm collecting Social Security, not working at all, and getting more than three times that. But I don't feel rich! I'm getting a lot more than the average Social Security payment, because I was, for a few years, doing really well, and that's factored into the payment. But let's be real! The $55,000 (roughly) I was making in 1994 was really $9,650 (again, rounded off) in 1951 dollars — yes, a pretty good salary, almost $186 a week where I thought $100 was a goal. But it was hardly the princely sum it might have appeared to me if I'd been told in 1951 that that would be my peak income! And the $1400 a month (again, rounded) that I'm getting in Social Security benefits would be about $165 in 1951 dollars — that's per month, not per week, so I'm subsisting on a pretty skimpy amount! But I am getting by; there are a lot of people getting much less than I am. So I can't really complain. I don't have to work any more, and yet I'm not starving. Still, it's hard to look at a price and understand whether it is high or low.
Still, making those conversions is hard on the mind, and I don't always remember to do it. I don't own a car, but $4 a gallon gasoline looks like a lot to me. I used to pass a gas station every day when I walked to school in 1951, and the price for gas was 27.9¢ for regular and 29.9¢ for hi-test. (There were only two grades of gas at most stations then, not 3!) Nowadays, that would be $2.36 and $2.53. Yes, $4 is expensive!
But I wish a dollar would stay constant. I guess that's the appeal the gold standard has for so many people. Prices stayed a lot more stable. A hundred dollars in 1913 (the earliest date the BLS calculator provides) equaled $131.31 in 1933 (the year we went off the gold standard), only a 1.4% annual increase (compounded). People in those days had no need to keep adjusting their psychology.
When I was a kid, my goal was to earn $100 a week. That was what a "good salary" meant. Now, I'm collecting Social Security, not working at all, and getting more than three times that. But I don't feel rich! I'm getting a lot more than the average Social Security payment, because I was, for a few years, doing really well, and that's factored into the payment. But let's be real! The $55,000 (roughly) I was making in 1994 was really $9,650 (again, rounded off) in 1951 dollars — yes, a pretty good salary, almost $186 a week where I thought $100 was a goal. But it was hardly the princely sum it might have appeared to me if I'd been told in 1951 that that would be my peak income! And the $1400 a month (again, rounded) that I'm getting in Social Security benefits would be about $165 in 1951 dollars — that's per month, not per week, so I'm subsisting on a pretty skimpy amount! But I am getting by; there are a lot of people getting much less than I am. So I can't really complain. I don't have to work any more, and yet I'm not starving. Still, it's hard to look at a price and understand whether it is high or low.
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