It's Getting Better? 3 - 2014
Back to The Future
Sha-la-la-la-la-la, live for today And don't worry 'bout tomorrow, hey, hey, hey. - The Grass Roots - Let's Live For Today
Jimmy Durante... alrighty then, that was quite the visit to the mid 60's. I think we have enough data for now, lets head back to the future. Mr. Peabody, set the way back machine for 2014.
Sherman, please hit the switch. Fast forward almost 50 years to the present day, 2014.
Here is the data we brought back from 1965, showing the conversion to 2005 and 2014 dollars:
1965 New car price to income ratio of 1 to 4.6 = 22%
1965 Housing price to income ratio of 2.17 to 1 = 217%
Mr. Peabody: Its very interesting to look at the same items at today's prices. Let's show the conversions from 2014 and 2005 prices to 1965 dollars and the ACTUAL 1965 price.
2005 New car price to income ratio of 1 to 1.94 = 51%
2005 Housing price to income ratio of 4.19 to 1 = 419%
According to the CPI: a 2005 dollar is worth –83% less than a 1965 dollar. Just take the conversion factor of 0.16 and mulitiply by the 2005 dollars, and Voila! You get what 2005 prices would be in 1965 dollars.
2014 New car price to income ratio of 1 to 1.57 = 63%
2014 Housing price to income ratio of 4.34 to 1 = 434%
According to the CPI: a 2014 dollar is worth –87% less than a 1965 dollar. Just take the conversion factor of 0.13 and mulitiply by the 2014 dollars, and Voila! You get what 2014 prices would be in 1965 dollars.
Sherman: Gee, these days, things being what they are, with all the wonderful hi tech gadgets, convenience, "cheaper" labor at the margin goods, and home ownership; you have to admit it's getting better all the time. Right?
Mr. Peabody: Here's where it gets really interesting. Let's compare the actual 1965 price to the 2014 price converted to 1965 dollars.
Mr. Peabody: A close examination of the numbers as translated by the CPI indicates that since 1965 median income has actually decreased -3.21%.
Sherman: Interestingly enough, in 2014 the purchasing power of the typical family is 3.1% lower than it was in 2009.
Mr. Peabody: Lets be generous and use median real household income, for those aged 15 - 34, like you Sherman, since 1965 your income has remained stagnant.
Sherman: I know, I haven't seen a raise in almost 50 years, Ahem.
Worse yet, for peak year earners aged 45-54 there has been a paltry 20% increase while gasoline +55%; cigarettes +264%; gold +385%; new car +182%; house +93%.
Please note in the above graph provided by one of our favorites Doug Short: Excepting those aged 54+, since peaking circa 2000, real median income for all age brackets has suffered sharp double digit declines.
Mr. Peabody: To make matters worse, what the CPI doesn't really take into effect is the real interest rate, that being the nominal interest rate less real inflation.
Sherman: Wow, it would seem that our standard of living has decreased. I guess thats how most people get robbed right under their noses, while their sleeping.
Mr. Peabody: Sherman my boy, literally, "At the wheel" and it is a tough pill to swallow.
More to come in Its Getting Better IV? or As Ye Sow So Shall Ye Reap.
FYI - Dave Shapiro originally wrote and recorded "Piangi Con Me" or "Cry with Me" with "The Rokes" in 1966; which was subsequently translated, changed and popularized by "The Grass Roots" in 1967 as "Let's Live For Today".
Overhauled & Updated from 05/11/2005 for 2014.
It's Getting Better? 1 - 2014
It's Getting Better? 2 - 2014
It's Getting Better? 3 - 2014
It's Getting Better? 4 - 2014
It's Getting Better? 5- 2014
Sha-la-la-la-la-la, live for today And don't worry 'bout tomorrow, hey, hey, hey. - The Grass Roots - Let's Live For Today
Jimmy Durante... alrighty then, that was quite the visit to the mid 60's. I think we have enough data for now, lets head back to the future. Mr. Peabody, set the way back machine for 2014.
Sherman, please hit the switch. Fast forward almost 50 years to the present day, 2014.
Here is the data we brought back from 1965, showing the conversion to 2005 and 2014 dollars:
| In 1965 Dollars | 1965 Price | 2005$ Price | 2014$ Price |
|---|---|---|---|
| Median Income | $6,900 | $42,780 | $52,233 |
| New car | $1,500 | $9,300 | $11,355 |
| New house | $15,000 | $93,000 | $113,550 |
| 1st class stamp | $0.05 | $0.31 | $0.38 |
| Gallon of gas | $0.31 | $1.92 | $2.35 |
| Dozen eggs | $0.53 | $3.29 | $4.01 |
| Pack of Cigs | $0.25 | $1.55 | $1.89 |
| Gallon of Milk | $0.95 | $5.89 | $7.19 |
| Ounce of Gold | $35.12 | $217.74 | $265.86 |
| Movie Ticket | $1.01 | $6.26 | $7.65 |
1965 New car price to income ratio of 1 to 4.6 = 22%
1965 Housing price to income ratio of 2.17 to 1 = 217%
Mr. Peabody: Its very interesting to look at the same items at today's prices. Let's show the conversions from 2014 and 2005 prices to 1965 dollars and the ACTUAL 1965 price.
| Item | 1965 Price | 2005 Price in 1965$ | 2005 Price | 2014 Price in 1965$ | 2014 Price |
|---|---|---|---|---|---|
| Median Income | $6,900 | $8,718 | $54,486 | $6,678 | $51,371 |
| New car | $1,500 | $4,480 | $28,000 | $4,232 | $32,556 |
| New house | $15,000 | $36,608 | $228,800 | $29,029 | $223,300 |
| 1stclass stamp | $0.05 | $0.06 | $0.37 | $0.06 | $0.49 |
| Gallon of gas | $0.31 | $0.38 | $2.40 | $0.48 | $3.69 |
| Dozen eggs | $0.53 | $0.16 | $0.99 | $0.25 | $1.95 |
| Pack of Cigs | $0.25 | $0.56 | $3.50 | $0.91 | $7.00 |
| Gallon of Milk | $0.95 | $0.52 | $3.25 | $0.47 | $3.62 |
| Ounce of Gold | $35.12 | $71.16 | $444.74 | $170.35 | $1,310.40 |
| Movie Ticket | $1.01 | $1.03 | $6.41 | $1.03 | $7.96 |
2005 New car price to income ratio of 1 to 1.94 = 51%
2005 Housing price to income ratio of 4.19 to 1 = 419%
According to the CPI: a 2005 dollar is worth –83% less than a 1965 dollar. Just take the conversion factor of 0.16 and mulitiply by the 2005 dollars, and Voila! You get what 2005 prices would be in 1965 dollars.
2014 New car price to income ratio of 1 to 1.57 = 63%
2014 Housing price to income ratio of 4.34 to 1 = 434%
According to the CPI: a 2014 dollar is worth –87% less than a 1965 dollar. Just take the conversion factor of 0.13 and mulitiply by the 2014 dollars, and Voila! You get what 2014 prices would be in 1965 dollars.
Sherman: Gee, these days, things being what they are, with all the wonderful hi tech gadgets, convenience, "cheaper" labor at the margin goods, and home ownership; you have to admit it's getting better all the time. Right?
Mr. Peabody: Here's where it gets really interesting. Let's compare the actual 1965 price to the 2014 price converted to 1965 dollars.
| Item | 1965 Price | 2014 Price 1965$ | Price Change | %change |
|---|---|---|---|---|
| Median Income | $6,900 | $6,678 | -$222 | -3.21% |
| New car | $1,500 | $4,232 | $2,732 | 182.15% |
| New house | $15,000 | $29,029 | $14,029 | 93.53% |
| 1stclass stamp | $0.05 | $0.06 | $0.01 | 27.40% |
| Gallon of gas | $0.31 | $0.48 | $0.17 | 54.74% |
| Dozen eggs | $0.53 | $0.25 | -$0.28 | -52.17% |
| Pack of Cigs | $0.25 | $0.91 | $0.66 | 264.00% |
| Gallon of Milk | $0.95 | $0.47 | -$0.48 | -50.46% |
| Ounce of Gold | $35.12 | $170.35 | $135.23 | 385.06% |
| Movie Ticket | $1.01 | $1.03 | $0.02 | 2.46% |
Mr. Peabody: A close examination of the numbers as translated by the CPI indicates that since 1965 median income has actually decreased -3.21%.
Sherman: Interestingly enough, in 2014 the purchasing power of the typical family is 3.1% lower than it was in 2009.
Mr. Peabody: Lets be generous and use median real household income, for those aged 15 - 34, like you Sherman, since 1965 your income has remained stagnant.
Sherman: I know, I haven't seen a raise in almost 50 years, Ahem.
Worse yet, for peak year earners aged 45-54 there has been a paltry 20% increase while gasoline +55%; cigarettes +264%; gold +385%; new car +182%; house +93%.
Please note in the above graph provided by one of our favorites Doug Short: Excepting those aged 54+, since peaking circa 2000, real median income for all age brackets has suffered sharp double digit declines.
Mr. Peabody: To make matters worse, what the CPI doesn't really take into effect is the real interest rate, that being the nominal interest rate less real inflation.
Sherman: Wow, it would seem that our standard of living has decreased. I guess thats how most people get robbed right under their noses, while their sleeping.
Mr. Peabody: Sherman my boy, literally, "At the wheel" and it is a tough pill to swallow.
More to come in Its Getting Better IV? or As Ye Sow So Shall Ye Reap.
FYI - Dave Shapiro originally wrote and recorded "Piangi Con Me" or "Cry with Me" with "The Rokes" in 1966; which was subsequently translated, changed and popularized by "The Grass Roots" in 1967 as "Let's Live For Today".
Overhauled & Updated from 05/11/2005 for 2014.
It's Getting Better? 1 - 2014
It's Getting Better? 2 - 2014
It's Getting Better? 3 - 2014
It's Getting Better? 4 - 2014
It's Getting Better? 5- 2014
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