Thoughts on cost of living

I've mentioned History in Pictures a few times before, and they recently posted a picture of some cost-of-living figures from 1938.
What was interesting to me are the relative increases over that time period.
The Consumer Price Index (CPI) has increased 16.6 fold over those seventy-six years, which feels like a lot. But there was a breakdown, and that's what I find interesting.
Harvard's tuition (as a proxy for college education, I suppose) has increased 105-fold, which is far the largest. What would probably be interesting here is to see the actual progression on that. I would bet that a large percentage of that increase is over the last twenty years (it's been around ten percent annually for a while now).
Houses have increased 67 fold, which is the second largest. Movies are next at 38-fold, a tiny bit ahead of gas, cars, and rent (37, 36, and 35, respectively).
All of these are well ahead of income, which is only 29-fold. All of these are well ahead of CPI, but here's another place where I'd been curious to see what the rate of increase is. The reason for that is that I know that, outside of the top one percent, income has not outpaced inflation over the last thirty years or so.
There were a couple of others. Stamps have increased 16-fold, almost exactly on par with CPI.
There were also numbers for several food items. And the multiples of those were all single digits, which makes me wonder about including food in CPI calculations. I guess they are necessities, though.
I guess what I wonder most about, though, is why houses (especially) and cars have increased so much faster than inflation. The average house was less than three times annual salary back then, and is now more than fives times as much. That's a striking distance, to me. Part of that relates to availability (and terms) of loans, I'm sure, but I wonder what else is involved.

No comments:

Post a Comment