Another one bites the dust

I know what you mean, I see it regularly myself. Though I'm talking about when you're on the tail end of standstill traffic with 70 MPH traffic catching up, not drawing additional attention to the accident causing the standstill.

You're lucky if the gawkers don't cause an accident in the opposing traffic.

Paul

-- Excuse me, I'll be right back. I have to log onto a server in Romania and verify all of my EBay, PayPal, bank and Social Security information before they suspend my accounts.

Working the rockie road of the G&PX

Inflation x15???, wages x20???

If wages went up at a rate FASTER than inflation, wouldn't that effectively make the price of that kit less today than it was fifty years ago?

____ Mark

Well, Mark, your ???? imply a plea for insight, so here's how I understand inflation. But you might want to google "cost of living" for sources of the numbers. There are several.

Cost of living numbers come from various more or less official agencies. The historical ones estimate inflation rates from the middle ages onwards use factors such as the price of wheat, a day labourer's wage, etc.

Official (govt) CoL numbers are problematic, however, since the the "basket of goods" has been revised several times since the 1950s, in Canada at least twice that I know of. That's necessary because technology changes what's necessary and/or available: the fuel price component for example doesn't include the price of coal anymore, because people heat their homes with gas or oil, not coal. The price of gasoline is weighted higher because the average Canadian drives further now than then (and has to, since we prefer to live in the suburbs.)

Also, the base on which to calculate CoL increases is adjusted every few years to prevent really large numbers for current CoL. IMO, what's more significant than CoL is the CoL/wage ratio: the percentage of average income that was/is needed to buy the current basket of goods. (BTW, the "poverty threshold" is the income for which that ratio is 100%.)

To calculate an old price in today's money, multiply by the inflation factor. To calculate today's price in old money, divide by the inflation factor.

Wage inflation is a better guide to real cost IMO, because price is a proportion of my wages. That is, $1 of income now is equivalent to 5 cents in the mid-fifties. That's what counts: my budget is estimated in terms of my income, not cost of living. For a low income earner even a mild rise in cost of living will be difficult to manage. For a high income earner, even a large rise in cost of living will be barely noticeable. So wage inflation seems to me a better guide to real prices

- it measures the hit your wallet takes. To calculate the price of that $2.49 kit in terms of your wallet, multiply $2.49 by 20. Any _current_ price that's less than that for a _comparable_ product shows that the real price of that product has come down, as you infer in your comment. But it was higher back then, which is my point.

The fact that wages have inflated about 20x while CoL has inflated 15x means that on average we have more "disposable income" than we did 50 years ago. Disposable income is what's left after the necessities (as measured by CoL) are taken care of. IOW, we now have more money for toys, like model railroads. But being the ornery 'uman cusses we are, the more spare change we have to spend, the more we whinge about prices. Go figure.

I haven't seen any attempts to measure the inflation of prices for amenities, toys, and luxuries, but it's worth noting that a flat-screen plasma TV costs about the same in mid-50s dollars as a b/w TV cost then. If you know a grad student in economics, you could suggest such a study as Ph. D. project.

HTH

(snip)

I recommend you try this site and be done with it:

There are a number of inflation calculators on the Net so I ran the numbers through a few of them. The calculator here:

this result:

1955 - $2.49 2006 - $18.04

The calculator here:

this result:

1955 - $2.49 2007 - $19.53

The calculator here:

this results:

1955 - $2.49 2007 - $1938

The calculator here:

this results:

1955 - $2.49 2004 - $17.55

"Rick Jones" wrote

The world's population is now in excess of 6.5 billion.

This means that even if you happen to be a one-in-a-million kind of a guy, there are still 6,500 other guys out there *exactly* like you.

Genetically, you're one in some unimaginable huge number. 1 in {2^(23*X)}, where X is the number of variations possible in each chromosome that your Daddy and Mommy each contributed to making you. In fact, the odds are you don't exist at all. ;-)

HTH

OK, I'll accept the figures as given above, though I have questions about them (see below). The figures don't refute my point, they just make it less spectacular. I can live with that. ;-) My point was and is that we get more model railroading product and higher quality for our dollars now than we did 50 some years ago. This is especially true when you translate those dollars in time spent earning them.

You needn't read the rest of this unless you want to puzzle about cost of living, inflation, and how they are calculated. ;-)

Now for my puzzlement about the inflation figures used on those sites When I investigated the issue about a year and a half ago, the factor 15 for prices and 20 for wages stuck in my memory. I seem to recall it was a calculation prepared by The Economist. Have to check that out, I guess. Not that the actual numbers matter. What matters is what's meant by "cost of living", for that determines how it's calculated.

I checked the numbers on Aier Research, which are nearly identical to the ones you come up with. The factor of about 7.5 for both wages and prices doesn't seem right at all. They don't seem to match or illuminate the typical experience of the typical earner in Canada (and the USA). Has the US Bureau of Statistics changed the way it calculates cost of living? If so, when, how, and why? Or does it use a different base than whatever source I used that impressed me with the numbers I cited?

Anecdotally:

Re: wages: In 1957/58, when I worked for Chemcell in Edmonton, Alberta, industrial wages in that city ranged from about $1.50/hour to about $2.50/hour. Nowadays, industrial wages in Alberta range from about $25 to about $40 an hour, which gives a factor of 17 or more. Minimum wage was 69 cents/hour, now its about $6 an hour, for a factor of 8.7. A teacher's maximum wage was about $3,000 per school year, now it's about $60,000 per school year, for a factor of 20.

Re: prices: A cup of coffee cost 5 cents (it went up to to 10 cents sometime after

1960 IIRC). Now a cup of coffee costs $1 or more, giving a factor of 20 or more. A loaf of bread cost 19 cents. It now costs $2 more or less, for a factor of 10. A pair of dress shoes cost $40, now it costs about $120, for a factor of 3. A 21" b/w TV cost about $300, now a 21" colour TV costs about $150, for a factor of 1/2. A computer equivalent in power to a modern desktop computer cost about $1,000,000; the desktop computer costs less than $1,000, for a factor of 1/1,000 or less.

So it all depends on the way cost of living is calculated. I seem to recall that the factors of 15 was based on the cost of necessities, ie, minimal food, shelter, clothing, and energy. If the basket of goods used by the USA Bureau of Statistics includes amenities such an entertainment, private owned automobiles, etc, that will certainly bring the cost of living inflation factor down.

But that's enough on this topic in this forum, I think.

I'm going to assemble or finish assembling at least two kits this weekend. I promise! Scout's Honour! Really! Cross my heart! Spit and shake on it!

;-)

I vaguely seem to recall that such is the case. Some items that were included in the calculation decades ago are not included today. I do not know specifically what sort of things, but my (faulty) memory seems to be thinking of gasoline as one of the items, or perhaps heating oil/gas. I think the government may have dropped certain items such as these from the calculation in an attempt to gloss over how bad things were really getting a couple of decades ago.

I remember a big write-up on the items some years ago. One thing I remember was a piano. Everyone said WHAT! Other items as dumb are included. This is so it's far better than what you think it is !

"Wolf K." wrote

I knew you were going to say that.