Don Boudreaux on the stagnating middle class, presented at Cato University on 7/25/2011 Edited by Hal snarr.

Don Boudreaux on the stagnating middle class,

presented at Cato University on 7/25/2011

Edited by Hal snarr

• The nominal average wage for non-supervisory workers in the U.S. in 1975 was $4.87 per hour

In 2011 dollars, that’s $20.16 per hour

• Today’s nominal average wage for non-supervisory workers in the U.S is $19.00 per hour

First, watch Robert Reich, former Labor Secretary under Clinton (click here), argue that Americans are no better off today than they were before Reagan and “laissez faire” economics.

The good old days vs. today

1975(2011 $$s) Today

dozen eggs $3.190.16 hrs

$1.580.08 hrs

$6.500.32 hrs

gallon whole milk $3.620.19 hrs

pound ofground beef

$3.38 [1978]0.20 hrs

$2.770.15 hrs

An employee works 0.16 hours (at

$4.87/hr) to buy a dozen eggs in 1975

An employee works half as long (.08 hrs) to buy a dozen eggs

today

The good old days vs. today

1975(2011 dollars)

Today

wholechicken/lb

$3.35 [1978]0.18 hrs

$1.310.07 hrs

butter/lb $4.54 [1978]0.24 hrs

$3.610.19 hrs

large tomatoes/l

b

$1.920.10 hrs

$1.67 [1978]0.10 hrs

7.5 ozs.toothpaste

$4.42 [1970]0.17 hrs

$2.190.12 hrs

The good old days vs. today

$151.037.5 hrs

(2011 dollars)$23.69

1.2 hrs

The good old days vs. today

$3,103.97154 hrs

(2011 dollars) $239.00

32” HD LCD 720p

12.6 hrs

The good old days vs. today

$1,220.79

61.6 hrs

(2011 dollars)

21.6” LCD HD 720p

$1497.8 hrs

The good old days vs. today

$322.63(2011 dollars)16 hrs

$109

13” LCD HD 720p

5.7 hrs

The good old days vs. today

$246.27

12.2 hrs

(2011 dollars)

available at Amazon.com

$11.00

0.58 hrs

You don’t need this today because

your cell phone does it

XThe good old days vs. today

$246.27$17.60 per song (holds 14)

12.2 hrs

(2011 dollars)

iPod Nano16GB

$1795 cents per song (holds 4000)

9.4 hrs

You don’t need this today because

your cell phone does it.

X

The good old days vs. today

The least-pricey turntable:$163.45

163.45 per album8.1 hrs

(2011 dollars) $115.44$23 per album

6.1 hrs

Sony 5-disc CD player

The good old days vs. today

$1,054.73

57.3 hrs

(2011 dollars) $99952.6 hrs

MacBook Air

The good old days vs. today

$1,436.22

71.3 hrs

(2011 dollars)

4.8 hrs

$92.00

12.0 mp

You don’t need this today because

your cell phone does it

XThe good old days vs. today

Sound camera, projector, & screen

$2,069.44102.7 hrs

(2011 dollars) $42.902.3 hrs

You don’t need this today because

your cell phone does it

XThe good old days vs. today

least-pricey one:$411.8320.4 hrs

(2011 dollars) $17.530.92 hrs

least-pricey one at Amazon.com(It’s an Emerson)

You don’t need this today because

your cell phone does it

XThe good old days vs. today

$860.70 $20710.9 hrs

available fromBusinessSupply.com

(2011 dollars)42.7 hrs

The good old days vs. today

$168.66

8.4 hrs

Bridgestone Potenza165/13

$68.70

3.6 hrs

(2011 dollars)

The good old days vs. today

$786.1938.4 hrs

40,000 BTU, 2 burner62,000 BTU 5-burner gas

$249

13.1(2011 dollars)

The good old days vs. today

$1,820.93 (2011 dollars)90.3 hrs

0.9 cu. ft., 600 watts

0.9 cu ft., 900 watts

$583.1 hrs

The good old days vs. today

$827.58 (2011 dollars)

41.1 hrs

Home Depot’s least-pricey standard-sized washer

$349

18.4 hrs

The good old days vs. today

$2,814.28 (2011 dollars)139.6 hrs

Sears*Best 22.1 cu. ft & no ice dispenser

21.9 cu. ft., G.E.

$1,124.10

at Home Depot

59.2 hrs

The good old days vs. today

$765.50 (2011 dollars)

38 hrs

5.78 cu. ft. 5.1 cu. ft., Magic Chef

$299

15.7 hrs

The good old days vs. today

$661.82 (2011 dollars)

32.9 hrs

10’ x 14’

$97

5.1 hrs

10’ x 18’

The good old days vs. today

$140.68 (2011 dollars)

7 hrs

$49.99

2.6 hrs

The good old days vs. today

$2,069.27 (2011 dollars)

102.7 hrs

$698

Home Depot

36.7 hrs

The good old days vs. today

$682.72 (2011 dollars)

33.9 hrs

Eureka

$65.99

3.5 hrs

The good old days vs. today

$94.58 (2011 dollars)

4.7 hrs

$4.50at Amazon.com

0.24 hrs

You don’t need this today because

your cell phone does it

XThe good old days vs. today

$70.32 (2011 dollars)

3.5 hrs

$29.99 at Ikea

1.6 hrs

The good old days vs. today

$972.45 (2011 dollars)

68.8 hrs

$899

Home Depot’s priciest

47.3 hrs

The good old days vs. today

$868.97 (2011 dollars)43.1 hrs

$19910.5 hrs

At Home Depot

The good old days vs. today

$248.30 (2011 dollars)(the bottom one)

12.3 hrs

$67

3.5 hrs

The good old days vs. today

$41.35 (2011 dollars)2.1 hrs

$29.991.6 hrs

polyester/rayonat Target

The good old days vs. today

Apple II 1 MHz, 4KB of RAM (1977)

external floppy drive, 1 floppy disk (228 KB), 2D graphics, NO

mouse

Mac Pro Quad-Core 2.8 GHz, 3GB of RAM, 1 TB Hard Drive,

SuperDrive, 3D graphics, mouse, keyboard

132 hrs

The good old days vs. today

$0.0025 per KB of RAM$ 0.22 per MHz

$0.0000025 per storage KB (HD & SD)≈ 345 hrs

$1738.80 per KB of RAM$6955.20 per MHz

$30.51 per storage KB (floppy drive)

$6955.20 (2011 dollars) $2499

Is a non-supervisory worker better off making 4.87 per hour in 1975 or making $19 an hour in 2011?

• Suppose you are right of high school, working in a non-supervisory position.

The good old days vs. today

• You have an empty apartment, and need one of each of the durable goods listed above with the exception of 4 tires, 4 chairs, and 10 pants

• You also need to stock up on groceries (for the year). Assume you consume the following quantities a year:

The good old days vs. today

Quantitydozen eggs 21gallons of milk 23lbs of beef 65lbs of chicken 40lbs of butter 5tomatoes 10toothpaste 10

The total cost of the lower quality 1975 products in 2011 dollars is

The total cost of higher quality 2011 products is

The good old days vs. today

$33,019.011667 hours of work

$9598.91505 hours of work

Is Robert Reich correct?Was it better in the good old days?