Price Changes Over Time, Some Things Have Become Ridiculously Cheap
I’m going to be taking it a bit easy on the blog this holiday season but I still plan to post most weeks. Today I wanted to do a short post on an interesting graphic I stumbled across.
I found this chart of price changes of various items since the year 2000 from the American Enterprise Institute very interesting.
It’s crazy how cheap most electronics have become, and this chart only shows the trend since 2000. If you went back further it’d be even more stark. This past black Friday Walmart had a 64″ big screen TV for $260. That’s absurd.
What’s also probably surprising to most is that average hourly wages have risen faster than inflation. This goes against virtually everything you hear in mainstream media and the general zeitgeist.
I’ve done a few posts showing this, including one in 2018 where I ran the income numbers compared to inflation from 2016 all the way back to 1984.
The data clearly show the middle class is indeed shrinking, because so many middle class people have graduated to the upper middle class. The phenomenon of the rise in single income households has also changed how the data are seen, as this piece points out.
The obvious elephant in the room of this graph is those steep red lines. Hospital services and college tuition have gone bonkers for lack of a better term. Some claim college tuition isn’t included in the CPI inflation index, but that’s not true.
So the fact that wages are still beating inflation considering inflation does have college tuition included is impressive. And it also suggests there are a lot more items that have decreased substantially in price that are not shown on the graph above.
What’s Cheaper Lately?
The chart above is covering a 22 year period, but the current spike in inflation has recent prices on the minds of most people. GoBankingRates published an article listing 6 things that have gotten cheaper this year. Everyday staples like window treatments and fertilizer are on the list.
Haha, I jest, but they are on the list. Nothing on the list is an item that’s going to help the average person lessen the impact of inflation as most of the items are rare or specialty purchases.
What concerns most folks are things like groceries which have to be purchased often. According to Bloomberg some relief has already occurred and perhaps more is coming, we’ll see.
Where prices are going to go in the near term is anyone’s guess, but over the longer term I think it’s safe to say that in general electronics and established technology items will continue to decrease. Anomalies such as chip shortages can temporarily disrupt that of course as we saw recently.
Your Turn – Have you noticed any decrease in grocery prices recently as Bloomberg mentioned? Are you old enough to remember when a measly 19″ color TV with tubes cost $250 in 1980’s money that would now equate to over $400? Chime in!
i can assure you the cost of wine if definitely way up. however, the quality of lower priced offerings is much better than it was 20 years ago. the one thing that astounds me is the quality of an automobile between now and when i first had cars in the 80’s and 90’s.
if a car company could leave out some of the distracting junk tech and make a basic car with just a/c and cruise i think the market could be huge.
As for cheap wine, I’m a connoisseur and yes they’re fine with me but prices did go up somewhat this year. And you’re idea about a stripped down car is awesome, I think there’s a huge market for it. A neighbor of mine recently shelled out $400 to get her back-up camera system fixed. She’s reliant on the thing and can’t out of a parking spot without it. I can’t help but think much of this stuff is making us worse drivers and that’s a scary thought.
If you look at the graph, all the stuff that’s come down in price is the garbage: media devices and the tech that spew more crap media into your lives. Combine that with understated inflation for food and energy, and i see why everyone’s standard of living is getting much worse.
If only I was in the market for toys, cellphones, or a TV! It’s seems like the FI movement is taking off as people shun material things like TVs and instead put their money toward experiences and other things. Kidding, it’s tough to see how high medical costs and tuition has gone, but then again medical and student loan debt are a burden for many.
Some things I’ve found are cheaper include greeting cards, cleaning supplies, landscaping materials, athletic shoes and some furniture.
I remember just 2 years ago when I bought a fully loaded Prius with 20k miles for $20k, and now people think they can sell one with 60k miles for $30k!
I just replaced my running shoes again as they’re only good for 400-500 miles and YES, they’re were awesome deals everywhere. I’m loyal to Asics and I got new Gel Contend-7’s for $31.99! That is an affiliate link folks but I’ve been running with Asics for about 30 years and love them. Ridiculously cheap, and great shoes.
Haha that is so eye opening to me. Every year all family members, including great grandparents, give money to my wife and me to buy them toys as christmas presents for our kids. And every year it is way too much money. Especially the great grandparents get upset when their present costs one third of what they’ve been expecting. First world problem: I can’t buy that much stuff. Now, I think this graph explains a lot. Thank you 🙂
I don’t have kids so can’t vouch for the toy thing, and I guess that’s good, haha.
Average wages may have risen faster than inflation, but not nearly as much as healthcare and education — the most critical expenses listed on this graph. Doesn’t matter if your TV is cheap if you can’t pay your hospital bill.
I think healthcare expenses will continue to rise much faster than anything else and it’s scary. The obesity crisis just keeps getting worse and the resulting chronic illnesses are only multiplying in number. I don’t see that red line turning around