/biz/ - Business & Finance

The Spring/Summer 1980 issue of the Sears catalog offered a hammer with a fiberglass handle for $9.59. At the time, a typical worker made $6.86 per hour, so they needed to work about 1.4 hours to buy it. Today you can buy a comparable hammer from Amazon for $13.98. A typical worker today makes $27.33, which means they can buy a hammer after about 30 minutes of work—a 63 percent decline in work hours over 42 years.

I scanned through all 1,566 pages of that 1980 Sears catalog looking for items where it would be easy to make apples-to-apples comparisons like this. Almost every item I looked at saw significant declines in the hours of work required it buy it.

The most ridiculous example is the color TV. I picked the cheapest 25-inch television in the catalog, priced at $469.95 with no remote. Other 25-inch models went as high as $949.95 and came with a remote control and fancy oak, pine, or pecan cabinets. Modern flat-screen televisions, of course, are superior in many ways. And yet a similar-sized television today is a quarter the price even before you adjust for inflation.

I got the idea to look at old Sears catalogs from the Cato Institute’s Marian Tupy. I’ll use his underlying method—comparing growth in wages to growth in prices—for a bunch of the charts in this article. People often adjust past prices for inflation to see whether they’ve gone up or down over time. But there’s inherent subjectivity in inflation estimates, especially over long time periods. Directly comparing changes in wages to changes in prices eliminates much of that subjectivity and lets you, the reader, judge for yourself whether things are getting more affordable.