B24—Lancaster Farming, Thursday, December 24,1981
The Average Wage Earner of 1930 Worked Nearly Twice as Long to Buy the
Same Amount of Food 1
(T)
110 mm. J
'Based on average annual income and the cost for a comparable "basket" of foods representing average quantities purchased by
urban wage earners in 1967 from 1 hour's work.
LANCASTER The nickel beer,
quarter-a-loaf bread, and dollar-a
pound steak may sound like
reminders of the “good old days,”
but the fact is that food is a much
better bargain today.
While retail food prices are more
than four times higher than a half
century ago, the average worker’s
paycheck is more than 11 times
higher.
As a result, the typical wage
earner worked only 61 minutes in
1980 to buy the same basket of
foods that required almost 2 hours
work in 1929, says USDA economist
Lloyd Teigen.
These figures don’t mean that
food is getting 4 ‘cheaper” every
year even in terms of hours
worked. That same food basket
that took 61 minutes of work in 1960
required a minute less in 1967. The
reason: grocery store prices rose,
155 percent, while hourly wages
rose only 151 percent.
But economists say that food
price rises have been relatively
modest compared with other
prices in the economy. For
example, food prices more than
doubled during the 1970’5, while
fuel prices more than tripled,
Today’s Food Costs Compare Well With “Good Old Days” 1
Total food
Cereals and
bakery products
Margarine
Sugar and sweets
Nonalcoholic
beverages
Fresh fruits and
vegetables
Processed fruits
and vegetables
Meats
Beef and veal
Pork
Poultry
Fish
Dairy products
Eggs
'Consumer Price Index relative to after-tax income per member of the labor force.
1930
1960
Measuring food
based on the consumer price index
(CPI).
A better way to measure the
“real cost” of food to consumers.
Teigen says, is to take into account
the growth in after-tax income of
each breadwinner (personal
disposable income).
To do this, Teigen devised an
index which compares food prices
to disposable personal income per
member of the labor force.
This translates the .price of
beefsteak into an index of work
time, while comparisons based on
the CPI can only express the price
of beefsteak as so many units of
other consumer goods.
Besides adjusting for inflation.
Teigen’s index separates the
growth in family income from the
trend in recent years of more
family members going to work. In
other words, this index prices food
in terms of a proportion of working
time required, or leisure given up.
Using the Index
By this yardstick, food costs fell
more than 2.5 percent annually
from 1947 to 1972, then shot up 11
percent from 1972 to 1974. Since
then, the index has stayed on a.
plateau which has seen year-to-
1940
Starting Time Sam
1970
1940 1950
177.8
188.4
281.3
206.1
147.0
218.2
158.6
167.7
152.5
370.2
132.3
201.0
323.2
eosfs
year variations of less than 3
percent.
Using the CPl’s standard market
basket of food a widely used
measure of food price movement
let’s examine Teigen’s food
price indexes for the items in that
standard basket (see table).
The index fell from almost 180
points in 1940 to less than 95 points
in the early 1970’5, just before farm
prices boomed. Last year, the
index hit 101.2. In other words, food
costs were far higher in 1940.
Peeking into the basket, some
items are better bargains than
others in real price terms.
From 1940 to 1980, food costs fell;
About 37.6 percent for all meats.
Around 79.5 percent for poultry.
55 percent for dairy products.
64.7 percent for margarine.
55.8 percent for processed fruits
and vegetables.
For cereals arid baked goods,
about 48 percent.
For sugar, 34.2 percent
What is the likelihood that food
prices will stay at such relatively
modest levels in future years? The
answer depends greatly on the'
1960' 1970 1980
1967=100
122.4
156.2
121.1
139.4
209.6
123.2
158.9
125.3
181.8
127.3
122.8
146.3
139.9
156.8
168.3
121.3
179.9
128.1
160.4
113.6
297.3
148.7
153.2
118.2
122.9
152.2
248.2
157.4
1950
1980
(Turn to Page 826)
Farnsworth Farm
Supplies, Inc.
103 Cemetery Street
717-584-2106
| Lancaster, PA
96.3
101.2
91.3
99.3
88.9
96.5
135.7
98.4
157.4
95.1
100.4
91.1
96.4
98.6
98.9
100.2
107.5
97.1
83.1
. 90.9
75.9
131.3
98.9
93.7
90.4
118.0
67.5
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Paul Shovers, Inc
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400 N. Antrim Way
P.O. Box 97
717-597-2176
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R D. 3, Box 13
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215 488 102 b
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lan D
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717-734-3682
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30 Evergreen Road
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Paul Shovers, Inc
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EdwardsParm
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«t. 29
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Marlin W. Schretfler
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717-6481120
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Brooks Ford Tractor
W. College Ave.
814-359-2751
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. C E. Wiley & Son, Inc
101 South Lime Street
717-786-2895
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Rmgtown Farm ,
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717-889-3184
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R B. Miller, Inc
N Seneca St
717-532-4178
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I G. Sales
Box 149
215-257-5135
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Charles S Snyder, Inc
R.D. 3
717-386-5945
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M.S. Yearsley & Son
114-116 East
Market Street
215-696-2990
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S.G. Lewis & Son, Inc
R.D. 2. Box 66
215-869-2214
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Walter G. Coale, Inc.
2849-53
Churchville Rd.
301-734-7722
Rising Sun. MD
Ag. Ind.
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12Q7 Telegraph Rd
301-398-6132
301-658-5568
215-869-3542
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Leslie G Fogg, Inc
Canton &
Stow Creek
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R D. 3
609-451-2727
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Frank Rymon & Sons
814-793-3791
Woodstown, NJ
Owen Supply Co
Broad Street &
East Avenue
609-769-0308