Tuesday, October 11, 2011
The Hidden Rise in the Cost of Living
If you were a typical American family 75 years ago, in 1936, you may or may not have had a telephone. If you did, the chances are that you were on a party line in order to save money.
You may or may not have had an automobile. Most people were a walk or short bus ride from work back then. But if you did have an automobile, you probably had only one for the family and used it sparingly.
You probably had a radio, but once you bought it — probably on the installment plan — it hardly cost you anything. Once you plugged it in, you got the stations you were going to get, and you didn’t have to pay for cable or premium channels.
Today, of course, the average family has several cell phones in addition to the land line most still keep. The monthly cost of watching television, factoring in cable, premium channels and Netflix, can easily exceed $100. And that family will have at least two cars, often making long daily commutes. Since those cars are mostly computerized, they cost the earth to repair.
Add to that the cost of buying and maintaining washers, dryers, dishwashers and solar panels, as well as having computers, printers, and other gadgets, and you have to conclude that the basic cost of living has gotten higher as society has become more technologically advanced.
That rise in the bottom line of living costs is something rarely discussed, but it’s a key part of the ongoing squeeze of the middle class. Not only have wages been stagnant, jobs less secure, health benefits less generous; the dollars people do make have to cover far more things now considered essential.
It’s a factor that makes cost-of-living comparisons a squishy business. A standard like the Consumer Price Index can give us a sense of what a dollar will buy in gasoline, groceries and rent compared to years past, but how do you factor in all the other stuff that sucks money out of our wallets?
A friend of mine likes to say that the computer companies are the new drug pushers. They get us hooked on their product so we can’t live without it, he says, then once we’re enslaved, we have to constantly spend more money on software, upgrades and new models. And really, it’s not just the computer companies. It’s all the firms that produce technological products. I still fish with the same fly rod I bought in 1984, but I’m on my fifth cell phone since 2005 and am probably not unusual in that regard.
In 1956, British Prime Minister Anthony Eden said the advanced western nations were faced with a crisis of rising expectations. But it’s really turned into a crisis of rising necessities. If you don’t have a cell phone or a computer, it’s tough to get a job, so how do you cut those things out of your budget? It’s analogous to the government problem of being bled by the cost of paying for health care as it gets better, more complicated and more expensive each year.
A century ago, in a rapidly urbanized and industrialized nation, Henry Ford saw a similar problem. He possessed a great ability to produce automobiles in large numbers, but he also realized he had to grow the market for his product. One of his answers, considered radical at the time, was to raise the pay of his workers so they could afford to buy a car. Is anyone applying that kind of thinking today to the high cost of living in modern times?