Cost of Living 1962 – 2012
How Much things cost in 1962 1987 2012
Yearly Inflation Rate USA 1.20% 3.66% 1.02% Ratio ’62-’87 Ratio ’87-’12
Year End Jones Average 652 1938 12,217 3X 6X
Average Cost of new house $12,500.00 92,000 282,600 7X 3X
Average Income per year $5,556.00 24,350 40,584 4X 1.66X
Average monthly rent $110.00 400 1,020 3.6X 2.55X
Tuition to Harvard University $1,520.00 9,985 52,650 6.5X 5X
Average Cost of a new car $3,125.00 10,305 30,425 3X 3X
Eggs per dozen .32 .65 2.13 2X 3X
Gas per Gallon .28 .89 3.80 3X 4X
As bad as inflation is today it’s actually been lower for most things in the past twenty-five years compared to the previous twenty-five year period. For example the average price of a home was seven times what it was from 1962 to 1987 and only three times from 1987 to today. As we also see average car prices have stayed fairly consistent over the years rising at about a three times ratio in both periods. What is vastly different today is with regard to average income per person going from 6.5times the 1962 rate in 1987 and increasing only by a factor of 1.66 times from 1987 to the present.
So the good news is that inflation is moving slower than it was twenty-five years ago but the slowing of incomes per worker is about to steamroll us all. It’s like telling someone with a charging herd coming straight for them that the herd is slowing their speed, so instead of running you over in 1 minute it will run you over in 3 minutes !