Is the Cost of Living Really Rising?

According to Prof. Steve Horwitz, one contemporary economic myth is that the cost of living has consistently risen for Americans over the past century. In fact, prices are higher today than they were 100 years ago. However, prices today have been heavily influenced by inflation. One way of avoiding inflationary distortions is to look at amount of labor hours required to make a purchase. Using this analysis, Prof. Horwitz finds that most goods and services have never been cheaper.

6 Comments

  1. Matt Wavle

    Seeing both the Quality difference AND the cost per avg labor hour really puts this in perspective.

  2. gab912

    For some reason, I’ve heard some of these somewhere… Maybe in the book "Abundance" or the movie that my co-worker showed me which was "Thrive." Not sure… Maybe both…

  3. Kenny Legge

    Great information. This is not something that you hear often, but it makes perfect sense.

  4. Chocolate Thunder

    What about things like housing?

  5. Anonymous

    The quality of things has gotten better. However based on this information you are still considered poor if you make $19.40. This is the average ‘industrial wage’ due to industrial wages being heavily unionized. The average wage in the US in 2013 overall is only $16.87. (http://www.bls.gov/) So more than half of wage earners are making less than what they would need to make for this argument to be correct. For his argument to be mathematically correct wage earners would need a 15% raise. Also I agree that competition does make everyone have everyone have to offer more for less, the people who have been hit with the most competition are wage earners. Who despite being the most educated generation ever, find it hard to find those jobs that pay $19.40. The unions that have eliminated some of the competition for wage earners in the ‘industrial’ sector have not had to become as inexpensive and thus can claim the $19.40.

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