Inflation: The Invisible Tax (Explained)

[Bastiat's The Law]

Let's see what you guys make of my numbers.

1960

Median Family Income $5,600

Purchasing Power of $5,600 income in 2012 dollars = $139,924.73

Median Male Income $4,100

Purchasing Power of $4,100 income in 2012 dollars = $102,444.89

Median Female Income $1,300

Purchasing Power of $1,300 income in 2012 dollars = $32,482.52

Full Time Employed Male $5,400

Purchasing Power of $5,400 income in 2012 dollars = $134,927.42


1960 Minimum Wage was $1.00

1960 Quarters contain 0.1808 oz of Silver

(4) Quarters x 0.1808 oz = 0.7232 oz of Silver

0.7232 oz of Silver x $34.55 (current Silver price) = $24.98

1960 Minimum Wage was equal to $24.98 into today's money.

What this all means is unless you're making $24.98/hour you're living far below the standards of living your parents experienced in 1960. You must gross $134,927.42 in today's money just to be on par with an average wage earner in that era. Of course the average salary for most people in 2012 is around $41,673, so this is an astounding loss of about 70% of purchasing power for the average American worker.

[FSP-Rebel]

Got a link for this? cause that info is worth sending far and wide.

[Bastiat's The Law]

Got a link for this? cause that info is worth sending far and wide.

I did it on my own from the US Dept of Commerce Consumer Income Report dated June 1961.

[Nic]

I would love to see this expanded on. How much was a gallon of milk then compared to now? A gallon of gas? Median housing price? Median automobile price? What about other basic necessities?

[Bastiat's The Law]

I'm looking into those items. I heard gas is historically cheap right now compared to earlier years, which makes sense. Prices were also higher for a number of reasons, mostly cost to bring things to market back in 1960.

[GunnyFreedom]

these figures as well as the proposed additions could make for some hellified charts. I have access to shadowstats too. Plus I can make some hot charts. Ross Perot redux. but digital rather than paper.

[CT4Liberty]

Pretty awesome work - anyone able to verify the numbers before I start blasting this out to everyone I know

[DGambler]

+rep and thread subscribed too, as soon as we get the verification, this is going to everyone I know.

[awake]

When the numbers go up people think they are wealthier. But in reality they are being doped, duped and sedated. I'm sure Bernie Madoff sent out statements every so often that had numbers that magically kept going up...his clients were happy and the ponzi blew up.

The GDP number, which is holy economic scripture, goes up with Ben Bernanke flooring the money printer. No real gain in wealth is actually occurring. It takes a series of models and equations to try and sift through this illusion for even remotly accurate guage of combined wealth.

Inflation is like a form of vertigo. Its like going two directions at once; getting poorer, while the official number say you are making more than you ever have. A man who is blindfolded and drunk can barly walk a straight line, but sober and unincumberd, he can navigate gingerly and with clarity. The Fed will not let us sober up and take the blindfold off. They say we need them to make sure we stay drunk and blind or all hell would break loose. Its a lie that has become an obsessive quasi-religion of self destruction.

[Zippyjuan]

Bureau of Labor Statistics report on 1960- 61 figures: http://www.bls.gov/opub/uscs/1960-61.pdf

Includes figures for New York and Boston besides national ones.

Median family income in 1960 was
$5,620. In terms of income distribution
in the country, 36.1 percent of families
had incomes below $5,000, while 18.9
percent had incomes under $3,000.
Food, clothing, and housing accounted
for 64.2 percent of family
spending, a decrease from 1950 levels.

For the first time since 1901, a shift
in the relative importance of expenditure
categories had taken place. Housing—
which included shelter, furnishing,
utilities, and operational
costs—had become the largest category
of expense in 1960–61, at 29.5
percent. Food was in second place at
24.3 percent, followed by clothing at
10.4 percent.

Also has some food item prices - since that was asked- (food comprised 24% of expenditures back then- it is down to 11% today)
Flour- 5 lb- 55 cents
Round Steak- pound- $1.06
Pork Chops $0.86 a pound
Bacon $0.66 lb
Butter $0.75 lb
Eggs Dozen $0.57
Milk- half gallon: $.52

Compare to $1 an hour minimum wage at the time. Today's minimum wage is $7.25 so if those food prices were the same percent of the minimum wage (Yes, this is really a meaningless exercise but I am doing it anyways) they would convert to:
Flour: $3.98 for 5 lbs
Round Steak: $7.69 lb
Pork Chops: $6.23/ lb
Bacon: $4.79/ lb
Butter: $5.43/ lb
Eggs: $4.13
Milk: $3.77 half gallon ($7.54 a gallon)