Things No One Mentions When They Whine for the Good Old Days

Via Eugene Volokh:

Year Food spending as share of disposable income
1929 23.4%
1939 21.3%
1949 22.1%
1959 17.8%
1969 13.7%
1979 13.4%
1989 10.9%
1999 10.2%
2000 9.9%
2001 9.9%
2002 9.8%
2003 9.8%
2004 9.7%
2005 9.8%
2006 9.9%

My sense is the same pattern would emerge for gasoline prices, electricity (if you had it), phone service (if you had it), cross-country transportation, air conditioning, etc.

 

  • GU

    But the evil, greedy rich people are out there oppressing the poor, and all you can do is point out improvements in life that have trickled down to all classes of people in the U.S.? Sheesh. You would have failed the "History of White Male Greed & Oppression" course I took in college.

  • Everitt Mickey

    I agree with you. I think everything is cheaper....when view from "how long did I have to work to get it", or "what percentage of my income is required to get it". I'm a truck driver and not an economist, however, I think monetary inflation obscures the trends. Too bad the fact that "we've never had it so good" and " these ARE the good old days" are not popularly realized.

  • http://david-damore.blogspot.com/ David Damore

    Dear Sir,
    US Food Spending per year is about $1 Trillion [Grocery + Food Service]
    Number of US households = approximately 110 Million
    Food spending per household [1,000,000,000,000 / 110,000,000] = $9,090
    Median household income [2006] $48,201.00 [Source: http://en.wikipedia.org/wiki/Household_income_in_the_United_States ]
    Median household income for food [$9,090 / $48,210] = 18.85%

    The average household spends nearly 20% of income on food.
    Food Spending is a large part of the budget for most families.

    Please feel free to check and verify the numbers and math above.

    Sincerely,
    David Damore

  • gj

    Dear David Damore,

    30 seconds with Google turns up the weekly household food spending per person for 2004:

    http://www.infoplease.com/ipa/A0922492.html

    The source for the results in that survey is the Economic Research Service of the U.S. Department of Agriculture. According to these folks, you're overestimating by a factor of 2x. $40 per person per week is $2,080 per person per year, and the average household size is 2.57 (look for other statistics on households). So that's (2,080 * 2.57)/48,210 = 11% of household income going toward food.

  • John Dewey

    David Damore,

    First, are you assuming that median household income is a good approximation for mean (average) household income? According to the U.S. Census Bureau, median income for a U.S. household is $48,451, and mean household income is $65,527. If you are want to derive a valid percentage of income used for food purchases, you should use either median measures for both the numerator and denominator or else mean measures for both numerator and denominator.

    Second, a comparison of 1929 food spending with 2006 food spending plus food preparation spending is just not valid. Very few meals in 1929 - or even 1949 - were consumed outside the home. The problem with lumping together food costs and food preparation costs is that housewives are not compensated for food preparation and post-meal cleanup in the home. So food preparation/cleanup costs from 50 years ago and 80 years ago are greatly understated in economic data. If those hidden costs by housewives were included in the data provided above by Warren, I think you would see an even larger reduction in the cost of food over the past 80 years. That's because specialization of labor and economies of scale have drastically reduced the unit cost of preparing food.

  • bbartlog

    Very few meals in 1929 - or even 1949 - were consumed outside the home.

    And in fact the source data reflect this. They have two columns (home and away from home food expenditures). In 1929 the 'away from home' percentage is 3.1%; in the latest year it's up to 4.2% even as the 'at home' percentage has dropped drastically (from 20 or so to 5.8%).

    the same pattern would emerge for gasoline prices, electricity (if you had it), phone service (if you had it), cross-country transportation, air conditioning, etc

    Well... maybe not? Obviously if you're spending less on the essentials of life your percentage expenditures for other items may rise. The 'away from home' food expenditures, which rise slightly from 3% to 4%, are one example - but I would expect that you might also see something similar for money spent on vacation (cross-country transportation in your example). Of course this is just a quibble, since it's obviously a *good thing* if necessities are so cheap that we can spend a larger portion of income on luxuries.
    The other counterexample (which you may not have intended to include in your 'etc.') would be health care expenditures. I don't know how much we spent in 1929 but it was nowhere near as big a chunk of our GDP as it is now.

  • mjh

    My sense is the same pattern would emerge for gasoline prices, electricity (if you had it), phone service (if you had it), cross-country transportation, air conditioning, etc.

    Read Myths of Rich & Poor. It puts data to your intuition.

  • John Dewey

    I've now followed the links and actually looked at the data and accompanying notes. To me, the decline in food expenditures as a share of disposable income since 1929 is even more amazing than I originally thought.

    Based on what I've read, and on what my parents have told me, one-third to one-half the pre-World War II households grew and hunted their own food - or at least a significant portion of what they consumed. 80 years ago rural folks across the South obtained most of their protein from the woods or rivers and from the barnyard. Such foods would not have been included in the department of Agriculture's food expenditure statistics. Very few households today butcher hogs, milk cows, and clean fish.

  • epobirs

    It can be carried further. A large array of items we frequently look upon as essential to our daily lives were free of charge to our forebears, largely because they had yet to exist. Imagine trying to explain to somebody in 1929 the video rental store. Then try to explain why that business is in danger of collapse due to the growing alternatives. Trying to explain this modern interplay of businesses would be like an elaborate science fiction novel to somebody in 1929 who probably had yet to see a movie with voices and music rather than an accompanist playing organ in the theater.

    Then try to explain how the average citizen had become so accustommed to having multiple amusement sources close at hand that we regard them as a requirement of life. Can anyone born after 1985 in other than severe poverty imagine not having a small library of their favorite movies on video tape or disc? Yet, an old fogey like me in his early 40s still gets a tiny thrill from the idea of having all this at his beck and call.

  • chris

    Mark Perry has done the gasoline work for you:

    http://mjperry.blogspot.com/2007/11/why-goldilocks-can-handle-3-gas.html

  • http://mistersnitch.blogspot.com/ Mister Snitch

    I appreciate the thrust of the piece. However, food prices are unquestionably headed up. You can Google that too, if you like.

    I wish it were otherwise. Hey, show me I'm wrong. Make my day.

  • Mike G

    The price of fuel is sucking the puchasing power out of the American people. Our dollar ain't worth chit, the political power in America has done it's best to alienate us. It's time for us to realize it before we are reduced to driving bicycles like the Chinese, and that would be fine, if you didn't have to drive half the day to get where you ought to be in RURAL America and where we feed you.

    If you cut Rural Agricultural America away from society We'll bust your ass as you drive out for food, we will know who you are assholes. You have no clue how to grow the chit that keeps your ass alive in your metro world.

    Remember who feeds you and it and it ain't that worthless american dollar in you pocket,

    You couldn't produce pig chit all you can can do is talk chit

  • Katelyn Elizabeth

    It makes sense to me! I mean think about it. Back then people would complain about prices going up, thats what we are doing today too! Back then you would complain when gas hit .75 cents a gallon. Now we are complaining that its $4.00!! Its always going to seem exspensive. But we all make more money right now.
    Think about it...it all makes sense.

  • Katelyn Elizabeth

    It makes sense to me! I mean think about it. Back then people would complain about prices going up, thats what we are doing today too! Back then you would complain when gas hit .75 cents a gallon. Now we are complaining that its $4.00!! Its always going to seem exspensive. But we all make more money right now.
    Think about it...it all makes sense.

  • Yoshidad1

    What's missing from the table is the chart of rising health costs. It's true food costs have trended downward, aided by agricultural subsidies amounting to 40% of farm income (Michael Pollan's "Omnivore's Dilemma" quotes one farmer saying "we just launder the money for Cargill and ADM"), and an increase in high-fructose corn syrup in our diets. But the quality of the calories has deterioriated.

    Corn-fed beef, for example, would not be possible at current prices without the enormous subsidy, not only for the corn, but in forgiving the social costs. Feedlots are currently the largest consumers of antibiotics in the U.S., meaning not only that we eat a lot of very sick cows, but also that feedlots are breeding antibiotic-resistant super germs, and providing the motivation for (without paying) finding more and more antibiotics.

    Why are the cows so sick? Because they're designed to eat grass, not corn. Corn turns their naturally basic stomachs acidic, giving them ulcers and illness galore. The germs from ruminants basic stomachs that we'd naturally resist are therefore being bred for an acid environment -- like our stomachs.

    The pork CAFOs (Confined Animal Feeding Operations) put out literally ten times the amount of animal waste that an equivalent number of humans do. Having 500,000 pigs in such a collection of CAFOs -- without treating their waste -- is a commonplace. Imagine New York City without treated sewage... If permitting that without charging for the social costs isn't a subsidy, I don't know what it is.

    So yes, corn and the food that eats corn is cheap, but it has cost us obesity, an epidemic of type II diabetes, and a host of other chronic illnesses.

    Let's not be too cocksure this is a good thing, shall we?

  • Yoshidad1

    What's missing from the table is the chart of rising health costs. It's true food costs have trended downward, aided by agricultural subsidies amounting to 40% of farm income (Michael Pollan's "Omnivore's Dilemma" quotes one farmer saying "we just launder the money for Cargill and ADM"), and an increase in high-fructose corn syrup in our diets. But the quality of the calories has deterioriated.

    Corn-fed beef, for example, would not be possible at current prices without the enormous subsidy, not only for the corn, but in forgiving the social costs. Feedlots are currently the largest consumers of antibiotics in the U.S., meaning not only that we eat a lot of very sick cows, but also that feedlots are breeding antibiotic-resistant super germs, and providing the motivation for (without paying) finding more and more antibiotics.

    Why are the cows so sick? Because they're designed to eat grass, not corn. Corn turns their naturally basic stomachs acidic, giving them ulcers and illness galore. The germs from ruminants basic stomachs that we'd naturally resist are therefore being bred for an acid environment -- like our stomachs.

    The pork CAFOs (Confined Animal Feeding Operations) put out literally ten times the amount of animal waste that an equivalent number of humans do. Having 500,000 pigs in such a collection of CAFOs -- without treating their waste -- is a commonplace. Imagine New York City without treated sewage... If permitting that without charging for the social costs isn't a subsidy, I don't know what it is.

    So yes, corn and the food that eats corn is cheap, but it has cost us obesity, an epidemic of type II diabetes, and a host of other chronic illnesses.

    Let's not be too cocksure this is a good thing, shall we?

  • Solar Lad

    "So yes, corn and the food that eats corn is cheap, but it has cost us obesity, [etc.]"

    People are being FORCED to overeat ?????

    Rubbish.

    But I agree with your points about factory farming. America can afford better.