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Free Market System Drives down the Real Cost of Living

This 1997 Annual Report of the Federal Reserve Bank of Dallas, Time Well Spent: The Declining Real Cost of Living in America, shows how the real cost of living has declined over the century. It uses the work-time required to purchase goods and services to compare the living costs across time. Truly eye-opening, especially, for those who are fond of complaining that life has become harder over time.

The "Exhibit 8", titled, "The Bounty of Time Well Spent—Household Ownership and Use of Products", plots % of households with Telephones, Automobiles, etc. over the century. It is stunning!

The chart, titled "THE WORK-TIME COST OF PRODUCTS, TODAY VERSUS YESTERDAY", gives average work-time required to acquire various goods and services over the years.

It won't be real if everything was so good! The spoiler comes at page 14:

Americans do, of course, have to work
longer to buy some goods and services.
Paying for higher education and medical
care requires more hours of work than it
used to. Tuition and fees at public colleges,
for example, have doubled in terms
of work time since the mid-1970s. Inflation
has been even steeper at America’s
private institutions.9

Also, see the accompanying chart giving the comparison of higher education costs over the year. It has almost doubled compared to 1979! Education at a Public University costs 200 hours more!

What's missing is analysis of whether those extra work hours spent in educating yourself is worth the decline in the work-hour costs for a typical univesity graduate!

They should given more space for analysis of medical expenses too!


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