The good news is that from 2024 to 2025 the price fell by 5 percent from $58.08 to $55.18. The better news is that according to the the Bureau of Labor Statistics, the blue-collar wage rate increased by 4 percent from $30.13 per hour to $31.33. It took 1.93 hours to earn the money last year compared to 1.76 hours this year— an 8.6 percent decrease. For the time it took to earn the money to buy one Thanksgiving dinner last year, you get 1.095 dinners this year, a 9.5 percent increase
While we gripe about tariffs and inflation (understandably so), we must also remember that nominal purchase dollars are not the best metric for comparing prices over time.
It’s better to measure the cost of goods and services in terms of time prices. That is, the amount of time that the median worker must work to earn enough money to make the purchase.
From this perspective, the cost of many goods and services continues to decline. The concept of cost compression, measured in time prices, is a recurring discussion at Risk & Progress.
I try to remember that inflation influences hourly wages as well. If prices and wages both increase at the same rate, time prices don’t change. However, wages typically increase faster than prices over time. I interpret this as the growth of knowledge. We can have inflation and innovation at the same time. Thanks for reading Doomslayer.
The good news is that from 2024 to 2025 the price fell by 5 percent from $58.08 to $55.18. The better news is that according to the the Bureau of Labor Statistics, the blue-collar wage rate increased by 4 percent from $30.13 per hour to $31.33. It took 1.93 hours to earn the money last year compared to 1.76 hours this year— an 8.6 percent decrease. For the time it took to earn the money to buy one Thanksgiving dinner last year, you get 1.095 dinners this year, a 9.5 percent increase
That's pretty remarkable given persistent inflation and tariffs. Good to know that the trend of falling time prices continues despite them.
While we gripe about tariffs and inflation (understandably so), we must also remember that nominal purchase dollars are not the best metric for comparing prices over time.
It’s better to measure the cost of goods and services in terms of time prices. That is, the amount of time that the median worker must work to earn enough money to make the purchase.
From this perspective, the cost of many goods and services continues to decline. The concept of cost compression, measured in time prices, is a recurring discussion at Risk & Progress.
I try to remember that inflation influences hourly wages as well. If prices and wages both increase at the same rate, time prices don’t change. However, wages typically increase faster than prices over time. I interpret this as the growth of knowledge. We can have inflation and innovation at the same time. Thanks for reading Doomslayer.
Well said.