I saw this chart several months ago. It shows price changes over a 20-year period in various US Consumer Goods & Services, as well as the growth in Wages during that same time period.
I can’t really put many of my observations into solid paragraphs, so I’ve listed a few bullet points of my thoughts below:
- Wages have outpaced inflation (55.6%) during this time period. That’s good.
- All of the “essentials” have pretty much grown in line with, or wildly outpaced, wage growth. Hospital Services, College textbooks, and College Tuition all posted ~200% price changes, compared to ~75%-80% growth in wages during the period.
- Childcare and Medical Care Services (I would also consider these essentials) saw ~120%-130% price changes, well above wage growth during the period.
- “Non-essentials” (New Cars, Household Furnishings, Clothing, Cellphone Service, Software, Toys, and TV’s) became more affordable, having flat or negative price changes during this period. It’s interesting to me that the technology categories haven’t had the huge price changes.
- Housing and Food & Beverage have paced right in line with inflation growth, a promising sign in my opinion.
I find it pretty interesting what has become more expensive versus more affordable over this 20-year period. I’m not sure if some of this is good or bad (might be a bit over my head), but logic leads me to believe that essentials well-outpacing wage growth is never a good sign.
Let me know what you think.