Prices back in the old days

I’m still reading Coolidge and sometimes the prices back around the turn of the 20th century are striking:

  • “In 1890, professors’ salaries [at Amherst College] were $ 2,500, more than twenty times tuition. The step up from laborer to professor was immense, for the average wage earner in 1890 earned $425 a year. ” [i.e., tuition has gone from 1/20th of a professor's salary to between 1/3 and 1/2]
  • “[In 1894] Tuition at Harvard Law that year was $150, and the university catalog estimated additional expenses of up to $471.” [i.e., the tuition has gone from about $4000 in 2014 dollars (calculator used) to $52,350 (source).]
  • “Homes in western Massachusetts ranged in price from $2,000 to $5,000, about what a young lawyer could earn in a year if he was lucky.” [Zillow says that the median sale price for a house or condo in Northampton is now $261,000, perhaps four times a young lawyer's salary out there.]
  • “The State House on Beacon Hill was a glorious structure, its cornerstone having been laid by Samuel Adams, the governor, who had arrived to deliver it with fifteen white horses. Its thirty-five-foot dome shone gold, having been freshly gilded in twenty-three-carat paint the autumn before at a price of $4,758.79, a sign that in autumn 1906, Massachusetts was feeling extravagant.” [Compare to present; the state government will spend $1 million to pay off-duty state police cars to park at the closed-for-construction Callahan Tunnel (Boston Herald).]
  • Total federal income tax revenues for 1924: $1.84 billion [About $250 billion in today's dollars, compared to about $3.78 trillion in current spending (Washington Post), i.e., enough to fund 24 days of our current government's spending.]

3 Comments

  1. Chris Neumann

    January 19, 2014 @ 12:39 am

    1

    Food as a percentage of overall income was much higher back in those days. However, housing as a percentage of income has gone up dramatically in only more recent times, so it makes me wonder what the parents of the boomers spent their money on.

  2. Marcel Weiher

    January 19, 2014 @ 6:28 am

    2

    So federal income tax revenues increased by a factor of 15.2 from 1924 to 2013. GDP increased by a factor of 13.5. (from http://www.huppi.com/kangaroo/GDPreal.htm and http://www.multpl.com/us-gdp-inflation-adjusted/table ), making the increase 12% over 90 years.

  3. Peter Reed

    January 20, 2014 @ 8:50 am

    3

    The use of inflation over long periods becomes innacurate because of the fudge factors for quality of goods and substitutions used in the CPI calculations. The ratios are more helpful. When I was reading Walden, I founds the ratios interesting as well, like ratio of house cost to annual wages.

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