Caution: if you read any of this, read through to the end. Where two prices are listed, I believe that the higher one is what we would consider a dinner portion, and the lower, a luncheon or light portion. Sadly, I used to know this. BTW, the University of Washington Libraries have digitized their very nice collection of menus if you are interested in researching food trends and prices over the past century and some.
Above is a menu from the Metropolitan Club, a fancy private club in DC, from 1901. I was invited to an event there this week, and stumbled across this menu while researching the venue. At first I was shocked at how high the prices were — even by modern standards, $20 is ridiculous for a celery appetizer.
Then I realized: These prices are in cents, and the most expensive things on this fine dining menu cost all of $1.
60¢ for lobster salad. 20¢ for spaghetti. 40¢ for brandy peaches.
This is inflation writ in asparagus and meringues.
The extreme differences between the prices on this menu and the prices we’d pay today (between 10 and 40 times the 1901 prices — e.g. $8 for a dessert rather than 25¢), is due to a century-long trend of the Dollar’s decline into near-worthlessness.
[Rest of the post at hipsterlibertarian, but she ends with “ inflation robs the poor to help the rich afford the lobster salad whose time of costing 60¢ grows more distant by the day.”
I looked up the average hourly wage for a manufacturing worker in 1901. It was 23 cents, according to the Bureau of Labor statistics.
The average wage for manufacturing workers in 2012 was $19.20.
That means someone living in 1901 had to work 3 hours for that lobster salad. Today’s worker would have to put in one hour to afford an equivalent meal.
Basically, the poor chump in 1901 would have to slave away the whole day just so he can afford the things I can purchase with the work-time I spend browsing Tumblr.
This is a great takedown of an incredibly sloppy economic analysis. Inflation doesn’t only affect prices—it also affects wages! If you only look at the rise of prices relative to prices in the past, it seems like the dollar is “worthless” today. But if you also look at the change in wages, as Ilya Gerner did, then you can compare apples to apples.
Inflation, by itself, isn’t a very useful economic indicator. It’s only really useful compared to wage structure and other contextual factors. The fact that prices have gone up is irrelevant, if wages also go up.
However, notice that wages have not kept up with inflation. So the real lesson of this menu isn’t that the dollar has become worthless (in fact, the dollar has grown much stronger since 1901, when the dollar was not the default global currency). Rather, the lesson is that workers are poorer today (in relative terms) than they were in 1901.