Times have changed when it comes to the purchasing power of a dollar. According to the United States Bureau of Labor Statistics, to buy the same goods you'd pay $10 for in 1922, you'd have to spend $140.65. After getting through the economic depression that followed World War I, people started to have more spending money, just in time to take advantage of the wealth of consumer goods that became available with the rise of factory-based mass production.
In 1922, the US Internal Revenue Service reported that the average net annual income in the United States was $3,143.46, with many earning less than that in a year. According to the US Social Security Administration, that average was $42,498.21 in 2012, with a large number of people making do with less per year. US Census data puts the average new home sale price today at about $273,000. In 1922, a person in New York City could expect to pay $3,000 for a furnished house. The average car cost $355 in 1922, a great deal less than today's $31,252.
Going to college is far more common than it used to be, despite an average cost of $15,000 per year. An undergraduate student in 1922 would have spent about $1,100 for a year at University of Pennsylvania, depending on how frugal that student was with writing supplies and such. By the end of the 1920s about 20 percent of high school students went on to college. This decade saw a dramatic change - women were on campus in full force, making up almost half of the student body.
For those who translated their college degrees into middle-class jobs or upper middle-class incomes, there were plenty of modern conveniences on the market in the early 1920s. An electric wringer washer could be had for $112.50, making wash day easier than ever, about a quarter of what a basic washing machine costs today. A vacuum cleaner cost about $34, a third of what we now pay for an average quality vacuum cleaner. Radios cost about $15 during the early 1920s. Popular radio programs during this era included the Capitol Theatre, broadcast from New York City, the Happiness Boys , and Amos 'n' Andy.
In the 1920s, modern technologies helped to make a wide range of food available to the average person. The factory system, transportation advances and refrigeration technologies were all contributing factors to another change to the daily diet - the convenience food. There were canned foods and boxed foods, including cake mixes, and towards the end of the decade, frozen foods. Velveeta was born. However, there was still plenty of home cooking.
By 1922, food prices came back down after skewing higher during the war and the depression that followed. Pork chops, according to the US Bureau of Labor Statistics, 33 cents per pound. On sale, they can be had for around a dollar a pound today, and can run two to three times higher when not on sale. Milk was about 75 cents a gallon, butter almost 50 cents a pound, and eggs hovered at about 45 cents a dozen. Sugar sold for about 8 cents a pound in the early 1920s, with coffee costing around 50 cents a pound. Oranges cost about 55 cents for a dozen and cabbage was 2 cents a pound.
Ninety years can make a real price difference. To be fair, when thinking about the dramatic differences in prices then and now, it should be noted that while prices are much higher, so too our our salaries. However, the buying power of the dollar has certainly suffered from the effects of inflation. While salaries have risen, We have lost ground on what those salaries can actually buy, not just in consumer goods, but also in big ticket items, such as cars and houses. It is essential to keep inflation in mind when planning for future needs, including college costs and retirement savings.
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Marko Rubel is the CEO and founder of Real Estate Money and its a nationally known real estate investment coach. For the latest news in real estate investment updates visit our site.
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