📈Cost of Success
First, I apologize for the lack of content over the last month or so. The reality is our lives have gotten busier and certain things have taken priority. We enjoy doing this and know that our readers are like the Marines - both few and proud - so we’ll continue to pump out memes and advice as our schedules allow.
Now onto this week. I was looking for inspiration when none other than President Biden himself triggered me with another horrible take on inflation. I mean this tweet is complete nonsense, and our Twitter friend Corey Hoffstein accurately summed this up.
As you readers know, this sort of rhetoric is annoying. Not for political reasons but just the fact that it makes zero sense. Inflation slowing down is not the same as prices going down; inflation is the rate of change in prices, so a positive inflation percent still means prices are going higher, just at a slower rate than before. This is clear when you look at the overall price index, which is clearly not going down despite what the White House tweets.
While we aren’t rocketing higher like in the post-pandemic stage, prices are still going up.
I thought this might be a good time to look at things in a different way. Instead of using the value of a dollar or some made-up index, let's look at how much time it takes us to buy certain things. Because it’s not just the price of things that has risen, wages have also risen. And in reality, all we care about is how much we can buy at the end of our long work week.
This is actually a simpler way to measure inflation: we don't need government indexes that we argue about; it strips out corporate greed, supply chain issues, or any other noise that muddies the narrative. Below is a short article that articulates this point much better than I could, so I encourage you to read it.
I originally got turned on to this idea by Jeremy Horpedahl, who proposed using a simple ratio like how many gallons of gas you can buy for an hour of work. And just so I don't have to hear about how it’s the 1% making all the money, I am going to use wages for “Production and Non-Supervisory Employees” because dammit, the middle class built this country!
As you can see here, pay for this cohort has increased greatly over the last 10 years.
So let’s take a look at how many hours the hard-working people of America need to work to buy a gallon of gas.
Currently, an hour of work buys about 8 gallons of gas. Not bad! While it may not be the nearly 14 gallons you could buy during the pandemic, it is higher than a decade-long stretch from 2005-2015 (and, since we are doing back in my day here, I got my Driver's License in this stretch and was making min wage so an hour of work bought me maybe 2 gallons).
So, sure, we can complain about gas prices and remember the good ole days when it was cheaper, but in reality, given our income level, an hour of work pays for about the same amount of gas as it has for the last 30 years.
Since gasoline is just one data point, I decided to have some fun and see how our time value was holding up for breakfast, especially with people losing their minds about egg prices over the last year or so.
Yes, that was a real WALL STREET JOURNAL article.
From 10 months ago.
Telling you to skip breakfast to save money!
And I spend my hard earned egg money to subscribe to that newspaper. For fucks sake, man, I don’t like Elon Musk but he might have a point about journalism.
Anyway, I created the Ron Swanson Index for Breakfast Affordability (RSIFBA).
This index asks how many hours we need to work to afford a Ron Swanson-sized breakfast.
1 lb Bacon
1 lb Toast (bread whole wheat)
1 Gallon Milk
1 Dozen Eggs
1 lb Ground Coffee
Now there are some gaps in the chart because the government isn’t as concerned about the RSIFBA index as I am. However, you can see a Ron Swanson-sized breakfast still costs us less than 1 hour of work and sits on the lower end of the 10-year average.
So despite all the hand-wringing and articles telling you eggs are ruining your retirement, the cost of breakfast and the cost of the gas required to get you to the supermarket remain pretty similar to the good old days when you view it in terms of hours worked to afford these things.
What’s the Upside?
Are things more expensive than ever in $ terms, yes.
Are some things that are really important like housing and healthcare more expensive than ever in time terms, yes.
But the truth is we are making more money than ever, and if we look at things in terms of how much time it costs instead of just dollars we might have a clearer understanding of what is going on in the economy.
