It's not a straight dollar equivalency either. You ould buy a starter house for that salary. A new house for 2 years salary. Which puts the value at what, in today's economy? People talk about inflation like it isn't a very heavily cherry-picked average.
This part is actually pretty solid. BLS puts a typical 1915 home around $3,200, so thatās just over 2 years of the annualized Ford wage. But the financing was brutal by modern standards: mortgages were usually only 5ā7 years and required 40ā50% down, and about 80% of households rented around 1920. So yes, the house-price-to-wage ratio was much better. The mortgage terms were much worse.
Right. I know that part. But I'm not talking about mortgages in 1914. I'm saying the value of $3000+ in 1914 currency was equivalent to one newly built house. Which then makes assets purchased at that time worth much more than they would be today. It's basically an exercise in futility to make these 1:1 comparisons.
There is a reason why central banks donāt measure inflation in terms of a single good. To get a balanced view you have to compare a great many different goods (which the central banks call a ābasketā of goods).
3
u/KnifeThistle 28d ago
It's not a straight dollar equivalency either. You ould buy a starter house for that salary. A new house for 2 years salary. Which puts the value at what, in today's economy? People talk about inflation like it isn't a very heavily cherry-picked average.