This week, I have a profile in the Business Journal of Robert L. “Bob” Enck, who retired this week after half a century as a hometown banker in Elizabethtown.
As part of the story, my editor asked me to compile a table of facts and figures about 1963, the year Enck officially started full-time at Elizabethtown Trust Co. I hunted a bit and came up with a few examples.
They're certainly eye-popping! Median family income, for example, rose almost exactly tenfold, from $6,200 in 1963 to $62,273 in 2011, the last year for which the U.S. Census Bureau has released data.
So everyone out there who was alive in 1963 – you agree people are 10 times richer now than they were then, right?
Of course you don't. Those are nominal dollars, unadjusted for inflation. A dollar today has much less purchasing power than it did five decades ago.
That accords more with everyone's intuitions, doesn't it?
I plugged my other stats into the calculator. A 5-cent stamp in 1963 would be a 38-cent stamp today, which suggests that the Post Office has added only 8 cents to the steady-state cost. Perhaps that's partly to deal with the higher real cost of gasoline: The 1963 price of 31 cents per gallon equals $2.35 today, almost exactly two-thirds of the contemporary price of $3.56.
And if you think new houses today are bigger and more elaborate than they used to be, you're right: $18,000 in 1963 works out to $136,568.24 today, far under the actual median new home price of $246,800.
When you think about the changes that something like housing has undergone between 1963 and 2013, I think it underscores the difficulties of cross-year comparisons in general. The government tries hard to measure inflation accurately (see this link), but I keep thinking about things like cell phones vs. landlines and Ma Bell, typewriters and adding machines vs. laptops.
Not to mention in-person neighborhood banking vs. today's online version. Bob Enck has a few things to say about that in my article.
"The past is a foreign country," according to novelist L.P. Hartley. "They do things differently there." They price things differently there, too, and sometimes you need more context than you realize at first to figure out what those prices mean.
I think I'll go watch an episode of "Mad Men" now. On a smartphone, of course.
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