Burger King tells us that its cofounder, Jim McLamore wanted customers to know he had created a very big burger so he named it the Whopper. Now, 64 years later, Burger King lowered the price of the Whopper to 37 cents during its “two day birthday bash.” Last Friday and Saturday, if you were a part of the chain’s Royal Perks reward program, you could have paid $3.82 less for your burger.
So yes, the difference in all of our grocery prices was a whopper since 1957. But, if you look at our purchasing power, the story changes considerably.
HowStuffWorks tells us that in 1957, we paid around $20,000 for our house, $2,500 for a Ford, and 27 cents for a gallon of gasoline.
In 1957, milk would have cost us close to $1 a gallon and ground beef, 30 cents a pound. Also seemingly inexpensive, butter was 75 cents a pound and a can of Campbell’s Tomato Soup was a dime. Meanwhile eggs were 55 cents a dozen, iceberg lettuce, 19 cents a head, and a bunch of broccoli, 23 cents.
While HowStuffWorks told us the correct prices, they were less accurate when they said the items were much cheaper. It is a bit more complicated.
Our Bottom Line: Purchasing Power
As economists, we should look at more than a price change when comparing different years. More importantly, we have to consider inflation and our purchasing power. We can start with plugging in $1.00 for October 1957 at the BLS Inflation Calculator and see that $9.77 had the equivalent buying power in October 2021.
As a result, that dollar for a gallon milk should have been close to $10 today. Instead, it averages $3.59. Similarly, according to the BLS, eggs average $1.82 a dozen and FRED says a pound of butter is $3.65. Both of these 2021 prices are far less than their equivalent in 1957. Meanwhile, Campbell’s Tomato Soup and ground beef are almost the same.
Next, we can see that average wages in 1957 were in the 2 dollar range for selected industries. As a result, we needed close to a half hour of work for a gallon of milk or one quarter of an hour for a pound of butter:
Now, with an average wage close to 30 dollars, we just have to work 7 or 8 minutes for a gallon of milk, slightly less for a pound of butter, and 3 or 4 minutes for our dozen eggs:
Our featured image is from Burger King via Fast Company.