The Price of Life in the United States: 1946 vs. 2006

September 2006
By SIGNAL Magazine Staff

Among the most pervasive changes of the past 60 years has been the cost of living. No costs or salaries could remain static during six decades of capitalism, as 1946 saw the beginning of the removal of wartime wage and price controls. Major economic growth ensued, aided and abetted by technology innovations that continue to transform society.

The figures below represent the average costs of U.S. items in 1946 and in 2006. Between those 60 years, the inflation rate depreciated the dollar’s buying power elevenfold, such that $1 in 2006 buys roughly what 9 cents bought in 1946. But, while many prices rose considerably, salaries often increased to a greater degree during that period, so individuals had much greater relative earning power. And, if inflation is factored in, the cost of some commodities actually dropped over time. Still, some of the numbers offer an interesting contrast:

 

Item

1946

2006

Federal Minimum Hourly Wage

$0.40   

$5.15

Average Annual Income

$2,600 

$37,900

House  

$5,150 

$266,000

Monthly Rent    

$35      

$950

New Car           

$1,125 

$28,800

First-Class U.S. Postage

$0.03

$0.39

One-Year Tuition at Harvard           

$420    

$30,275

 

Movie Ticket     

$0.55   

$6.04

Gallon of Gasoline         

$0.21   

$3.03

Gallon of Milk

$0.67   

$3.23

1 Dozen Eggs   

$0.59   

$0.98

Loaf of White Bread       

$0.10   

$0.97

AFCEA Membership     

$4 (SIGNAL $3 extra)

$35 (with SIGNAL)

Computer         

$486,804.00 (ENIAC)           

$299.99(2.93-GHz HPa1200y desktop)

(U.S. government, professional and trade association averages derived through second quarter of 2006.) ENIAC = electronic numerical integrator and computer.