‘Inflation and the cost of living: It’s all relative to me’

Jan 25, 2020
Has the cost of living really changed so dramatically over the past 60 years? Source: Getty Images

We bought our first home in New Zealand 59 years ago. It cost us the enormous sum of 3,700 pounds (about $7,400). We had to take out a 25-year mortgage to pay it off. But I was only earning 20 pounds a week in those days, which was good money in 1960. I don’t feel the situation has changed a lot today, except that all the figures are much bigger now!

To go back even further, when my parents bought their first home, in Bristol in the United Kingdom, they paid 400 pounds for it, on my father’s weekly pay of something like five pounds! Inflation is something that just goes on and on, and we don’t seem to have any way of stopping it!

Of course, the main reason for the overall increase in the price of everything, if not the value, is that we all want to earn more money and every time we get a raise, the price for the goods or services we help to produce goes up to pay for it! If only we lived is a perfect world, we’d all be satisfied with what we have and inflation would be a thing of the past. But of course that is an impossible dream, sometimes known as communism!

Naturally, we all complain about this state of affairs; the beer’s gone up another cent at the pub, steak is now about $20 a kilo; fill up your petrol tank and you practically need to take out a mortgage on the vehicle. As for the ridiculous price of houses today — compared to 50 years ago — well its frightening isn’t it. The 3,700 pounds we paid for our first home in 1960 could be paid for a good quality bicycle now, while you practically need to be a millionaire to buy a house today … Or so it seems!

Electricity, gas, water and the many other services we have to pay for, like property tax and even the price of the weekly food bill seems extravagant and hard to keep up with.

Yet oddly, if you look at the whole ‘prices’ thing from a completely different point of view, I find there’s a rather different sort of picture. Look at it in the simple ‘wages versus prices’ way and yes, they do seem high, but when I think back to the ’60s really seriously, I remember that we all thought prices were too high then as well! It would seem there’s really little or no difference.

When I look at prices of goods and services against how long a man or woman has to work to afford these things and I get a completely different picture again. This is because many manufacturing processes have been developed over the years to aid in production, or the development of containerisation to mass-deliver products mechanically without costly handling by people, or the use of new materials (not all of them good as it turns out, like plastic) that are just as effective as the old wood, tin and paper we grew up with but much cheaper to make, lighter to handle and just as strong or even stronger than the old stuff.

To put it in some sort of perspective, I believe a bottle of scotch in the 1960s cost about $20, while a reasonably well paid chap would be bringing home something like $40 a week, so the drink would cost him about half of a week’s pay. A bottle of the same now costs, on average about $45, but Australian average men’s weekly pay in 2019, according to the Australian Bureau of Statistics is $1,634, making the true cost of the bottle one-36th of a week’s pay.

These sorts of figures apply over a very wide range of the things we purchase, though funnily, one of the exceptions to this rule is the good old pair of jeans. In the 1960s they were strictly working clothes and a man could buy a pair for just a few dollars; but then the fashion gurus got their hands on them, applied fancy stitching to the pockets and ripped the knees on them and suddenly they were worth more than $100 a pair. As they say, there is always an exception to every rule!

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