Today I'm yelping at a very boring topic, the inflation of the price of a slice of New York pizza compared to salaries.
I'm going to use 1972 as my standard to start with because that was the first full year that the United States full abandoned gold. I'm going to us cheese pizza as the commodity that I judge wages on because it doesn't change, the ingredients stay the same, flour, water, tomato sauce, cheese and olive oil. If I were to use cars, televisions, or even houses there are so many variations in those products that have happen in those 38 years it would be impossible to compare wages against those products, the cheese pizza has stayed constant.
I have checked a NY times article from January 12,2002 which stated that the cost of a slice of plain cheese pizza was 35cents I have checked my local pizza parlors and the price ranges from 2 dollars to 2.50 using the 2 dollar option the job one has now would have to make 5.8 times the type of job just to stay even.
Now if one uses 2.50 ones job would have 7 times the pay to be even.
Lets say that in 1972 you had a job that payed 7,133 dollars (The mean pay per social security administration) and that job pays 39,652 in 2008 (the mean pay per social security administration).
The 2 dollar pizza means that the job now pays more by about 10%, if the norm is 2.50 then the jobs worth has dropped by 28% which I think is closer to norm.
Now this is just an exercise, it has no meaning just as most economic reasoning has none.
Monday, August 23, 2010
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