100 years ago

The original caption, dated April 15, 1922, reads: "Speed demons beware. The Los Angeles Motor Corps with their new fleet of Indian motorcycles all ready and waiting to set out after Californian motorists who like to step on the gas."

Adjusted for inflation, $185 in 1922 is equal to $2,981 in 2022.

That’s a great pic !

But as a ‘BTW’ your numbers show why those inflation calculators don’t work.

That’s around the time Henry Ford revolutionised the working man’s wage by paying a dollar a day.

So the Indian cost 185 working days of a well paid working man.

Thats a LOT more that $2,981 !

The average factory worker in the US in 1922 made ~$1200/yr. So, this bike listed for ~15% of their annual salary. And note that "cash talks".

A good white color job, like an office manager, paid $2400-4800. Or, 3.8-7.7%.

Average blue collar wage in US is ~34k. 15%=~$5K.

Average white coar wage is ~76k. 6.5% of that is ~$5k.

You can't buy a new performance bike or a Harley for that.

Indeed, I agree with your numbers, my ‘dollar a day’ was at least a decade out !

But still, my point is that those inflation calculators do not work.

I don’t really know why, but I think they basically incorrectly value the true ’Net Present Value’ of money in days gone by.

If you look at the vast array of ‘things’ a well paid manual worker spends their money on today, it is a very long list including fashion goods, fancy foods, computers, i pads, mobiles, TVS, satellite TV, foreign holidays, home ownership, throwing money at obsolete motorcycles, etc, etc.

In 1922 the average working man paid rent, fed and clothed his family, and spent most of what little was left on beer and cigarettes!

The concept of ‘disposable income’ for the working classes did not really exist.

And nor did credit… purchases had to be made in ‘saved up for‘ cash. Which when added to the above point means such purchases were NOT easy!

So, whilst I agree with your 15% (which is already more than the inflation calculator suggests) I do not believe it’s truly representative, as 15% of a salary that has a large amount of disposable income AND access to credit, is very different to 15% of a salary where almost all of it is consumed merely by existing and there is close to zero access to credit.

Yup. I thought about editing my post to say the same thing about disposable income, but was too lazy.

Inflation over time seems much higher than those calculators suggest.
In 1973 I was 18 years old and had worked 1 year after high school. I bought a tiny old shack of a house on a small lot near the beach in White Rock, a beach town near Vancouver, B.C. I had just enough cash to pay the purchase price of $18,000.
Most of that money came from cutting firewood during summer holidays as well as the usual various other part time jobs kids tended to do back then.
Today that same shack on a lot is 1.5 million $.
Imagine a kid finishing high today school with 1.5 million in the bank from part time low paid jobs done during highschool years. Not going to happen.
I can't imagine even putting away enough for a downpayment
from four or five years of wood cutting/ lawn mowing etc.


Glen

Looks like a Scout. $250 retail



Value today, $30k?

IIRC from my reading of history, Henry was near pilloried by his fellow industrialists for paying the unheard of sum of $5/day for work on the Model T assembly line. That amounts to $1260/Yr. So $250 amounted to just short of 20% of his annual wage. My guess is that not too many of Ford's production workers bought new Scouts.

Fast forward to 1963, I was paid $1/hr working at McDonald's Hamburgers and mowed lawns for $1.25 each and made about $35/month delivering newspapers. My parents would not hear of me buying a little Honda. My friend Garth had a 305 Honda about this time and I was terribly envious. I needed transportation to get to my $1/hr job so I bought a 1951 Mercury for $125. That was 13% of my ~$900 annual income but I was living at home and only required to buy my own clothes. The Mercury had blow-by so bad that I stuffed a rag down the oil-filler pipe to force the blow-by out the bottom vent. Between gas and oil, I'm not sure that my McDonald's job was a net gain given the transportation cost, just like my father warned me. But what did he know when I was 16.

Fast forward again to 1984 and I bought a little Seattle house for $75,000 hoping to catch the brass ring of the real estate market, which was then ramping up. I still own the house and it's taxed at a value of $985,000. More than a 10 bagger. Whats a 305 Honda worth today? I pay one of the local high school kids $35 a time to mow and trim my yard but there's now way in heavens name he'll be able to buy a house. His mother is barely hanging onto her rented house nearby. Has the working class come a full circle economically?

Thomasa said:

I bought a little Seattle house for $75,000 hoping to catch the brass ring of the real estate market, which was then ramping up. I still own the house and it's taxed at a value of $985,000

Click to expand...

That's some capital gains right there