The other day, on route to collect my daughter from swimming, I happened to note the price of diesel at a local garage. For many of us, particularly those of us who are parents, the price of fuel for our cars is just a ‘necessary evil’ that we have to pay otherwise our precious charges wouldn’t get to Guides, Cubs, karate and in some cases school. In any event, for the more mature drivers (for ‘mature read ‘old’), when retailers started to use litres instead of gallons, we lost our yardstick to judge how much it has risen since we started buying it.
So I did the maths in my head and worked out that diesel is now over £6.50 a gallon! Now memories have a habit of playing tricks on you as time progresses but I was fairly certain that is ten times the amount I paid for the first gallon I ever bought in 1972 for the moped my parents bought me.
This got me thinking about inflation and whether an increase of that sort over 41 years was above or below average. How much had other commodities risen since that time? What was the buying power of my weekly wage when I started work in 1975 compared with the weekly wage for the same job now?
The first thing I established, despite being fairly adept at using Google, was that reliable price lists from the 1970s were very hard to find. I found myself relying almost exclusively on press articles that referred to price lists that I couldn’t find for myself. Then I realised that journalists presumably had access to newspaper archives where they could research 1970’s reports and adverts so their references were probably accurate.
So armed with a shopping list rather shorter than I would have liked and containing at least one item that I have never bought for myself (i.e a packet of cigarettes), I set about finding out what those things cost now in March 2013. I decided I wasn’t just going to compare the prices and calculate how much they had risen but I would start by comparing my wages then and now (or more accurately with someone starting the same job in 2013 that I started in 1975).
In 1975 I was paid weekly in cash: I remember opening the envelope and removing around £28 after deductions. I judge my salary therefore to be in the region of £40 gross a week or just over £2,000 per annum. Someone starting exactly the same job today would be on £28,605 or £550 per week. That’s an increase of just over 1,300%.
So how did prices I found compare?
|Pint of Bitter||11p||£3.25||2955%|
|1st Class Stamp||3p||60p||2000%|
|Gallon of petrol||33p||£6.50||1970%|
|Loaf of Bread||9p||£1.35||1500%|
|Range Rover||£ 1,998||£ 22,495||1126%|
|Pint of milk||6p||45p||750%|
So a 19 year-old embarking today on the same career path that I took in 1975 will be worse off posting a letter, buying sweets, beer, cigarettes, a mini, petrol and bread as all those items have gone up more than the salary. Only Range Rovers and milk have survived the ravages of inflation! You might also note that my recollection of the price of a gallon was faulty and it has risen by nearly 2,000%.
All that having been said, the most astonishing figures I came across related to house prices. In 1971 the average house price in the UK was just over £5,000. The average wage per annum was £2,000. So in 1971, to raise enough money to buy the average house the average worker had to borrow about 2.5 times their income. My recollection is that was the multiplier that banks and building societies used. In 2013 the average house price in the UK has risen to nearly £250,000 and the average wage is, by comparison, a mere £25,000. Surely nobody can be expected to borrow ten times their income?
Many of us who have children are worried how they will ever get on the so-called ‘housing ladder’. I’m worried. Very worried.