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by libartsreader 61 days ago
The assertion that the CPI simultaneously overlooks downward product substitution and prices in product improvements in order to paint an overly-rosy picture is belied by the fact that most stuff is cheaper than it’s ever been.

Thirty years ago, internet service was $2.95/hour (in 1996 dollars!), long-distance phone calls were 10 cents/minute, and a low-res 28” color TV with 5 channels cost a fortune.
2 comments
drBonkers 61 days ago
I don't care about internet service, long distance phone calls, or TVs. I care about shelter, groceries, healthcare, and education. I can forego the former, I must buy the latter.
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libartsreader 60 days ago
Shelter, groceries, healthcare, and education comprise 53.2% of the CPI bundle.
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dualvariable 61 days ago
> a low-res 28” color TV with 5 channels cost a fortune.

Uh, back in 2000 (okay not quite 30 years ago, but getting close) I had a 36" Sony Wega which cost around $1500 with DirectTV and hundreds of channels. A 25" to 27" TV was more of a 1988 kind of thing (which is almost 40 years ago now). Being limited to 5 OTA channels was more of a 1980 thing.

But again you can't really buy that Sony Wega anymore, even though the CPI probably prices it at $20 these days.

Back 50 years ago, average household spend on the Internet was also $0, so it was very cheap, we weirdly didn't spend anything on it when I was growing up. Now I spend $80/month on it, and have trouble finding anything cheaper around here.

If you want to consider "communications spend", back in 1988, you might have spent $50/month on your landline, cable tv and newspaper subscription. Today households tend to spend $280/month on internet, wireless and streaming/cable services. That is actually double the CPI. They get lots more for that, but the cost of being an average middle class household has grown at double the CPI. And these days you need the internet in order to keep up with Joneses, it isn't really a choice.

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libartsreader 60 days ago
US households faced much higher costs than you recall. According to the BLS, mean monthly expenditures were $44.75 on landline service, $13.50 on cable TV, and $12.33 on newspapers. That’s $70.33 in 1996 USD, or ~$193 in 2026 USD.

More households subscribe to services today, which inflates the "average expenditures" data cited below: 93% of 1988 households had a landline, 53% cable TV, and 63% newspaper. Compare with today's household services penetration: 98% mobile phone, 94% broadband, and 74% streaming media.

You’re right that this is less than the cost of internet + cell + streaming services today — these are ~50% higher than the 1988 bundle — but consider the differences: you can access almost any kind of content from almost anywhere. And you can consume it on a smart phone or TV that costs 75% less in real terms than that TV from 2000.

Meanwhile, real median household income grew from ~$65,130 in 1988 to $83,730 in 2024 — and furthermore, the tax burden on the middle class fell during this period.

Sources: https://www.bls.gov/cex/1988/Standard/cusize.pdf https://fred.stlouisfed.org/series/MEHOINUSA672N

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