Buying Power: Computers Are Cheaper, College Is 248.4% More Expensive
The American Institute for Economic Research has released their Cost-of-Living Guide, which tracks the purchasing power of the dollar, says the WSJ Wallet Blog. They pulled some interesting examples of items that have increased in price — and a few that have actually gone down since 1990.
Up:
College tuition and fees: 248.4%
Cigarettes & other tobacco products: 246.5%
Motor oil, coolant & fluids: 170.7%
Oranges and tangerines: 157.6%
Down:
Personal computers & other information processing equipment: -89.4%
Televisions: -83.0%
Audio equipment: -45.4%
Toys: -43.4%
Good news for those of you who like electronics, and bad news for those of you who want to go to college to learn more about them.
The Buying Power of a Dollar, on a Downswing [WSJ]
(Photo:frankieleon)
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Comments:
The "television" one seems deceiving, to a point. Here's my theory: In 1990, a "big screen TV" was often a glass-screened CRT that was 31" or maybe 35" diagonal and ran around $1,500 new.
Today you can get the same number of inches for a lot less money...but most people are buying larger TVs. Those same exact people who bought the 31" CRT are now buying 60"+ LCD models for $3,000 or more. The same idea trickles down to the smaller ones, from what I've seen. Most LCD buyers are going with 42"+ now. So the bang-for-buck on inches is better, but people's expectations have grown at a greater rate.
Hope that made some semblance of sense.
It does seem like toys are cheaper nowadays. I was a kid in the '80s and early '90s and I feel like my family just couldn't afford to buy us that much stuff. Partially because we were pretty poor, but also because toys were expensive! We had to save our allowance to get anything and it took a long time to save enough for anything significant.
@FatLynn: Yeah, and then the surrounding schools will up their prices just to "match" the rising school's prices, and thus, the cycle perpetuates, even though no one is really getting a "better" education from one semester to the next or whatever.
True story.
/angst
@nighttrain2007: Goddamn the tangerine lobbyists!
But seriously, wtf are you talking about? I understand how tobacco is taxed more but are you saying if the government stopped funding universities they would be cheaper?
@Bladefist: I'm already operating on the notion that my eventual kids will really have to earn their way into college. If they're not 100% academically inclined, I feel they'd be better off at one of the many tech schools available now. College degrees are being devalued (or commoditized) more and more every year, but the prices are still going exponentially higher.
A personal computer was not something every house had is 1990, based on the fact that the technology was so much more expensive. I don't feel like this is a fair comparison. It would be like comparing the cost of a prescription drug when it is first released with itself after 10 years and a generic is available.
@Ash78: I fully agree. One of my theories is a bachelor degree will be the equiv of a GED in 20 years and everyone will have masters. Then, in 20 years, phd.
Hard to know what went into the college cost calculations.
It is true tuition is going up quite fast, but that's in part due to the decreases in government support of colleges, either through direct funding or indirect research dollars.
As government support of education has waned, the colleges have little choice but to raise tuition.
One side effect of this is grade inflation - since the schools are more dependent on keeping students happy.
@nighttrain2007: And if the government stopped regulating all these industries the prices would go down and the consumers would all live happily ever after?
We have had more government regulations tossed aside in the last thirty years than you or I could imagine and look where the hell we are right now.
Get it through your head... American corporations are not run by starry eyed idealists full of altruistic motives and with the best interests of the country at heart.
@anonymousryan: In fact if universities, not just a few, but ALL, were privately funded and forced to face the free market, instead of living off my dime (subsidizations by the government), universities would be forced to adjust their prices and offerings to bring in customers (students). Some prices may go up, but many would go down.
@TCTH: "American corporations are not run by starry eyed idealists full of altruistic motives and with the best interests of the country at heart."
Neither is the government.
@Jean Britt: Work with the financial aid offices of the colleges you're looking at. While I don't know your exact situation, I can tell you that there are many financing options available if you are attending a regionally accredited college/university (e.g. Pell Grants for your first undergraduate degree, subsidized/unsubsidized student loans, state and local grants and loans, college financing, work study, scholarships). Private universities, while their sticker price may look prohibitively expensive at first glance, often aren't even close to the actual cost to the student.
Just my two cents, as someone who has worked in a smaller private university for many, many years.
You may also want to look for accelerated programs tailored for working/adult students.
@FatLynn: There's a thing in academia called the 'discount rate', which shows you this information. Unfortuntately, I am not aware of any public regulations that require this information to be published. However, what you can find in many cases is a breakdown of the amount of financial aid offered to students, including institutional aid (e.g. scholarships). The College Board's website has this information on colleges and universities, and even provides an average amount for different award types, as well as the percentage of students whose need was fully met.
NACUBO (the National Association of College and University Business Officers) does quite a bit of work with discount rates. Just FYI.
@nighttrain2007: And you think that these cheaper universities would still conduct the same amount of beneficial research and provide the same quality of education that they currently do? Guess what? Your private sector universities already exist - they're called DeVry, ITT-tech, University of Phoenix, etc... Hey, a B.A. is a B.A., right?
@TCTH: Yes because the government has done such a good job the previous 60 years they've been interfering in the economy haven't they? Promising drugs not getting to patients when needed, limited choice of safe and interesting foods available throughout the world, socialized medicine that has skyrocketed the prices in the medical industry. The list can go on quite a while...
I can honestly say there is not major government regulation entity that if it didn't exist, the free market wouldn't handle just as easily.
>>American corporations are not run by starry eyed idealists full of altruistic motives and with the best interests of the country at heart
Of course those 536 idiots in Washington know what's best right? One more 'bailout' and we'll be wallpapering our cardboard boxes with dollar bills...
@nighttrain2007: "universities would be forced to adjust their prices and offerings to bring in customers (students)"
yes, because catering to student demands works out SO WELL for universities, and doesn't contribute AT ALL to grade inflation, lowering of standards, and students who graduate illiterate. It doesn't create "majors" that train for a job that will exist for exactly five years before changing technology makes it obsolete and you now have some fachidioten (specialty idiots) who can do nothing else but the major they DEMANDED the university provide.
There's a robust and competitive market in universities, public, traditional private, and for-profit. The truth is they compete based on student services, not cost. Lowering tuition doesn't help the bottom line; raising it while providing a spakin' new gym helps the bottom line a lot. Students don't make (many) educational decisions based on price.
@GildaKorn: That's exactly what I was thinking: things produced here versus things produced elsewhere/outsourced.
@nighttrain2007: You do realize that the truth lies somewhere in the middle, right? Maybe we should go back to privately run fire departments and toll roads? The unfettered free market would be a scary thing indeed -- no fire codes, no building codes, no concerns about insider trading and manipulating the stock market, no minimum wage laws, no OSHA or worker's comp. Sounds like a ball.
Constantly harranging about the studidity of government doesn't really do much to move the discussion forward.
@nighttrain2007: If you think what exists in America is "socialized medicine" I firmly believe that you need a re-orientation.
@RandomHookup: You do realize that the truth lies somewhere in the middle, right?
Unfortunately to the point that we have gotten that may be the best possible solution. But interesting you bring up privately run fire departments and privately owned roads, both of which are on the RISE (include privately funded police and ambulance services)
>>Constantly harranging about the studidity of government doesn't really do much to move the discussion forward
I see. So pointing out that the three areas that have seen an over 100% increase in fees since 1990 are heavily regulated by the government while those that have seen a similar decrease are not is 'harranging about the stupidity of government'.
I thought it was making a logical statement about the general ineptness of government that quite a few here seem to believe to be doing a good job...
@Ash78: Tell that to my mother. She insists on me going to collee to the point that she's considering sending me to a Chinese college (yes- because undergrad "international student" tuition at most Chinese colleges is 1/10 what equivalent colleges cost in the US, living costs included- and local resident students only pay 1/10 of THAT- yes, imagine a college that only charges US$500 in tuition per year).
College tuitions also increased significantly because student loans were given out freely to just about anyone who asked. That's why college students graduate owing $100,000 or more and then struggle trying to pay off these student loans (which are not discharageable in bankruptcy) while working at fairly low paying jobs. It will only get worse over the next few years.
I think if more people stopped going to college defacto, but looked into trade schools and other forms of post-high school education/training, college tuitions will decrease due to less demand.
@nighttrain2007 wrote: "Yes because the government has done such a good job the previous 60 years they've been interfering in the economy haven't they? Promising drugs not getting to patients when needed, limited choice of safe and interesting foods available throughout the world, socialized medicine that has skyrocketed the prices in the medical industry. The list can go on quite a while..."
No, the private sector did a great job with the economy over the last sixty years. That's why our health care costs are so low relative to all the other countries and the Investment Banks and Auto Industries are absolutely tripping overthemselves trying to lend the bankrupt inept government money so that it doesn't fail.
Speaking of failures...
@Ash78: While many consumers certainly are buying bigger and bigger televisions based on this reduced cost, I personally have no interest in having a TV bigger than my 32 inch CRT. I don't think I'm alone in that notion either, that at some point, enough is enough, and bigger is not always "better" if a TV is merely an accessory to life rather than its focus. I think its fair to compare a 35 inch TV in 1990 with a 35 inch TV today in the way this study does. While a 60 inch LCD or plasma is far superior to a 1990's jumbo screen CRT (and likely about half as much), certainly a 750$ computer of today is light years ahead of the 1500$ personal computer of 1990, and that is not "counted" either in this study.
@stevejust: That's why our health care costs are so low relative to all the other countries
UM EXCUSE ME? When you have to mortgage your house to pay for lifesaving surgery, or forgo sending a child to college and throw yourself into massive debt to live through the cancer you quite obviously brought on yourself. Right? Or pay upwards of a months salary because you had to ride in an ambulance. That's "cheap" right?
@TCTH: You're right, they only care about themselves. The problem is, the government is also full of self interested people. The government isn't full of starry eyed idealists full of altruistic motives either.
@nicemarmot617: I'm not sure I would say that. I think partially because you may not have been earning as much as swiftly. To me it seems that items have only gotten more expensive, even though they're being made more cheaply.
Personally, shelling out $50 for a video game is reprehensible, and $29.95 for a stuffed animal I could make myself is beyond belief. Look at the action figures - $10 even $15 for something that used to be $5 MAX.
I just think the "assumption" of affordability is there because people were making more money.. for a time.
@nighttrain2007: And even if they were starry eyed and perfectly altruistic , they don't have a fraction of the information they would need regarding the preferences of ever individual in the country. (See public choice thoery)
@stevejust: Take a look at the S&P since inception and tell me that the private sector doesn't do amazing things.
@floraposte: They say due to declining enrollment and donations.
I wonder what the per student cost of public primary and secondary education has been doing.
@chuckv: At least the government does have some semblance of responsibility to the public and politicians have much less to gain than corporate managers. While public vs. private is certainly not a black and white issue, and some mix is required, it does generally seem like our government cleans up the mess left behind by capitalism run-amok. If you feel that the people who represent you at any level of government are simply self interested liars trying to make a buck in public service, by all means, vote them out. If you don't like any of the candidates, maybe it's time to try to run for office yourself, or try to make your voice heard by exercising some of your political freedoms. If politicians are as you say, it is only because of the political apathy of the American people.
@nicemarmot617: With toys, everything is marketed around the holiday season (and with a lot of other products as well). The cost of toys gets SIGNIFICANTLY cheaper if you don't shop for them right before Christmas.
If you are poor, teach your kids that Santa doesn't exist, but when the store clearance sale starts for toys they can buy double what they would normally get for Christmas for the same price as pre-Xmas. So if they got 4 toys, they could get 8. The electronic toys that are oh so wanted by today's children yet tossed aside after 1-2 days of play seem to have the biggest drops, so if your looking for this stuff, try to hold off till after Xmas. Yes you lose the magic, but you get more entertainment value for what you pay, if you are poor this is what you might have to do. There are some instances where the toy will be cheaper before Xmas, but that doesn't happen often.
That 50$ video game WILL go down in price, I have seen it a million times. If your looking for a Mario game that seemingly never goes down in price you will have to look a little harder, but during the off-holiday-season the ebay selling price for games goes down significantly, this is the time to buy! I have seen copies of Super Smash Brothers Melee sell for 20$ on ebay.
@Jean Britt: As someone with a photography degree and a student loan debt in the high 5 figures, I suggest you just get jobs in the industry. Start photo assisting, working in production...unless you are really set on having a degree in which case by all means...
I just kind of feel that if you want to SHOOT a degree isn't necessary. Its kind of like getting an MBA from Harvard, its more about the connections you get than the actual learning.
Also, the photo industry isn't really doing so hot at the moment. I've had other photo assistants who have been in the business longer than I have asking me if I know of any bartending jobs. And considering I'm STILL bartending 2 years out of school, you might want to get that job at Applebee's. Photography is a work your way up from the ABSOLUTE bottom kind of career. You will not be making money out of the gate. If you are interested in weddings, running a portrait gallery etc. you probably could but why would you need a degree for that?
Sorry, I could go on and on...pm me if you want any more info.
@Bladefist: As a semi-recent college graduate, I have to agree. College was a bit of a joke, although I went to a state school. Most students view it as a place to party, not learn. I would venture to guess that a high schooler 40 years ago knew more than the average college grad now.
@Jean Britt: There are thousands of grants and scholarships out there to help people go to school.
I'm not positive about how to look them up, but if you're serious about it and don't mind a lot of writing, you can get a lot of it paid for that way.
@Bladefist: When did this "increase in student aid" happen exactly?
I was allowed to take out government loans but the amount of actual AID I got for school was miniscule. I would have assumed the increasing cost had to do with the government NOT giving more aid and PRIVATE companies stepping in to offer loans at high interest rates to anyone who wanted them, everyone but the students looked at the problem as "solved" and moved on.
I can't imagine the incidence of default on student loans isn't rising along with the rate of default on mortgages, but unlike mortgages companies that give out student loans lobbied congress hard enough to make them the ONLY loans you can't declare bankruptcy to get out of. I wonder if there is a coincidence between that and them giving so freely of their money????????

















In general the areas that increased are either sponsored by the government, heavily regulated by the government, or in the case of tobacco heavily taxed by the government.
OTOH, products that do not face the same regulation, interference, or mandating of government 'intervention' are seeing a decrease in prices. Imagine that....
Of course when you compare the value of a dollar to pre-1913 (creation of the Fed), the dollar these days is pretty much worthless.