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Bad Way To Measure Inflation

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The Tampa Tribune

Published: August 23, 2008

Regarding "Gasoline's Big Surprise" by Goklany and Taylor (Commentary, Aug. 17):

The authors tell us, "Gasoline is more affordable for American families now than in the days of the gas-guzzling muscle cars of the 1960s."

With that quote in mind and another one, "adjusted for inflation," which is always trotted out by the experts, I would like to trot out some much ignored facts as stated in a much overlooked book titled "The Value Of A Dollar: 1860-1989," edited by Scott Dirks, as follows.

In 1960, the cost of a gallon of gas in Alaska: 45 cents; in the "lower 48": 23 cents. A busboy averaged $1 per hour. Therefore a gallon of gas cost about one-fourth his hourly wage.

Today a gallon of gas costs, on average (taking a recent high) $4 per gallon. The minimum wage is around $6.75 an hour. That means a gallon of gas today costs the average low-wage earner over half his hourly wage. Now, that's a fact to chew on.

My point is that the "adjusted for inflation" tack is not the correct one to use in the inflation equation. Since gasoline now seems to be the coin of the realm, it should be judged on how much damage it does to the lowest on the economic scale - which is plenty. Why else would 2 percent of Americans cut back on driving?

In 1960 we did drive those big, beautiful gas guzzlers, but we didn't have to sell our souls to the oil companies to do it. Incidentally, the oil companies were still under government control and regulation, which was a holdover from World War II to keep prices affordable for GI Joe and his family. They broke that hold and today are calling the shots.

RALPH ANNAN

Hudson

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