^{Wealth & Poverty Review} Ritz Abundance

Joseph (Jake) Klein recently wrote a great article about Ritz Crackers. He notes that they were introduced in 1934 at a price of 19 cents for a one pound box. There are around 8.75 crackers per ounce so a 16-ounce box would yield around 140 of the tasty wafers. Ritz outsold every other cracker their first year on the market. Five billion were baked in 1935, giving every American 40 crackers on the average.

Today you can pick up a 13.7 ounce box at Walmart for $3.88. This will give you around 120 crackers. Blue-collar hourly compensation (wages and benefits) were around 53 cents in 1934. This would put the time price per cracker at 9.2 seconds. The blue-collar hourly compensation rate is up to $35.72 today, putting the rate per cracker at 2.8 seconds. The time price has fallen by 69.2 percent. You get 3.24 crackers today for the price of one in 1934. Ritz abundance has increased by 224 percent. This happened over the same period that U.S. population increased by 165 percent from 127 million to 336 million. Ritz abundance increased at a 36 percent faster rate than population.

Things used to be cheaper but were much less affordable. This is why comparing time prices over time is much more revealing. The time price is the true price we pay for the things we buy. As long as hourly income is increasing faster than prices, things can get more expensive and more affordable at the same time.

Tip of the Hat: J.K. Lund