Thanksgiving is almost upon us and time has come for that most sacred of American traditions: bemoaning the rising cost of living. Per this Bloomberg headline on Thursday, “Thanksgiving Meal Costs Most Ever as Bird Flu Hits Turkeys.”
Well, that’s complete and utter nonsense.
The headline grabbing data comes from the American Farm Bureau Federation, which faithfully records the cost of 12 items (e.g., turkey, pumpkin pie mix, sweet potatoes, etc.) that go into a preparation of a Thanksgiving meal for 10 people.
On the face of it, the nominal cost has risen by $0.70 from $49.41 in 2014 to $50.11 in 2015. Using a BLS calculator, I have inflated $49.41 in 2014 dollars to $49.64 in 2015 dollars. So, the real increase amounts to mere $0.47.
Now let us see what happens when we adjust the nominal cost of Thanksgiving dinners by the rise in nominal wages.
In October 2014, FRED tells us, the average hourly wage of production and nonsupervisory employees in the private sector (i.e., blue collar workers) was $20.72. In October 2015, it was $21.18.
That means that in 2014, an average worker had to work 2 hours 23 minutes and 5 seconds to procure all the items needed to buy a Thanksgiving dinner for 10 people. In 2015, s/he had to work 2 hours 21 minutes and 57 seconds to do the same. So, in terms of actual work, the price of a Thanksgiving dinner has decreased by 1 minute and 8 seconds between 2014 and 2015.
That may seem like small beans, but consider what happened to the cost of a Thanksgiving dinner since 1986, which was the first year in which the AFBF collected the pertinent data. In 1986, Thanksgiving dinner cost $28.74. In October 1986, an average worker made $8.96 an hour. That means that s/he had to work 3 hours 12 minutes and 27 seconds, or 50 minutes and 30 seconds longer than worker today.
So, enjoy your Thanksgiving dinner and rejoice in knowing that you have worked almost an hour less to earn it than would have been the case in 1986.