In another thread, there was a tongue in cheek comment about inflation causing a case of beer and a box of ammo to exceed the weekly average wage at some point due to inflation. Just because I’m a sucker for obtuse data questions, I dug in:
The most recent statistics from the BLS show that in the fourth quarter of 2022, the median weekly income of all full-time wage and salary American workers was $1,084. This was a 7.3% year-over-year increase and a 1.3% increase from the previous quarter. Assuming a 40-hour workweek, the average hourly income for American workers in Q4 2022 came in at $27.10.
https://www.oberlo.com/statistics/average-us-income#:~:text=Average%20US%20Income%20(Q4%202021,increase%20from%20the%20previous%20quarter.
Currently a case of “commercial” beer (think a Budweiser, Micheloeb, Miller, and maybe Coors or Rolling Rock) costs between $15 and $30. Craft beers are higher, often approaching $80-$100 a case. And they vary widely in price by state, as do the taxes you pay for that case.
Ammunition is also highly variable. Aside from taxation issues, you have differing calibres, different gun powder loads (which influence lethality and speed of projectile), full metal jacket/partial or no coating, etc.
Fiacable was selling boxes of 9mm rounds for $12 pre-pandemic — that rose to $40 to $60 during peak pricing. Meanwhile a box of .380 caliber rounds that cost $15 pre-pandemic was going for $50 to $60 at peak, while a box of .22 rounds rose from $7 to $20, a box of .45 rounds rose from $15 to a range of $50 to $60, and a box of .38 Special rose from $15 to a range of $50 to $60. Boxes of these calibers typically contain 50 rounds.
https://www.forbes.com/sites/aaronsmith/2021/08/10/ammunition-inflation-prompts-gun-buyers-to-count-their-bullets/?sh=4d4e36007ce3
So while the prices are indeed going up, inflation would have to really really be beyond bad to get to a point where you need to spend a week’s worth of pay to shoot a case of Bud Lite.
I don’t drink, smoke, or shoot. Doesn’t feel like I’m immune to inflation so there’s that.Report
Fair enough. Doubt many wage earners are.Report
High inflation alone does not necessarily lead to falling real wages, so even if inflation were really bad it might not meaningfully affect affordability of goods and services. It depends on whether inflation is driven by excessive growth in the money supply (wages rise along with prices) or by negative supply shocks (wages don’t keep up).
On a related note, the advance estimate for Q1 GDP came out yesterday, and it looks like quarterly nominal GDP growth is down to an annualized 5%. While that’s not quite where we want to be, especially given the mediocre real GDP growth, it’s getting close and shows continued progress on controlling monetary inflation.
Also, here’s a chart of real wage growth:
https://fred.stlouisfed.org/graph/?g=12VmE
Populists keep claiming that wages haven’t kept up with inflation, and it’s just not true.Report
+1 for the link. Great post.Report
Agree with Dark. Excellent post.Report
I want to say that I very much appreciate Philip writing this and that I was tickled when I saw it. I also want to reiterate to those who didn’t see the original exchange that my comment really was a joke not a serious attempt at analysis!Report
I figured we needed a bit of lighter fare heading into the weekend. Thanks for opening the door.Report
These craft beer numbers are a bit off. You can get just about anything for $8-12 a six pack, which is $30-50. I haven’t seen any domestic cases for more than about $20. Guinness, which I drink, is the same or cheaper for a 4 pack or 8 pack. About $18 per 8 pack, same as when they came out in 2020. 4 packs are $8-10, same as 2020. I don’t know why beer prices seem to be stable. The beers at the bar, however, have gone from $3.00 to $4.50 on happy hour in the last three years.Report