This Christmas, Americans Can Afford More Toys Than Ever
The rising prices throughout much of the economy make it a little easier to appreciate the things that seem to be inflation-proof, like video games.
Inflation has been a nasty grinch for the past few years—seemingly stealing away our hard-earned dollars while we sleep.
But the rising prices throughout much of the economy make it a little easier to appreciate the things that seem to be inflation-proof.
Like video games. When The Legend of Zelda: Ocarina of Time was released in 1998, it cost $69.99 to order through the Sears catalog. Another Zelda game, Tears of the Kingdom, was released this year—25 years later—and it retailed for $70. That actually made it one of the most expensive games of the year, since most new Nintendo games these days sell for about $60.
Do the math. If Zelda games had kept pace with inflation, the new one should have cost about $130 today.
Sure, games today achieve some cost-savings because they're digital downloads. That means production companies like Nintendo don't have to pay for a physical game cartridge or CD-ROM, packaging, or shipping. But games today are also far, far more advanced than anything you could have bought for any amount of money a quarter-century ago.
It's not just video games that have defied inflation's steady creep. Toys in general are less expensive today, even before adjusting for inflation, than they were a few decades ago. That's despite the fact that wages have grown significantly over the same period of time. The average worker in the United States made about $13 an hour in December 1998, compared to about $29 dollar per hour now.
This is true over longer periods of time too. As I wrote earlier this year, the amount of work necessary to buy a single new Barbie has fallen quite a bit since the doll was introduced. According to what University of Central Arkansas economist Jeremy Horpedahl has termed the "Barbie Price Index," the average American woman has to work about 30 minutes to afford a Barbie—down from about two hours in 1959, when the doll first appeared on store shelves.
In fact, toys are so much cheaper today that some columnists say it's a problem. "A toy that cost $20 in 1993 would cost only $4.68 today," writes Katie Notopoulos, a senior correspondent at Business Insider. She claims that the availability of so many easily affordable toys and games—made possible by global trade, as she notes—is one of the reasons parents today are "so stressed out."
Seems like a good problem to have, doesn't it?
We're wealthier than ever, and we have better stuff. Nevertheless, it seems like capitalism can't catch a break these days. There's a steady drumbeat of economic nostalgia on both the political right and left that cherry-picks statistics to make the argument that Americans were better off 20, 40, or even 70 years ago. And when presented with evidence that many of the things Americans like to buy are getting cheaper, that's somehow a problem too.
There will always be those who want to declare "Bah, humbug!" during the holiday season. But prosperity is the gift that keeps on giving.
