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Message: <blockquote data-quote="Cerebral Paladin" data-source="post: 5901717" data-attributes="member: 3448">One of the problems with cross-temporal purchasing parity comparisons (or international purchasing parity comparisons) is that the relative costs of goods and services changes over time.  Today, in the United States, any sort of labor is fairly expensive.  Hiring an unskilled laborer at the federal minimum wage is roughly $15,000, as the original poster noted.  Conversely, food and especially finished goods like clothes are extraordinarily cheap in a historical context.  It would be possible to get subsistence food (including meat!) in the U.S. for under $5/day, and you can get a set of clothes for $20 or less (if you're willing to buy as cheap as you can).  Housing is fairly expensive, though.If you compare that to most of history, it was very common for food to be expensive relative to unskilled labor--unskilled laborers would be earning at or around a subsistence living, and often starving when a harvest was bad, a drought hit, etc.  The same was true for clothes.  But that meant that as soon as you got out of abject poverty, you could afford to hire a personal servant.  My favorite example of this is a statement from Agatha Christie's autobiography that Brad DeLong paraphrased as "she mentioned how she never thought she would ever be wealthy enough to own a car – nor so poor that she wouldn’t have servants"--a statement that would be inconceivable by the end of her own lifetime, when cars became (relatively) cheap and servants became relatively expensive.So the problem is that picking a basket of goods for purchasing price parity greatly skews the cost.  Do you include a cook, maid, and private tutor for the children?  Then people in the past look rich.  Do you include only physical goods?  Then people in the past look like paupers.</blockquote>

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