| | | I can't believe the quality I get for the price at Amazon.
Chart of the day: Adjusted for inflation, clothing has fallen in price by 66.8% over the last 20 years
 Over the last 20 years, the Consumer Price Index for all items has increased by 63.5% (see red line in chart above), while the CPI for clothing has fallen by 3.3% (blue line), meaning the real inflation-adjusted cost of apparel for Americans has fallen by about two-thirds (66.8%), see chart above. In other words, clothing that would have cost $100 in 1993 would today cost only $33.20.
Measured in average hourly earnings (“time cost”), clothing prices have fallen even more dramatically over the last two decades. Since January 1993, the Average Earnings of Private Production and Nonsupervisory Employees has increased by 84.6% from $10.94 per hour to $20.20 per hour. Accounting for that 84.6% nominal increase in wages and the nominal decline of 3.3% in the clothing CPI, the “time cost” of clothing has fallen by almost 88%. Clothing that would have required the earnings from 10 hours of work to purchase in 1993 at the average hourly wage could now be purchased with only 1.54 hours of work at the average hourly wage today.
Bottom Line: This is another example of the fact that even if median household money income (which doesn’t account for total compensation, i.e. non-monetary fringe benefits) is stagnant over time, that doesn’t necessarily mean that the average household’s standard of living is stagnant or declining. In the case of buying clothing for a typical American household even with a constant income over time, the standard of living for most households has actually increased significantly over the last 20 years, when measured in what is ultimately most important: household consumption and the affordability of life’s basics.
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