Prices and earnings
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Life in 1908, it would appear, was cheap to live: you could enjoy a pint of bitter in the pub for a penny, travel from Birmingham to London for 20p, and see the opening day of the 1908 Games from as little as 12p.
If you were among the 50,000 or so individuals who owned a car (around £400), petrol would cost just 4.7p per litre.
Of course, while simple comparisons with today’s prices might appeal to our sense of nostalgia, they are not very meaningful. Whether something is expensive or cheap depends not on the price tag in isolation, but on prices and incomes generally. Account for the fact that average annual earnings in 1908 were £70, and the capacity for the common man to drink, drive, or buy-out a box in the White City athletics stadium becomes severely diminished.
In truth, the dramatic increase in incomes in the UK since 1908 makes almost every good for which comparisons are possible look much cheaper today. Prices may have risen eighty-fold, but over the same period average earnings have increased 350-fold, with the real take-off in our purchasing power occurring in the post-war period. The notable exception to this rule is housing: in 1930, the average house cost three times the average wage; today, the figure is ten. Houses have not merely risen in price; they have become fundamentally less affordable.
Even though we can afford more of them than we could in 1948 or 1908, other items have become relatively more expensive, that is, their price has increased faster than the cost of things generally. Labour-intensive services, from healthcare to hairdressing, have become more costly because the price of these tends to keep pace with earnings. Rising duties on cigarettes and alcohol have made these relatively dearer, too.
On the other hand, trade, outsourcing and improved production techniques have brought down the cost of food, clothing and electronic gadgets in recent years.
In the run-up to 2012, the UK saw the first serious dip in price-adjusted incomes since the 1970s. The economic and psychological effects of this have certainly been dramatic; but though it might not always feel that way, we can buy far more petrol, more beer, more food and more Games tickets in 2012 than we could in 1948 or 1908.
The fruits of our toil: average earnings have risen faster than prices, particularly since WWII, reducing the time it takes to ‘earn’ most consumer goods
The chart shows how many minutes someone on the average wage would need to work in order to earn the money to buy certain goods