Ah, Thanksgiving! An occasion to spend time with family and friends, eat and drink to excess, and give thanks for our many blessings, regardless of how large or small they may be.
And, of course, to contemplate inflation!
Each year in mid-November, a former Oxford Club colleague of mine, Anthony Summers, used to write about the price of a Thanksgiving dinner and how it’s changed over the years. But Anthony has moved on to a new position and has other duties.
So this year, that turkey and stuffing feast is all mine (to write about).
And I’ll add a twist that might make you think about it in an entirely new way.
First, however, we’ll need to consult the American Farm Bureau Federation. Every year, the fine folks at this organization send out volunteer shoppers to check prices for two weeks at the end of October. They look at the costs of 11 primary ingredients needed to cook a classic Thanksgiving dinner for 10 people.
In fact, this year’s survey results came out just this morning, and you can find them here.
Here are the 11 products surveyed…
- A turkey (16 pounds)
- Pumpkin pie mix (30 ounces)
- Milk (1 gallon)
- A veggie tray of carrots and celery (1 pound)
- Dinner rolls (12)
- Pie shells (2)
- Green peas (1 pound)
- Fresh cranberries (12 ounces)
- Whipping cream (half pint)
- Sweet potatoes (3 pounds)
- Cubed stuffing (14 ounces).
This year, the American Farm Bureau found the combined price of these 11 ingredients fell 4.5%, to $61.17, from $64.05 last year. Yet that’s still 25% higher than the price in 2019, according to the survey, and a big jump from pre-pandemic prices in general.
The Time Price
But really, the best questions to ask here are a) What did that meal cost in time worked? and b) How has that changed over the years?
Why time and not money?
Well, inflation wreaks havoc on prices. It also changes the value of the dollar and its purchasing power and distorts our incomes. And it alters these things at different rates and at different moments in the business cycle, making them difficult to compare.
So a better way to look at the prices of the things we buy and how they change over the years – i.e., how affordable they are – is the time price. This is the length of time the average worker has to labor to afford something.
The beauty of this method is that it takes money out of the equation.
Because, after all, money is just a medium of exchange between the labor you provide and the goods and services you want and need. Get rid of the money element – by valuing things in time worked – and you get a much cleaner look at how much you must work to afford something.
Ordinary prices are expressed in dollars and cents. Time prices are expressed in hours and minutes.
[Note: You can read much more about time prices and why they’re such a valuable measure of productivity and progress in Superabundance: The Story of Population Growth, Innovation, and Human Flourishing on an Infinitely Bountiful Planet. I highly recommend it.]
So how many hours and minutes did the average worker need to put in this year to buy that Thanksgiving dinner?
Computing this is simple. Just divide the price of the dinner by the average hourly wage of an ordinary worker. I’ll use the average hourly wage for a production worker in 2022 because that’s the latest data we have. That’s $34.76, according to the MeasuringWorth database, which is probably the most respected data source for historical wage data.
If this year’s dinner costs $61.17, that means the average worker needs to work about 1.75 hours, or an hour and 45 minutes, to afford it. That’s the time price of a Thanksgiving dinner in 2023.
And we can easily compare that time price with those of previous years.
According to the American Farm Bureau, the price of the same dinner in 1986, the first year the survey was conducted, was $28.74. The average blue-collar wage that year, according to MeasuringWorth, was $12.90 an hour. So that worker had to work 2.23 hours, or about two hours and 14 minutes, to afford the Thanksgiving dinner.
That was a lot more work for the same dinner.
(By the way, because I used the 2022 figure for average hourly wages this year, these calculations don’t even consider the 25% wage increase (33% when cost-of-living increases are factored in) that the United Auto Workers just won from Ford, GM and Stellantis. So next year, those auto manufacturing workers will have to labor a lot less for their Thanksgiving dinners.)
The bottom line is that despite inflation and changing prices, this year the average person could work less and spend more time at the table with friends and family than he or she did in 1986.