Re:It takes now 53 weeks salary to earn same as 30 weeks in ...
by NovemberWhiskey on Thursday February 20, 2020 @06:48PM
(#22379699)
It's hard to do with minivans, because the segment is pretty small.
But (assuming a 1996->2019 comparison) if you're looking at sedans, you can often go 'down market' for something that's objectively superior by almost every metric for very similar money.
For example, a mid-model Ford Taurus from 1996 (say $19K) is a much worse car than the base-model VW Jetta from 2020 that costs the same money. Slower, worse gas mileage, vastly inferior technology, safety equipment and so on.
Also let's not forget a good rate on a car loan in 1996 was 9%.
The economists are saying that due to additional features/horsepower/fuel economy etc in the base models we're getting the equivalent of 1.5 cars for 27K in 2018 vs getting 1 car for 18K in 1996, so that both 1996 and 2018 dollars buy equivalent amounts of car.
OTOH a $18K annual rent in 1996 is now $36K. So in a basket that's half car half rent, the economists calculations say that $18K car and $18K rent in 1996 is equivalent to 18K car + 36K rent in 2018 for 50% inflation.
The OP is saying that's bullshit. The car may be 50% better, but you can't buy part of a car. So the equivalent of $18K + $18K in 1996 is now $27K + $36K for 75% inflation.