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Archive for Sunday, September 28, 1997

PRICES HAVE SOARED, BUT SO HAS BUYING POWER

September 28, 1997

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Looking for cheap grocery prices? Try aisle 1937.

Imagine rolling your shopping cart down a local grocery aisle and finding steak at 19 cents a pound.

Or pounds of apples for 25 cents. Or even a pound of bacon for 39 cents.

Those prices were available in Lawrence -- six decades ago.

"They're sort of hard to believe, except when you look at what people were making per hour back then," said Russ Jensen, a local 75-year-old retired grocer.

Jensen was a 15-year-old high school student in 1937 when he worked part time in the local Safeway store at 10th and Massachusetts.

Jensen, who was employed by the grocery chain for more than 42 years, has a yellowed price guide from the 1940-1941 era that shows how prices have changed over the years.

For example, back then, pie cherries were a dime a can. They're 99 cents to $1.09 a can now, he said.

Jensen's recent visit to the Journal-World to show some of the prices spurred a trip to the Lawrence Public Library. A search through old J-W copies on microfilm showed what prices were for a range of goods back in September 1937.

For example, the Cut Rate Grocery and Market, 734 Mass., had a newspaper ad selling 6 pounds of bananas for 25 cents. Now you can find them on sale for 19 cents a pound.

Service was also stressed back then.

The Corner Grocery, 303 W. 13th, offered to deliver your groceries for free. And the store had charge accounts.

Now many grocery stores make you sack groceries yourself -- although some let you buy with a credit card.

The seemingly rock-bottom prices of yesteryear were actually not that great compared to the buying power of today's consumers, according to a Kansas University economist.

"There are a lot of things that are higher today," said David Burress, an economist with KU's Institute for Public Policy and Business Research.

"But on the other hand, we earn more real dollars," Burress said. "The question is, what share of your income do you spend on food? The answer is you spend a significantly less amount now than you did back then."

Low salaries, low prices

Part of the reason grocery prices were so low 60 years ago was because salaries were low.

In 1937 Congress was still a year away from establishing the first federal minimum wage of 25 cents an hour, said Steve Jansen, director of Lawrence's Watkins Community Museum of History.

"In 1937, the average hourly earnings were 62 cents an hour for manufacturing," Jansen said. Because manufacturing was one of the higher-paying professions, most workers were paid less than that, he said.

At 25 cents an hour in a 40-hour week, workers would make $10 a week, or $520 a year in salary.

At those wage scales, the 1937 grocery prices don't seem like that much of a bargain.

"In some ways, that may have been more money out of their pocketbook than it is out of ours (at today's prices)," Jansen said.

$550 for a car

Skimming through the J-W ads from 60 years ago shows just how much prices have risen.

Kansas University football tickets to a home Big 6 conference game were $2.25. Today's cost is $26 for reserved seats and $16 for general admission.

An eight-room "modern" home, with a corner location on the west side, cost $2,000. Compare that with a typical home on the west side today of $100,000-plus.

Weaver's Department Store, 901 Mass., had an ad in 1937 selling sweaters and skirts at $1.95 each.

"Isn't that incredible at $1.95?" said Linda Burhenn, merchandising manager for ladies department at Weaver's, laughing about that price.

"Most of our skirts start at $26.99 and tops start at $24.99," she said.

Burhenn, who said the store is celebrating its 140th year, said she would like to go back in time to take advantage of the prices.

"But I'd like to have all the conveniences of today,"

she said.

The J-W ads also showed you could by a year-old 1936 Studebaker -- "A deluxe sedan with low mileage and clean as a pin" -- for $665 at Bullene-Skinner Motor Co., 614-618 Mass.

And at Winter Chevrolet, a 1937 Ford Coupe with 9,000 miles was going for $555 -- a year's earnings for many people back then.

Today's year-old models are also selling for about a year's earnings for some people.

For example, a recent ad from Laird Noller, 23rd and Alabama, listed a 1997 Ford Taurus GL at $15,999 and a 1997 Ford Mustang Cobra at $24,999. A 1997 Lincoln Town Car was $30,999.

However, today's car buyers are getting a better deal, Burress said.

"Cars are much safer, they last longer and they don't break down as much," Burress said.

Back in 1937 it was also much cheaper to go out on a date to the movies.

For 10 cents, you could have seen Bette Davis and Henry Fonda in "That Certain Woman" at the Granada Theatre. Now, a local theater ticket will cost you about $5.50.

Probably the best way to tell whether you're better off with today's prices is to see how long it might take you to work for a nice thick steak.

Back in 1937, at 62 cents an hour in a factory, it would take you just under 19 minutes to work long enough to buy a one-pound steak, then going for 19 cents a pound.

A comparable salary today might be $12 an hour, Burress said. And at $2.84 a pound, you'd have to work about 14 minutes.

"Today you're working fewer minutes for most things," Burress said. "People are better off."

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