I’m reading Little House on the Prairie to my daughter. Christmas of (approximately 1870), Laura and Mary each received a shiny penny in their stockings. My daughter wants to know, how much a penny was worth in those days? She said “A penny was worth a lot back then, wasn’t it?” And I have to concede that yes, it had substantial buying power (at least a child would think so)…but what kind of buying power are we talking about? Similar to a dollar today? $.50 today? I’ve tried using Google, but I apparently don’t have the right search terms, because I keep coming up with numismatological sites.
Well, the inflation-calculators and other sites I found while searching on Google seem to give a range of $0.13-0.20, but that seems low to me.
The term you are looking for is “constant dollars”, which is the value of a given dolar value at different times in history. Here is a constant dollar calculator that will do the math for you; according to their calculations, one penny in 1870 would be equal to 14¢ today.
Well, FWIW, I’ve got a Dover reprint of Shoppell’s catalog of house plans from the 1880s.
Page 20.
A smallish 1880s two-story Victorian frame house, clapboards 1st story, shingles 2nd story and roof, with 9’ ceilings downstairs and 8’6" ceilings upstairs, parlor, dining room, kitchen, front hall, three bedrooms and one bathroom upstairs, an unfinished attic (really just a garret, not one of the really big ones you can convert into a studio or a spare bedroom), a cellar under whole house, a modest front porch, a small bay window, and only a tiny amount of stickwork…in other words, we’re not talking about one of those Queen Anne painted ladies with the 11-foot ceilings and the turrets, we’re talking about a smallish yet fashionable house for a smallish middle-class wage-earner with a smallish family who wanted a nice little house in the suburbs…
…was estimated by Mr. Shoppell at coming in at $3,112.
So what’s a modest little three-bedroom going for nowadays?
From this website, $0.01 in 1870 is worth about $0.14 in 2003 dollars. This seems to agree with several other posters, so it’s probably reasonable. Note: this kind of data before 1913 (when the government started keeping better records) is very much an estimate.
Considering it probably didn’t include the cost of the real estate that it sits on, and it had little or no insulation, indoor plumbing, electricity or built in appliances, $43,568 sounds like a bargain (3211 x 14).
I think $.14 is a bit low. Consider as just one example that you could get on the streecar or subway for a nickel; I think today’s fare is over two dollars for NYC, and well over one dollar for most other metro areas.
IMHO for most things, in most contexts, a factor of at least 20 works better.
It just shows you how the perception of money has altered over 100 years ago. A person of that time would not be able to comprehend why we need such tiny, tiny denominations (in terms of purchasing power). That person would have known no “inconvenient” money and never let change pile up at home because it was worth too little in relation to your daily needs to be worth carrying around. In the days of Little House, all money was worth carrying, and using because there existed no coins of nearly infinitesimal value.
Probably at least twice that.
(Of course it is important to remember that houses at that time did not have to have electrical or plumbing contractors, which alone would have reduced the cost of building substantially.)
Here is an excerpt from “Minnesota as it is in 1870” on the cost of living. It leaves a little to be desired and deals mostly with things like building materials and such. It does list wages for some professions, but neglects to give the timeframe. For example, laborers make $1.50 to $2 but per what? Day?
If that’s per day, we can compare that with minimum wage now ($5.15/hour). Assuming an 8 hour day in 1870 (which may or may not be valid), we get $0.18 to $0.25 cents per hour.
NOTE: I am not an economist, so I’ll just leave it at that and hope someone who knows what they’re talking about chimes in.
Here’s two more: a table of consumer price indexes from the Federal Reserve Bank of Minneapolis and an article from The Economist. The first link has a table of consumer price indexes ranging from 1800 to 2004; you simply divide the historical CPI into the 2004 CPI to get a conversion factor. So, the CPI in 2004 was 567 and the CPI in 1870 was 38; 567/38 gives $14.92 2004 dollars to $1.00 1870 dollars.
However, that doesn’t mean that a penny in 1870 would be worth 15 cents. For various reasons, things at the extreme low end of the price range don’t increase in the same way. A penny in 1870 might have bought some candy that might cost 50 cents today, a candy bar that might cost a dollar now, or a toy that might even cost 5 to 10 dollars. The second link, from The Economist, shows charts of how various types of consumer goods have changed in price. Cigarettes and alcohol, for example, are much more expensive today than inflation would suggest, because of higher taxes. Technologies which were new a hundred years ago are now vastly less expensive. For example, a long-distance telephone call (impossible in 1870) that cost, say, $5 in 1900 dollars might cost well under a dollar today, in 2005 dollars. Or consider computers and their pre-silicon chip equivalents. Today, you can buy an inexpensive computer and a copy of Microsoft Excel for around $500; to rent an office and hire a staff of accountants to perform similar calculations for you by hand would’ve cost a fortune in 1900.
IIRC the workers on the Transcontinental Railroad got $1/day.
All I can come up with is that the plain penny postcard was introduced in 1870 (now $.37) and there was a song called “A Penny For A Loaf Of Bread.”
Unless the plain penny postcard is something different from today’s postcard, first class USPS postage for a postcard is only $0.23
The value of money depends on what goods and services can be purchased with it, doesn’t it? So what did kids in 1870 buy?
I was going by this and assumed the cheapest must be the price for a blank postcard with the postage printed on it, but I must be wrong because I can’t find such a thing.
I’ve been trying to find a site with prices from general stores but haven’t had any luck.
Since they were living far from any store, the chances of the girls actually spending the money was limited. It was very probably more of a “shiny object” to them that they somehow knew was linked to buying things. Ma & Pa Ingalls probably rarely saw more than $100 per year in cash since they were itinerant farmers.
Its not just inflation that is a factor things like technology, transportation & communications have made goods and services cheaper. So a penny may be worth 20 cents in regards to inflation but in the 1870 alot more labor went into each product bought with a penny. Coke for example started selling at the turn of the 20th century for a nickel for a 6oz bottle. In 2005 a 2-liter (67oz) can be had for $0.99 so the price per ounce is only double what it was a hundred years ago even though wages are 10-20x higher.
From this page
So an 1870 penny could buy a candy bar. Of course, a candy bar in 1870 was a big treat for a poor kid.
McDonalds may pay a kid $5.15 per hour, but union laborer rates are probably on the average of $15.00 per hour if not more, NJ area. I have a hard time finding kids to cut grass in the summer for less than $9.00 No economist either sorry, just observations
Someone else has already commented on the postage. However, a loaf of bread did sell for a penny during that era. And (what passes for) a (decent) loaf of bread nowadays goes for $2 or more. Yes, you can buy a loaf of white play-doh for $1 in Wally World, but I wouldn’t eat that, sorry. I’m frustrated enough with what’s happened to rye and “whole wheat” bread as it is. They’ve both turned soft, too.
There was “penny candy,” but that wasn’t a penny a piece, it was so much for a penny. What made it that expensive was the sugar, which mostly came from the Caribbean back then, and the shipping costs. Bread, OTOH, was flour (wheat was the #1 crop planted on the prairie at that time), :smack: yeast (“sour dough” yeast is wild yeast you get from leaving water with something the yeast can digest setting out open), and water. Of course, there was also the “opportunity” cost of fuel to bake the bread (not many trees on the prairie; houses were built from sod, but I don’t think you’d want to bake bread with dried dung). OTOH, when you build, etc., with wood, the wood’s not gone; when you burn it, bye-bye.
All that to say this: As someone else has already commented, some prices have increased proportionately; others haven’t. :dubious: