Good Question

DENVER (CBS4) ― "I've been in retail for 30 years, it's been hard," said business owner Lisa Satterfield.

But she sees opportunity, even in a recession. Recently Lisa and her business partner moved their Siam Secrets store from a kiosk at the Cherry Creek Mall into a store.

The mall these days is at 100 percent occupancy again. Hardly sounds like a recession.

"There's a lot of us that are paying our bills making our mortgage payments doing what we're supposed to be doing," said a woman shopping in the mall.

I know, I know, there's another side to this story and it's heartbreaking. People are getting laid off and can't find jobs. People are losing homes. People are without health care and proper food.

But you hear that other side every day with the grim economic news that keeps pouring out like boiling oil over a castle wall. We thought we'd look at how bad we have it compared to the past.

Professor Mark Perry studies the American economy at the University of Michigan-Flint. Not exactly a city in its glory days with the decline of the auto industry.

He was stunned recently to see so many people at the mall in his area.

"It was so crowded I couldn't believe it, it was like a Christmas season ... the parking lot was full of cars, the food court was full of people. People were in line to buy movie tickets, people were shopping at all the stores," said Perry.

He said America as the richest country in the world has lost track of just how good, on average, we have it.

"As much as we hear how bad everything is the reality is people are still shopping, they're still out in lines. They're not in bread lines, they're in lines at the food court and lines at stores at some of the malls," said Perry.

Perry figured out a way to measure just how well we are doing.

He took old Sears and Montgomery Ward catalogs from the 40s through the 70s and used them to gauge the typical price of a product. Then he looked at the average wage at that time and calculated the number of hours it would take at the average wage to by some typical household items.

"Back in 1950, somebody would have to work 154 hours at the average wage back then to be able to afford a refrigerator and today somebody would only have to work around 22 hours," said Perry.

That's not all he found. "Back in 1950 that took 127 hours of time or work to purchase a dryer, today that could be purchased for 20 hours," said Perry.

He created a list of items. Things like a refrigerator and dryer, toaster, vacuum cleaner, sofa, etc. and figured it would take eight months to buy them. "An average worker today would only have to work 1.6 months to purchase those same items that almost everybody has in their household," said Perry.

Perry points out that cars are cheaper, better, safer and have more options. "About ten years ago the average price of a new car in real inflation adjusted dollars was around $25,000. In almost every year since then, over the last ten years, the average price of a new car has fallen and the most recent year for which we have data, the average car was selling for around 23,000," said Perry.

This year, car prices have gone through the floor with dealer incentives and pricing.

Need a cheap home? Zillow.com reports the average home price in Flint these days has dropped more than 12 percent over the past year to $54,000.

In Denver, Zillow reports the average price down two percent in the last year to $216,500. Across the country the average price is running about $200,000.

"In terms of housing affordability there's never been a better time in the history of the United States to buy a new house or a used house," said Perry. "Because of the mortgage rates being at historical lows, housing prices being low and then the fact that the medium income has either stayed the same or gone up."

No one has it better than Americans said Perry when it comes to food. The U.S. Department of Agriculture has tracked the cost of food since the early half of the last century.

"That's consistently declined, year by year and so now that we're down so that the average family in the United States only spends about six percent of their household income on food," said Perry. "And that's the lowest it's ever been in the history of the United States also on an international comparison we have the lowest food prices of any country in the world and measured by the percent of our income that we spend on food it's less than six percent. Even in Canada it's nine percent in France and a lot of European countries it's 14 or 15 percent, Mexico it's 24 percent. Countries like China and Russia it's 35 percent of their income."

Like the size of our homes, it has meant upsizing. "Our problem is not expensive food our problem is that food is so cheap that we have an obesity problem. But in terms of affordability for food for the average person food prices have never been lower as a percent of our income. So consumers have never had it this good in the history of the country."

Makes you think doesn't it. To be average in America, seems like a pretty good deal.

Additional Information

Links to Dr. Mark Perry's research:

http://mjperry.blogspot.com/2008/09/high-cost-of-living-vs-cost-of-living.html
http://mjperry.blogspot.com/2009/03/miracle-of-market.html
http://mjperry.blogspot.com/2008/10/blog-post.html
http://mjperry.blogspot.com/2008/09/spending-on-food-at-all-tiime.html
http://mjperry.blogspot.com/2008/06/new-real-car-prices-fell-by-2500-from.html

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