The affordability debate: Are things getting cheaper or more expensive?

Overview

Updated May 23

For decades, economists have argued over whether life is getting more affordable. A new analysis of Bureau of Labor Statistics data from 2000 to 2025 shows that while the Consumer Price Index rose 92.6%, average hourly wages climbed 131.1%.

Workers can buy 20% more goods today for the same hours worked. The finding rests on measuring 'time prices': not what things cost in dollars, but how many hours of labor it takes to afford them.

The debate matters because it shapes policy: if traditional inflation measures overstate hardship, calls for intervention may be misplaced. But critics argue time-price analysis obscures important details—regional variation, wage inequality, and the fact that healthcare, education, and housing costs have outpaced earnings for millions of Americans. What looks like progress in aggregate may mask stagnation or decline for specific groups.

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Key Indicators

131.1%

Wage Growth (2000-2025)

Average hourly earnings increase over 25 years, per BLS data

92.6%

CPI Increase (2000-2025)

Consumer Price Index rise over the same period

16.7%

Time Price Decline

Reduction in work hours needed to purchase a standard basket of goods

57%

Workers Beating Inflation

Share of American workers whose wages outpaced inflation as of mid-2025

Voices

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People Involved

Mark J. Perry

Economist, American Enterprise Institute Senior Fellow

Creator and annual updater of the 'Chart of the Century'

Gale L. Pooley

Economist, Senior Fellow at Discovery Institute

Co-developer of time price methodology and Simon Abundance Index

Marian Tupy

Editor of HumanProgress.org, Cato Institute Senior Fellow

Leading proponent of 'superabundance' theory

William D. Nordhaus

Economist, 2018 Nobel Laureate

Original academic proponent of time-based price measurement

Organizations Involved

HumanProgress.org

Research Project

Primary publisher of time-price analyses

A Cato Institute project that aggregates data on improvements in human welfare across health, wealth, education, and environment.

American Enterprise Institute

Public policy think tank

Institutional home of Mark Perry and the Chart of the Century

A center-right think tank in Washington, D.C. focused on government, economics, and foreign policy research.

Bureau of Labor Statistics

Federal statistical agency

Primary data source for wage and price analyses

The principal fact-finding agency for the federal government in labor economics and statistics.

Timeline

September 1980 January 2026

8 events Latest: January 27th, 2026 · 7 months ago

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January 2026
Updated Analysis Shows 20% Abundance Increase
Latest Analysis

HumanProgress.org releases analysis of 2000-2025 BLS data showing average hourly wages rose 131.1% while Consumer Price Index rose 92.6%, translating to a 16.7% decline in time prices and a 20% increase in the 'abundance multiplier.'
January 27th, 2026
January 2024
HumanProgress Applies Time Prices to Perry's Chart
Analysis

HumanProgress.org publishes analysis applying time-price methodology to Perry's Chart of the Century, finding that most consumer goods became more affordable in terms of work hours required.
January 2024
September 2022
Superabundance Book Published
Publication

Marian Tupy and Gale Pooley publish 'Superabundance,' arguing that population growth correlates with declining time prices for commodities. The book extends Julian Simon's thesis with decades of new data.
September 2022
March 2019
Chart Dubbed 'Chart of the Century'
Recognition

Clemson economist Bruce Yandle coins the name 'Chart of the Century' in a Washington Examiner op-ed, cementing the visualization's prominence in economic discourse.
March 2019
July 2018
Fed Economists Circulate Perry's Chart
Recognition

Bloomberg reports that Federal Reserve economists are sharing Mark Perry's price divergence chart, noting its implications for understanding inflation dynamics across sectors.
July 2018
1994
Nordhaus Publishes Time-Price Study
Research

Yale economist William Nordhaus demonstrates that conventional inflation measures understate improvements in lighting technology by a factor of 1,000. His methodology becomes foundational for later time-price analyses.
1994
October 1990
Simon Wins the Bet
Historical

All five metals Ehrlich chose fell in inflation-adjusted price. Ehrlich mailed Simon a check for $576.07. The outcome bolstered arguments that innovation and market forces can overcome apparent resource constraints.
October 1990
September 1980
Simon-Ehrlich Bet Formalized
Historical

Economist Julian Simon and biologist Paul Ehrlich wager on whether commodity prices will rise or fall over the next decade. The bet frames the debate over whether human innovation can outpace resource depletion.
September 29th, 1980

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

1973 - Present

Real Wage Stagnation Debate (1973-Present)

The Economic Policy Institute and other labor-focused researchers documented that while productivity rose 80.9% from 1979 to 2024, average hourly compensation increased just 29.4% after inflation. Median wages for non-supervisory workers barely budged in real terms for four decades.

Then

The data fueled policy debates over minimum wage increases, union protections, and income redistribution throughout the 1990s and 2000s.

Now

Wage stagnation became a defining economic narrative, contributing to political movements focused on inequality. The top 1% saw wage growth of 162% over this period while the bottom 90% saw 36%.

Why this matters now

Time-price optimists and wage-stagnation pessimists interpret the same underlying data differently. The debate over which framing better captures economic reality remains central to policy disputes over affordability and living standards.

September 1980 - October 1990

The Simon-Ehrlich Wager (1980-1990)

Biologist Paul Ehrlich, author of 'The Population Bomb,' bet economist Julian Simon $1,000 that the prices of five metals—copper, chromium, nickel, tin, and tungsten—would rise over the next decade due to population growth and resource depletion. Simon, who argued human ingenuity creates abundance, let Ehrlich choose the commodities.

Then

All five metals fell in inflation-adjusted price. Ehrlich mailed Simon a check for $576.07 in October 1990.

Now

The bet became a touchstone in debates over population, resources, and environmental limits. Simon's 'ultimate resource' thesis—that human innovation overcomes scarcity—became foundational for optimistic economic frameworks including time-price analysis.

Why this matters now

Time-price proponents explicitly build on Simon's framework, and the Simon Abundance Index is named in his honor. The 1980 bet established the intellectual lineage for arguments that rising populations correlate with falling real prices.

1994

Nordhaus Lighting Study (1994)

Yale economist William Nordhaus traced the cost of artificial light from Babylonian oil lamps to modern LEDs, finding that conventional price indices understated the decline in lighting costs by a factor of 1,000. One hour of labor that once produced minutes of light now yields 51 years of illumination.

Then

The paper became a landmark in economic measurement literature, demonstrating how quality improvements can be systematically missed by standard inflation calculations.

Now

Nordhaus received the 2018 Nobel Prize (for climate economics, not this work). His lighting study provided academic legitimacy for measuring prices in time rather than currency.

Why this matters now

Nordhaus's methodology is the direct intellectual ancestor of modern time-price analysis. His demonstration that conventional measures miss dramatic quality improvements underlies claims that current inflation statistics overstate economic hardship.