Monday, 9 July 2012

How well off were your late 19th century British ancestors?

I've been reviewing a recent book on the History of the British Meteorological Office and was surprised to read that the office's director, Robert Scott, was receiving the same salary when he retired at the end of 1899 as he had when he assumed the position in 1867.
However, that same salary was worth more in real terms, something that seems quite unusual for those of us who've lived through a time when inflation, more or less, has been a given for the economy.
It was a period of falling prices and increasing industrial efficiency. Check the retail price index at http://www.measuringworth.com/ukcompare/relativevalue.php which shows that by the end of the century prices were a bit over 80% of what they were in 1867.
The farm gate price of wheat was reduced half, barley, oats, coal and textiles down by one third. Britain operated a free trade regime, cheap imports kept prices low. The cost of transporting goods declined, by more than half by rail.  Refrigeration meant imports of perishable products like meat increased. Almost one-third of the meat sold in Britain was imported at the end of the century.
This was good if you had a job. But unemployment boomed; less than 1% unemployment rose to above 10%.

Does any of this ring a bell in today's economy?

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