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Cost of Living in 1938 – How did it Compare?

Cost of Living in 1938 – How did it Compare?

During 1937, the American economy fell suddenly, causing a financial impact on the cost of living in 1938.

The 1930s were a difficult time for most Americans because of the Great Depression, which lost people their jobs, businesses, comfortable lifestyle and more.

But how much did things cost during this time?

In this guide, we take a trip back in time and take a look at the price of:

·       Housing

·       Food

·       Travel

·       Entertainment

·       Cars

·       Clothing and makeup

We also answer some commonly asked questions about 1938 and compare the prices to today.

What was the average pay in 1938?

Before we look at living costs during this era, let’s take a look at how much people earned in the 1930s.

Under the Fair Labor Standards Act, people earned a minimum of $0.25 per hour in 1938. This equals to $4.94 in today’s money.

The average income in the 1930s was $1,368 a year (just over $27,000 a year in today’s money), with manufacturing, labor and healthcare being the most thriving industries. The recession caused a spike in unemployment, so most Americans took temporary labor jobs or lived off family farms. Repair work, painting, repair work were common jobs that allowed people to earn a bit of money. Women often found positions as nannies or maids for wealthy families.

The cost of living in 1938

Living in the midst of a recession was tough. Millions of families lived in poverty and had hardly anything to eat.

The school was considered a luxury. There were no transport links to take children to school, so many took on labor jobs to help support their families rather than have an education.  

A postage stamp cost $0.03, which is equivalent to %0.058 in today’s dollars.

Want to know more about the specific cost of living in 1938? Keep reading to find out.

Housing

The 1930s saw a shift in property styles to brick and half timbering and also bungalows.

In 1938, a new house would cost you $3,900 on average, compared to $348,079 in 2022.

If you were renting a property, the average rent was around $18 per month, so only $216 a year. In 2022, the average rental for a two bedroom apartment reached $1,295 a month in comparison.

If you lived in a large town or city, most people had access to electricity by 1930, however some rural locations didn’t have power until 1935.

Payphones were readily available from the 1920s across cities and states. By the 1930s, calls cost five cents to make. You’d need around $1.35 for each additional minute that you spent using a pay phone.

An overnight stay in a hotel would cost you around $4-$7 per night. In 2021, the average cost of a hotel room in the United States was £125 a night.

Food

The great depression forced families to find recipes that used the cheapest and fewest ingredients to save money. They weren’t particularly appetizing, however they were cost-effective and people had to work with the ingredients that were available at the time.

Before we look at the cost of food and give a few examples, let’s take a look at some of the weirdest meals from the Depression era.

·       Creamed chip beef – dried beef mixed with butter, flour and milk.

·       Mulligan stew – this was basically any ingredients or leftovers that were thrown into a pot and stewed down. Today, Mulligan stew is typically made with potatoes, beef, carrots and tomatoes.

·       Hot water pie – butter, sugar and flour were mixed together to make the crust, then butter, sugar, eggs and boiling water were combined to make a custard filling. Whilst this doesn’t sound like the tastiest of desserts, it was actually simple and sweet.

Cooked bread – when a loaf of bread went too stale to eat, people in the 1930s would cut it into slices, top it with salt and olive oil and pour boiling water over it. The bread would then be mashed up and eaten.

·       Cabbage and dumplings – this dish really is as simple as it sounds. Cabbage and onions are fried together in a pan and then served with homemade flour and egg dumplings. This was a popular, tasty and nutritious meal.

So, how much did food cost in 1938?

The average price for household essential items was:

·       A loaf of bread 9 cents

·       Milk 26 cents per gallon

·       A dozen eggs for 15 cents

·       A pound of hamburger meat is 13 cents

·       Toothpaste 35 cents

·       Noodle soup 10 cents

·       Bacon 41 cents

 In the early 1930s, alcohol was prohibited because of the Great Depression. This meant that people started making their own alcoholic beverages instead. In 1933, the nationwide prohibition ended and the manufacturing and selling of alcohol were allowed.

For a pint of beer, people would pay around $1.50 for a six-pack of beers. The equivalent of $30 today.

How much did a hamburger cost in 1938?

If you could afford to eat out in the 1930s, you would pay between 15 and 40 cents (between £3 to $8 today) depending on the location of the restaurant and what you ordered.

A hamburger cost around 20 cents and was a popular meal to eat out during this era. The demand for burgers is even high today, along with a significantly higher price tag of $2.65.

During the Depression, some eateries would offer their meals for as low as 1 cent per item for people that had lost their jobs and homes. This led to people queuing up every day to get some cheap food. Local residents were happy and restaurants were able to stay in business even though they didn’t make much profit from the food they sold. Common menu items were pea soup served with a slice of bread and pork and beans. Both of these meals were inexpensive yet satisfying.

Entertainment

Most people in 1938 could not afford books let alone have any spare money to spend. To keep busy, backyard games, card games and board games were a popular way to have fun.

Books were also a great way for people to relax and entertain themselves. Hardback books cost around $2.50 each or $49 in today’s money.

A movie ticket only cost 25 cents in 1938, making a trip to the movies a relatively cheap and popular way to spend an evening or weekend. Movies, musicals and comedies were a great way for people to forget about the troubles that the Great Depression had caused most families.

How else did people prevent boredom during this era?

Well, here’s a list of hobbies that were created. Many of these are still loved today.

·       Stamp collecting

·       Bird watching

·       Making music

·       Crafting with wood

Clothing  and makeup

Fashion in the 1930s was heavily influenced by Hollywood, specifically stars such as Clark Gable, Shirley Temple and Jean Harlow.

Women mainly wore wide-shouldered dresses with puffy sleeves. The neckline was always modest and the waistlines were high and belted. Buttons, bows and ruffles accessorized dresses to make them into statement pieces. Plain day dresses made from flour and feed sack fabric were worn during the daily chores. Some women also chose to wear skirts and blouses.

Men’s suits during this era were designed to be loose and slightly less casual than how they are worn today. Padded shoulders, bests and handkerchiefs were common additions to suits in the 1930s. Laboring men would wear overalls made from denim and sturdy leather boots to protect their feet.

Children mainly wore handmade clothes crafted by their mothers using flour sacks.

Some examples of the price of fashion items in the 1930s are:

·       Ladies’ winter coat – $16 ($316 today)

·       Ladies’ wool flannel robes – $3.95 ($78 today)

·       Men’s shirt – $2.50 – ($49 today)

·       Men’s dress shoes – $4 ($79 today)

Makeup

The 1920s changed the way women expressed themselves through makeup, in particular lipstick. Lipstick could be bought for $1.10 ($21.75 today) and it was a handbag must-have for many American women.

Travel

These days, travel can be a huge part of your monthly budget. But was it always the same? People would tend to take manual work jobs that were local to them, so there was no real need to commute during this period of time.

School buses had only just started to be introduced in most American states. The steam locomotive also becomes a new way of life for Americans.

Planes

Commercial flying began to boom in the 1930s after planes returned from war.

A coast-to-coast return trip in America cost approximately $260 in the 1930s. Whilst this is cheap to us, it cost a fortune for people at the time. It was mainly the rich and businessmen that could afford to travel via this mode of transport. To put things into perspective, a car costs double the round trip. Flying was new for everyone in this era, which made it feel like it was worth the cost.

Traveling via airplane wasn’t quite the experience we know today though.

Flying was cold, loud and bumpy. It was common for passengers to experience sickness from the flow altitudes and the motion.

By 1938, it’s estimated that only 1.2 million people had traveled via plane, which is a tiny proportion of the population at the time.

Cars

Of course, the great depression had a dramatic effect on people’s driving habits. Unemployment was sometimes over 25% and the luxury of driving was simply out of many people’s reach. Driving habits back then are nothing like they are today where many of us would jump into the car just to nip around the block to visit a grocery store or to catch up and hang out with friends. Back then, most people young and old simply walked, even if it was for several miles.

In 2022, the average cost of a new car came close to the $50,000 mark. Back in 1938, it was around $850. This is just over $18,000 in today’s money.

In this sort of economy where everything became difficult to obtain financially, anyone who could afford a car in 1938 was certainly not short of friends. In short, any young man who had his own car could practically attract any girl in the country. This is a time when going for a drive really was an event to cherish. This isn’t the case today mainly down to the fact that driving and owning a vehicle is very much taken for granted.

Likewise the style of the car back then is very different from today. These days, the emphasis is very much on safety with cars with 5 seats having 5 proper 3-point safety belts fitted and in the event of an accident, airbags everywhere to the point you could be thinking you’re driving a mobile bouncy castle! But we all know why this is needed. But back in 1938, cars of the time were fitted with bench seating. For the simple reason of it allows you to fit as many people in the car as possible with not much care or thought given to occupant safety. If you can picture the scene of you and your car full of friends cruising down the highway with little to no traffic, stopping off at various sight-seeing destinations with no cares in the world. It really was a wonderful time to enjoy the open road without the congestion and stress of today’s busy world.

Fueling the car back in 1938 cost on average cost about 10c a gallon. In today’s money, that’s just under $2 a gallon. Today, the average is circa $3.29 a gallon and at one point in 2022 was nudging near $4.99 a gallon.

One of the more popular cars in 1938 was the Cadillac Sixty Special. In its debut year, the model sold over 3,700 units and cost $2,090 which in today’s money would be over £44,000. Which interestingly is close to today’s average cost for a new car as mentioned above.

To sum up, owning a car in the great depression really was a privilege and added to this the lack of stress and traffic on the roads meant it really did add up to one hell of an experience. Having a driving trip with your friends was a special event to cherish and enjoy. Of course, this is indeed possible today but if you honestly think about your personal driving habits, when was the last time you planned a trip like this? Especially without the traffic constraints of today’s busy world. Imagine that – you, a car full of friends knowing that the trip will be so special and not a care in the world. Sounds perfect!

How much has the cost of living gone up since 1938?

The cost of things depends on a variety of factors such as demand and availability. Inflation also impacts the price. Inflation happens when the overall price of goods rise.

The cost of living is measured by economists by taking into account the price of goods in different cities or countries where people need to live. This includes housing, food, transport, healthcare and taxes.

It’s worth noting that the worth of an item today is not a like-for-like with the same item in 1938.

To put things into perspective, here are a few examples:

·       $1000 in 1938 would have had the purchasing power of over $21,000.

·       $1 in 1938 would be equal to $19,38 today.

What was the average cost of living in the 1930s?

America had a population of 123 million in the 1930s. The average cost of living was approximately $4000 per year.

How does this compare to the 2022 figures?

According to the Price Index Review, the average yearly spending in American households is $61, 334 a year. Now obviously this figure will depend on how many people are in your family and how much you earn, but it’s clear that this is a huge increase from the 1930s.

When did the Great Depression start?

Black Tuesday. October 29th 1929. A stock market crash that had been argued by many was coming for years. There was great international instability since World War I and there were also claims that there was an uneven distribution of money during the 1920s. As we have seen in recent times when things go wrong, the response to the situation is key to protecting citizens and livelihoods. But the Black Tuesday crash showed that everyone was unprepared for it and there was no compensation offered to those who were unemployed. And it makes total sense that if Americans were not earning, they can’t be spending which added more fuel to the fire for the overall situation.

To put the cost of living question into context, we need to understand that the 1930s USA really did start at an all time low. The decade started with more than 15 million Americans sadly unemployed. This was a quarter of all wage earning workers. President Hoover at the time did little to help the situation basically asking the country to be patient to get through this ‘passing incident in our national lives’.

President Roosevelt came to power in 1932 and he created a New Deal over the next nine years to provide a safety net to millions of Americans who were struggling. The New Deal didn’t end the depression but by using federal government power to make citizens’ lives better, it certainly helped. His first 100 days showed that he had the need and desire to make changes with some very fast moves to shore up banks. After this, he then with Congress helped passed 15 laws that helped to restructure the economy.

After starting to get control of the situation, President Roosevelt then launched what some have called his Second New Deal. This was designed to be a tougher set of new federal programs. He brought in the Social Security Act of 1935. This basically put a guarantee on pensions to some older citizens and also set up a system of unemployment insurance. There was also a plan that to help with dependent children and the disabled that the federal government would provide help and assistance. The National Labor Relations Act of 1935 gave rights to workers to form unions which allowed them to campaign for better wages and a more fairer working environment. The Works Progress Administration helped to provide work for the unemployed and also helped to build new schools, parks, highways and post offices.

President Roosevelt went on to campaign for the presidential elections in 1936 and ended up winning by a landslide.

By the end of the 1930s, the global landscape changed once again when Adolf Hitler invaded Poland in 1939 kickstarting World War II. The bombing of Pearl Harbor in 1941 by the Japanese meant that the United States joined the allies in the war and it also gave stimulation to the American economy therefore ending the Great Depression.

Popular culture did help people to have an escape from the dark times of the 1930s. Even though spare money was in exceptionally short supply, about 80% of households in the United States had a radio. And of course listening to it was completely free of charge! Although when Orson Welles broadcast his adaptation of HG Wells ‘War Of The Worlds’ in October 1938 and it was alleged that the broadcast caused mass hysteria across the country, that could have been avoided if the radio wasn’t so popular! Also, 1938 saw the introduction of Superman for the very first time when Action Comics #1 was published. This first edition was just 10 cents to buy (or about $2 in today’s money). One of these sold at an auction in September 2021 for a staggering $3.18 million making it the fourth largest sum ever realized for a comic book.

Interesting facts about the Great Depression

The great depression started when the stock market crashed in late 1929 as mentioned above.

Here are some interesting facts that you might not know about this era.

·       Between 1929 and 1933, the stock market lost nearly 90% of its value.

·       Income for families dropped by 40% during this time.

·       Nearly 11,000 banks ceased trading during the Great Depression era, which left some people with no savings. This also resulted in $1 bank deposits being lost due to closures.

·       The Great Depression hit hardest during 1932 and 1933.

·       During this time, 300,000 ceased trading.

·       Hundreds of thousands of people were evicted from their homes because they couldn’t pay their mortgages.

·       To try to escape the Great Depression, lots of people migrated to different parts of America, including California.

What else was happening in 1938 in America?

The 1930s will always be remembered for the fall of the economy, but some other significant events took place.

The National Foundation for Infantile Paralysis was founded. This was later known as the March of Dimes. This began with President Roosevelt’s personal struggle with Polio. The March of Dimes name was given as an appeal was made to Americans to donate a dime or several if they could afford it during the Great Depression. The comedian Eddie Cantor made an appeal saying that ‘it only takes 10 dimes to make a dollar and if a million people send one dime, the total will be $100,000. By the end of the month, 2,680,000 dimes (or $268,000) were sent to the White House. In today’s money, this would be about $5.3 million.

The Great New England Hurricane hit Long Island, New England and New York in September 1938 and caused about $306 million in damages which is over $6 billion in today’s money. It was reported to have caused up to 800 fatalities and lasted for about 2 weeks.

Seabiscuit and War Admiral had their long-awaited race on the 1st of November 1938. Seabiscuit did defeat War Admiral at the race in Pimlico. The earnings for Seabiscuit were reported to be over $437,000 or $8.6 million in today’s money.

Living in the 1930s

The cost of housing, food, clothing, transport and entertainment back then was only a fraction of what it is today. But salaries and household income were also low and reflected the rise in inflation.

Healthcare, technology and general quality of life are much better in 2023 than it was in the 1930s, so it’s no wonder that the cost of things has risen sharply.

So, when you complain about the rising cost of things, consider what it was actually like to live in 1938 and the financial troubles that most people experienced.

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