Costco introduced their Hot Dog and Soda combination in 1985 for $1.50. The price has not changed in 37 years. Meanwhile, according to measuringworth.com, nominal hourly wage rates for unskilled labor increased 180.4 percent from $5.18 per hour to $14.53. Blue-collar hourly compensation (wages and benefits) increased 167.1 percent from $12.50 an hour to $33.39.
Most people begin as unskilled workers and move up to blue-collar workers or better. We call this “upskilling.” If you started out in 1985 as an unskilled worker and over the years became a blue-collar worker, your hourly compensation increased 544.3 percent from $5.18 to $33.39 an hour.
What does this mean for the Costco Hot Dog-Soda Combo abundance? The time price of the Combo fell by 64.3 percent for unskilled workers, 62.6 percent for blue-collar workers, and 84.5 percent for upskilling workers. For the time it took an unskilled worker to earn the money to buy one Combo in 1985, they would get 2.8 in 2021. A Blue-collar worker would get 2.67 Combos, and an upskilling worker would get 6.44 Combos. This suggests that the Combo became 180.4 percent more abundant for unskilled workers, 167.1 percent more abundant for blue-collar workers, and 544.3 percent more abundant for upskilling workers. Combo abundance is growing at a compound annual rate of 2.91 percent for unskilled workers, 2.77 percent for blue-collar workers, and 5.31 percent for upskilling workers. At these rates, Combo abundance doubles every 24.2 years for unskilled workers, 25.4 years for blue-collar workers, and 13.4 years for upskilling workers.
Long live the entrepreneurs at Costco who make our lives so abundant.
You can learn more about these economic facts and ideas in our forthcoming book, Superabundance, available for pre-order at Amazon. Jordan Peterson calls it a “profoundly optimistic book.”
Gale Pooley is a Senior Fellow at the Discovery Institute and a board member at Human Progress.
All Hail to the $1.50 Costco Hot Dog and Soda Combo