Pickup Prosperity

Depending on how you compare, pickups have become 33 to 53 percent less expensive in the last 50 years. For the time required to buy one pickup in 1970, you get 1.5 to 2.12 pickups today.

Have pickups become more affordable in the last 50 years? We could try to compare a pickup built in 1970 to one built today, but they are almost as different as a Yugo and a Lexus.

According to the National Auto Dealers Association NADA Guide, in 1970 you could buy a basic Ford pickup for $2,599. Blue-Collar compensation (wages and benefits) was $3.93 per hour, indicating a time price of 661.3 hours. A 2021 basic F150 is now $28,940 and blue-collar production worker compensation is around $32.54 an hour indicating a time price of 889.4 hours, an increase around 35 percent since 1970.

But the 2021 model is a completely different species than the 1970 model. Mileage is 100 percent better at 22 city/30 highway versus 12 city/14 highway. Other differences include warranties (12 months vs. 36 months), reliability, power, safety, and comfort factors. If one were to conservatively estimate all of these factors at 100 percent better than the 1970 model, the time price for the 2021 relative to the 1970 has actually fallen to 444.7 hours indicating a time price decrease of 33 percent. You get 50 percent more pickup today for the time it took 50 years ago.

Most people don’t pay cash when they buy a new vehicle. The payment is more important than the price. Car loan interest rates in 1970 were around 11.5 percent compared to 4.25 percent today. Assuming five year loans would put the monthly payment on the 1970 pickup at $57.16 and the 2021 model at $536.25. With hourly compensation at $3.93 and $32.54 respectively, the time prices would be 14.54 hours in 1970 and 16.48 hours in 2021. The payment time price would be 13 percent higher. If you consider the 2021 model to be 100 percent better than the 1970 model, the 2021 payment falls to 8.24 hours or 43 percent lower than the 1970 payment. You get 1.76 pickups today for the payment time price of one in 1970.

Perhaps a better way to make a comparison is to find something manufactured today that is equivalent to the 1970 Ford pickup. India’s Mahindra and China’s Foton, JAC, and Hilux all make something similar to the 1970 F-100 for around $10,000. With blue-collar production worker compensation at $32.54 an hour, the time price is around 307 hours. 

This approach would suggest that pickups have become 53 percent less expensive. For the time required to buy one pickup in 1970, you will get 2.12 today. Pickups have become 112 percent more abundant in the last 50 years.

Thanks to creative entrepreneurs and global competition, pickups have enjoyed signifiant innovations the last 50 years. These innovations have made pickups 33 to 53 percent less expensive, which is to say 50 to 112 percent more abundant.

Excerpt from our forthcoming book, Age of Superabundance.

Gale Pooley is a Senior Fellow at the Discovery Institute and a board member at Human Progress