Is Shopsmith on your Christmas list?!

[dusty]

The contradiction here is in the reality of it all.

If only professionals and high-income earners bought Shopsmiths - I would not have a shop full!! In that shop, only one piece (the Shorty) was not purchased new.

I am not a professional and I am definitely not a high income earner. I did not buy on credit! I saved over time to buy what I have. Not so true today. The credit card does get used now and then but with a promise to self to liquidate that debt within three months of purchase.


Post Script: Curiosity made me do it. I pulled out my files on past purchases and checked a half dozen higher priced items. I was surprised by just how closely the listed prices follow the prices given by the inflation calculator.

[RFGuy]

Ed,

Thanks. I appreciate it. I am painting with broad strokes here and I may be wrong on how I am interpreting the data. What struck me is looking at the "by percentile" data from the government, it appears that the bottom 50th percentile earner's incomes have largely stagnated from 1950 to today (see pic below). Unfortunately, this data was plotted only back to 1965 so I can't say for sure that the 50th percentile and below curves all stagnate back to 1950, but I am making that assumption. Conversely, the top 50th percentile of income earners make significantly more today than they did in 1965. So, for the top half of earners they have conceivably more disposable income today than in 1965/1950, but then again SS equipment costs 2x more (inflation adjusted) now so perhaps it is a wash. However, I would say for the bottom half of earners, sadly a new SS is even less affordable today than it was in 1965/1950. Or at least that is what this data seems to be telling me. In addition, I believe there are more dual income families today than in 1950 so this also helps with affordability for married customers - assuming the significant other agrees with the purchase.

I always thought that SS targeted the middle class, i.e. average American, but after looking into the income data for this thread I am not sure they targeted all of the middle class. You do make a good point about the marketing materials (magazines) and that does speak to who their target audience/customer was. Based on the percentile data and what a Model 10 cost in 1950 I would have to say that I think SS likely targeted upper-middle class and upper class patrons. This customer would have had the earning potential to easily make a purchase decision on this product. For sure, anyone on the economic spectrum could purchase a SS, but it would be more of a commitment for them, i.e. more painful for their pocketbook. You also make a good point about access to easy credit. I believe the Diner's Club card (1st credit card) came out in/around 1950 so it is conceivable that store credit cards like at Montgomery Ward could have come shortly after and been of benefit.

My key takeaway is it looks like a new SS purchase was a big deal back in 1950 as much as it is today. To put it in perspective and to use that dreaded marketing slogan from De Beers ("a wedding ring purchase should be equivalent to two months salary"): Using individual income data, a Model 10 equated to 15% of the median income in 1950, which coincidentally is very nearly two months salary. So, buying a Model 10 in 1950, for many people, would have required the same level of commitment as committing to marriage.

P.S. I looked it up and was surprised to find that Montgomery Ward store credit cards didn't start until 1985 supposedly.
https://www.ozarkalabama.org/the-montgo ... a-history/

P.P.S. Rather than credit cards, I wonder if layaway plans at places like Montgomery Ward were used to make purchases like for the Model 10. I do believe layaway plans came into existence shortly after the Great Depression and could have been widely used at department stores like Montgomery Ward by 1950. Just a thought...

HistoricalRealIncomeUS_annotated.jpg (189.74 KiB) Viewed 716 times

[JPG]

1985? No wonder they expired shortly after that.

[john_001]

Another way to look at it is a Model 10 was about 10% of the cost of a Dodge sedan, while the Mark 7 is about 14% of one. I chose Dodge because it's one of the only companies that offered a sedan in 1950 (Coronet) and still offers one, sort of (Challenger), today. But there's a big difference between a 10 and a Mark 7.

[edflorence]

Another way to look at it is a Model 10 was about 10% of the cost of a Dodge sedan, while the Mark 7 is about 14% of one. I chose Dodge because it's one of the only companies that offered a sedan in 1950 (Coronet) and still offers one, sort of (Challenger), today. But there's a big difference between a 10 and a Mark 7.

So the rise in price of cars and Shopsmiths have roughly kept pace it seems. And for sure a Mark 7 and a Model 10 are as different as any recent auto is compared to any '50's car.

This comment made me wonder how many hours a minimum wage worker in 1950 would have to work to get a Shopsmith versus how many hours today's worker would have to work.

In 1950 the Federal minimum wage was $0.75 and the cost of a Model 10 was about $200, so 266 hours of work were required. In 2022 the Federal minimum wage is $7.25 and the cost of a Mark 7 is about $4800, meaning today's worker has to work 662 (!) hours for the new SS. According to the government's Consumer Price Index inflation calculator, $0.75 in 1950 would buy you what $9.75 will today. So even if the Fed minimum wage had kept up with inflation, it would still take about 510 hours to get that new SS. Pretty sure this is solid validation of RFGuy's chart of stagnant wages. To buy today's Shopsmith with the same number of hours that it took the 1950's worker, our modern day worker would need to be earning $18 per hour, which is about $36k per year. So, it does look like that whether Shopsmith deliberately markets to higher wage earners or not, those indeed are the folks most likely to buy new, not the minimum wage earners. And so, Ebay enters the picture.

[RFGuy]

Ed,

Thanks for the analysis on how much one would have to work in order to pay for a SS machine. Prior to this thread, I always thought that SS equipment was more affordable in the past, e.g. the Model 10 in the 50's compared to a Mark 7 today. However, when I started to dig in on this thread I started to question my opinion - didn't seem like the model 10 was quite as affordable as I thought it would have been in 1950. Yes, I know that today's Mark 7 has more features than the Model 10 did, but that is to be expected. In many industries the ASP (average selling price) stays about the same for a given product over time, but either more features or capacity, etc. gets added with time as products are innovated to fend off competition. So, I still consider a model 10 in 1950 to be temporally equivalent to a Mark 7 today IMHO; in other words they are equivalent flagship products in their respective time periods. The stagnation in wages for the lower percentile income brackets was really surprising to me. Still, your analysis is compelling and does indicate, I believe, that SS pricing was more palatable in the past. However, perhaps this is more of a function that a Mark 7 is less affordable for many today simply because wages have fallen behind for many consumers unfortunately. Great analysis. Definitely food for thought.