Shopsmith Forums

Merry Christmas to the community!
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If the prices today were anything close to what they were in that Popular Mechanics ad, then yes, SS would indeed be on my Christmas list...

Interesting...

Quick search of the interwebs indicates that $199.50 in 1950 was 6% of the median household income of about $3300. The current Mark 7 price of $4795 is approximately 6.8% of the current median household income of about $70,000. Hard for me to really grasp that, since I still think a bottomless cup of coffee, a slice of poundcake and a pack of Luckies should leave you with enough change from a dollar to tip the waitress a quarter.

I do not think a Model 10 could be made today to sell for $2500.

JPG wrote: ↑Thu Dec 22, 2022 11:38 pm I do not think a Model 10 could be made today to sell for $2500.

Now that would be a very interesting experiment if SS would offer a new Model 10 for that price. I would say it would be a pretty good deal, when compared to say a Felder multi-purpose machine starting at about 6K, with no drill press or lathe. Of course to be fair the new Model 10 would probably come in closer to 3k with jointer and bandsaw and larger motor. Still, I have to wonder if there might actually be a market for such a machine. Might buy one myself if they offered an extended version with a lathe that could accept 4 foot spindles.

edflorence wrote: ↑Fri Dec 23, 2022 1:12 am Now that would be a very interesting experiment if SS would offer a new Model 10 for that price.

Can you imagine the reaction at Underwriters Laboratories??!

“Love the exposed belts! We haven’t given a safety rating this low since the Ford Pinto…”

edflorence wrote: ↑Thu Dec 22, 2022 11:16 pm Interesting...

Quick search of the interwebs indicates that $199.50 in 1950 was 6% of the median household income of about $3300. The current Mark 7 price of $4795 is approximately 6.8% of the current median household income of about $70,000. Hard for me to really grasp that, since I still think a bottomless cup of coffee, a slice of poundcake and a pack of Luckies should leave you with enough change from a dollar to tip the waitress a quarter.

Ed,

Thanks for posting this. It definitely got me thinking because I have brought up the elevated SS price relative to inflation in the past, so it got me wondering if it really is more affordable now by comparison? In looking at the median income in the chart below for 1950 compared to now, household (family) income has gone up 2.3x during this time period, but individual income has only gone up 1.7x. Makes sense right, since there are more dual income married families and/or families with kids working today than in 1950? Since only about a third of wives were working in 1950 (compared to 2/3 today), I think it is only fair to compare individual income between 1950 and now, rather than using household income. If you only use individual income to compare, then an inflation adjusted Model 10 would have consumed about 15% of income in 1950. By comparison, using individual income only, a new Mark 7 would consume about 18% of income today. What I take away from this is that on an inflation adjusted basis, a new Mark 7 is only slightly more expensive than a Model 10 was in 1950, BUT neither are affordable in their respective time periods. Spending 15% of annual income on a single luxury purchase in 1950 would certainly not be something everyone could do. To illustrate this, in the 2nd chart below you can see income by percentile. For the bottom 50th percentiles, income has barely inched upwards during this time but for the top 20th percentiles income has made a significant jump during this time. To me, I believe this proves that new SS equipment has always been sold to the high income earners who are more able to afford it, i.e. it is targeted at the professionals and NOT the average consumer. Said another way, for the bottom 50th percentile of income earners, new SS equipment has become less affordable today than in 1950, but for the top earners, new SS equipment is about the same price today as it was in 1950. Bottomline is even with inflation adjustment, new SS equipment costs about 2x what somewhat comparable equipment did in 1950. Fortunately today there is a rather large and robust market of used SS equipment that lowers the barrier to entry. I appreciate you bringing this up and prompting me to dig a bit deeper into this because it cleared up my own mis-understanding regarding the affordability of SS equipment in the past.

Household Income: Real Household Income by percentile:

RFGuy wrote: ↑Fri Dec 23, 2022 7:44 am

edflorence wrote: ↑Thu Dec 22, 2022 11:16 pm Interesting...

Quick search of the interwebs indicates that $199.50 in 1950 was 6% of the median household income of about $3300. The current Mark 7 price of $4795 is approximately 6.8% of the current median household income of about $70,000. Hard for me to really grasp that, since I still think a bottomless cup of coffee, a slice of poundcake and a pack of Luckies should leave you with enough change from a dollar to tip the waitress a quarter.

What I take away from this is that on an inflation adjusted basis, a new Mark 7 is only slightly more expensive than a Model 10 was in 1950, BUT neither are affordable in their respective time periods. Spending 15% of annual income on a single luxury purchase in 1950 would certainly not be something everyone could do. To illustrate this, in the 2nd chart below you can see income by percentile. For the bottom 50th percentiles, income has barely inched upwards during this time but for the top 20th percentiles income has made a significant jump during this time. To me, I believe this proves that new SS equipment has always been sold to the high income earners who are more able to afford it, i.e. it is targeted at the professionals and NOT the average consumer. Said another way, for the bottom 50th percentile of income earners, new SS equipment has become less affordable today than in 1950, but for the top earners, new SS equipment is about the same price today as it was in 1950.

Thanks much for your deeper dive into this. It is interesting that whether we look at individual income or household income, for many consumers the purchase of a new Shopsmith in 2022 requires spending about the same % of income that it did 70 years ago. That remarkable consistency is an interesting fact in itself. As you point out, though, for some people the cost is just too much to spend at one time on a non-essential item, but I wonder if the conclusion that only professionals or the highest earners were therefore Shopsmith's target audience might not tell the whole story. My first thought is that if that conclusion is correct, I would not expect to find SS advertised in magazines like Popular Science and Popular Mechanics, whose target audience seemed to be more blue collar than white collar, but I know that ads did appear in those magazines. So how could the earners in the lower earnings percentiles afford a SS? My guess is that Shopsmith had the good fortune to come on the market at the same time that the easy consumer credit industry was gathering steam. I don't know if Montgomery Ward offered credit, but I would be surprised if they didn't have some kind of either "lay-away" or "buy now pay later" plans. When I was a kid in the 50's my parents helped me set up a "Christmas Club" account at the local bank. The idea was to put aside a little bit from my allowance each week and in that way have money available to spend at Christmas. Essentially a Christmas lay-away plan. I would guess that many prospective SS owners simply "saved up" over the course of a couple of years for the purchase. Not to get too sociological, but I think people 70 years ago were better at deferring gratification than we are now, and so "saving up" for the purchase was a solid option.

I suspect that during the 50's many Shopsmiths were sold "on time" in one way or another, and when plastic credit cards showed up at the end of that decade, then it became even easier for someone who could not afford the one-time cost to make the purchase and spread the cost out over a couple of years. Sort of like the automobile financing model. Sometime in the 70's the Shopsmith company even got into the financing game. I still have my old Shopsmith credit card around here somewhere.

True, a working person's wages have stagnated since the 50's, making the purchase of a new Shopsmith even more expensive in terms of % of income, but this barrier is not a problem to those willing to "put it on the plastic." That said, I heartily agree the robust market in used equipment is often the most affordable entry into SS ownership for many of us.