On the day after Christmas, Bob Cratchit was late for work. “I was making rather merry yesterday,” he offered by way of apology.
Ebenezer Scrooge, his coldhearted boss, was having none of it. “I am not going to stand for this thing any longer,” he said sternly. Cratchit braced himself for the worst.
I know how he felt. Like many Americans, I have been indulging myself rather much during the past COVID-dimmed year, spending money to boost my morale and — when it looked as if the pandemic might be ending — spending more. Thus, I bear at least some responsibility for the supply-chain shortages that have turned this Christmas shopping season into a frustrating scramble.
My profligacy has also helped fuel the worst inflation in 30 years, making gifts, travel and almost any kind of merriment more expensive this year. And much like Bob Cratchit in Charles Dickens’ 1843 classic, “A Christmas Carol” (from which my opening paragraph is lifted), we will all very likely be paying a heavy price this holiday season for our indulgence.
To calm my holiday anxiety, I took a page from the Dickens saga and went back, back in time — to visit the gifts of Christmas past.
The first such memory I have is of my dad bringing home a state-of-the-art Dumont black-and-white television set, with a huge cabinet and a tiny screen. Cost him $500. Adjusted for inflation, that would be $5,000 today. He loved Christmas.
Coincidentally, I’m thinking this year about getting my wife her own smart TV, with a screen about the size of the Dumont’s. (Don’t tell her.) Such models go for a mere $199 right now. Maybe we’re looking at this inflation thing the wrong way.
I did a little digging and found lots of items that are cheaper — and better — than ever. The iPhone we rashly gave one of our kids 14 Christmases ago cost $599, which would be $799 in current dollars. Today, we would spend exactly that much for the latest, vastly superior model.
Same with many nonelectronic items. A Monopoly game, like the one I found under the tree too many years ago, now costs only half what it did back then, after inflation. Even the fixings for my mom’s memorable Christmas dinners turn out to be about 20 percent lower today, inflation-adjusted.
Of course, people don’t live in an inflation-adjusted world. They’re buying stuff now, and paying more than last year — for cars, gasoline, restaurant meals, movie and airline tickets (though not, mercifully, books and toys).
Bad news sells. Surveys have found that consumers tend to be relatively pessimistic about economic forecasts — and usually overestimate the current rate of inflation — compared with professional economists. That’s human nature. We ordinary mortals tend to focus more on what could go wrong. It’s a skill we developed eons ago to survive in a hostile world.
I don’t want to be a scold, but Christmas is not about the loot, much less the consumer price index. Yes, you know where this sermon is going.
Let me just recommend that, sometime this holiday season, you catch one of the many TV or stage versions of “A Christmas Carol.” It holds lessons not just in love and forgiveness, but also in economics. Poor Bob Cratchit is barely able to keep his ailing son Tiny Tim alive on the 15 shillings a week he earns as a clerk for stingy old Scrooge.
Let’s do the math. In today’s U.S. dollars, Cratchit is making more than $27,000 a year for a 40-hour week. The current federal minimum wage, unchanged since 2009, would get you only $15,000 a year.
The problem this Christmas is not that gifts have gotten too expensive, it’s that incomes have gotten too paltry. Various factors — technology, a weakened labor movement, powerful business lobbies — have combined to hold wages down.
The pandemic, however, has driven many people from the labor market, putting upward pressure on wages. That should have little impact on inflation, since pay increases still lag far behind productivity gains. Rising wages are generally a good thing, not just for workers and the economy, but also for the souls of bosses.
Just ask Scrooge. On the story’s last page, he calls Cratchit into his office, apparently to fire him. Instead, he surprises him with a generous raise. You can discover the reason on your own.
Scrooge’s stroke of generosity gives him the best Christmas of his life. Indeed, it gives him a life — as a good friend, a good man and a second father to Tiny Tim, who has the story’s final, instructive line: “God bless us, every one.”