What 'Psycho' can teach you about inflation
The price of cheap motel rooms, new bathrooms and Madison Avenue salaries in old movies are a lot more accurate than you'd think.
NEW YORK (CNNMoney.com) - $25 a day plus expenses. That's what Sam Spade (Humphrey Bogart) charged to do detective work in 1941's "The Maltese Falcon."
Sometimes, money references in classic movies provide the jolt that reminds us of how inflation has changed what we pay for things. After adjusting for inflation, $25 in 1941 is the equivalent of $332 today -- a PI today might get between $80 and $125 an hour (or more).
Mike Myers skillfully exploited the disconnect in the first "Austin Powers" epic. The villain, Dr. Evil, who has just come out of a 30-year deep freeze, is holding the world hostage and demands . . . (portentous music) . . . $1 million dollars to spare it. After some consultation with henchmen, he ups the demand to $100 billion.
Even in 1997 dollars, when the movie was made, a million 1967 dollars only comes to a little under $5 million. Either Dr. Evil was a bit of a piker or the cryogenics had frosted some of his brain cells.
Here is a sampling of some classic movie money moments, complete with a rating of how surprisingly HIGH or LOW they seem from our perspective in 2006
Of Mice and Men: Cheap land?
Some movie prices seem totally divorced from reality. Lenny and George in "Of Mice and Men" are trying to scrape together $600 to buy a rabbit farm in the Salinas Valley. In California today, $600 wouldn't buy a rabbit hutch.
Rating: LOW. The movie may be set during the Great Depression, but even adjusting for inflation, $600 then is only about $8,500 today. Perhaps Lenny and George were angling for a no-down payment, interest-only mortgage, intending to flip the property in six months.
Psycho: Cheap digs?
In the 1960 Hitchcock opus, "Psycho," the room rate at the Bates motel is $10 (including a hot shower), which sounds pretty low, but it's actually the equivalent of $66 today.
Rating: HIGH. Remember, this isn't the Ritz; it's a seedy place in the middle of nowhere that the new highway has bypassed, leaving it with no customers. For $66 you can rent a pretty good room in a chain motel and not have to worry about Norman's mom.
Double Indemnity: Cheap cigars?
In "Double Indemnity," the payoff conspirators Fred McMurray and Barbara Stanwyck hope to realize on her husband's life insurance is $100,000, a substantial pile of money back in 1944, and worth more than $1.1 million today.
But the really amusing sum mentioned in the script comes as a by-play between Edward G. Robinson and a witness to the murder, who tells him, "These are fine cigars you smoke."
Robinson's reply: "Two for a quarter." Witness: "That's what I said."
Rating: LOW. 12 and a half cents works out to $1.39 in 2006. But the price of a good cigar these days would be between $10 and $15.
Jaws: Enough bounty?
In "Jaws" (1975), a victim's relative offered a whopping $3,000 to whomever could catch and kill the shark (played, of course, by "Bruce," the mechanical shark).
Rating: LOW. In today's dollars, that's about $11,000 -- we're betting bounty hunters would need quite a bit more to put together some barrels of fish guts for chumming and seek out a three-ton, 25 foot long great white.
Kramer vs. Kramer: A fair wage?
In 1979's "Kramer vs. Kramer," Dustin Hoffman's character gets fired from his high-powered ad agency job, paying in the low $30s, and has to settle for another that pays him $28,200 a year.
Rating: LOW. That salary is higher than it sounds, worth about $76,000 today. But the Bureau of Labor Statistics reports that the average wage for an advertising VP is $83,000.
Marty: Striking out on your own
In 1955's Oscar winner, "Marty," Ernest Borgnine is planning to buy the butcher shop where he works. It means taking out a loan for $8,000. ("That's a big note to carry, boy," he says.)
Rating: LOW. A big note, indeed, worth close to $60,000 today. That still seems reasonable to buy the physical plant and goodwill of a going concern. But most of the butcher shops listed for sale on various Web sites are at least in the six-figure range.
Midnight Cowboy: Man of the evening
In "Midnight Cowboy" (1969), Ratso Rizzo (Dustin Hoffman) tells the na´ve Joe Buck (Jon Voight), who has relocated to Manhattan hoping to jump start a career as a male hustler, that, with the right connections, he can make "fifty, maybe a hundred dollars a day, easy."
The equivalent in 2006 is $265 to $530.
Rating: How would we know?
The Tender Trap: What would Frank wear?
"You pay $15 for a tie, you expect it to tie!" That's Frank Sinatra in 1955 in "The Tender Trap," complaining that a tie from Bergdorf Goodman isn't up to snuff.
Rating: Low. Sure, that's $110 today, which can buy quite a nice tie. But Sinatra might easily pay $150 and higher for quality neckwear.
Mr. Blandings builds his nest egg
Few movies spell out prices as completely as "Mr. Blandings Builds his Dream House," the timeless tale of home buyer and home owner angst from 1948 starring Cary Grant and Myrna Loy. Of course the prices aren't quite as timeless.
City dwellers Grant and Loy buy a rural Connecticut home on about 35 acres that is in such bad shape, demolition is the only solution. Purchase, demolition and construction ends up costing a total of $38,000 for a home with four beds and three bathrooms -- the bathrooms costing $1,300 a piece. That translates into $308,100 total cost in 2006 dollars, with each bathroom going for $10,540.
Rating: Low. Even with all their overspending, the Blandings came out very nicely on their investment. The median price of a four-bed, three-bath home in that part of Connecticut would just over $600,000 today, and that's with a small lot, not a sprawling 35 acres. The price of the bathroom is spot-on. A bathroom remodeling costs an average of $10,499 today.
Of course, despite Mr. Blandings' worries during the movie about being stretched financially, he should have been able to handle his spending spree. He was earning $15,000 as a Madison Avenue copywriter. That comes to $121,618 today, (doing far better than Ted Kramer 31 years later). He should have been able to easily handle the $18,000 mortgage identified in the movie, which would have had payments of just over $100 a month, especially if he was able to scrape together the other $20,000 on his own.