You mean the $89.95 box cars and cabooses that Lionel lists in the 2015 catalog  are priced the same as equal products back 18 years?  It doesn't look like it to me.

Actually they are cheaper. You $1000.00 had a lot more buying power 20 years ago.

$1,099.95 ~18 years ago is ~$2,000 today. I'm not familiar with that model but if it was a top o' the line in '97 than I'd agree, prices haven't changed much (a top end model today is ~$2,000)

I actually think that the prices today have Dropped a lot compared to 10-15 years ago. Look at an MTH premier steam engine, about $1000 ten years ago and now the the same engine with better details and better sounds and functions sell for bout the same, $1000. Considering inflation for 10-15 years, I think today's prices are a lot better value than years ago...

 

BUT, today's lower salary's, hard to find secure jobs and higher prices for everything may negate these better train prices...

 

Overall, modellers pay a "LOT" for this hobby.....

I think the perceived value is there with most of today's locomotive models, especially the scale sized trains. Not so much when looking at freight cars--I think the prices on those seem high to many people.

 

My problem is that there are very few model trains out there that could get me excited enough to spend $1200-2000--mainly because I just have a limited train budget right now, and because my overall enthusiasm for the hobby is ebbing a bit.

 

Jeff C

 

 

Two things I think are relatively constant over time are the inflation-corrected prices we pay for quality toy-train related products, and the way some people will complain that prices are going up and things have never been as bad as they are now. 

 

Just the way it has been, is, and probably will remain.

The original poster certainly makes an interesting point.

 

It is very difficult to accurately measure inflation.  One of the criticisms that is made of official inflation measurements is that they exclude volatile items such as food and energy costs.  While I understand that exclusion from a difficulty-of-calculation perspective, I also think it makes the official measurements far less useful since food and energy comprise a significant percentage of people's expenditures, particularly those people who are not within the higher end of the economic spectrum.  Those higher costs, combined with higher health care costs (as many people simply refuse to understand that the current model of pricing healthcare, with or without the ACA, is simply untenable) have combined to create real pressure on the budgets of the average working family. 

 

I think the very interesting thing about the train receipt cited about it shows, in very concrete terms, why there has been such pressure to outsource production to lower cost venues -- large firms are desperate to lower their costs to preserve our purchasing power, not out for some altruistic reason but to preserve their margins.  Absent such outsourcing, the cost of things, combined with the factors described above, would make a real mess of the average person's budget.

 

None of this isn't to say that there aren't problems created by outsourcing, from a lack of quality control at times, particularly with items from China to a loss of US-based jobs, but on the flip side many people fail to appreciate that if everything were still made in the USA, the bicycle you just bought your kid wouldn't cost the $150 you just spent at Target but probably $600-$700 for the same Schwinn. 

I don't think it matters much whether that bicycle is $150 or $600 when you don't have a job.

Certainly true, particularly for those who do not have the skillset for the jobs that remain. 

 

To say more than that will quickly get far afield from anything having to do with trains. 

Well, some things are definitely more expensive now than they used to be. Toy train track is a good example of that. But, to be fair, I recently paid the same price for a railking K4 w/ protosounds 2 manufactured in 2010 as I did the same loco w/ Protosounds1 in 1998.

Numbers, and figures can be manipulated, and have been for decades to meet the needs of a subject.

But when the world of the middle-class family is looked at in real times, things come down to reality and how it is/was. During the 40s, 50s, and even 60s. A family had 10 to 15 year loans on their homes, today, normally 30 year loans. Cars were 1 to 3 year max loans, today, 6 to 7 year loans.

I do remember that the 65 Mustang, fully equipped, I had a loan if 36.00 a month for 3 years. Our new 2014 Mustang fully equipped is costing us 449.75 a month for 72 months.

Between 1965 and 2014, my wages did not go up 10X.

There is one major factor being left out of this conversation. Exporting inflation by Manufactucturing in places where prices are reduced. China, Korea and a list of others.

 

Therefore, it may be true that some prices have been contained over the years. Unfortunately, cheap China is almost done. Massive increase on the way...

 

 

 

 

Back in the early to mid '70's I paid Maury Klein $190 for the 8753 Lionel GG1 with Pulmores, mechanical e unit, off color paint, poor striping and armatures that dripped oil on the center rail.

 

The latest Lionel GG1, with a street price of around $200, excells in all catagories.  It looks better, pulls more, sounds better, and basically has no negatives (except where built) compared to the 70's model.

I bought my first Atlas O USRA boxcars, Masterline, about that time and they were about $45 apiece.    Now new Atlas Masterline is coming in around 80-90.  

Regarless of the formula, O gauge model train prices have gone up.

There is no way to argue against that, even factoring, the value of the dollar, inflation, and other things.

All that is used to just gloss over rising prices.

 

IMHO, it is more of a personal experience based on each person financial situation, more that anything else.

 

If your wallet moans each time you buy something then its has probably gone up in price compared to your earnings, if your wallet does not complain, then the above is not true.

You can pretty much tell by each individuals buying habits what their personal situation is.

Some seemingly buy whatever they want whenever they want it without complaint, while others have to be more careful, cringe, hesitate, etc etc or do not feel too good after purchase and thinking about what they spent.

 

Bottom line is that O Gauge model trains are no longer a commodity...compared to the 1940s and 50s when it seemed almost every kid had an O Gauge train.

The same cannot be said today, most kids do not have model trains at all, especially O Gauge.

In fact, unlike the 1940s and 50s, for a long time now, most familys do not have model trains.

Nor do stores stock them like they did way back then, i.e. Sears, JC Penny, etc.

It is just not a commodity item anymore, if it ever was....you could maybe say, it was more "commodity like" back then, opposed to now.

 

I feel BTO, shrinking inventories of online and physical retailers of Model Trains especially O Gauge, and in many cases 2-3 year waits for catalog items all contribute to less availability and thus a more non commodity "like" stature.

 

In the PC Industry, once the PC went from being a luxury item for a select few, to a product almost every household has, the profit margins shrunk, and prices fell, and PC makers started having big issues and had to spread out to other business areas or risk financial failure.

 

The opposite is happening with O gauge/model trains, it is a luxury item for a select few, and a select few that gets fewer and fewer each year.

 

Thus, it is no surprise prices are going up.

 

However, as less is made, QUALITY should go up as well...is it? Will it?

 

Just my 2 cents...

 

Your point is will taken, but there are a couple of points to consider:

 

- China is still a command economy behind the scenes.  If their government decides that they want to maintain a cost advantage, they will see to it that it happens.  Market forces don't necessarily impact China the same way they do other true free-market economies.

 

- Industry has been remarkably adept in finding new low-cost producers to replace old ones that cease to provide the advantage they seek.   Remember that the US used to be to worlds low-cost provider until Japan and China industrialized.  Today it is largely China; in time it could be any number of African or less developed Asian countries still trying to claw their way out of the stone age.   

 

Either way, it will be interesting to watch.   The important thing is that we remain competitive here in the industries that really matter.  Heavy manufacturing, technology, medical, etc.   I still say, as do many economists, that there are certain industries that we probably don't want back on our shores.  Low value-add stuff that struggles to find and retain labor to do those types of jobs and remain competitive.   Model trains fall somewhere in the middle, but I'd argue that they are closer to the lower end.  Detail parts and decals take some skill and dexterity to apply, but it's monotonous work.  The PCB's and wiring are similar - some skill but no a lot.   None of us want our kids or grandkids to line up for this kind of work.  I would suspect things would have to get really bad HERE for people to take this kind of work at what would be a pittance at that point.  

 

Another contributing factor:  we can't just keep printing money and racking up debt and expecting our currency to retain value.  Other countries need to WANT US dollars.  

 

I maintain a theory that Lionel and MTH are marching towards exactly what BMW/Mercedes did many years ago:  upmarket.  Fewer products at higher price points.   Why kick your own butt producing and selling Fords that you make pennies on the dollar on when you can build a higher end product and make .25-.35 cents?  I think we're already seeing it, and it makes perfect sense.  Sell fewer items, maintain fewer dealerships, employee fewer people, make MORE money.   And it all works fabulously unless, due to a myriad of other socio-economic issues, the market dries up - the "high end" customer disappears.   Then you have to find a new "high end" market, and that's easier said than done.   BMW/Mercedes may be able to do it, but I'm not sure Lionel/MTH can.  

 

Short term:  we will pay more for trains, and we will continue to do so until... we won't.  At that point on the demand curve, the manufacturers will have a choice to make.  Abandon this market in search of another, leave the market entirely, or cheapen the product.  We've seen this before.  Perhaps we're even starting to see it again?

This is true and why people have to be careful when comparing prices "then and now" using the various calculation index methods.

 

Fortunately, there is a quick and easy method that can't be easily manipulated by special interests, and that method is by looking at a measurable medium of exchange - silver - since before 1965, all U.S. coins were silver-based.  For example, not too long ago, a friend was complaining about today's high prices and that he used to pay $0.20 per gallon for gasoline back in the early 1960's.  Back then, the two dimes used to buy that gallon each contained 0.0723 oz of silver for a total of 0.1446 oz silver per gallon.  Today, silver is around $16.55 per oz, so those two dimes containing 0.1446 oz of silver at today's silver price (and I am including zero numismatic value to those dimes) is roughly $2.393.  And if you look at the national average price today for gasoline (according to AAA), it is $2.343.  In other words, when you look at the prices in a fixed medium (quantity of silver), they have not changed much in 50 years ($0.05 decrease).  When you compare many near-identical trains from today with trains made in the silver-coinage era, you will see similar results.

 

The only thing that has changed is the *value* of the dollar, and the unfortunate thing is that we are paid in dollars, and every time Wall Street and the government do things to devalue the dollar, we in the working class effectively take a pay cut.

 

I highly reccomend the book "The Creature From Jekyll Island" by G. Edward Griffin for a more in-depth look at this subject and much much more.

 

Andy

 

 

Excellent post Stumper!

You summed it up perfectly.

 

Just consider inflation and other increases related to offshore production and we are in a good place overall.

 

 

To steal a sentence of your post; wages have in fact gone down. Years ago when minimum wage was $1.00 per hour the tolls on the George Washington Bridge were 25 cents or 1/4 the minimum wage per hour.

Today the NJ minimum wage is $8.75 per hour and the toll is $9.00; over an hours minimum wage. Years back my family could afford to buy a house on factory workers wages. Today there are few factories and wages in the retail sector are poor.

Point is that government has taken more in the way of taxes and wages have gone down. Inflation and all that are irrelevant, as the American citizens spending power has been severely diminished. If workers are getting paid less then why are the prices of model trains going up?

 

"If workers are getting paid less then why are the prices of model trains going up?"

 

Not sure where you are getting this information.

 

Workers are getting paid more, quite a bit more, thus the cost of doing business is more, thus the cost of the item (trains in this case) will cost more.

 

Charlie

To add a bit more to the above post.

 

According to Apple, the most profitable company in America right now, is predicting more GOLD Apple iWatches to be sold on China then in the US.

 

Who keeps spreading this information that the Chinese worker is underpaid, unskilled and uneducated? Don't forget Harleys, Buicks, the entertainment industry products and food. All exports that China can't get enough of.

 

Charlie

 

You raise a great point but also something to keep in mind:

 

Your new Mustang has a lot more "stuff" in it than the '65!  I laugh when I see that the newest compact cars (granted not the base models but the up-level models) have a level of equipment similar to my 6 year old E class Mercedes.  Then there is also all the additional cost of required safety equipment.

 

I don't disagree with your underlying point, rather just emphasizing that a lot of these additional expenses are due to the fact that we have, as a society, become spoiled.  There is also a cost (and a benefit, to be fair) to the regulations governing new products (such as safety equipment on cars).

 

It makes these comparisons difficult, but at the same time worthwhile and interesting exercises.

Yes the prices of our trains have been comparable to prices in the 90's but it is not our trains we should worry about. The pay checks have not increased very much since 1987. The middle class is being squeezed big time. 

 

The place where I work have not seen a pay raise to middle mgrs in about 9 years and the union workers are in the middle of a no raise 6 year contract. 

 

If you have allot of money in the market your doing pretty good but most of us do not. 

Been to the grocery store lately, prices are skyrocketing and the govt. don't count it in the inflation rate. Pretty amazing. 

I suspect this thread is destined to be deleted; just as the thread regarding the affordability of our model trains 'today' by the 'middle class' - long gone.  

 

Alex

That engine Superwarp paid $1099 in 1997 would cost $1600 today in 2015 using the CPI inflation calculator. The Lionel 2015, hicube boxcar has a street of about $69 dollars at Charle Ro.

Have you checked out the prices on HO scale high end boxcars, they have msrp of $60 or more. We're in the O gauge glory days! It's a great time to be into model trains. Tons of stuff out there for everyone at every price point, and you always hear; I don't or can't afford a New locomotive, we'll just wait awhile and buy it used for 1/2 or less off the original MSRP. I ve done it.

quote:

Who keeps spreading this information that the Chinese worker is underpaid, unskilled and uneducated? Don't forget Harleys, Buicks, the entertainment industry products and food. All exports that China can't get enough of.

 

I don't think the line workers at the factory making toy trains or Nike shoes are buying those things.

The half-life of a given thread is generally greatly diminished when the armchair economists start chiming in.

 

I do think that this is a golden age for model railroading, and I'm optimistic about the future.

 

Jeff C

Prices haven't really changed that much in 18 years

 

Yes... that's particular true at many toy train shows.  The same dealers hauling out the same old stuff from show to show, asking the same over-inflated price points show after show.  What don't they understand? 

 

David

Trains will always be affordable for people who can afford trains...

 

Rusty