Previously discussed the twentyfold drop in the cost of eggs compared to hourly wage of a teacher. What caused the change?
Technology change which enabled productivity improvements.
This discussion is based on The Price of Everything, by Prof. Russell Roberts.
When my father was a child living on the farm, every year the family would get several hundred newborn chicks. They would spread newspapers out in the kitchen and let the chicks run around until they grew enough to go outside. I’m not sure, but think they would have gone to the henhouse.
By the way, when there weren’t chicks to be kept warm, grandma had to get up a couple of hours before breakfast to get a fire going in the stove so it could be hot enough so breakfast could be cooked. From scratch.
She didn’t turn the knob on a gas-fired stove to start cooking breakfast from boxed ingredients.
If there were chicks to be kept warm, I suppose someone had to get up several times during the night to keep the stove going. None of this adjusting the thermostat up a few degrees before going to bed.
Anyway, that is how my dad’s family raised enough chickens to eat for the year and have lots of eggs to sell off for cash.
What does an egg farm look like today?
How about 800,000 chickens.
Suppose it takes 1,000 people to take care of that? No.
What happened? Did chickens get faster at laying eggs? No.
Technology change which enabled productivity improvements. (I know I’m repeating myself but it’s a pattern that shows up everywhere to explain most of the change in the last 100 years.)
The Price of Everything explains:
“The biggest changes were figuring out ways to make the workers more productive.
“Yes. Chickens lay eggs. But people get those eggs from the egg farm to your refrigerator. People take care of the chickens, people collect the eggs, people put the eggs into containers. Look at the job of taking care of the chickens and collecting eggs – the job of running the henhouse. Two people can oversee 800,000 chickens that produced 240 million eggs a year. Two hundred fourty million! Can you imagine it? The average worker produces 120 million eggs in a year.
Those are big farms with lots of technology and two people at a computer controlling it all.
That is why the amount of labor it takes to buy a dozen eggs for a teacher has fallen from an hour 100 years ago to about 2 or 3 minutes today. Technology changes that in turn create productivity improvements.