But just how expensive is gasoline in historical terms? Certainly, the nominal price today—the one posted by a typical gas station—is just about as high as it’s ever been. During the last period of high prices, in 1981, a gallon of gas in the United States sold for $1.35. However, adjusted for inflation (or, more accurately, the Consumer Price Index, or CPI) and put into 2000 dollars, that was the same as US $2.55—considerably higher than today’s prices.
Of course, consumer prices are just one way of comparing costs over time. As this page points out, there are several different ways of comparing the costs of goods over time, many of which make gasoline seem even more expensive in the past than the CPI would suggest. For example, adjusting for the typical hourly wage of an unskilled worker, a gallon of gasoline cost the equivalent of $3.25 in 1949. Adjusting for per capita economic output, a gallon of gas cost the equivalent of $5.24 in 1949. (Both of those figures are in 2000 dollars)
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There are two points here. The first and most obvious is that, whenever you hear something called “cheap” or “expensive” in historic terms, hold onto your wallet. The economy has changed so much over just the past 50 years, and the concept of inflation-adjustment is so slippery, that historic comparisons of this sort should be viewed with skepticism.
The second point, though, is that most ways of looking at the question suggest that gasoline is not particularly expensive right now. Even at today’s seemingly elevated prices, an hour’s worth of unskilled labor will buy more gasoline today than it did in the 1950s, or during the price peak of the late 1970s and early 1980s. Likewise, the cost of a gallon of gasoline today represents a smaller share of both total and per capita economic output than it did at any time from the Korean War through the mid 1980s.
That means that gasoline will have to become a lot more expensive than it is now before it becomes as costly as it was at the heyday of American car culture.