What Was The Cost of Living in 1927?

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Before the Great Depression began at the end of the decade, the Roaring Twenties was an economically prosperous time in history. Wage growth and increased availability of credit allowed many consumers to purchase new luxuries like electric household appliances and cars. However, the cost of living in 1927 wasn’t low enough to give anybody a free ride.

Americans still had to work hard and save up for the things they wanted, especially major purchases like radios and homes. Let’s take a closer look at the cost of living in 1927 to gain a better understanding of this period of history.

Cost of Living in 1927

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According to the IRS, the average net income in 1927 was $5,496 per year. However, wages depended on your location, industry, and job title just like they do today.

For example, managers in the railroad industry earned roughly $4,500 per year, whereas clerical workers only brought home an average of $1,880 per year. Although this doesn’t sound like a lot of money, it was possible to get by because prices were lower than today.

For instance, a Harley-Davidson motorcycle only used to cost $235 and a pound of coffee was about $0.50. To get a better sense of the cost of living in 1927, here’s an overview of the average prices of food and other consumer goods.

Cost of Food in 1927

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With the grocery inflation we’ve experienced in the past few years, the cost of living in 1927 may make you jealous. However, it’s important to remember that these food prices didn’t seem cheap to families living in the 1920s.

They spent a much larger portion of their incomes on groceries than we do today. In 1929, households had to devote 24% of their disposable income to food, whereas families in 2022 only spent 11%.

Keep that in mind as you check out the chart below, which compares food prices in 1927 to today.

Cost of Major Purchases in 1927

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During the 20s, car prices fell, which made them more accessible to average families. This helped spur the growth of the suburbs and led to the rise of the quintessential American road trip.

Although cars and consumer goods were more affordable thanks to expanding access to credit, households still had to save up for major purchases like buying a home. Check out the cost of big expenses like housing and college tuition below.

Cost of Having Fun in 1927

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The so-called Roaring Twenties was a lively time in American culture. Despite Prohibition which banned the sale of alcohol, Americans still enjoyed drinks at famous establishments like the Cotton Club in Harlem, New York City. Iconic Black musicians like Louis Armstrong and Ethel Waters performed there. The popularity of the club and jazz itself spread thanks to the radio, which broadcasted the shows to a wider audience.

The Savoy Ballroom, another nighttime destination in Harlem, was the place to go to dance. It was the birthplace of the Lindy Hop, a partnered swing dance that remained popular throughout the 30s. Going to the movies also became popular during this time. By the end of the decade, 75% of Americans visited the movie theater once a week.

At home, Americans listened to the radio to entertain themselves and hosted dinner parties with friends. Check out the cost of these entertainment options below.

What do you think of the cost of living in 1927? Does it seem high or low compared to today? Share your thoughts in the comments!

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Vicky Monroe

Vicky Monroe is a freelance personal finance and lifestyle writer. When she’s not busy writing about her favorite money saving hacks or tinkering with her budget spreadsheets, she likes to travel, garden, and cook healthy vegetarian meals.