Here’s what a Greek-Italian restaurant can teach you about inflation

One thing for certain: Chicken livers are a bargain in 2021

By David Enna,

There’s a restaurant in my hometown – Charlotte, N.C. – that has been in business continuously at the same location on West Morehead Street since 1952. The restaurant business draws a notoriously fickle clientele, so that’s pretty remarkable.

The Open Kitchen was founded by Steve Kokenes, who was Greek, not Italian. His menu of pizza, lasagna, spaghetti and other “international” cuisine was a rarity for Charlotte in those days. The city didn’t get an “authentic” Italian restaurant – meaning, run by actual Italians – until the late 1980s. But that didn’t matter, the Open Kitchen specialized in simple, tasty comfort food and it prospered.

The restaurant expanded in the 1960s and 1970s. An interesting side note is that its location — once a dreary area of warehouses and factories — is now a booming area of modern apartments, art galleries, trendy breweries and “artisan” restaurants, very close to Bank of America Stadium. It’s now a very valuable piece of property, so I have to wonder if the owners will eventually sell the land.

The restaurant is still run by members of the Kokenes family, who wait tables and run the cash register. And they have a remarkable collection of Charlotte memorabilia displayed all over the walls. But what really caught my attention on a recent visit was a 1963 menu posted by the entrance to the dining room. It’s especially interesting since today’s menu contains many of the same items – with exactly the same names – 58 years later. Aha! This offers a unique look into inflation over the last 58 years, and … what could be in store for our future.

Where were you 58 years ago?

Back in 1963, $1 was worth … well, one dollar. And that is still true today. But adjusted for inflation (based on the Bureau of Labor Statistics’ Inflation Calculator) it takes $8.89 in today’s dollars to equal the buying power of $1 in July 1963. That is an increase of 789%, and it is my baseline for comparisons of price changes from 1963 to today.

Anyone who drove a car before the 1973 gas crisis fondly remembers gasoline at 25 cents a gallon. That’s what it was selling for back in 1963. Those were the days! But in reality, gas prices until recently were as cheap (relatively speaking) as they were in 1963. However, after a 41.8% increase in gas prices over the last 12 months, the cost of gasoline has now surged 1,172% since 1963, well over the rate of overall inflation

And look at the median U.S. home sales price – $329,522 in 2021 – up 1,731% since 1963, more than double the inflation rate. So even with the home price collapse in 2008, home prices have been running well above inflation. Same with the stock market, which has endured two major bear markets in the last two decades and yet is up 5,368% since 1963, nearly seven times inflation. Do these numbers bode well for the stock market and housing prices? Or are they an omen of rough times ahead?

At the same time, the U.S. minimum wage at $7.25 has lagged well behind inflation.

The Open Kitchen: Then, and now

The Open Kitchen menu items are pretty much in line – with some variations – with inflation over the last 58 years. Spaghetti with Meat Balls and Mushrooms (one of my favorite Open Kitchen offerings) costs $13.25 today versus $1.50 in 1963, a 783% increase and just slightly lower than inflation.

Want the more exotic Ravioli Parmigiana? That will cost you 980% more than it did in 1963, and probably destroy any hope you had of maintaining your diet. Want half spaghetti, half ravioli? (Good choice.) That will cost you $10.25 and I’d say that’s a bargain, but the price is 925% higher than the 1963 cost. So, dang, not a bargain.

The inflation-adjusted bargain on this menu is Spaghetti with Chicken Livers (now called Spaghetti ala Caruso), which at $13 is only 643% more expensive than in 1963, running well under overall U.S. inflation. (This dish is now relegated to very fine print at the bottom of the current menu. Understandable.)

The Open Kitchen also offers a new dish, “Chicken Livers Greque,” with this awesome description:

Plump, juicy chicken livers sauteed in butter, delicately seasoned with oregano and lemon. Served with garden salad and French fries. ($13.50)

I am imagining that The Open Kitchen doesn’t sell a lot of Chicken Livers Greque or ala Caruso, but it’s a testament to their sense of tradition that they keep these on the menu.

A real world example, in our lifetimes

If you were alive in 1963 — I was 10 years old then — you and I have seen U.S. inflation rise 789% in the last 58 years. Gasoline costs are up more than 1,000%. Same with the cost of a first-class postage stamp, and the typical American home.

Inflation is an unrelenting force. I look at today’s Open Kitchen prices and my reaction is “perfectly reasonable.” But imagine if you saw these prices in 1968. You’d have been stunned. Now, imagine the prices you could be seeing in 20, 30, 40 years.

Inflation exists. It’s a force that must be considered.

* * *

This article draws on information I first collected for a Seeking Alpha article in 2017.

David Enna is a financial journalist, not a financial adviser. He is not selling or profiting from any investment discussed. The investments he discusses can purchased through the Treasury or other providers without fees, commissions or carrying charges. Please do your own research before investing.


About Tipswatch

Author of blog, David Enna is a long-time journalist based in Charlotte, N.C. A past winner of two Society of American Business Editors and Writers awards, he has written on real estate and home finance, and was a founding editor of The Charlotte Observer's website.
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6 Responses to Here’s what a Greek-Italian restaurant can teach you about inflation

  1. DW says:

    erosive power of inflation imagery: purchasing power of a full spaghetti and meatball dinner dwindles to half a meatball over 50+ years

  2. David Michael says:

    We purchased our first house at $36,000 in 1966 in Los Altos, California. Forty years later it was valued at 2.5 million. As a new college teacher I could afford the house on my salary of about $40,000 a year. Today, on a salary of $150,000 I could not afford any house in the Bay Area.

    I cannot imagine the difficulties of living in large cities these days for the younger generation, especially with college debt. Thanks for the story on inflation. Very dramatic!

  3. Mendy says:

    In 1963, my first passbook savings account paid 4% interest compounded monthly. The highest savings account rates today pay 0.40%, and the national average is 0.06%. I’ve been reading your articles for several years and have always found them lucid, well-researched, and helpful. I’d appreciate your thoughts about the dramatic decline in savings interest rates in the face of the dramatic increase in inflation over the last six decades.

    • Tipswatch says:

      Mendy, I often think about those long-gone 4% passbook savings accounts, even 5% at times. And you are right, a best-in-nation savings account now can get you only 0.5%, 1/10th the return, and most money market accounts are paying 0.05%, 1/100th the return. My advice is to still hold cash you need, and don’t take dangerous risks to get a higher yield. I Bonds are a very good investment for $10,000 of cash a year. After that? Things could begin changing, but short-term rates are likely to remain near zero for 12 more months, at least.

  4. Judy F. says:

    Thank you for a very effective & clear (and nostalgic) illustration addressing this issue. Kudos to The Open Kitchen for its successful navigation of the inflationary landscape and attendant challenges over the last half a century and counting! No small feat!

  5. Karyn says:

    I appreciate this real-world example. The numbers are stunning. Thanks for your posts. I have recently “discovered” your blog and am learning a lot from you. Thank you!

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