Summary: Energy powers economic progress, and it has become much more abundant since 1980. Despite nominal price increases, electricity is more affordable in terms of labor. A blue-collar worker today can buy much more electricity per hour worked than in 1980. Thanks to rising productivity and innovation, we’re getting significantly more energy for less time.

Energy is essential to creating abundance. Whether it’s used to organize and move atoms or to store and transmit information, economic development depends on energy. Although energy is available in many forms and measured in various units, the kilowatt-hour (kWh) is a common standard of comparison, especially in electricity-related contexts. A kWh represents the energy delivered by one kilowatt of power sustained over one hour. For perspective, a standard 42-gallon barrel of crude oil contains approximately 1,700 kWh of energy, though the exact amount depends on the oil’s grade.

The US Bureau of Labor Statistics (BLS) tracks average electricity prices over time in nominal terms. The chart below shows the U.S. average price per kWh from 1980 to the present—rising from about 6 cents per kWh in 1980 to 17.6 cents today.

To convert the money price into a time price, we compared the US blue-collar hourly compensation rate for each year, indexing 1980 as the baseline (1.0). The result shows that the time required to purchase a kWh of electricity has declined by 26.6 percent since 1980.

Another way to understand electricity prices is to ask: how many kWh can you buy with one hour of work? This chart illustrates that relationship. In 1980, an hour of US blue-collar labor could buy 152 kWh; today, it buys 207 kWh—a 36 percent increase in energy abundance.

The regression line plotted on the chart suggests a steady gain of about two additional kWh per year for the same amount of work. Although time prices have spiked in the past three years, the long-term trend still indicates growing abundance..

If you started your first job as an unskilled worker in 1980 and “upskilled” to a blue-collar job by 2024, your time price for electricity would have dropped by 67.3 percent. For the time it took to earn enough to buy 100 kWh in 1980, you could now purchase 306 kWh—representing a 206 percent increase in electricity abundance.

Find more of Gale’s work at his Substack, Gale Winds.