Why Do We Use Inflation Adjusted Prices?

We often see statements like this made by economists:

Gas prices reached a new 2008 low of $1.61 per gallon, which is the lowest inflation-adjusted price since...

(Emphasis mine)

But what do economists mean by inflation-adjusted? A typical definition of inflation is:

Inflation is an increase in the price of a basket of goods and services that is representative of the economy as a whole.

By definition some goods and services have to rise in price faster than others, so some prices will have to rise in real terms and others will have to fall in real terms. But why is that important?

What truly is important is purchasing power - how many gallons of gasoline, or iPhones or computers we can buy with a week's worth of wages.

I would dearly love if the media would stop reporting inflation adjusted prices (which are meaningless) and rather report price changes in terms of minutes or hours worked. The BLS reports average hourly earnings in current dollars. I would prefer median hourly earnings, but average works.

In November 2008, the average hourly earnings was $18.36 an hour, meaning that at $1.61 per gallon it takes about 5 1/2 minutes for the average worker to earn enough to purchase a gallon. This is a much more meaningful figure; I would love it if someone took the time to calculate past gasoline prices in these terms.

(Note: Absolutely none of this should be taken as criticizing Mark Perry for providing prices in inflation-adjusted terms. All economists do it; I just chose his blog post as an example).