Sunday, April 19, 2015

Inflation calculators and the “good old days”

            The next time friends get excited and express amazement at how little things cost and how much less people were paid in the “good old days,” settle them down with a couple of clicks on an inflation calculator. Often, the low prices and salaries, when adjusted for inflation, are not THAT low!
            Recently, a friend forwarded me an email from an excited acquaintance of his who was amazed at some 1910 statistics he had come across. Some of the data was truly staggering. For example, according to the email, the 1910 life expectancy for men was 47 years—in 2010, men could expect to live 76.2 years.[1] Again, in 1910, only 6 percent of all Americans had graduated from high school—in 2009, 85 percent of adults aged 25 or over reported having a high school diploma.[2]

Cartoon by Otto Lang in "Judge" magazine (1890-1910). Library of Congress.


            However, after the figures in the email were fed into an inflation calculator, the “amazing” 1910 prices for sugar, eggs and coffee, and the salaries for accountants and mechanical engineers, were underwhelming.
            According to the email, in 1910 sugar cost four cents a pound, eggs were fourteen cents a dozen, and coffee was fifteen cents a pound. But, an inflation calculator indicated that in today’s dollars, sugar would cost about $1.00 a pound in 1910 (at a grocery store today, sugar can be purchased for 49 cents a pound); eggs would cost about $3.50 a dozen in 1910 (in a grocery store today, eggs can be purchased for $2.06 a dozen); and coffee would cost approximately $3.75 a pound in 1910 (coffee can be purchased for $3.68 a pound in one of today’s supermarkets).[3]

Library of Congress.


            According to the email, an accountant in 1910 could expect to earn $2,000 a year, and a mechanical engineer might earn $5,000 a year. But, an inflation calculator showed that in today’s dollars, an accountant in 1910 could expect to earn about $50,060 a year, and a mechanical engineer in 1910 might earn approximately $125,150 a year.[4]
            The 19th century Scottish historian and essayist, Thomas Carlyle, once said, “you might prove anything by figures.” The use of an inflation calculator can add a new dimension to the numbers game and give new meaning to the prices and salaries paid in those “good old days.”



[1] “Life Expectancy,” Centers for Disease Control and Prevention, accessed April 18, 2015, http://www.cdc.gov/nchs/fastats/life-expectancy.htm.
[2] U.S. Census Bureau, “Educational Attainment in the United States: 2009,” February 2012.
[3] “The Inflation Calculator,” accessed April 17, 2015, http://www.westegg.com/inflation/ This calculator can be used on dollar amounts from the years 1800 to 2014. The following is another calculator that can be used for dollar amounts from the years 1913 to 2015. “Inflation Calculator: Bureau of Labor Statistics,” accessed April 17, 2015, http://www.bls.gov/data/inflation_calculator.htm.
[4] “The Inflation Calculator.”

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