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Raw data: $100,000 adjusted for inflation

Yesterday's post about college grads pulling in starting salaries of $100,000 has prompted me to produce a chart showing the equivalent of $100,000 over the past century or so. Here it is:

If you made $18,000 in 1970, that's the equivalent of making $100,000 today.

21 thoughts on “Raw data: $100,000 adjusted for inflation

      1. golack

        take home pay is different than salary. And benefits not included.
        Taxes are lower, but contributions to health care are up. Pensions were included, today, you have to make a contribution.

    1. rick_jones

      While it doesn't speak to the latter, you might take a second look at the headline:

      Raw data: $100,000 adjusted for inflation

      Emphasis mine.

  1. J. Frank Parnell

    I still remember the Carter years. Double digit inflation meant big fat raises every year. On an intellectual level I knew I wasn't really gaining all that much (except my mortgage was shrinking relative to my income) but the big raises still felt good.

  2. iamr4man

    It’s tough to really compare. Up through the 60’s, a college education in California would be tuition free. Using today’s inflation numbers it would have cost $732 per year back then. My parents paid $14,500. It’s current value is around $800,000. That works out to around $80,000 using CPI in reverse. Beverly Hills mansion price in those days.

  3. haddockbranzini

    I think the minimum wage was around 1.50. That would be around 8.33 today. $15/hr is just gonna create another class of millionaires!

    When I was in high school in the 80's I could go out Friday night with $5 - get a six pack of Bud and a pack of Marlboros.

  4. rick_jones

    Since someone brought-up taxes:

    Year $100K Equivalent Top Tax Bracket Effective Tax Rate
    1940 $6,500 10.00% 5.69%
    1950 $11,000 38.00% 27.45%
    1960 $14,000 43.00% 30.43%
    1970 $18,000 42.00% 28.72%
    1980 $36,000 49.00% 29.71%
    1990 $54,000 28.00% 23.32%
    2000 $66,000 31.00% 22.89%
    2010 $81,000 25.00% 22.03%
    2020 $96,000 24.00% 17.20%
    2022 $100,000

    Kevin was clearly rounding the income levels. Depending on the direction he went, 1960 and 1970 might not be the correct Top Tax Bracket (for that level of income) - they landed right on top of the > for the next bracket up.

    https://docs.google.com/spreadsheets/d/1dqe_vjUlPAkkBznpnArpue1t93eVkqLuxutr_TLIbQk/edit?usp=sharing

    Transcribing the brackets from the source into my spreadsheet made me appreciate how by the 1980s folks might have found the tax system overly complicated.

    By necessity this does not include deductions and such.

    1. rick_jones

      Computing the $100K equivalent using the BLS CPI (I couldn't find my way to the FRED data of Kevin's to see which way he was rounding - this isn't rounding. Going January to January):

      Year $100K Equivalent Top Tax Bracket Effective Tax Rate
      1940 $4,944 10.00% 4.76%
      1950 $8,359 38.00% 24.91%
      1960 $10,422 43.00% 26.87%
      1970 $13,445 42.00% 24.92%
      1980 $27,672 49.00% 25.28%
      1990 $45,314 28.00% 22.42%
      2000 $60,040 31.00% 22.26%
      2010 $77,072 25.00% 21.72%
      2020 $91,756 24.00% 16.89%
      2022 $100,000

  5. realrobmac

    Somehow it just doesn't quite seem right that 66K in 2000 is the same as 100K today. If this is really accurate I'm kind of shocked. I'd expect it to be more like 85K in 2000.

    1. cmayo

      2% annual inflation from 66K in 2000 to 2022 is actually 102K.

      Granted, we had about 10 years below 2% inflation (with one or two negative years?), but we had others higher than that. Just figuring 2% as a ballpark and turns out that's about right.

    2. golack

      say 3% a year for 20 years. Not compounded, 60%. Roughly compounded (10 year bins), first 10, 30%; second 10: 10x1.3x3=39% so total 30+39= 69%. And your 66K is now 111K. Ok, inflation was not that high.
      for 2%: 40% not compounded; 10 year bin compounded: 44%; and 66K is 95K.

      So, if you do a proper compounding of the interest over 20 years, you'll get to 100K from 60K with an average rate of just less than 2%.

      Of course, inflation is different than wage growth. "Blue collar" union jobs could get you that 100K equivalent back in the day. Fewer of them now, and wage growth has taken a hit--see warehouse workers.

  6. cmayo

    I was thinking about this the other week. When I was in high school in the early 2000s and being talked to about college, and what jobs were available, and the prospect of taking on student loans vs. what I would make - jobs out of college that paid (at the time of discussion) in the low- to mid-40K range. That's about 2/3 of the ~66K that 2022 100K would have been equivalent to in 2000.

    Instead, I graduated in 2009 and didn't land my first real job until 2011 and made 35K. No wonder I didn't really feel like I was making an OK (but not stellar) amount until I got my most recent promotion a little over a year ago, which finally put me around what my post-college expectations would have been (accounting for inflation) - except without accounting for living in one of the most expensive metro areas in the country, rather than in one of the most moderately priced ones in the Midwest.

  7. ey81

    I doubt that any newly-minted college graduates made $18,000 in 1970. Graduates of Yale in 1980 had starting salaries of $20,000 at Goldman Sachs (I had some friends in that position). It's hard to imagine what credentials would get you more. (I know, Harvard.)

  8. Jasper_in_Boston

    This chart arguably underplays the "inflation" of wage income (or, if you prefer, living standards), in that wages over the long term rise faster than inflation. In other words, if your salary was $6,500 in 1940, you'd be in a higher percentile than someone with a $100,000 salary today. Or, to put it another way, to reach the same percentile of a $6,500/year worker from 1940, a worker today would need to be pulling in, say, $130,000.*

    *Guesstimate: I didn't bother to google for accuracy, but the point is it would be more than 100K.

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