Adjusted for inflation wages?

[Crackles McFarly]

If min wage was $0.25 per hour in 1939 how can you, adjusted for
inflation/cola, calculate what the wage should be in 2008?

I'd need some explanation of the formula also if you could?

Also, where do you get cola/inflation rates per year since 1939?


thanks a lot.

 

[Bernard Liengme]

Google?

 

[Crackles McFarly]

Thanks for being a smart ass.

never mind then.

 

[Bernard Liengme]

Sorry if I inadvertently offended but this is an Excel newsgroup not an
Economics one
happy new year

 

[Crackles McFarly]

I asked for a FORMULA.

 

[Dave Peterson]

You also asked where to find cola/inflation rates.

 

[joeu2004]

You also asked where to find cola/inflation rates.

The OP asked for __both__. The OP wrote: "I'd need some explanation
of the __formula__ also if you could?", emphasis added for the reading-
impaired. And yes, the OP also wrote: "Also, where do you get cola/
inflation rates per year since 1939?" Besides, we often address the
non-Excel part of questions in these newsgroups.

Anyway, moving beyond this childish sniping.....

Bernard answer the second question best, I think: google for
"inflation rates" without quotes, and you will find sites that provide
calculators and/or tables of rates. Caveat emptor: these are US CPI
rates, for the most part, which may or may not be related to wage
inflation rates. (Probably not, IMHO.) It is the best you can do.
However, following the details, you might find specific tables of wage
inflation rates, ideally broken down by industry, but probably not.

(I used to have a link to the US govt website that is the primary
source of all this data. I believe it did have different inflation
rate tables. But, sigh, it seems that I have lost track of the link.)

As for a formula, well, that really depends on how you decide to
represent the data. Suppose you have a table of annual rates
(percentage increases) in A1:A68 for 1939 through 2006. (It might be
a little early to find 2007 rates.) The following array formula
(commit with ctrl+shift+Enter) computes the average annual rate:

=geomean(1+A1:A68)-1

Caveat emptor: GEOMEAN sometimes fails for a large number of periods
and/or widely varying fractions. I don't think either would be a
problem for this application.

If you have the average annual rate in B1, the following would compute
a 1939 price in 2008 dollars:

=fv(B1, 2008-1939, 0, -0.25)

HTH.

 

[Dave Peterson]

The OP asked for __both__.

That's what "also" meant in my reply.

 

[joeu2004]

PS....

 Caveat emptor:  these are US CPI
rates, for the most part, which may or may not be related to wage
inflation rates.  (Probably not, IMHO.)  It is the best you can do.

I meant to write "it is __probably__ the best you can do".

The OP wrote: "If min wage was $0.25 per hour in 1939 how can you,
adjusted for inflation/cola, calculate what the wage should be in
2008?". There are many ways to interpret what the OP really wants.

If the OP is asking about the equivalent buying power of $0.25 in
2008, the CPI might, indeed, be the appropriate index to use.

However, if the OP wants to compare the minimum wage increase with the
average wage increase, the OP might consider using the Average Wage
Index data from the (US) Soc Sec Admin. A table is available at
http://www.socialsecurity.gov/OACT/COLA/awiseries.html . In Excel
2003, the table can be imported easily by using Data>Import External
Data>New Web Query. Unfortunately, that table only back as far as
1951.

 

[joeu2004]

That's what "also" meant in my reply.

True. Mea culpa!

But I think the OP's response to Bernard's second response is
appropriate (although I disagree with the OP's tone and reaction to
Bernard's first response). Bernard seemed to imply that the OP's
question was inappropriate for an Excel newsgroup ("this is an Excel
newsgroup not an Economics one"). I interpreted your retort as
support of Bernard's implication. Perhaps I misunderstood you.

 

[Dave Peterson]

Just to add some Bernard mindreading <bg>.

I figured he was answering the last question--check google for the historical
data.

The OP and Bernard did not have a meeting of minds, though <vbg>.