To find your wage's value in "constant dollars" (buying power), use this calculation:
: Divide the Current Year CPI by the Base Year CPI.
: The price index value provided by government agencies like the U.S. Bureau of Labor Statistics (BLS). Step-by-Step Paper Calculation
Real Wage=(Nominal WageCPI for current period)×100Real Wage equals open paren the fraction with numerator Nominal Wage and denominator CPI for current period end-fraction close paren cross 100 : The actual dollar amount on your paycheck.
: Look up the CPI-U (All Urban Consumers) for your starting year and your current year.
If you want to see if your current salary has kept up with the buying power you had in a "Base Year" (e.g., five years ago), follow these steps:
To find your wage's value in "constant dollars" (buying power), use this calculation:
: Divide the Current Year CPI by the Base Year CPI.
: The price index value provided by government agencies like the U.S. Bureau of Labor Statistics (BLS). Step-by-Step Paper Calculation
Real Wage=(Nominal WageCPI for current period)×100Real Wage equals open paren the fraction with numerator Nominal Wage and denominator CPI for current period end-fraction close paren cross 100 : The actual dollar amount on your paycheck.
: Look up the CPI-U (All Urban Consumers) for your starting year and your current year.
If you want to see if your current salary has kept up with the buying power you had in a "Base Year" (e.g., five years ago), follow these steps: