From Ruth to Rodriguez
In 1932, Babe Ruth was the highest paid player in baseball, earning $80,000 annually.
In 2005, Alex Rodriguez held the same title, earning $26,000,000 annually.
From Measuring Worth, In 2005, $1.00 from 1932 is worth:
$14.30 using the Consumer Price Index
$12.36 using the GDP deflator
$44.28 using the unskilled wage
$89.49 using the nominal GDP per capita
$212.19 using the relative share of GDP
In other words...
In 2005, $80,000.00 from 1932 is worth:
$1,143,777.45 using the Consumer Price Index
$988,947.37 using the GDP deflator
$3,542,535.21 using the unskilled wage
$7,159,446.29 using the nominal GDP per capita
$16,975,536.63 using the relative share of GDP
This means that either Ruth was severely underpaid or that the CPI & GDP deflator measurements used to determine the "value" of a dollar are severely skewed to underestimation.
Perhaps the price of the average 1932 home from "The People History", might give us a clue, $6,510.
In 2005, $6,510.00 from 1932 is worth:
$93,074.89 using the Consumer Price Index
$80,475.59 using the GDP deflator
$288,273.80 using the unskilled wage
$582,599.94 using the nominal GDP per capita
$1,381,384.29 using the relative share of GDP
The unskilled wage calculation is 50K above the current US median home price.
The nominal GDP per capita calculation seems closer to a starter home price in the larger and more popular metro centers.
The relative share of GDP calculation is close to the norm for a decent upscale home in New York, Hawaii or San Francisco.
However, the CPI & GDP deflator calculations which are a government staple, might get you a nice mobile home in a trailer park, somewhere in the rust belt.
No surprise here, thats the money shufflers and government at work, always looking out for your "best" interests....
Getting back to Ruth, and using the relative share of GDP calculation, either he was underpaid by $45K per annum, (80K+45K = 125K = $26 Million today) or Alex Rodriguez is grossly overpaid.
Given todays unjustified housing prices and overpaid underperforming athletes, I would tend to agree on both counts.
In 2005, Alex Rodriguez held the same title, earning $26,000,000 annually.
From Measuring Worth, In 2005, $1.00 from 1932 is worth:
$14.30 using the Consumer Price Index
$12.36 using the GDP deflator
$44.28 using the unskilled wage
$89.49 using the nominal GDP per capita
$212.19 using the relative share of GDP
In other words...
In 2005, $80,000.00 from 1932 is worth:
$1,143,777.45 using the Consumer Price Index
$988,947.37 using the GDP deflator
$3,542,535.21 using the unskilled wage
$7,159,446.29 using the nominal GDP per capita
$16,975,536.63 using the relative share of GDP
This means that either Ruth was severely underpaid or that the CPI & GDP deflator measurements used to determine the "value" of a dollar are severely skewed to underestimation.
Perhaps the price of the average 1932 home from "The People History", might give us a clue, $6,510.
In 2005, $6,510.00 from 1932 is worth:
$93,074.89 using the Consumer Price Index
$80,475.59 using the GDP deflator
$288,273.80 using the unskilled wage
$582,599.94 using the nominal GDP per capita
$1,381,384.29 using the relative share of GDP
The unskilled wage calculation is 50K above the current US median home price.
The nominal GDP per capita calculation seems closer to a starter home price in the larger and more popular metro centers.
The relative share of GDP calculation is close to the norm for a decent upscale home in New York, Hawaii or San Francisco.
However, the CPI & GDP deflator calculations which are a government staple, might get you a nice mobile home in a trailer park, somewhere in the rust belt.
No surprise here, thats the money shufflers and government at work, always looking out for your "best" interests....
Getting back to Ruth, and using the relative share of GDP calculation, either he was underpaid by $45K per annum, (80K+45K = 125K = $26 Million today) or Alex Rodriguez is grossly overpaid.
Given todays unjustified housing prices and overpaid underperforming athletes, I would tend to agree on both counts.
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