Salary Inflation

Salary Inflation - President Hoovers salary (2005): $75,000...

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Federico Nusymowicz Lecture 16 Assignment Deflate Babe Ruth's salary and compare it to that of the president. Which one has growth more (on average): the salary of a top baseball player or that of the President of the US? 1931 CPI: 15.2 2005 CPI: 195 To adjust past dollars to current levels, we take the previous amount and adjust it by multiplying it by: 2005 CPI / 1931 CPI = 195 / 15.2 Babe Ruth’s salary (1931): $80,000 Babe Ruth’s salary (2005): $80,000 x (195 / 15.2) = $1,026,316 Median New York Yankee salary (2005): $5,800,000 President Hoover salary (1931): $75,000
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Unformatted text preview: President Hoovers salary (2005): $75,000 x (195 / 15.2) = $962,171 President George W. Bushs salary (2005): $400,000 In real terms, then, the salary of the average New York Yankee has grown far more than that of the president in fact, while it has quintupled, the real salary of the president has been cut in more than half. And thats just the average Yankee if were addressing the top baseball player, the difference would be much larger (in 2005 Alex Rodriquez was paid $26,000,000)....
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This note was uploaded on 06/26/2008 for the course ECON S-10ab taught by Professor Medoff during the Summer '07 term at Harvard.

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