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Rella
Lv 6
Rella asked in Social ScienceEconomics · 8 years ago

How do I determine real vs. nominal income for real life use?

I've taken 3 college econ classes, but I don't know where my notes are about how to do this. I'm not currently in class; I want to know how to do this so I can figure out if pay raises are advancing me past inflation and to be able to compare what I was making in previous years to the current year.

If I'm making a certain hourly wage, and I want to compare that to a different hourly wage (for ex. pay raise) or a different year's inflation rate (for example, to see how much I should be making now to be breaking even with what I was making before), how do I figure that? And where online do I find accurate info to use for inflation between years? Thank you very much for your help!

Update:

I do NOT know why Yahoo Answers is acting like this. I've tried about 6 times to choose your answer as best, but it won't let me. It's not like I'm new at this...I'm doing everything just as usual, but it keeps sending the question back to unresolved status. Well, this is what I had planned to say when I gave you 5 stars and chose your answer:

Wow, thank you so much. I don't know why I'm amazed that there is an easy online calcular I can use that will do all the work for me. I guess I just got so used to doing math and using formulas for econ classes that it didn't even occur to me that there would be an easier way. Awesome!

1 Answer

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  • OPM
    Lv 7
    8 years ago
    Favorite Answer

    The Bureau of Labor Statistics provides just such a calculator.

    http://data.bls.gov/cgi-bin/cpicalc.pl

    Put your old wage in and the year received. If it is larger in 2012 dollars than you are making today, you have been taking real losses. The reverse is true for real gains of course.

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