Seventy some years ago, carpenters working on the construction of the NIH campus in Bethesda made a mere $1.62 per hour. Carpenter apprentices made even less. Fast forward to 2011 and carpenters working on the restoration of Building #3 on the campus were paid a prevailing wage rate of $17.44 per hour.
That’s a big difference at first glance. Though when we thought about the fact that 1938 was almost one hundred years ago, we might have expected a bigger difference in wages between now and then. Which made us wonder: which was really worth more?
On their face values, the current prevailing wage of $17.44 certainly appears to have the greater value. But what of inflation? It is tempting to quickly (and fairly reasonably) assume that the two incomes are probably fairly comparable in value, given that the cost of living would have risen along with the hourly rate. But did income and cost of living rise equitably?
And what about the Great Depression? 1938 was at the tail end of the Great Depression and it’s full effect would have been felt deeply across the country. Would the vast numbers of people looking for work, desperate to bring in the income needed to house, clothe, and feed their families, have driven down labor wages? On the other hand, perhaps the lack of funds, creating a lack of demand, equally drove down the cost of goods and services?
So which wage rate truly had more buying power: $1.62 per hour wages in 1938 or $17.44 per hour wages in 2011?
The US Department of Labor provides an inflation calculator on their Bureau of Labor Statistics website that answers this very question and inputting our historical data gave us a surprising answer:
Carpenters working on the NIH construction project in 1938 earned wages that were worth more than our carpenters working on the NIH project in 2011.
Which could be read to imply that our current economic climate may have had a more sobering effect on incomes than the Great Depression did. Which is a thought that had a sobering effect on us.