[lelio]

With 6.5% inflation over 40 years $2018 becomes $26974. To be 2.5x as bad, inflation will only have to creep up to 8.6% for the 1960 salary of $2k to be worth $54k.

But that's really mental masturbation over compound interest. The real world is a lot different.

[Texas_Dawg]

With 6.5% inflation over 40 years $2018 becomes $26974. To be 2.5x as bad, inflation will only have to creep up to 8.6% for the 1960 salary of $2k to be worth $54k.

But that's really mental masturbation over compound interest. The real world is a lot different.

True, but the inflation rate is a terrible way to measure that because it does not account for substitution. A better way is via the CPI. Using the CPI inflation calculator you can see that $1 in 1960 was the equivalent of $6.08 in 2002. So whereas per capita take-home income is 12 times higher today, the dollar has only lost 6 times its value. (Again, not to mention all the amazing technologies in education, travel, entertainment, etc. that we have today that we didn't have then.)