Salary Inflation Adjustment (COLA) Calculator
Visualize real wage growth versus inflation. This tool compares historical salaries against BLS CPI data to determine true purchasing power.
To match your old lifestyle, you need this amount today.
About
Earning a higher number on a paycheck does not automatically equate to increased wealth. Inflation continuously erodes the purchasing power of currency meaning that a $50,000 salary in 2010 bought significantly more goods and services than the same amount today. This tool serves employees and HR managers who need to calculate the "Real Wage" versus the "Nominal Wage". By indexing historical income against the Consumer Price Index (CPI), users can determine if their career trajectory is actually beating the cost of living or if they are effectively taking a pay cut despite numerical raises.
The data engine behind this calculator utilizes over 40 years of monthly CPI-U (Consumer Price Index for All Urban Consumers) data. This provides a granular look at how specific start and end dates impact purchasing power. Use this analysis during performance reviews to justify salary adjustments that match economic reality.
Formulas
The core mechanic for adjusting a historical salary to current dollars involves the ratio of the Consumer Price Index (CPI) at the target date versus the starting date.
To determine the percentage change in Real Wages (purchasing power), we compare the inflation-adjusted equivalent to the actual current salary:
Reference Data
| Year | CPI-U Avg | Inflation Rate | $100k Equiv. | Purchasing Power |
|---|---|---|---|---|
| 1980 | 82.4 | 13.5% | $358,000 | High Erosion |
| 1990 | 130.7 | 5.4% | $225,000 | Moderate |
| 2000 | 172.2 | 3.4% | $171,000 | Stable |
| 2010 | 218.1 | 1.6% | $135,000 | Low Inflation |
| 2020 | 258.8 | 1.2% | $114,000 | Pre-Spike |
| 2023 | 304.7 | 4.1% | $100,000 | Current Baseline |