The Federal Government likes to tell us what “inflation” is on a regular basis. The inflation number is widely debated, and for good reason. Often times the math doesn’t quite line up with the stated inflation percentage. Over the past 50 years, the printed inflation number from the government has typically ranged from 2.75% - 3.75% (when considering a longer time frame during those 50 years).
Below, I look at 5 case studies to determine how closely the stated inflation figures line up with true, historical inflation percentages. These items below apparently didn’t get the memo from Congress…
Case #1: Mickey Mantle vs. Mike Trout
Then: in today’s dollars, the most money that Mickey Mantle was ever paid to play baseball was $800,000. That salary is 80% less than what the league-average player makes today. For those of you who don’t know, Mantle was one of the greatest players of all-time and the greatest player of his generation.
Now: today’s best player, Mike Trout, earns an average annual salary of $27,683,000.
- Government's stated inflation from then until now: 3.93% per year
- Actual inflation from Mantle to Trout: 6.65% per year
Case #2: Met Stadium vs. Target Field
Then: in today's dollars, to attend a Twins game in 1965 would have cost a family of five $50.31.
Now: today’s average ticket price at Target Field is $31.72, for a total of $158.60.
- Government's stated inflation from then until now: 2.91% per year
- Actual inflation from Met Stadium to Target Field: 5.25% per year
Case #3: Ivy League Education
Then: in today’s dollars, to attend a 1950 Ivy League institution would cost $13,800 (includes room & board, tuition and fees).
Now: today’s average cost of attending an Ivy League institution is $66,000.
- Government's stated inflation from then until now: 3.57% per year
- Actual inflation of an Ivy League education from 1950 to today: 6.05% per year
Case #4: Delivering a Baby
Then: in today’s dollars, to have a baby born in 1969 would cost $1,346.
Now: today’s average cost of delivering a baby is $9,700. (Believe me, I would know!)
- Government's stated inflation from then until now: 4.14% per year
- Actual inflation of childbirth costs from 1969 to today: 8.61% per year
Case #5: Buying a Gallon of Gas
Then: in today’s dollars, a gallon of gasoline from 1980 would cost $3.95.
Now: I filled up last month for $1.99/gallon.
- Government's stated inflation from then until now: 3.39% per year
- Actual inflation of gasoline from 1980 to today: 1.44% per year