The key problem with historic data on wages comes in understanding – even roughly – what the equivalent sum of money would be today.
There is an excellent online calculator which allows you to input any figure, choose your year, and then update it either in line with rising prices or with rising wages to today’s values.
You can try out this tool on the Measuring Worth website.
But what are the issues you need to take into account?
Well, first, you need to choose whether you update the figure in line with changes in wages or changes in prices.
The two will produce very different results.
For example, £1 in 1850, increased in line with rising prices, would have been worth £85.60 by 2008. Increased in line with rising wages it would have been worth £774.
The difference essentially reflects the fact that we have all got a lot better off in the past century and a half.
But it’s also worth keeping in mind the much less measurable changes that affect relative values.
Many of things we now take for granted – such as a car, the freedom to fly off to foreign countries, or even antibiotics – simply weren’t available to our ancestors no matter how much they earned.
