Charles and I are thoroughly enjoying the tv show "Mad Men" and eagerly anticipate each week's new episode. In one episode we learn that the main character Don Draper, the head of the Creative team at the SterlingCooper Advertizing Agency makes $45,000 per year. His then secretary Peggy makes just $20 per week (aka $1040 per year). That threw us for a loop.
So we began wondering just what $45k was worth in today's money? We knew Don is doing well - large house, a stay-at-home wife who takes riding lessons, a nanny to help with the two kids, a tv and he had a spare $5,000 in cash just lying around in a desk drawer. But Don is enough of a penny-pincher to not let wife Betsy buy a window air conditioning unit so what gives?
Luckily the US Bureau of Labor Statistics came to the rescue with their handy Consumer Price Index Inflation Calculator. Don is doing well, quite well in my opinion. His annual salary of $45,000 in 1960 has the same buying power as $334,404.73 today. Wow! If Don's salary were really $334k in 2008 that puts the Draper Family in the top 1.5% of families based on US Household Income (US Census Bureau, 2005).
But back to 1960, or rather 1967 which is where this chart of US Income Distribution (1967-2003) is useful. We can see how Don is faring compared to the rest of the country. If Don keeps doing well at SterlingCooper or jumps ship to a firm where he'll be promoted and earn even more we can use this chart to see how he'll fare. Don's doing well - he is in the 80th percentile, in otherwords, he is earning more than 80% of all households in the US.
For Betty's sake I hope Don is investing this money. According to this life expectancy table, Betty is going to outlive Don by about 14 years, and with no income or pension of her own she needs a safety net.