Inflation Calculator
Free inflation calculator. Project how prices rise over time, calculate purchasing power loss, and find the future cost of goods using a custom or average inflation rate.
Real Wage Growth Calculator
Free real wage growth calculator. See if your raise actually increases purchasing power after inflation. Compare nominal vs real wage growth.
$
%
%
Real Wage Change
+0.97%
✓ Real Raise
Nominal Raise
$3,000.00
Inflation Cost
$2,250.00
Real Gain
+$728.00
New Salary⧉
$78,000.00
+$3,000.00 nominal
Break-Even Raise⧉
3%
Matches inflation exactly
Raise Scenarios (10-Year Outlook)
| Scenario | Real Growth/yr | Real Salary (Yr 10) | vs Today |
|---|---|---|---|
| No Raise (0%) | -2.91% | $55,807.00 | -$19,193.00 |
| Inflation Match (3%) | 0% | $75,000.00 | +$0.00 |
| Your Raise (4%) | +0.97% | $82,608.00 | +$7,608.00 |
| Inflation + 2% | +1.94% | $90,904.00 | +$15,904.00 |
| Inflation + 5% | +4.85% | $120,483.00 | +$45,483.00 |
Your Salary Projection (Nominal vs Real)
| Year | Nominal | Real (today's $) | Cum. Real Change |
|---|---|---|---|
| 0 | $75,000.00 | $75,000.00 | +0% |
| 1 | $78,000.00 | $75,728.00 | +1% |
| 2 | $81,120.00 | $76,463.00 | +2% |
| 3 | $84,365.00 | $77,206.00 | +2.9% |
| 4 | $87,739.00 | $77,955.00 | +3.9% |
| 5 | $91,249.00 | $78,712.00 | +4.9% |
| 10 | $111,018.00 | $82,608.00 | +10.1% |
Assumes constant raise and inflation rates each year. Actual rates vary annually. Use Federal Reserve CPI data for your specific inflation rate.
Planning notes, formulas, and examples
About the Real Wage Growth Calculator
Getting a 3% raise sounds good — until you realize inflation was 4%. Your nominal wage went up, but your real wage (purchasing power) actually declined by about 1%. Real wage growth = ((1 + nominal raise%) / (1 + inflation%)) − 1.
Over long stretches of payroll data, nominal wages usually rise faster than published prices only by a modest margin. Understanding this distinction is critical for evaluating compensation packages, negotiating raises, and assessing whether you're genuinely getting ahead financially.
This calculator compares your raise to inflation, shows your real wage change, and projects multi-year trends to reveal the long-term impact of above or below-inflation raises. This distinction matters most during elevated inflation, when a seemingly generous 5% raise may still represent only a small real improvement. Employees who track their real wage growth over time can build a clearer case for compensation adjustments that maintain or improve purchasing power.
When This Page Helps
Without comparing raises to inflation, you can't tell if you're actually earning more or just keeping up. This calculator reveals the truth behind your paycheck and helps you negotiate raises that genuinely increase your standard of living. Armed with real wage data, your salary conversations shift from opinions to evidence.
How to Use the Inputs
- Enter your current salary.
- Enter your raise percentage (or new salary).
- Enter the current inflation rate.
- View your real wage change — positive means you're ahead, negative means you fell behind.
- See multi-year projections to understand cumulative impact.
Formula used
Real Wage Growth = ((1 + Nominal Raise) / (1 + Inflation)) − 1
Real Salary = Nominal Salary / (1 + Inflation)^years (in base-year dollars)
Cumulative Real Change = Π(1 + real_growth_i) − 1Example Calculation
Result: Nominal raise: 4.0% | Real raise: 0.97% | Real gain: $728
A 4% raise on $75K = $78,000 new salary ($3,000 nominal increase). But with 3% inflation, you need $77,250 just to maintain purchasing power. Your real gain is $78,000 − $77,250 = $750, equivalent to a ~1% real raise. Better than nothing, but barely.
Tips & Best Practices
- If your raise is less than inflation, you're taking a pay cut in real terms. Use this data when negotiating.
- The minimum acceptable raise in any year should be the inflation rate. Anything above inflation is a real raise.
- Track cumulative real wage growth over your career, not just year-to-year. Five years of 1% below inflation = ~5% real pay cut.
- Switch employers for significant real wage gains. Internal raises often lag inflation; external offers typically don't.
- Benefits changes matter too. If your health insurance premium increased by $200/month, that's a $2,400 implicit pay cut.
- Negotiate in real terms: "I'm requesting X%, which represents Y% above inflation for a real Z% improvement."
The Compounding Effect of Below-Inflation Raises
If inflation averages 3% and your raises average 2% for 10 years, your cumulative real wage change is (1.02/1.03)^10 − 1 = −9.4%. Your purchasing power dropped nearly 10% despite getting raises every year. This is why tracking real wage growth annually matters.
Negotiation Strategy
Frame raise requests in terms of inflation + merit. "CPI this year was 3.5%. I'm requesting a 6.5% adjustment: 3.5% to maintain purchasing power and 3% for performance/market alignment." This framing makes it harder to justify below-inflation raises as "generous."
The Job-Hopping Premium
Research consistently shows that changing employers yields 10-20% average salary increases, versus 3-5% for internal raises. Over a 20-year career, strategic job changes every 2-4 years can result in 50-100% higher cumulative earnings compared to staying with one employer. The "loyalty penalty" is real wage stagnation.
Sources & Methodology
Last updated:
Methodology
This worksheet compares nominal wage growth with inflation to estimate the change in purchasing power. It uses a simple real-growth relationship so users can compare a raise with price growth over the same period.
The page is meant for compensation planning and comparison, not labor-market forecasting.
Sources
- Consumer Price Index (U.S. Bureau of Labor Statistics) — Inflation context for real-wage comparisons.
- Wage growth and earnings data (BLS Current Employment Statistics / ECI) — Nominal wage-growth context.
- Real earnings and inflation adjustment guidance (Federal Reserve / BLS references) — Purchasing-power context.
Frequently Asked Questions
2-3% above inflation is a strong raise and usually reflects real career progression. 0-1% above inflation means you are only modestly ahead of price growth. Below inflation means you are falling behind in purchasing-power terms.
Options: (1) Negotiate additional compensation (bonus, equity, benefits). (2) Ask for a title change with a market-rate adjustment. (3) Start interviewing — external offers average 10-20% increases. (4) Acquire skills that command higher market rates. Stagnant real wages compound negatively over time.
Multiply each year's real growth factor: (1+r1) × (1+r2) × ... − 1. If Year 1 real growth is +2% and Year 2 is −1%, cumulative real growth = 1.02 × 0.99 − 1 = +0.98%, not +1%. Negative years offset positive ones.
No — a 0% raise is an inflation-sized pay cut. At 3% inflation, a 0% raise means you can buy 3% less with your salary. Over 5 years of 0% raises at 3% inflation, your purchasing power drops by about 14%.
Absolutely. If your employer's health insurance contribution increased by $3,000 but your salary only went up $2,000, your total compensation actually increased by $5,000. Conversely, if your premium share increased, subtract that from your raise.
Historical U.S. data show long stretches of modest median real wage growth, with stronger gains for some high earners and periods where inflation temporarily erased nominal raises. The exact pattern depends on job mix, bargaining power, and the inflation cycle.
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