Treating dollars in different years as being worth the same is “a mistake … simply because inflation reduces the value or purchasing power of dollars every year. So for example, if last year we had an inflation rate of 3 percent, that means today’s dollar is worth only 97 cents compared to a full dollar’s value a year ago,” explains Dr. Walden, a professor of agricultural and resource economics.

“Clearly the impact is even greater over longer periods of time, so you need to make an adjustment when you are comparing any dollar amount in two different years, whether you are comparing price, costs, profits or importantly your salary,” he concludes.

“Fortunately there is an easy way to do this. There is a calculator on the Web at www.bls.gov -- that stands for the Bureau of Labor Statistics -- that will actually allow you to make this adjustment very simply.”