Money Earnings Comparisons
To be truthful, I think golfers are overpaid. It's unreal, and I have trouble dealing with the guilt sometime. —Colin Montgomerie
Not sure what moved reader Bob Baima to bring this to our attention today. Perhaps the recent reference here to Zach Johnson out-earning Bob Goalby at the Masters, $1.6 million to $116,000. But you can tell Bob (the reader) has been steamed about it for a while.
Hi. Wanted to write quick note to get something off my chest. I have subscribed to Golf Digest for several years. Periodically, I see Golf Digest compare a current player's earnings to a player of a former era. The message is always the same: "Gee, whiz, look how much today's players earn!"
I don't mean to sound mean-spirited, but did anyone at Golf Digest stay awake during Economics class? If they did, they'd know that comparing earnings from one year to another is a meaningless comparison UNLESS the figures are adjusted for inflation.
For instance, in 1946 Ben Hogan was able to buy a gallon of gas for 26 cents. Seen any 26-cent gallons of gas lately? It's laughable, but it's just as laughable to compare his winnings to Tiger Woods' winnings without adjustment for inflation.
You can find a nifty Inflation Calculator, provided by your tax dollars and the U.S. Department of Labor, at http://www.bls.gov/cpi/. I think your staff would find it a great tool if they want to do any future true comparisons of winnings.
For the record, I, for one, stayed awake in Econ class at Michigan, but only with the aid of No-Doz. So I took Bob's suggestion and visited the DOL site. Here's what I learned about Johnson and Goalby: In 1968 Goalby earned today's equivalent of $684, 506. That's still a far cry from $1.6 million—about 42 per cent of it actually—but Mr. Baima has made his point and we stand corrected. Indeed, we should make monetary comparisons exactly as he suggests. Makes for a better story.
We've bookmarked the site, Bob. Thanks for your letter.