I visited the prison that was used as the backdrop for the GREAT movie "Shawshank Redemption". It is located in Mansfield, Ohio and is open to the public. It is an unbelievable facility and if you are a fan or the movie (or prisons) it is a must see!
I am always looking for an economics lesson and by luck they had this pay stub for a prison guard from 1962.
His pay was $315.00 per month ($2,481.00 in 2014 dollars) or $157.50 every two weeks ($1,240.50 in 2014).
I assume he worked a 40 hour week which means he earned $1.97 per hour over 80 hours in the two week pay period. As a comparison, in 2014 dollars that would be $15.52 per hour.
There is a new correctional facility right next to the old prison. According to Salary.com the median salary of a correctional officer at that facility is about $38,000. Using 2,000 as the number of hours worked in a given year (with 2 weeks vacation unpaid vacation--not likely) that works out to $19.00 per hour (this is wage and NOT other non-cash benefits which I am guessing are much better today than in 1962).
The salary of a prison guard today in Mansfield, Ohio has at least kept up with inflation ($19.00 versus the $15.52).
Not sure if Andy Dufrane or Old Red would appreciate that or not.
And your wife probably wanted no part of it. "Why are we here?" she wonders...
ReplyDeleteHey, this is crude, but: $19 per hour today is 22.4% above the value of the 1962 wage.
According to FRED data, the Real GDP of 2013 was 466.3% above the Real GDP of 1962. 466.3% versus 22.4%
U.S. Population increased by a factor of 1.7, from 186475 thousand in 1962, to 316373 thousand in 2013.
Dividing 466.3% by 1.7, the population increase, gives 274% as a rough estimate of RGDP-per-capita increase between 1962 and 2013 slash 2014.
274% Real GDP increase versus 22.4% prison guard wage increase leaves quite a large difference to be made up by non-cash benefits.
I'm nervous about my numbers because the discrepancy is so large. And I didn't think through a method, so maybe my arithmetic is nonsense...
RGDP 1962 (base 2009) = 3,379.9 billions
RGDP 2013 (base 2009) = 15, 761.3 billions
POP 1962 = 186,475.0
POP 2013 = 316,373.0
2013 value divided by 1962 value = 1.6966, say 1.7
Or go the other way instead this time:
RGDP divided by POP for 1962 times 1,000,000 for units = $18,125.22 RGDP per Capita in 1962
RGDP divided by POP for 2013 times 1,000,000 for units = $49,818.73 RGDP per Capita in 2013
The 2013 number is 2.749 times larger than the 1962 number, or 274.9% of the 1962 number.
274.9% versus 274%. The difference is a rounding error. My arithmetic is okay.
But it still doesn't seem right. The discrepancy is too big!
Art,
DeleteThis is a terrific analysis and I am saving your methodology for the next time I come across something like this. I will just plug in the respective numbers. It puts it in a much better perspective.
Thanks!