Fact Check: "In 1987, a $400K salary equals $1.1 million today."
What We Know
The claim states that a salary of $400,000 in 1987 is equivalent to approximately $1.1 million today. According to the CPI Inflation Calculator, $400,000 in 1987 translates to about $1,131,919.01 in 2025, which reflects a cumulative price increase of 182.98% over the 38-year period. This calculation is based on an average inflation rate of 2.78% per year, as reported by the Bureau of Labor Statistics. The dollar's purchasing power has significantly decreased, meaning that $1 today buys only about 35.34% of what it could buy in 1987.
Analysis
The evidence supporting the claim is robust. The inflation data from the CPI Inflation Calculator clearly shows that $400,000 in 1987 is equivalent to $1,131,919.01 today, confirming the assertion. The inflation rate used for this calculation is derived from the Consumer Price Index (CPI), which is a widely accepted measure of inflation and is maintained by the Bureau of Labor Statistics.
However, it is important to note that different inflation measures can yield varying results. For instance, the Personal Consumption Expenditures (PCE) Price Index, which is the Federal Reserve's preferred measure, suggests that $400,000 in 1987 would be equivalent to $951,842.34 in 2025, indicating a lower inflation rate of 137.96% over the same period. This discrepancy highlights the variability in inflation calculations depending on the methodology used, but it does not undermine the original claim significantly, as both measures indicate a substantial increase in the equivalent value of the 1987 salary.
The source of the inflation data is credible, as it is based on government-collected statistics. The methodology used for calculating inflation is standard and recognized in economic analysis, which adds to the reliability of the claim.
Conclusion
Verdict: True
The claim that a $400,000 salary in 1987 equals approximately $1.1 million today is accurate based on the inflation data provided. The calculations from the CPI Inflation Calculator confirm that the purchasing power of money has decreased significantly over the past decades, validating the assertion.
