An editor for the CBS evening news called me today. She said that this was the 83rd anniversary of Babe Ruth signing a contract making him the highest paid baseball player in history. She wanted to know what he signed for was worth today and how it compared to Alex Rodriguez who made $33 million last year. They were going to run a story on it tonight.
She said she had gone to the BLS site where it says $70,000 in 1927 has the same buying power as $871,729 in 2010. Then she went to our web site, MeasuringWorth.Com, and was confused by the five answers she got ranging from $865,000 to $10.4 million. She asked me to explain and I told her that a question about what something is worth in the past couldn't have one answer as it depends on the context of the question.
I contend that the BLS's answer is not very useful. Ruth had lots of buying power in 1927, but he could not buy treatment for throat cancer that millions get today. He died of it at age 53. He could buy lots of cigars.
I suggested to the editor that the piece on Babe Ruth should say that if you compared his salary to the average person today he would be making $4 million. That this is the kind of relative status he held in New York in those days.
I do not think the story made it out of the editing room.