Recently at my day job, I got to work with some awesome researchers who were looking at the difference in salaries between two occupations over the last decade.
The development process brought up several good questions about how to visualize dollars over time, so I thought it would be a good to step through some basic economic considerations when showing these kind of data: current dollars and real dollars.
Current Dollars vs. Real Dollars
I’m not a statistician, math nerd, or even a genius. I just had the great opportunity to work with some awesome economists for several years who taught me almost everything I know about data visualization.
That Darn Inflation
Before we can define current or real dollars, we need to put our real culprit under the hot light: inflation. The reason we’re even having this discussion in the first place is because inflation changes everything and unfortunately, cannot be ignored. It’s what makes a $1 in 1978 and 2014 two totally different dollars. It’s what makes our salaries sometimes artificially rise and makes our grandparents complain about the cost of milk now-a-days.
Inflation is taken into account by using the Consumer Price Index, which you can get from Bureau of Labor Statistics. There is a great intro to this process from the Mathematical Association of America if you’re interested in how inflation and CPI is used to adjust dollars over time. We won’t cover it today, just the differences in viz.
The first way to visualize dollars over time is with current dollars. Current dollars are the dollar value at the point in time in which it was the present.
Think of it like this: you go to your local library and you pick up an issue of your town’s newspaper from 1968. The prices you see for the furniture store, movie theater, real estate, etc would all be in current dollars. In terms of income, current dollars is the “income in the year in which a person, household, or family receives it.” You are seeing these dollars from the perspective of those who held that money in their hands in that year.
The second way to use real (or constant) dollars. Real dollars are the dollar value interpreted in values conceptualized for the present day (our present day). These dollars amounts, let’s say, have been adjusted for our point of view: we see them in context of how we see the value of a dollar to us right now.
Real dollars are what you see when trends indicated the dollars are adjusted or “in 2014 dollars.” Mostly importantly, these dollar figures have been adjusted to consider inflation. This is a very important distinction. We see the value of say $10 today much different from our parents did. This moves onto another concept called real income which takes into account purchasing power that I won’t get into now, but it reinforces this idea. Because of inflation, the concept of a dollar changes over time.
Seeing the Difference in the Data
For the particular project I had been working on, we were looking at the growing difference in median salary between reporters and public relation specialists. You can read the final write-up and see the viz methods we chose to use instead, but I’ll use this data set as an example.
Here’s the data we pulled from BLS:
When you scroll through, you see I’ve pulled the Current Dollars and then, using the CPI published by BLS, the salaries in Real (Constant) Dollars.
Graphing Current Dollars
Here’s the trend line when we graph the Current Dollars:
When the current dollars are charted, we see that PR specialists have always made more money than reporters, and that gap as in fact increased over the last 10 years, from $12,510 in 2004 to $19,340. Salaries for reporters have also increased 14% over time, with PR specialists seeing a gain of 25%. A pretty compelling story, huh?
Graphing Real Dollars
But now, that’s look at the Real (Constant) Dollars, calculated into 2013 dollar values:
The change is subtle, but what a difference. Instead of a distinctly growing gap, with both jobs increasing their wages, we actually have more a leveling off, with reporters actually making less than they did in 2004.
And more importantly, when we actually calculate the gap and percent change, there’s even more of a difference from the current dollar chart. While the gap in 2013 stays the same, the gap in 2004 increases to $15,427.70, a +$2,617.70 change from the current dollar calculations.
Additionally, the percent change in wages over time is even more stark. This is even more apparent when we chart these two types of dollars and the percent change:
Whereas the current dollars showed a change of 25% and 14% for PR specialists and reporters respectively, the real dollars show only a 2% increase for PR specialists and a -8% change for reporters, showing that not only reporters continue to make less than a competitive career, but their wages haven’t kept pace with inflation.
Critique the Data, Not Just the Visualization
As you can see by our example, the data and its format had a huge impact on the visual story (and essentially the written story) in the end. It is important, I believe, as an information designer to critique the data as much as you would a graphic problem solving technique.
As information designers, particularly when working with awesome researchers, writers and experts, it is essential to try to learn as much as we can about the numbers and to not be afraid to speak up when something seems a bit off or misleading. We don’t need to all become statisticians, but learning some basic concepts can help you find better solutions to design problems, tell better data stories, and work as a partner with your writers, experts, etc.
Pipe up! Sometimes the best way to create clear and effective solutions to data problems is to ask all those questions that make you feel stupid. Someone else will have those same questions and will be better informed because of your efforts.