Nominal versus real wages and the CPI

A wage figure is “nominal” when it is stated in the dollars of the time it was paid, and “real” when it has been restated in the dollars of some other period so that two years can be compared on purchasing power. Every figure on the occupation and state pages is nominal. This page explains what the conversion involves and why the site leaves it to the reader.

What a price index does

The Consumer Price Index measures the average change over time in the prices of a market basket of goods and services bought by a defined population. Dividing a nominal wage by the index for its period, and multiplying by the index for a chosen base period, restates the wage in base-period dollars. BLS publishes its national indexes with the 1982 to 1984 average set to 100, so a “constant 1982-84 dollar” figure is one that has been scaled to that base. The arithmetic is simple; the choices behind it are not.

Two populations, two indexes

BLS maintains two headline indexes that differ in whose spending they represent. The CPI for All Urban Consumers, CPI-U, covers households in metropolitan areas and urban places of 10,000 or more, over 90 percent of the population; it is the “official CPI” quoted in news reports. The CPI-W, for Urban Wage Earners and Clerical Workers, covers a subset of those households, about 30 percent of the population, in which at least one member worked 37 weeks or more in an eligible clerical, sales, craft, service or laborer occupation and at least half of household income came from such work. The two indexes move together closely but not identically, and a real wage series built on one will differ slightly from the same series built on the other.

BLS’s own Real Earnings release shows the choice being made: it deflates average hourly and weekly earnings of all employees with the CPI-U, and the series for production and nonsupervisory employees with the CPI-W, matching each earnings series to the index whose population best fits it. The real earnings page carries both the current-dollar and constant-dollar figures as BLS publishes them.

Which geography

National indexes are published monthly for the CPI-U, CPI-W and the chained CPI-U. Regional indexes for the Northeast, Midwest, South and West, and indexes for selected metropolitan areas, are published as well, some monthly and some bimonthly. A real wage computed with the national index applies the average household’s price change to a worker who may live where prices moved differently. For a comparison of two cities, no price index answers the question of levels: the CPI measures change over time within an area, not the difference in price between areas. Comparing two states fairly explains why this site does not adjust for cost of living.

What the index does not measure

BLS states that the CPI reflects the experience of the relevant average household, not of any particular family. A household whose spending is weighted toward categories rising faster than the basket, such as medical care or rent, experiences more inflation than the index records, and the reverse. A real wage is therefore an average-household figure, and “real wages rose” means the nominal wage outpaced the basket, not that any specific worker is better off.

Revisions

The national CPI-U and CPI-W are not routinely revised once published, which is why they can be written into contracts and statutes; the chained CPI-U is revised quarterly and is final only after ten to twelve months.

Why OEWS is left nominal

OEWS estimates combine three years of panels, with earlier panels’ wages moved forward to the reference month using the Employment Cost Index, and are published for a single May. Deflating a May 2025 median to 2020 dollars would stack a second adjustment on that one, using an index whose geography does not match the OEWS area. The published medians section on each occupation page shows the nominal series from May 2021 to May 2025 so the reader can apply whichever index fits the question. Wage growth and the ECI covers the series BLS built for measuring change, and how minimum wages are indexed covers the statutes that apply a CPI to a minimum wage automatically.