Economist Writing Every Day

SPOILER ALERT FOR THE THIRD SEASON OF THE GILDED AGE

In Season 3 of the drama series “The Gilded Age,” one of the servants (Jack, a footman) earns a sum of $300,000 by selling a patent for a clock he invented (the total sum was $600,000, split with his partner, the son of the even wealthier neighbor to the house Jack works in). In the series, both the servants and Jack’s wealthy employers are shocked by this amount. Really shocked. They almost can’t believe it.

How can we put that $300,000 from 1883 in New York City in context so we can understand it today?

A recent WSJ article attempts to do that. They did a good job, but I think more context could help. For example, they say “Jack could buy a small regional bank outside of New York or bankroll a new newspaper.” Probably so, but I don’t think that quite conveys the shock and awe from the other characters in the show (a regional bank? Ho-hum).

First, the WSJ states that the “figure nowadays would be between $9 and $10 million.” That’s just doing a simple inflation adjustment, probably using a calculator such as Measuring Worth (it’s a good tool, and they mention it later in the story). But as the WSJ goes on to note, that probably isn’t the best way to think about that figure.

Here’s my best attempt to contextualize the $300,000 figure: as a footman, Jack probably made $7 to $10 per week. Or let’s call it $1 per day. That means Jack’s fellow servants would have had to work 300,000 days to earn that same amount of income — in other words, assuming 6 days of work per week, they would have had to work for almost 1,000 years to earn that much income. Jack appears, to his co-workers, to have earned that income almost in one fell swoop (though in reality, he spent months of his free time toiling away at the clock).

Another similar way to think about it, this time in today’s money. A worker at the 10th percentile of wages in the US earned $14.42 in 2024 (a servant is probably near the 10th percentile in 1883). For an 8-hour day of work, that worker today earns $115, which would be $34.6 million if we use the same 300,000 days of work from the paragraph above. A low-income wage earner suddenly coming into $34.6 million today is like winning the lottery — not quite the Powerball jackpot, but as large as some of the biggest state-specific lottery jackpots today.

To better understand this $300,000 figure, it is useful to recall that even the wealthier New Yorkers, such as Jack’s employers, are shocked by this amount. How can we put the figure in context for wealthy people in 1883 and today?

A dollar figure from earlier in the series gives us a clue: in Season 1, the Astor family purchases the Beechwood mansion in Newport for $200,000 (this figure appears to be historically accurate). This is not just any house, it is one of the grandest mansions ever built in the United States. More than that, this is the mansion that the Astors — possibly the wealthiest family in the US if not the world at this point in history — purchased specifically for the purpose of entertaining the other 400 wealthy families of New York. It is literally the pinnacle of the wealth pyramid. And a mere footman has come into enough cash that he could buy that mansion himself.

Here is one more piece of context: according to the Historical Statistics of the US, total national wealth in the US was about $43 billion in 1880. Today, according to the Fed’s Distributional Financial Accounts, total wealth is about $160 trillion. That means someone with $300,000 of wealth in 1883 has roughly $1 billion of wealth today, assuming the same fraction of total national wealth. $1 billion today would not make you the richest person in the US, but it would put you in the top 800.

And $1 billion is quite a bit more than the $9-10 million a simple inflation adjustment will yield you.