How Much Did George Washington Make Per Year As President?

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On "Forbes Newsroom" Forbes Reporter Kyle Khan-Mullins joins Brittany Lewis to discuss the history of presidential salaries.  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript   Stay Connected Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com

Transcript

00:00Kyle I would love for you to give us a bit of a history lesson here

00:03So can you talk to us about the origins of the presidential salary? Let's start with George, Washington

00:10Yeah, I was a history major. So this is my bread and butter here. I was super excited right now

00:14I'm just writing this story. So when the framers were putting together the Constitution, they disagreed on a lot of stuff

00:19But they ultimately came to the conclusion that the president should not be like a king

00:24and

00:26They decided the president should be compensated for their work, but should not be, you know, getting all of the money in the world, right?

00:33That said Alexander Hamilton in the Federalist Papers, which were written to defend the Constitution and then, you know

00:40advocate for its ratification

00:43he advocated for the president to be

00:45Paid really is reasonably well

00:47And the reason why is a poorly paid president might be more susceptible to corruption

00:53You know if you have a somebody who is only making, you know, the equivalent of a farmer's salary, for example

00:58Or you know blacksmith's wage. Maybe they will be you know

01:03More susceptible to bribes and gifts and that kind of thing

01:06So Congress passed in 1789 when George Washington became president Congress awarded him a salary of $25,000

01:13Which doesn't sound like much but at the time was worth over $600,000 in today's money

01:20So, yeah pretty well pretty well compensated guy now George Washington, of course plantation owner

01:25Was plenty wealthy himself. He didn't really need the salary

01:28He probably wouldn't have been too susceptible to bribery anyway, but nonetheless that was sort of the precedent that was set going forward

01:35So the precedent set you need to be have a president paid reasonably well

01:39But obviously there are factors like wars and financial disasters like the Great Depression as well as the recession

01:46So how has this impacted the worth of the presidential salary?

01:51Yeah, so when we look at history, we see that the presidential salaries value in inflation adjusted terms in today's money

01:58Swings up and down wildly. We use the chart

02:02It looks like a mountain with big gaps and and and and caverns and all sorts of stuff

02:07And that even that's despite the fact that the actual

02:11Nominal value of the president's salary has only been adjusted upwards a couple of times

02:14I'm gonna adjust upwards five times over the course of the history of the United States

02:21So, you know, for example early on in our history we had the war of 1812 the British burned down the White House

02:27They were blockading the coast which you know made it impossible for the US to import goods

02:32That raises the price of everything that's that's a lot of inflation, right?

02:36That caused the value of the president's salary in today's terms to plummet so James Madison

02:42I think James Madison if I remember correctly

02:44was making less than

02:47$400,000 in today's dollars

02:49Even though he's making that same

02:50$25,000 salary the inflation adjusted value dropped same thing during the Civil War

02:54the federal government was printing lots of money to try to fund its you know, all of the things that needed for the war effort and

03:01Lincoln's salary lost hundreds of thousands of dollars in inflation adjusted value just over his five years four to five years in

03:09office between 1861 and 1865

03:11so these big events

03:13Really do show up in the historical record when we're looking at the historical salaries

03:17And the other thing I'll say is the US economy used to be much more unstable

03:20You had these big swings of inflation and deflation

03:24And you had you know kind of rapid

03:27Depressions and rapid recessions that would then switch over and also need a rapid growth the next year

03:31It was a very it was much more unstable economy

03:33Especially in like the 1900 of the 1800s. And so that also causes these big swings that we're talking about

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