It's no secret that inflation causes prices and wages to rise. As of May 2012, the median annual wage in the United States was $34,750, according to the U.S. Bureau of Labor Statistics. That's about 10 times the annual salary for workers in 1920.
Wages in 1920
As is the case today, wage earners in the United States filed tax returns and paid federal tax on their wages. In 1920, the Internal Revenue Service reports, the average income was $3,269.40 per year. During that time, men filed the majority of tax returns, and the majority of people filing returns were employees of other companies -- as opposed to those owning or operating their own businesses.