Year Minimum wage CPI Minimum wage in 2020 $s 1949 $0.40 23.8 1968 $1.60 34.8 1995 $4.25 152.4 2020 $7.25 259.1 2024 (proposed) $15 306 (projected)
Year Minimum wage CPI Minimum wage in 2020 $s 1949 $0.40 23.8 1968 $1.60 34.8 1995 $4.25 152.4 2020 $7.25 259.1 2024 (proposed) $15 306 (projected)
Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter8: Economic Fluctuations, Unemployment, And Inflation
Section: Chapter Questions
Problem 10CQ
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Question
Transcribed Image Text:The table below presents some data on the federal minimum wage and the CPI for several years. Fill in the column for "minimum wage in
2020 $s."
Year
Minimum wage
CPI
Minimum wage in 2020 $s
1949
$0.40
23.8
1968
$1.60
34.8
1995
$4.25
152.4
2020
$7.25
259.1
2024 (proposed)
$15
306 (projected)
What was the 1949 minimum wage equivalent to in 2020 $s?
4.35
QUESTION 7
Many people have proposed raising the minimum wage in increments so that it is $15 by 2024. Some people say that this $15 minimum
wage would restore the purchasing power that the minimum wage used to have. Others say it would make the minimum wage higher, in
real terms, that it has ever been before. What is the best evaluation of these claims?
O the $15 minimum wage would have more purchasing power than any other year in the table
O the $15 minimum wage is lower, in real terms, than most of the other years in the table
O the $15 minimum wage would be the second highest in real terms (1968 is the highest)
O there isn't enough information to compare the purchasing powers in different years
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