HW 5 - that it has the same...

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Matthew Syers Economics 110 HW #5 April 20, 2008 1. The table shows the actual (current dollar) value for the minimum wage, as well as the consumer price index for each year. Find the "real" minimum wage for each year. Year Wage CPI Real Wage 38 \$.25 14.1 \$3.77 48 .40 23.9 \$3.53 58 1.00 28.9 \$7.30 68 1.60 34.7 \$9.73 78 2.65 65.2 \$8.57 88 3.35 119.0 \$5.94 98 5.15 163.2 \$6.66 08 6.55 213.5 \$6.48 2. What is the year the minimum wage attained its highest real value? In 1960, the American minimum wage reached its highest real value. 3. What should the minimum wage be set at (current dollar value) in the year 2008 so
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Unformatted text preview: that it has the same &quot;real&quot; value as the historical highest value? Show your calculation. 1968 CPI = 34.7 2008 January CPI = 211.08 2008 March CPI = 213.528 Jan 08 CPI = 211.08 = 6.08 * \$1.60 (1968 Wage) = \$9.73 1968 CPI 34.7 Jan 08 CPI = 211.08 = 0.988 \$9.73/0.988= \$9.84 Mar 08 CPI 213.528 In order for the current American minimum wage real value to become equal to the historical high point of 1968, the minimum wage would have to be increased from \$6.55 to \$9.84....
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This note was uploaded on 04/20/2008 for the course ECO 110 taught by Professor Dr.duffy during the Spring '08 term at SUNY Plattsburgh.

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