Question

Problem 16-02

Refer to the minimum wage history data in the table below:

Oct. 1938	$0.25	Jan. 1978	$2.65
Oct. 1939	0.30	Jan. 1979	2.90
Oct. 1945	0.40	Jan. 1980	3.10
Jan. 1950	0.75	Jan. 1981	3.35
Mar. 1956	1.00	Apr. 1990	3.80
Sept. 1961	1.15	Apr. 1991	4.25
Sept. 1963	1.25	Oct. 1996	4.75
Feb. 1967	1.40	Sept. 1997	5.15
Feb. 1968	1.60	July 2007	5.85
May. 1974	2.00	July 2008	6.55
Jan. 1975	2.10	July 2009	7.25
Jan. 1976	2.30

Instructions: Round your responses to one decimal place.

a. By what percentage did the federal minimum wage increase between September 1997 and July 2009?

%

b. Use the In the News to answer the following question:

If President Obama’s wage-hike proposal were accepted, by what percentage would the federal minimum wage increase?

      %

Answer 1

a) Minimum wage in Sept. 1997 was $5.15

Minimum wage in July 2009 was $7.25

Hence, the percentage increase in minimum wage is found at (7.25 - 5.15)*100/5.15 = 40.78%

b) When President Obama’s wage-hike proposal is accepted, the minimum wage would increase from

$7.25 to $10.10.

Hence, the percentage increase in minimum wage is found at (10.10 - 7.25)*100/7.25 = 39.31%