Quick Question: What has happened to the purchasing power of the minimum wage over this period...
Quick Question: What has happened to the purchasing power of the minimum wage over this period (i.e., has it increased or decreased)? And the % change between 1965 and 2019 for each of the columns. Thanks!
| Year | min wage | CPI 1965 = 100 | Real wages based on 1965 prices |
| 1965 | 1 | 100 | 1 |
| 1967 | 2.65 | 185.12 | 1.43 |
| 2019 | 14 | 809.52 | 1.73 |
Homework Answers
The purchasing power of the minimum wage has increased because
real wages have increased from 165 to 2019.
% change between 1965 and 1967 = [(1.43-1)/1]*100 = (0.43)*100 =
43%
% change between 1967 and 2019 = [(1.73-1.43)/1.43]*100 =
(0.3/1.43)*100 = 20.98%
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