Minimum Wage. The following table lists the federal hourly minimum wage in both actual dollars at the time and 2012 dollars (based on data from the U.S. Department of Labor).

a. According to the table, how much is $0.25 in 1938 dollars worth in 2012 dollars?
b. According to the table, how much is $1.00 in 1956 dollars worth in 2012 dollars?
c. The Consumer Price Index was 65.2 in 1978, and it was 229.6 in 2012. If the minimum wage had increased at the same rate as the CPI from 1978 to 2012, what would have been the hourly minimum wage in 2012? How does that compare to the actual minimum wage in 2012?

Transcribed Image Text:

Minimum wage Minimum wage Year in actual dollars in 2012 dollars 1938 0.25 3.98 1956 1.00 8.29 1978 2.65 9.14 1990 3.50 6.66 1997 5.15 7.39 2012 A7.25 ate Win 7.25