Correcting for Inflation: Minimum Wage a.. b. What happened to standard of living? How to Interpret?

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Presentation transcript:

Correcting for Inflation: Minimum Wage a.

b. What happened to standard of living? How to Interpret?

c. Deflate ’90 to ‘65

d. ’81-89 min wage stayed same: Purchasing power decreased by… SO????.....

…so purchasing power or standard of living decreased by…..

e standard of living …….so?

Wages outpaced inflation Standard of living increases

1. Ask your parents to identify the price (or wage) (approximate) of three items they would have purchased (or earned) when they were teens. 2. Expect you to identify who, what, when 3. And then adjust those prices to 2014 using CPI =237 Format: Dad – bought first new car Ford Falcon – $ x 237/31.5 = $45,142