1. Correcting for Inflation: Minimum Wage

2. b. What happened to standard of living?
How to Interpret? Compare Inflation rate to wage growth

3. c. Deflate ’90 to ‘65

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

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

6. e standard of living
…….so?

7. Wages outpaced inflation
Standard of living increases

8. Ohio’s Minimum Wage is $8.10/hour
The CPI for 2014 = 237
Deflate this wage rate to 1997
8.10 x / = $5.49
Are minimum wage workers of today better off or worse off than minimum wage workers of 1997.
Workers in 2014 are better off. They would have been making more than the $5.15 min. wage in 1997

9. Workers in 2014 are better off
Workers in 2014 are better off. They would have been making more than the $5.15 min. wage in 1997
If you inflate = x 237/ =
$7.60

10. In 1994, I paid $0.99 / gal. gas
Is gas more or less expensive today?
.99 x 237/ = $1.58
Gas is more expensive today ($2.30)

11. Extra Credit
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 Example Format: Dad – bought first new car Ford Falcon – $ x 237/31.5 = $45,142