Question

The minimum wage in 1980 was $3.10 and it was $3.80 in 1990. if the minimum wage had grown with inflation, what would have been the expected value in 1990? round to the nearest cent.

Answer 1

To answer the question correctly, actual inflation rates from 1980 to 1990 are necessary, which are not provided. Hence, a precise calculation cannot be made. The text suggests the adjusted minimum wage in 1990 would be much higher than the nominal $3.80 had it kept up with inflation.

Step-by-step explanation:

To calculate the expected minimum wage in 1990 adjusted for inflation, we would need the annual inflation rates for the years between 1980 and 1990. Since this information is not provided, we can't compute an exact value.

However, according to the provided reference, the federal minimum wage dropped about 30 percent after adjusting for inflation from 1967 to 2010. This implies that if minimum wage increases had paced perfectly with inflation, the wage would be approximately 30 percent higher than the nominal figure in 1990. A rough estimate would thus be to calculate 30 percent of the 1980 minimum wage ($3.10) and then add it to the 1990 minimum wage ($3.80) to get a sense of the real value.

There is not enough data to perform a precise calculation, but the text implies it would be significantly higher than the $3.80 if it had kept up with inflation properly.