US Minimum Wage
These questions require the use of the table CPI.xls.
1. Open the file MinWage.xls, which contains the minimum wage rate for the US starting in 1938 when it was instituted.
(a) Make an XY scatter graph of this data and paste it into your Word document. (for this graph, choose the subtype with straight lines but no data points) Make sure you title and label axes appropriately.
(b) Describe the general shape of the graph you made in (a).
(c) Is the graph you made in (a) an accurate portrayal of the buying power of the minimum wage? Explain why or why not.
(d) We want to make a graph of the minimum wage rate in constant 2005 dollars. Open the file CPI.xls, a file that contains the consumer price index from 1912 to the present. Paste the CPI values from 1938 to 2005 in the column next to the minimum wage column in MinWage.xls. Add a column in which you have calculated the minimum wage in constant 2005 dollars. Make a new graph of the minimum wage in constant 2005 dollars. (Choose the same subtype as above) Paste your graph into your Word document.
(e) If you were earning the minimum wage, what year do you wish you were living in? Why?
(f) Look at years in your first graph when the actual minimum wage rate did not change (for example: 1968-1973, 1981-89). Then look at the second graph and describe what happened to the minimum wage rate in constant dollars during those years. Explain why this pattern occurs.
(g) Write a short paragraph (3-4 sentences) describing the graph in d). Be sure to include when the minimum wage was the worth most, the worth the least, it exceeded inflation, was lower than inflation and where the minimum wage increased at the same rate of inflation.