@[email protected] to politics @lemmy.world • 2 months agoIt has now been 15 years since the federal minimum wage rose to $7.25www.npr.orgmessage-square135fedilinkarrow-up1739
arrow-up1739external-linkIt has now been 15 years since the federal minimum wage rose to $7.25www.npr.org@[email protected] to politics @lemmy.world • 2 months agomessage-square135fedilink
minus-square@iknowitwheniseeitlink4•edit-21 month agoThat’s not how compound increases are measured. We can use the compound interest formula for this. A = P * (1 + r) ^ t A is the final amount. P is the starting amount (the principal). r is the rate (as a proportion, so 50% would be 0.5). t is the time. To figure out the annual increase for the whole time we can plug in what we know and solve for what we don’t: 7.25 = 0.25 * (1+r) ^ 80 29 = (1+r) ^ 80 years 1.043 = 1+r 0.043 = r So that’s about 4.3% increase per year over the 80 years. Now we can see what we would have as minimum wage if it had continued over the past 15 years: A = 7.25 * (1+0.043) ^ 15 A = 7.25 * 1.043 ^ 15 A = 7.25 * 1.88 A = 13.63 So that’s a $13.63 minimum wage.
That’s not how compound increases are measured.
We can use the compound interest formula for this.
A = P * (1 + r) ^ t
To figure out the annual increase for the whole time we can plug in what we know and solve for what we don’t:
7.25 = 0.25 * (1+r) ^ 80 29 = (1+r) ^ 80 years 1.043 = 1+r 0.043 = r
So that’s about 4.3% increase per year over the 80 years.
Now we can see what we would have as minimum wage if it had continued over the past 15 years:
A = 7.25 * (1+0.043) ^ 15 A = 7.25 * 1.043 ^ 15 A = 7.25 * 1.88 A = 13.63
So that’s a $13.63 minimum wage.