ISP 120 Activity 8: US Minimum Wage

ISP 120 - Quantitative Reasoning
Group Activity 8: US Minimum Wage

All group activities must include a signed statement from each group member that they participated fully in the assignment.

Please do the following at the beginning of every computer activity.

a. Open a new Word/Writer document.

b. Click on the "File" on the top menu bar, then go to "Save As". Give your document a somewhat descriptive name (e.g. "Group Activity 8"). Also save the document to the desktop by setting the "Save in" textbox to "Desktop". (Saving to the desktop makes it easy to retrieve your work when you are finished.)

Learning Goals for this Activity

You will compare two prices for the same commodity from different years.
You will make a graph of a series of prices or wages in constant dollars.
You will develop your skills at interpreting graphs.
You will become a more critical user of graphs from the media.

These questions require the use of the table CPI.xls. For an explanation on converting prices to constant year dollars, see CPI tutorial.

1. Open the file MinWage.xls, which contains the minimum wage rate for the US starting in 1938 when it was instituted. An excellent source of information on the minimum wage in the United States is Department of Labor's page on the topic. (Please note that many states also have minimum wage laws. In cases where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages. The current minimum wage rate in Illinois is $6.50)

(a) Using the Chart Wizard, make a graph of this data and paste it into your Word/Writer document. You will find it easier if you choose an XY Scatter plot for this graph. Make sure you title the chart. Give the x and y axes appropriate labels.

(b) In a short paragraph, describe the graph you made in (a): What are its overall features? (Remember concepts like absolute maximum, absolute minimum, relative maximum, relative minimum, increasing, decreasing, constant....) During what periods did the minimum wage rate increase the most? During what periods did it increase very little?

(c) Can you make connections between which political parties and presidents were in power at various times and the patterns in the graph? Click here for the list of U.S. presidents. Does the data confirm or contradict popular stereotypes of the Republican and Democratic parties in the US?

(d) Is the graph you made in (a) an accurate portrayal of the buying power of the minimum wage? Explain why or why not.

(e) We want to make a graph of the minimum wage rate in constant 2004 dollars. Open the file CPI.xls, a file that contains the consumer price index (CPI-U base year 1982-84) from 1913 to the present. Paste the CPI values from 1938 to 2004 in the column next to the minimum wage column in MinWage.xls. Using the ideas discussed in class, add a column which contains the minimum wage in constant 2004 dollars. Make a new graph of the minimum wage in constant 2004 dollars (XY Scatter works best; remember you can select nonadjacent columns by holding down the Control key while you are selecting.) Paste your graph into your Word/Writer document.

(f) In a well written paragraph, describe the overall features of the graph. As part of your answer make sure you describe the overall shape (disregarding the annual choppiness), the maximum, and the minimum.

(g) If you were earning the minimum wage, what year do you wish you were living in? Why?

(h) Look at years in your first graph when the actual minimum wage rate did not change (E.g. 1950-1955, 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.

(i) In a short well written paragraph, contrast the different views that the two graphs give of the minimum wage over time. How helpful is the first graph in understanding the minimum wage over time?

(j) The graph below was widely distributed in September of 1997 when the last minimum wage hike was instituted. While it is very attractive, the graph contains a serious error. Find the error and describe it. What impression does this graph give? How does the impression differ from the impression made by your first graph? How does it differ from the impression made by your second?

(k) This data seems to be difficult for the media to handle. Time Magazine on Nov. 29, 1999 published a graph of the very same data. It is also incorrect, although the error is not as grievous as the AP graph above. Find the error in the graph and describe it in your Word/Writer document. (Hint. It has to do with the constant dollars graph.)

(l) The most recent proposal to raise the minimum wage is "Fair Minimum Wage Act of 2005" which has been introduced by Sen. Edward Kennedy (D-MA) in the Senate and Rep. George Miller (D-CA) in the House of Representatives. It would raise the minimum wage to $7.25 by 2007. Read the description of the bill on www.commondreams.org and democraticmajority.com. Do you think Congress should raise the minimum wage to $7.25 by 2007? In a short well-written paragraph, explain your group's view, giving a justification that uses the data in this activity. You can give non-quantitative arguments, but include at least one quantitative argument as part of your response.