• Cataphract@lemmy.ml
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    3 months ago

    with context, that’s a 2800% increase in 80 years, a 35% increase per year average. 15 years = 525% increase lost, final value would be 45 per hour. I have no idea if this is right and don’t condone this math for any reference.

    • Firefly7@lemmy.blahaj.zone
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      3 months ago

      The math is not right. Percentages don’t multiply like that.

      A change from 0.25 to 7.25 over 71 years means an annual increase of about 5%. That 5% annual change, starting with $7.25 15 years ago, would take us to around $15 today.

    • iknowitwheniseeit@lemmynsfw.com
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      3 months ago

      That’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.