How much would a worker have to be paid per hour in 2016 to keep her real wage the same as in 1980 if she earned $10 per hour in 1980

In order to calculate this question we need the CPI for both 1980 and 2016. I looked for them on the internet and found that the CPI for 1980 was 82.4 and the CPI for 2016 is 240.

This means that in real dollars (dollars adjusted to inflation), $10 back in 1980 were $10/0.824 = $12.1359

In order to convert 1980 real dollars to nominal dollars in 2016, we have to multiply $12.1359 x 2.4 = $29.1262 ≈ $29.13.

This means that $10 back in 1980 could purchase the same amount of goods or services that $29.13 dollars purchased in 2016.

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