What has happened to the purchasing power of people earning minimum wage?

Minimum wage stays the same but the price for everything else has gone up..Gas is a great example..10 years ago in my state anyway the minimum wage was the same as it is now but gas was a heck of alot cheaper..In result, the price of almost everything else has gone up do to the fact that the stores buying the merchandise have to spend more on gas for the trucks to get it on the shelves...So basicly people are making the same wage, but it costs alot more to live..

actually it looks like it has gone down by those numbers, I'm no expert but from 1982 t 2007 the pay has 175% increase while the price of product is well over 175%. it raised by over 200% actually. So the raise in pay is lagging behind the raise of product price, these poor people are getting poorer! that makes me sad.

the answers that you have been given so far are not that good apart from russell k so this might help. you have to explain about inflation and how over time the currency is devalued over time. you will have to explain that if the increase in the minimum wage is not equal to the increase in inflation then the purchasing power will decrease if the increase in the minimum wage is greater than inflation then the purchasing power will increase. you might want to explain that inflation is when the level of aggregate demand is greater than the level of aggregate supply, whether than has been caused by relative surplus of aggregate demand or a relative reduction in aggregate supply. you might want to comment on relative inflation which is the increase in the cost for a good over time not the aggregate amount. this is important if the items purchased by the minimum wage earners is affected then they could be hit more than other sectors of society. check our this website morganisteconomics.org.uk in the morganist see saw model (in the macro economics section). this may explain inflation and the relationship between monetary and fiscal policy. he has a contact email he will help you if you contact him he will make time for you.

If you subtract the %change in price from the %change in minimum wage, the result is the %change in purchasing power. I would average the price increases to get an average change in purchasing power.

Well the purchasing power of the fixed minimum wage erodes because the purchasing power of the dollar goes down. In fact, in 1972 I believe when the dollar was first floated, it was done because the war in Vietnam and rapid military expansion was depleting U,S gold reserves...which had went from $30 billion to just $10 billion. In order to keep the United States from going bankrupt and losing all its gold the dollar was unpegged from the gold and floated in an international market. The United States also asked OPEC to trade oil in dollars which would create intense worldwide demand for the dollar. As long as there was demand for the dollar the gov't could print more money to pursue its excesses....this causes inflation however as the more money there is total the less each individual note is worth. The running deficit the government has and lower interest rates is decreasing the value of your money. As the size of gov't issued debt increases(loans) which are bought by investors(foreign gov'ts like China)the value of the dollar decreases because there are constantly more and more of them with decreasing global demand. The annual inflation rate fluctuates but it is currently about 4%...that means if you have $1,000 and hold it till next year you will only have $960 of spending power.The more debt we issue the more money the gov't must print...this is how the modern form of capitalism is supported...so money will continue to become worthless unless something is done.