Explain the standard of living of minimum wage earners


The real value of the minimum wage declined, as measured using the CPI among the 1990 and 200. Suppose that the goal of the minimum wage policy is to maintain a constant standard of living for minimum wage earners over time (i.e. on average, their utility, stays constant). One proposal put forward has been to index the minimum wage to CPI, so that it rises over time at the inflation rate. Give 2 reasons why this proposal will likely lead to the standard of living of minimum wage earners increasing over time.

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Macroeconomics: Explain the standard of living of minimum wage earners
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