No peeking -- test your basic econ facts

In My Humble Opinion
1

Without looking it up (or peeking at prior posters) please post your best guesses:

  1. What percentage of workers in the US earn only minimum wage?

  2. As an overall average, what percentage of sales dollars are profits?

  3. What is the current inflation rate?

2
  1. 8%
  2. 12%
  3. No idea. Pretty low, I would think at this point.
3

Hmm, I don’t keep up on these things (and have never had a traditional job), so these are very guess-y:

  1. 10%
  2. 15%
  3. 0.25%? I heard recently that deflation was actually a concern, so I’m assuming it’s pretty low.
4

33%

12%

1%

5

7
5
1

6

I have lived in the UK all my life so you may wish to discount these answers. OTOH, I work in financial services so hear about a fair amount of economic news from the US - not the below figures though, unfortunately! For example, I know that the US unemployment rate is currently just under 10% (but perhaps everyone knows that).

  1. 20%

  2. 20%

  3. 2.5%

Very interested to see how far away I am from the official answers!

ETA: wildly different answers so far!

A quick Google search suggests 5% is a more likely answer for 1 (though I couldn’t immediately find anything definitive), 2 is currently 36.4%, and 3 is 1.15% (for August 2010)

7

  1. I’d be surprised if the percentage of the entire working population earning minimum wage rose above 5 or 6 percent–and that’s counting people who live in states that have a higher minimum wage than the Federal mandate.

  2. 42? Given the inherent flexibility of the definitions, lack of information (I run a small business and there’s no way an outsider/government agency can determine the ratio), and variation across industries, my surprise for this is limited to the usefulness of someone’s calculation.

  3. Not something I follow, but given the global economy, recent talk of deflation, and low low low interest rates (I think Ginsu knives are now included), I’d be surprised if this peaked above 2 to 4 percent.

Off to check my guesses…

8

Not that I know the answers either way, but do you mean the federal minimum or just the minimum in their particular region, be it state or county or town? The former is quite tiny, the later less so. Both numbers are interesting.

At risk of tangents, it’s also interesting to look at how many of those min wage earners are kids. That used to be most of them, although I imagine that component has shrunk a bit.

You can mark me down as not knowing any of the three off the top of my head. I’ve looked up 1 and 3 multiple times. I have an idea of 2 for specific products for specific businesses, but don’t know an across the board average for all consumer products.

9
  1. 5%
  2. I know profit margins are notoriously low for grocery stores at about 1%, so 5% seems reasonable overall.
  3. Not sure what period “current” covers. Historically, I know, it’s been running at ~2-3% for several years, but pretty flat recently. I’ll go with 1%.
10
  1. 26%
  2. 15%
  3. 1.1%
11

3%

25%

2%

I don’t think many jobs only pay minimum wage other than starting fast food workers, even in this economy.

12
  1. 15%
  2. 4%
  3. 0
13

  1. What percentage of workers in the US earn only minimum wage?

    No idea here but I’ll take a guess at 20%

  2. As an overall average, what percentage of sales dollars are profits?

    8% I know some things have huge markups but I think it’s balanced out by things that are loss leaders or very small profit margin. It might be closer to 7% since that is the number where is typically better to invest in the stock market

  3. What is the current inflation rate?
    2.5% I think it’s under 3 right now but I’m really not sure.

Off to the thread to see how I did.

14

I’d appreciate you folks googling this stuff posting what you find. Number 2 is probably impossible to find a number on given the fuzziness of the concepts and the different conventions in different industries etc.

15

Well at the risk of sounding completely moronic I’m going to guess:

  1. Minimum Wage 15%

  2. Profits 10%

  3. Inflation 2.5%

16

  1. <1%

  2. 10-25%

  3. around 1% maybe 1.5% by now.

17

  1. 5%

  2. 9%. I remember this from discussions of Exxon’s profits. Sure, they were record-breaking, but their margin was only 11%. If it takes a dollar to make 11 cents, then it takes 91 cents to make $1. So each 1 is .91 expense, $.09 profit.

  3. 2%? I know it’s usually around 3.5% and that’s it’s low right now. With 0% prime interest, I’d think it would still be buoyed somewhat.

18

Ironically, it turns out there are actually more people making less than minimum wage than there are making exactly (Federal) minimum wage.

[spoiler]The Bureau of Labor Statistics says “[a]ccording to Current Population Survey estimates for 2005, 75.6 million American workers were paid at hourly rates, representing 60.1 percent of all wage and salary workers.1 Of those paid by the hour, 479,000 were reported as earning exactly $5.15, the prevailing Federal minimum wage. Another 1.4 million were reported as earning wages below the minimum. Together, these 1.9 million workers with wages at or below the minimum made up 2.5 percent of all hourly-paid workers.”

So, minimum-wage-or-less earners are just 1.5% of the overall workforce.[/spoiler]
I don’t even know where to go to find the answer to #2. I found gross margin figures for lots of individual industries, but not for the economy as a whole.

The inflation rate varies by orders of magnitude from month to month, but for August the US rate was

1.15%

19

I’m sure that none of these have a single answer. For example, question 3 could be positive or negative, depending on the metric you use. CPI typically overstates inflation while the GDP Deflator understates it.

20

Checking the Department of Labour:

According to Current Population Survey estimates for 2004, some 73.9 million American workers were paid at hourly rates, representing 59.8 percent of all wage and salary workers.1 Of those paid by the hour, 520,000 were reported as earning exactly $5.15, the prevailing Federal minimum wage, and another 1.5 million were reported earning wages below the minimum.2 Together, these 2.0 million **workers with wages at or below the minimum made up 2.7 percent of all hourly-paid workers. **

I’m not sure if they meant to word it that way, but it sounds like 2.7% of hourly workers, which is 59.8% of all wage earners.

So in terms of the labour market, there are 123million Americans earning and income, of which 2million are earning at or below the federal minimum. So 1.6% of wage earners are at or below the Federal minimum wage.

By 2009, roughly the same percentage is hourly, but the federal minimum wage has gone up from $5.15 to $7.25. “Nearly 2.6 million had wages below the minimum.2 Together, these 3.6 million workers with wages at or below the minimum made up **4.9 percent of all hourly-paid workers. **”

In terms of the total labour market, that’s about 2.9%.