A Factory Worker Earned $10 an Hour in 1980

question 32

Multiple Choice

A factory worker earned $10 an hour in 1980. The CPI was 0.82 in 1980. The same factory worker was earning $15 an hour in 1990 when the CPI was 1.31. From 1980 to 1990, the factory worker's hourly real wage:

• A)increased from $7.63 to $18.29.
• B)decreased from $12.20 to $11.45.
• C)remained constant.
• D)increased from $10 to $15.

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Definitions:

Internal Equity

A pay strategy ensuring fairness in employees' wages within the same organization, based on job value and employee contribution.

External Equity

A principle in compensation management that ensures an organization's pay rates are competitive with those in the external labor market.

Hay Profile Method

A job evaluation technique that assesses roles based on knowledge, problem solving, accountability, and working conditions to determine pay scales.

Clerical Employees

Workers who perform administrative and office duties, such as answering phones, typing, filing, and record keeping.