Workers are compensated by firms with “benefits” in addition to wages and salari

Question

Workers are compensated by firms with “benefits” in addition to wages and salaries. The most prominent benefit offered by many firms is health insurance. Suppose that in 2000, workers at one steel plant were paid $45 per hour and in addition received health benefits at the rate of $9 per hour. Also suppose that by 2010 workers at that plant were paid $47.25 per hour but received $40.5 in health insurance benefits.

a. By what percentage did total compensation (wages plus benefits) change at this plant from 2000 to 2010?

     Instructions: Round your answer to 2 decimal places.

    Total compensation increased by _________ percent.

     What was the approximate average annual percentage change in total compensation?

     Instructions: Round your answer to 2 decimal places.

__________ percent.

b. By what percentage did wages change at this plant from 2000 to 2010?

     Instructions: Enter your answer as a whole number.

    Wages increased by ___5__ percent.

     What was the approximate average annual percentage change in wages?

     Instructions: Round your answer to 1 decimal place.

__________ percent.

c. If workers value a dollar of health benefits as much as they value a dollar of wages, by what total percentage will they feel that their incomes have risen over this time period?

     Instructions: Round your answer to 2 decimal places.

_________ percent.

     What if they only consider wages when calculating their incomes?

     Incomes go up by _______ percent.

d. Is it possible for workers to feel as though their wages are stagnating even if total compensation is rising?

Yes

Explanation / Answer

Note that in 2000, workers were paid $45 per hour and received health benefits of $9 per hour. So a total of $54 per hour was given to each worker. By 2010 workers were paid $47.25 per hour as well as received $40.5 per hour. So a total of $87.75 per hour was given to each worker

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