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July 24, 2008 at 10:01:58
Promoted to Headline (H3) on 7/24/08: by Holly Sklar Page 1 of 2 page(s) |
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Until 1968, minimum wage workers took frequent and big enough steps forward to make overall progress. Since 1968, when the minimum wage reached its peak buying power, workers have taken many steps backward for every step forward.
The July 24 minimum wage raise is so little, so late that workers will still make less than they did in 1997, adjusting for the increased cost of living, and way less than in 1968.
The decade between the federal minimum wage increase to $5.15 an hour on Sept. 1, 1997, and the July 24, 2007 increase to $5.85 was the longest period in history without a raise.
Gas prices rose from $1.23 to $2.97 a gallon in the same period. Now it's over $4.
The new $6.55 minimum wage is lower than the 1997 minimum wage, which is worth $6.88 in 2008 dollars, and way lower than the inflation-adjusted $9.86 minimum wage of 1968. For full-time workers that translates into $20,509 a year at the 1968 rate, compared with just $13,624 at the hourly rate of $6.55.
The minimum wage does not provide a minimally adequate living standard -- and it still won't when the last scheduled raise to $7.25 takes place next July.
Workers are constantly choosing what to go without -- "heat or eat," child care or health care.
Health care aides can't afford to take sick days. Retail clerks and child care workers depend on food banks. Security guards sleep at homeless shelters.
It wasn't always this way. Workers used to share in the gains of rising worker productivity.
Between 1947 and 1973, worker productivity rose 104 percent and the minimum wage rose 101 percent, adjusting for inflation. The middle class grew.
Between 1973 and 2007, productivity rose 83 percent and the minimum wage fell 22 percent, adjusting for inflation. Average worker wages fell 10 percent while domestic corporate profits rose 219 percent, and profits in the disproportionately low-wage retail industry jumped 346 percent. More jobs paid poverty wages.
Higher education does not protect you from falling wages. The inflation-adjusted wages of recent college graduates were lower in 2007 than they were in 2001.
There's been a massive shift of income from the bottom and middle to the top. The richest 1 percent of Americans has increased their share of the nation's income to a higher level than any year since 1928, the eve of the Great Depression.
Our modern robber baron age features people like Countrywide Financial CEO Angelo Mozilo. He pocketed $103 million last year as the subprime mortgage ponzi scheme morphed into the worst financial crisis since the Depression.
Minimum wage workers don't put raises into predatory lending, commodity speculation or offshore tax havens. They recycle their needed raises back into local businesses and the economy through increased spending.
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| 10 comments |
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Amen.
It's much too little, much too late. Once upon a time, I decided that "in 1999 dollars, minimum wage should be 6.87." When we apply headline inflation, in 2007 dollars that's 8.70. But in recent years, I've gained a heightened awareness of how the government literally lies with inflation statistics. The correcting factor is between 3X and 4X, so let's take 3.5X. (This means, when the government says inflation is 3.3%, multiply by 3.5. The result suggests that actual inflation is 11.55%.) On that basis, the 2007 number should not be 8.70, it should be 13.28. Even after compromising with business interests, I feel that any minimum wage number below $10.50 as of now is unconscionable. These insults from Uncle Sam ought to be categorized as crimes against humanity. (Can we have Nuremberg trials for the people who are setting the federal minimum wage -- and the poverty line and the inflation statistics?) by John Kusumi (54 articles, 0 quicklinks, 32 diaries, 108 comments [8 recommended, 0 rejected]) on Thursday, Jul 24, 2008 at 8:18:20 PM  (0+)
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This is the last thing we need
With the economy in a "slowdown", to use the euphamism, the minimum wage raise will only add to the unemployment & slow recovery: Once again politicians and pundits are calling for increases in the legal minimum wage. Their reasons are familiar. Market wages are supposedly immoral. People need to earn a "living wage." If the minimum wage went up at least to $7, or better still to near $10 an hour, millions would be lifted out of poverty.[1] The economic case against minimum wage laws is simple. Employers pay a wage no higher than the value of an additional hour's work. Raising minimum wages forces employers to dismiss low productivity workers. This policy has the largest affect on those with the least education, job experience, and maturity. Consequently, we should expect minimum wage laws to affect teenagers and those with less education. Eliminating minimum wage laws would reduce unemployment and improve the efficiency of markets for low productivity labor. by Darren Wolfe (15 articles, 402 quicklinks, 141 diaries, 1032 comments [84 recommended, 0 rejected]) on Thursday, Jul 24, 2008 at 8:50:32 PM (0+)
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Yearly adjustments along with a "Living Wage"!!!
As Chris Rock so correctly pointed out: Minimum wage means "if I could LEGALLY pay you less... I WOULD" A "Living Wage" appropriately adjusted to meet a locality's Cost of Living would do a great deal to relieve the suffering of minimum wage earners -so much so that enrollment in some government assistance programs by these same workers could be lessened substantially. This "Living Wage" when coupled with strict adherence to and enforcement of laws regarding the employment of legally qualified applicants (yep, I'm talking about the so-called 'undocumented workers' who are in reality 'criminally present and therefore illegal to employ') would go far in aiding the least of wage earners... Our entire Nation's workforce could proudly sustain itself with access to the dignified 'staples' and 'neccessities' that most people need to live comfortably! Our workers need more rights. Our citizens need more representation in the halls of our Government. We need to strictly regulate the corporations, ensure their compliance with the law, hold them to extreme public accountability, harness and significantly diminish the powerful hold they have on Washington by banning ALL of their political contributions and lobbying perks, and remove their 'citizen' rights! Pay me a respectful wage by which I can live without degradation. by C.Bid (0 articles, 7 quicklinks, 7 diaries, 739 comments [2 recommended, 0 rejected]) on Friday, Jul 25, 2008 at 6:16:21 AM (0+)
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Reply: Police state wage
Have you given any thought to the police state that it would take to enforce your ideas? by Darren Wolfe (15 articles, 402 quicklinks, 141 diaries, 1032 comments [84 recommended, 0 rejected]) on Friday, Jul 25, 2008 at 8:28:17 AM (0+)
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Reply: Save the Libertarian BS...
for other Lew Rockwell fans, please. I see little redemption in the overwhelmingly selfish motivations of that ideology and simply refuse to give any credence to its provocations whatsoever... Now, moving on... A 'Living Wage' coupled with strict adherence/enforcement of applicable employment laws in regards to the 'unlawfully present' would benefit the American workers' quality of life substantially and help to reduce reliance upon Government Assistance programs all around the board... The nauseatingly extreme profits that corporations have reaped at the expense of their own workers' and the complete disregard for all things decent in regards to anything other than maintaining a steady or otherwise growing flow of wealth is beyond reprehensible -it is simply disgusting! At this point in time, largely due to reduction and deregulation of environmental and pollution standards, corporate entities are held increasingly less accountable for any detriment to public health than, say, somebody lighting a cigarette within ten feet of a 'smoke-free zone'! When government becomes the servant and advocate of big business (profits) over its own citizens, we no longer need worry or look for terror without... Rein in. Regulate. Enforce. Protect the welfare of people, not profit. by C.Bid (0 articles, 7 quicklinks, 7 diaries, 739 comments [2 recommended, 0 rejected]) on Saturday, Jul 26, 2008 at 3:53:34 AM (0+)
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Living Wage
I would also support a living wage for high school graduates (& GED holders) age 26 and older. It would be from 150% to 200% of minimum wage. My instincts would now place it at $21, but I would compromise with the green eye shades types to a degree: The National Low Income Housing Coalition has set its "Housing Wage" at $17.32. That's a feasible compromise point. I'm also not certain that it has to be mandatory. To make it the "federal" living wage would go a long way in establishing it as a benchmark, and the federal government could pay its own qualifying employees that minimum, and require it of suppliers, vendors, contractors, and local governments that are the beneficiaries of federal largess. In that way, the living wage could be less than mandatory, but it would still be required for a large swath of the economy and it would be a standard that would be known and would stigmatize those jobs that don't pay a living wage. Employers who care to be competitive, increase retention, and reduce turnover would likely match the living wage voluntarily. But if it's not mandatory, then I would want the level to be $18.75. (The NLIHC Housing Wage assumes 2080 hours of work per year; I prefer to assume 1920. As the denominator shifts my way, the level goes from $17.32 to $18.75.) If I could get it to be mandatory, I'd take it at $17.32. Perhaps this situation offers another view into my idea of "practical idealism." Ideally, there would be a $14 minimum wage and a $21 living wage. But, as my posts reveal, I think of $10.50 and $17.32, respectively, as compromises that I'd roll with. That's being pragmatic in a less-than-ideal world. :-| by John Kusumi (54 articles, 0 quicklinks, 32 diaries, 108 comments [8 recommended, 0 rejected]) on Saturday, Jul 26, 2008 at 5:08:14 AM (0+)
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Reply: Family Wage
By the way, a "family size" wage is $40.28. And, if you had two earners at the proposed living wage, you would basically get there! :) Meanwhile, senile Uncle Sam offers $6.55, where two earners together would make $13.10. Helloooo? McGovernment? ..... by John Kusumi (54 articles, 0 quicklinks, 32 diaries, 108 comments [8 recommended, 0 rejected]) on Saturday, Jul 26, 2008 at 5:30:25 AM (0+)
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Reply: John,
While I like the figures you mentioned, I don't share any semblance of the optimism you possess in regards to any entity in the corporate behemoth willingly providing a realistic 'Living Wage' voluntarily in order to remain competitive. These giants are hardly compliant with existing laws to begin with especially when there's any chance that their mighty profit could be reduced in even the most minute ways! An excellent example is the exploitation of 'illegally present' employees who have no means or rights afforded to them to protect themselves -they are a feast of blood for the rabid and ever-hungry profiteers of big business. Even the most hard-working of the legitimate American workers has hardly any leverage beneath the heels of the beast! A lone worker is expendable beyond belief. Unions have diminished. Corporations have grown in their unrestrained reach for power. Labor Day is an extremely sick joke these days... The all-powerful profit has subverted the role of common decency in business ethic. Rather than play by the rules, it remains easier to duck accountability and oversight by shifting offshore or overseas to further maximize profits... They will never self-regulate. They cannot abide by even the most lax of restrictions! Mandatory compliance is the only way. Increasingly severe penalties should be awarded to those seeking to skirt U.S. law by moving offshore or overseas to increase their coffers. The exploitation of human beings in the name of profit must stop! Do not indulge in the false premise of charitable works by evil entities... by C.Bid (0 articles, 7 quicklinks, 7 diaries, 739 comments [2 recommended, 0 rejected]) on Saturday, Jul 26, 2008 at 10:19:51 AM (0+)
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Reply: Income brackets
It seems like these comments are recording my take on incomes. So, to round out for the sake of completeness, I think there is-- . a poverty class making $0 - $20,160 by John Kusumi (54 articles, 0 quicklinks, 32 diaries, 108 comments [8 recommended, 0 rejected]) on Saturday, Jul 26, 2008 at 4:48:12 PM (0+)
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Reply: Oh, and...
If a job will involve a lot of traveling sales, schmoozing, or road warrior presentations, it should come with a $48K expense account for T&E. by John Kusumi (54 articles, 0 quicklinks, 32 diaries, 108 comments [8 recommended, 0 rejected]) on Saturday, Jul 26, 2008 at 5:09:11 PM (0+)
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