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Forum Post: The Minimum Wage Is Stuck at $7.25; It Should Be $21.16 — or Higher

Posted 4 years ago on July 1, 2013, 12:51 a.m. EST by BradB (2693) from Washington, DC
This content is user submitted and not an official statement

America’s minimum wage was raised to $7.25 per hour on July 24, 2009. It’s still there. Unlike almost all other federal benchmarks, the minimum wage is not updated for inflation.

The minimum wage reached its (inflation-adjusted) historic high in 1968, when it was raised from $1.40 to $1.60 per hour. Adjusted for inflation using the BLS online inflation calculator that would come to $10.55 per hour in 2012 dollars.

That $10.55 figure is the focus of a nationwide campaign organized by the National Employment Law Project (NELP). In today’s political climate it would certainly be a major accomplishment to achieve a $10.55 minimum wage. But $10.55 is still far too low.

Using 1968 as our benchmark for the minimum wage implies that low-wage Americans today should be making just as much as low-wage Americans were making 44 years ago. That benchmark is — frankly — ridiculous.

Can you imagine Americans of 1968 settling for a minimum wage standard of living that had been set based on 1924 standards? What about 1880 standards? At some point we should expect low-wage workers to start living better than they used to. Don’t low-wage Americans deserve to live in the 21st century, not the mid-20th?

A better way to update the minimum wage is to benchmark it to personal income growth in the economy as a whole.

Per capita real personal income excluding current transfer receipts — that is, the personal income earned in the economy, excluding Social Security and other government programs, adjusted for inflation — has grown by 100.6% since 1968.

In other words, the NELP has it too low — by half. If our standard for minimum wages had kept pace with overall income growth in the American economy, it would now be $21.16 per hour.

Yes, had the US income distribution and US standards of decency remained exactly what it was in 1968, the minimum wage would now be $21.16 per hour.

I grew up on the idea that America stood for progress, continual progress toward a better society. Even a $21.16 minimum wage wouldn’t represent progress. It would mean socially standing still, just with better technology and higher productivity levels. Progress would mean a minimum wage in excess of $21.16 per hour.

Of course, a minimum wage in the mid-20s is politically inconceivable. But it is technically, economically, and socially realistic. The only reason we can’t have it is the greed of those at the top and the intransigence of those at the near-top. The only reason we can’t have it is that we don’t want it.

We are not the Americans of 1968.

Posted on July 24, 2012 by Salvatore Babones



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[-] 2 points by Kavatz (464) from Edmonton, AB 4 years ago

Which is why Worker Self Directed Enterprises would fix everything. Mondragon, for example, restricts how much more one person can earn than another. I had this thought years ago with what I called Responsible Capitalism.

An enterprise doesn't need high paid CEOs. Workers won't choose to earn shit and pay some greedy bastard everything. They wouldn't ship their jobs out of the community, or pollute their homes.

Money is worthless and a few bucks an hour is nothing more than slavery.

[-] 3 points by DKAtoday (33472) from Coon Rapids, MN 4 years ago

I heard years ago that in japan the owner can not make more than 50% more then the lowest paid employee.

[-] 2 points by Kavatz (464) from Edmonton, AB 4 years ago

Wow, I never knew that. Sounds extreme (even for my blood), but probably did the trick.

[-] 1 points by DKAtoday (33472) from Coon Rapids, MN 4 years ago

Well when you figure 50% can be a whole lot ( as long as one is not insanely greedy ) it makes sure the low person on the roster has a living wage and that the top end of the enterprise is not sucking up all of the profits.

[-] 1 points by BradB (2693) from Washington, DC 4 years ago
  • there is a reason for high paid CEOs is some businesses....

and that is for those businesses whose only product is the promotion and selling of ponzi schemes....

those businesses need ceo's who are connected... who have the team that can continue to rape the economy... in their pockets...

if we want to find the crooks... all we have to do is follow the money

[-] 1 points by DKAtoday (33472) from Coon Rapids, MN 4 years ago

$21.16 — or Higher

I will accept that - I was thinking entry level into the work life as 16.00 an hour for a living wage - but 21.16 would be more realistic - if you consider a living wage as being able to cover your living expenses = roof over head food clothing entertainment transportation insurance savings and a vacation ( not sitting at home for a week ) etc.

[-] 1 points by gsw (3141) from Woodbridge Township, NJ 4 years ago