how the minimum wage fails to keep up with inflation

[Bill McBlueState]

I made a post in my live journal about how the minimum wage hasn't kept up with inflation, much less other increases in the cost of living over the past 50 years.

Here's a chart, using data from here.



The black line shows the minimum wage in that year's dollars. You can see how the minimum wage stays constant for several years at a time, then jumps up a bit when federal legislation is passed to increase it.

The red line shows the minimum wage in constant dollars. (They're 1996 dollars, so the two curves overlap in 1996.) See how when you account for inflation, the minimum wage peaked in 1968, dropped off dramatically during the Nixon and Reagan administrations, and has been roughly constant since then. Clearly Republican presidents don't look out for the working class, but it's not like Democrats have done a great job either. This is why getting a job just doesn't solve all your problems the way it used to.

This isn't anything earth-shattering, but that maybe that plot will come in handy if anyone ever wants to prove this point.

[Union Thug]

1. Thanks for the post..

...bookmarking

[Massacure]

2. Kerry wants to raise it to $7.15 doesn't he?

That would bring it to about the level of the late 1970s.

[Bill McBlueState]

3. $7.00

Here's Kerry on the minimum wage:

Raise The Minimum Wage. As president, John Kerry will raise the minimum wage from $5.15 to $7.00 by 2007. An increase in the federal minimum wage is well overdue. It has fallen further and further behind the cost of living, and the impact of the last increase has been entirely eroded by inflation. Today, the minimum wage is worth only 33 percent of the average American wage, its lowest level since 1949. John Kerry's plan for an increase will impact nearly 15 million American workers, helping families move another step towards the American Dream by ensuring that no parents working full time will have to raise their children in poverty.

(from http://www.johnkerry.com/issues/economy/workers.html)

I certainly hope he can pull that off. It'll happen if we can get back control of Congress.

[Vulture]

4. Maybe I'm just cynical...

...but the minimum wage thing is Kerry pandering to the unions and nothing more.

Hardly anyone makes minimum wage, even at fast food joints, but many union wage contracts are defined as a multiple of the minimum wage, even relatively high paying jobs. The net effect is that if the minimum wage was raised from $5.15 to $7.00, companies in many industries would suddenly be forced to give all their employees, even employees in the upper-middle class, a 35% pay raise across the board. That is a hell of a cost to lay on companies that are already paying decent wages in a competitive world market.

This looks like a plan to encourage outsourcing and union-busting to me. I certainly don't see how it helps anyone. Even the illegal aliens around here make $7-8/hr doing crap jobs.