Upon inception it was set at $0.25. It is now $7.25.
If you do the comparisons in normalized dollars and compare to productivity, minimum wage (if it tracked to the same purchasing power as it did in the 1950s) would be somewhere around $26 in today’s dollars. If you do the same but track to inflation, it would be about $22.
When the wage doesn’t keep track to inflation, it’s not ‘increasing’, it’s a pay cut. When it doesn’t track to productivity, it’s a pay cut out of labor’s part of any growth.
When workers earning suppressed wages compete to buy things like housing, they’re bidding against the class of people that received the share of productivity they didn’t- and when the folks making more bid up prices of those things, it’s a double-whammy of foregone wage + increased cost-of-living.
Do you have a source on that nationally? Because that is very very high in many areas.
Well,
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If it kept line with productivity Minimum wage would be $26 an hour if it had grown in line with productivity
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If it kept up with inflation Advocates say minimum wage needs to be higher before it’s indexed to inflation or https://www.cnn.com/2021/02/21/politics/minimum-wage-inflation-productivity/index.html
These sources disagree among themselves if the right number is $21.45 or $26 or $20, they seem to base their analysis on productivity or inflation
Yeah, these numbers sound like a lot in some places, but those places where it ‘sounds like a lot’ tend to be really fucking poorer than necessary. It would hurt them not at all to have the minimum keep up with where it was in 1968 instead of being the output of both major parties in congress agreeing to fuck the working poor
Oh I see my confusion now I thought you were saying PPP against inflation, rather than PPP against productivity. But my point about nationally is that PPP differs based on area a lot, especially in housing. I don’t think comparing to productivity is fair because a lot of the money going to labor from US companies is going to offshoring or into automating jobs away.
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I agree it needs to be raised but that’s a terrible and misleading way to present the data.
I strongly agree with this comment.
You could as easily say it’s increased by 2800% (correct me if I’m wrong) since then, which sends the opposite message, but neither are good ways of showing what’s really going on…
inflation-adusted, the federal minimum wage peaked way tf back in february 1968 at $1.60 an hour (equal to $13.46 in ‘2022 dollars’).
Just when boomers were young (8-23 yrs old) … totally tracks!
Looking at the linked graph, there’s a relatively clear plateau from ‘56 to ‘80 … basically from oldest boomers being age 11 to youngest boomers being age 20. I’m a little astonished at how well it lines up with the whole fucking generation. Literally all of them, from the beginning of their teens to the end of their teens (at least), enjoyed the best minimum wage of the modern age.
It also, interestingly, justifies the seperate categorisation of the Jones generation (born 1960-1966) who were the first to see the steady decline.
Might as well use the latest numbers for this comparison. Yes, inflation is still absolutely sucking us all dry.
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I think a more alarming stat is that, due to inflation, minimum wage workers have received a pay cut every year for the last fourteen years.
Was going to ask, did op include inflation?
It should be noted that this is the federal minimum wage. Many states set a higher minimum wage than that. For example, California’s minimum wage will be $16/hr starting January 1st, Virginia is $12/hr, and New York is $14.20/hr.
California’s is actually even weirder, because they recently passed legislation that raises the minimum wage but specifically on franchised businesses
I think that got held up in lobbyists appealing to the court.
Berkeley’s minimum wage is $18.07
bUt fReE mArKeT gOod
But that has nothing to do with free market because minimum wage is set by the government?
Minimum wage is required because companies operating in the free market don’t pay many people enough to survive. So minimum wage is absolutely related to the free market.
Except a tiny percentage of people in the US earn minimum wage, and half of the them are under 25 iirc
Minimum wage is simply the lowest full time salary a company can legally get away with paying. Nothing more, nothing less.
I’m primarily talking about large corporations that make millions and billions, yet claim they can’t afford to pay more than minimum wage.
Can you name one? I don’t know a single person who actually makes minimum wage. Legit question.
I no longer work there but in the last year I worked for a “leading global source for education materials” according to Forbes, worth 2.8 billion and I was paid minimum wage as a retail employee.
Yikes, hope things are better now! Thanks for sharing!
Why do people even live in the US?
Well obviously it’s very difficult for the poor to leave and if you aren’t poor it’s actually a pretty nice place to live.
because am born in the u.s.
💀
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Which country bro?
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Do you remember that wages rose when unemployment was low?
Why is there a need for minimum wage?
Edit: downvoters, what do you want? A high minimum wage job while many are unemployed? Why focus on minimum wage when you can have low unemployment and decent wages for everybody at the same time by reducing unemployment?
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The Federal Reserve has mandate to ensure employment doesn’t get too high, which is high enough to cause inflation. By increasing interest rates, unemployment increases because it costs more to pay people.
Wages rose when unemployment was low because inflation was running away. The Fed was behind on its mandate shortly after the pandemic. Because interest rates were low, it was relatively inexpensive to hire people, and that’s what businesses did, especially after firing so many of them during the pandemic. But, ya know, the pandemic gave people more time to consider what was important to them…and working was pretty low on that list. Thanks to the low interest rates, businesses could pay them more as an incentive to come back to work. That whole “Great Resignation” thing was about workers finally having some bargaining power. And wages rose because workers could demand more.
But now interest rates are having some pressure on inflation. It costs more to hire people, and it costs more to keep people hired. The bargaining power workers had is basically gone. The demand for employees to literally come back into work and stop working from home is evidence that business managers have regained the upper hand. And so, now there’s no reason to pay people more. Just threaten to fire them and watch them dance.
So, basically, the need for a minimum wage is because there is no incentive to raise wages themselves but there’s every incentive to lower them. And the Fed has other methods of dealing with low unemployment that will kick in before businesses start raising wages to attract workers in most cases. The post-pandemic era was “unprecedented”, after all.
What would be a fair way to manage wages without the need for unemployment?
We don’t need unemployment as it is. Stephanie Kelton makes the case here (pdf). Here’s an AI summary of how wages are managed without the need for unemployment using a public service employment (PSE) program:
The PSE program would pay a wage of $15/hr plus benefits, establishing an effective minimum wage and compensation level nationwide.
It would provide jobs to anyone ready and willing to work, eliminating involuntary unemployment. The authors estimate the program could employ around 15 million workers currently unemployed, underemployed, or out of the labor force.
By providing jobs at $15/hr, the program would lift wages at the bottom and reduce poverty. The wage floor would pressure private employers to raise wages to compete for workers.
The program is designed not to compete with private employers, except to establish minimum standards. In economic upswings, private employers would recruit from the program, while in downturns the program would absorb laid-off workers.
So the PSE program aims to reduce unemployment by directly providing jobs, while also lifting wages by setting an effective nationwide minimum of $15/hr plus benefits. It establishes a wage floor that would ripple up to benefit other low-wage workers.
In summary, the policy note argues the PSE program could simultaneously reduce unemployment and increase wages for low-income workers through its design and job provision at $15/hr. The wage floor and job guarantee are interlinked policy goals.
It should be insulting to Americans the country over that one of our main economic institutions has determined that people must be unemployed for economic growth. Unemployment has so many socio-economic problems it’s insane, and it leads to physical and psychological problems, and even ultimately to suicide. Why would we want this, and why should it continue to be implemented, if an alternative exist that better manages wages and doesn’t need call for unemployment?
This sounds reasonable. Too bad that the post lost focus. I would love to know what others think about this.
Why are you so against a minimum wage when people keep telling you why it’s important?
Because I am not convinced by their arguments. It makes sense if you accept a minimum of unemployed people. But why should society settle for that? Employ everybody and find another way to prevent wages from rising too high.
But the workers don’t currently have either- lowering or removing the minimum wage might reduce the unemployment rate, but those jobs are not going to be paid at a livable rate. Currently more theft is wage theft committed by companies against workers, they’re already using the power they have against workers. There’s already a clear divide between union and nonunion blue collar benefits and wages: if there were a textbook play of economic principles, all nonunion blue collar employees would quit and join union companies or form their own.
Having neither, it’s the same as the saying about liberty and security. If you don’t seek employment for all then you won’t get minimum wage.
Let the people decide what a livable wage is. A bad job is better than no job. They can still refuse to work.
Of course, without new ideas, things don’t change. Not the workers but the companies need a reason for full employment.
Let the people decide what a livable wage is. A bad job is better than no job. They can still refuse to work.
The people have a gun to their head. If they’re not eligible for unemployment because a $3/hour job is available, they’ll take it not to starve to death. That doesn’t make it a free or advantageous choice.
The unemployment rate does not take into consideration people who are under-employed or people who are working multiple jobs to get by. You could be working 3 part time jobs (none of which offer benefits) and still not make enough money to pay your bills. The “unemployment rate” is a load of bullshit and should largely be discarded in favor of tracking how many people are living above the poverty line.
Right. This is important to remember. I think my question is still valid because it’s about the real rate and not the published figure.
Except that the published figure is what gets used in policy and calculations. The real rate is largely ignored and the numbers are heavily skewed by ever-changing definitions and parameters making the “unemployment rate” a nearly useless metric. We need to run our country based on keeping people out of functional poverty, not based on keeping profits up.
Policy and calculations don’t matter if there is low unemployment. It’s minimum wage that’s gamed. Why fight that lost battle?
I’m saying that the unemployment rate is artificially low as well as being a stupid metric to use, but unfortunately, it’s the metric that powerful entities use to make decisions about manipulating the economy at large.
There is the published figure and there is the actual number of unemployed people.
You rightfully point out that the figure is manipulated. I am talking about the actually unemployed people.
Could be worse. 25 cents in 1938 is still only worth $5.44 today.
2 dollars of progress for 85 years… How much has productivity risen during that time?
People working for minimal wage don’t produce more value. Considering advancements in mechanisation and automation over these years, their productivity has actually decreased.
Alternatively, 29x the original
And we are in by far the longest stretch of no increase. Thanks biden and democrats.
If that were true, we’d expect to see red states with higher minimum wages than blue states, no?
I aint mentioned republicans. Them being shit doesnt give dems a pass to also be shit
This shouldn’t be an unpopular opinion. We should be holding all appointed politicians liable.
Lmao Biden and the Democrats? Are you high? Part of Bidens covid relief bill included a $15 minimum wage. It was struck out of the bill by a vote of 58-42. A grand total of 7(well, 6, since Sinema isn’t a Dem anymore and never really was) democrats voted against it. EVERY SINGLE REPUBLICAN voted against it.
Now tell me, why is it “Biden and the Democrats” fault when they actually try to improve things but fail(even if the 6/7 nay dems had voted yeah, that’s still at best 49 yeahs), but never Republicans fault when they actually DO vote in lockstep to prevent any democrat endorsed legislation from passing, and when a significant percentage of them are actively trying to strip rights away from people?
Oh, I forgot to mention; while Biden doesn’t have the executive power to unilaterally raise the national minimum wage, he DOES have the power to raise the minimum wage for employees of the federal government, which… he did.
Oh right, that time we learned the senate parliamentarian exists. The convenient scapegoat for why dems failed again.
Republicans are shit, but republicans lost. This was a wholy dem controlled government, theres no one left to blame but dems.
This was a wholy dem controlled government
Composition of the United States House of Representatives from 1983 to 2023, by party affiliation
The 118th Congress was sworn-in in January 2023, with the Republicans holding a majority with 222 seats. In this year, the Democratic Party was in control of the Senate and the Presidency.
Another view on the same facts…
118th Congress House Lineup: 221 Republicans, 212 Democrats, 2 Vacancies
117th congress
And we are in by far the longest stretch of no increase. Thanks biden and democrats.
The 118th Congress could do something about that today.
don’t blame them. you need the white house, the house, and 60 votes in the senate to get most legislation through and into law.
60 votes thanks to democrats being fine with the filibuster. They had the ability to get rid of it in favor of simple majority.
In California, fast food workers wages will go up to $20 an hour we found today. That’s more than some college educated people make. Something is wrong here.
If you’re only making $20/hour after a college education, your college education is a broken promise.
This is the correct take. Unfortunately, there seems to be an overwhelming sense of “fuck you, I got mine” amongst a lot of people meaning they’d rather kick other people down than get pushed up.
Your right. Wages should be going up across the board, not just for fast food workers.
