It would take $9.92 today to match the buying power of the minimum wage at its peak in 1968. In today’s dollars, the 1968 hourly minimum wage adds up to $20,634 a year working full time. The new federal minimum wage of $7.25 comes to just $15,080. That’s $ 5,554 in lost wages. The long-term fall in worker buying power is one reason we are in the worst economic crisis since the Great Depression. When the minimum wage became law in 1938, President Franklin Roosevelt called it “an essential part of economic recovery.” And so it is today. Consumer spending makes up about 70 percent of our economy. We can’t build a strong economy on poverty wages. A growing share of workers make too little to buy necessities. If the minimum wage had stayed above the nearly $10 value it had in 1968, it would have put upward pressure on the average worker wage. The Let Justice Roll Living Wage Campaign, which I advise, is calling for a minimum wage of $10 in 2010. It’s time to break the cycle of too-little, too-late raises. — Holly Sklar, McClatchy-Tribune News Service
On July 24, the federal minimum wage increased for the third time in three years to $7.25 per hour. A small business with 20 entry-level employees will see more than $30,000 in new labor costs due to the increase. That doesn’t include the higher taxes the employer has to pay. Research has shown that minimum-wage hikes take a sledgehammer to the entry-level job market. In a 2007 survey, 73 percent of labor economists said increases in the minimum wage lead to employment losses. Teens get hit especially hard. Adult entry-level workers find themselves displaced. Businesses respond by laying off workers and cutting back on hours. The companies that are still hiring seek out more skilled applicants who are worth the higher wage, or switch to automated labor. The latest minimum-wage hike will only prolong the nation’s affliction with high unemployment — hurting job prospects for our most vulnerable workers and denying teens the opportunity to gain valuable on-the-job training this summer. — Kristen Lopez Eastlick, Employment Policies Institute
47 Comments
Oh please, the low wage advocates have been using the same rhetoric as always. They have a race to the bottom attitude but are probably the first to stick up for high executive wages claiming we need to retain talent with high wages. Nothing for the serfs, everything for the nobles. It’s the same old tune being replayed for over a thousand years.
They’ve made the same tired argument against minimum wages for decades and not a single shred of evidence shows this to be factual.
Matter of fact, it comes in quite the opposite.
The rich don’t sustain a society, the working class do. You give them more buying power and it will create more jobs, as long as you don’t outsource them to third world countries.
IMO if a company is off-shore or operating in another country and importing their products, they should be facing a far higher tariff to import. Perhaps that would convince them to keep their jobs here rather than taking them elsewhere.
Minimum wage went up 70-cents an hour last week.
McDonald’s still makes a profit when they sell a double-cheeseburger for a dollar.
“The rich don’t sustain a society, the working class do.”
Yep Maggotpunk, same rhetoric as always.
“IMO if a company is off-shore or operating in another country and importing their products, they should be facing a far higher tariff to import.”
IMO your sentence doesn’t make sense.
“American_Way” has no response except –
“IMO your sentence doesn’t make sense.”
The sentence makes perfect sense.
The policy it advocates has some logistical and economic problems. But the sentence makes sense.
If the companies are off shore and importing (into the off shore location)their products (raw materials used in their production process) that indicates PMomma wants a tariff on those raw materials “imported” by the manufacturers.
” they should be facing a far higher tariff to import”
So they should pay more tariff to import (to) the offshore location.
Hmmmmmmmmmmmmmm.
It might be a good idea to go ahead and approve a minimum wage to fill the gap for the future.
I’d suggest democrats use their majority to create utopia now.
Raise minimum wage to say $125.00 an hour.
Fifty years ago one working person could support a family. Now it takes two. Business now gets two employees for the price of one.
Ah yes, raise the minimum wage! It’s so beneficial. Most union contracts are tied to the minimum wage. That’s the real concern of the statists, pay off the unions.
Of course it makes little difference that it really hurts the small businesses. Makes no difference to the statist that it increases unemployment. Raise the minimum wage and there are less entry level jobs available.
When a person goes to work for minimum wage it’s a temporary thing. As they gain job experience and training they become more valuable to the employer and they gain skills that are more valuable in the job market.
When the government mandates a minimum wage increase it eventually hurts everyone concerned.
“Fifty years ago one working person could support a family.”
Yep. Mom stayed at home. Someone knew where the kids were.
That was before the LBJ “Great Society”. The invention of huge entitlement programs (which were advertised as paying for themselves – or low cost).
That was before the feds started spending the Social Security proceeds as part of the general fund (to hide the huge spending increases).
Seems the more free things a great society tries to offer – the harder everyone has to work for them.
Now these programs are going broke. Instead of heading to utopia – we are in reverse.
Social Security and retirement age should be earlier under utopia. Not working until age 70.
Medicare, medicaid, prescription drug program, and a broken social security (which was never expected to be a retirement income for all of us).
Raise minimum wage to say $125.00 an hour.
Everyone should make $250,000.00 a year.
“American_Way” advocates –
“Everyone should make $250,000.00 a year.”
And if they did, McDonald’s would still sell a double cheesburger for a buck.
Back in the 1950’s and early ’60’s, social scientists were seriously worried that technology and a minimum wage would allow the average family far too much free time, and spent a lot of money designing structured activities to keep them out of trouble. Disneyland was one of those projects. Seems to have gone the other way, as technology hasn’t increased free time, just vastly increased worker productivity, of which most went to profits and stockholders and so little to workers that now it takes two workers to support a family, and nobody below the upper-middle class has free time or money to do much of anything!
Profits are essential to small business. No profits no jobs. I do not want our nanny government setting wage levels for anybody. Libs, profits are not obscene, I’m sure the WE board does not think so.
You know what happened during the 80’s, when Reagan refused to sign any increase in the mininum wage. Wages stagnated. Jobs at the lower end of the scale stayed at the bottom as the cost of living went up.
Adjusting for inflation, those people were actually getting paid less.
This is why conservative politicians never talk about abolishing the minimum wage (they leave that to the ‘think tanks’.
They just want to freeze it, knowing that lackeys like American Way will uncritically back them up.
Of course, if there were no minimum wage at all, we’d see the real race to the bottom. Some quarters of America would resemble the poor sections of India.
But that would cause too much of a backlash, and they know it.
The problem with worshipping profits as the only goal is that mom-and-pop shops are not the rule. Instead we have huge multinational corporations driving much of our commerce, the and the rule of profit often has more to do with inflating the stock price than any tangible goods or services.
Yeah, they have to produce something people buy, or they go out of business, particularly in this economy. But for too long, profit-driven Wall Street thinking has been the only metric of success.
Jed, interesting point about technology. It, in fact, could free up enormous amount of time and still increase bottom-line productivity.
What most large companies have chosen to do–instead–is to throw workers into the machine (so to speak), and suck them dry.
P.S. All this whining about it hurting small businesses! In truth, many small businesses are exempt from minimum wage rules.
And small businesses that cannot even afford to pay their employees a living wage should probably use volunteers anyway.
Georgie,
“Profits are essential to small business. No profits no jobs. I do not want our nanny government setting wage levels for anybody.”
I take it you are in favor of bringing back slavery? Who do you want to own you?
“Teens get hit especially hard.”
Teens should be in school.
“That’s the real concern of the statists, pay off the unions.”
Oh LOOK, Hank ate Mark Levin’s book and digested his new catch word “statist”.
FDR was right to establish a minimum wage. The very minute that person A is forced by circumstances to work for person B (or more likely, corporationX) person A is no longer truly free. The Government MUST err to protecting whatever liberty the worker has left.
Rage,
How about a tax law that anything CEO’s are paid above say 40X what they pay their lowest-paid workers and independent contractors is taxed at 90%? If the CEO wants a raise, he knows how to get it.
Rage what you didn’t look at in your analogy of wage increases was ‘what causes the decrease in buying power’?
That would be inflation. Union wages in the seventies went up by leaps and bounds. Along with this cost to produce went up by leaps and bounds and this was passed along in higher costs to the consumer. Those who were living on non-union wages. You started to see a real divide in the ‘haves’ and the ‘have nots’.
Every action has a reaction. When businesses have increased wage costs they either cut their expenses (layoffs) or raise their prices. The head in the sand attitudes of the libs on this blog just amaze me.
The right wing whining and apocolyptic economic predictions about raising the minimum wage are the same tune that has been played for 40 years. The raises will always cost entry level jobs, and will impact teenagers. At least until the next raise in the minimum wage. I particularly liked this clueless line from Eastlick’s editorial:
“The companies that are still hiring seek out more skilled applicants who are worth the higher wage, or switch to automated labor.”
Riiiight, because in today’s economy the wage of $7.25 an hour is a professional level wage.
Idiot.
Minimum wage is an artifice created because there is no apprentice-journeyman-master system in the United States.
It was initially designed to prevent abuse of wage under ’sweat shop’ conditions.
In modern economic theory, labor can be considered a commodity. Raising the price of the commodity tends to cause the supply of it to increase and the demand for it to lessen. The result is a surplus of the commodity. When there is a wheat surplus, the government buys it. Since the government doesn’t hire surplus labor, the labor surplus takes the form of unemployment, which tends to be higher with minimum wage laws than without them. So the basic theory says that raising the minimum wage helps workers whose wages are raised, and hurts people who are not hired (or lose their jobs) because companies cut back on employment. But the situation is much more complicated than the basic theory can account for. WikiPedia
Actually, Okie, thanks largely to Paul Volcker, inflation was famously low in the 80s. That didn’t change the effect it had on lower-end workers whose wages stagnated.
Presumably, then you’re arguing that if more wages stagnated, this is a good thing, since everything would be cheaper–just no one could afford to buy them. That’s the equally simplistic counter-argument.
In fact, the increase in prices is not a law of hature, and there are numerous other factors (the most obvious being demand) that go into it.
But it’s a myth that it’s impossible for companies to pay their employees well and still make a healthy profit.
Minutelady there are NO union contracts tied to the minimum wage. NONE. Two years ago some in the Kansas Legislature asserted that but neither the unions nor those saying that could find even one union contract tied to the minimum wage. NONE.
Actually Rage I think I was addressing what happened in the 70’s. I can remember when gas was 25 cents a gallon, bread was 10 to 15 cents a loaf. My dad made $2.65 an hour as a semi mechanic. We were probably poor even by that days standards but I never knew it until I grew up and read about it.
That was a very good lifestyle to grow up in. Taught me the value of a dollars. Taught me that hard work gives you self respect and keeps you off the goverments welfare role.
And actually Rage I am saying that if wages didn’t inflate then the cost of goods wouldn’t inflate. Common sense will tell you that if the demand goes down because the price is too high then one of two things will happen. The cost of the goods will come down to match the demand or the supply will decrease. This can only happen with layoffs to cut labor cost or finding cheaper raw materials to build the products with. This is why the US can’t compete now on the global market because workers are unwilling or unable to take a pay cut and the cheap raw materials are being snapped up by the Chineses, Japanese, Twainese, and other nations who then bring them to our nation to sell.
There is no simple answer but raising the minimum wage is just a bandaid on a major gash.
Amway whines,
““The rich don’t sustain a society, the working class do.”
Yep Maggotpunk, same rhetoric as always.”
So now I am confused with Political_Mama as well as Monkeyhawk. Cons are so smart, they have a higher level of reading comprehension don’t they?
As for PMom’s statement, she’s right. The working people create the wealth, the rich just skim off the profits of their labor. Think those overpaid bank executives make wealth? Not at all, they just shuffle wealth back and forth.
A nation can consist of working people but no nation can exist with just wealthy aristocrats having to make and serve their own mint julips.
Hello again. Lets look at minimum wage. Companies pay taxes based on income revenue offset by allowable businesses expenses. The more justified, allowable expenses they have, the less they pay in company income revenue tax. The more they pay their staff, the less they pay in company income tax. Each employee is still in the lower income tax bracket and will pay less income tax from employment, than the employeer would pay. The more the employees make, the less the State and Federal Government gets in taxes from the companies. I think the companies would rather pay money to their employees instead of paying it into taxes. This increases the local incomes and economy and reduces the need for the cities to ask the State for relief. They spend their paychecks localy and this generates an increase in the local sales tax revenues. If the Companies pay it to the State in taxes, the State will mismanage it and steal more from the city budgets, to make up for the thefts. Minimum Wage makes local, sence. For every $15,080.00 paid, localy per person, that generates, 8% in local sales tax. 10% is $1,508 a year. Take that times 1,000 employees working in an average city, per county. That is $1,508,000.00 a year localy in sales tax. Take the same $15,080.00 paid for each person at 1/3 in taxes. 1/3 or 33% of $15,080.00 is $4,524.00 each to the State for the employees income tax returns. Take that times the 1,000 un-employeed. That is $4,524,000.00 that the businesses will pay in revenue taxes to the State and Federal Government, because the don’t have the 1,000 justified expense employees to pay. And the city loses the 1,000 people income that the people would spend localy. Minimum Wage is important!!!! Herbert West 3rd, Uncontested Democratic Candidate for Kansas Governor, 2010. Click on my name above. It will direct you to my website. Thanks,
It isn’t merely high school kids making the minimum wage, and in some cases less than. It is people supporting families and working in jobs that are undervalued.
An example of an under-minimum wage job I found out is overnight support for home care. 20 dollars a night. That is what the state pays. What quality do you think the workers are in that position? Do you really want them taking care of your mom and dad?
I have dealt with people who are working and can’t keep their mom or dad in the home anymore because they cannot keep their staff or mom laid soaked in urine all night long because the worker did nothing but lay on the couch all night.
These aren’t high school kids in these jobs.
Is there a need for 7 dollar an hour jobs? Sure, but it shouldn’t be the staple for most jobs, and unfortunately that’s where a lot of jobs are sitting at right now, and the businesses hiring for that COULD pay a lot more.
I think a business’s minimum wage should be dependent upon their profits.
I’m not surprised at all AmWay said he couldn’t figure out what I was saying. He’s not really that bright.
Minimum wage is an unnecessary government intervention into industry. Workers should be paid based on their market value. Labor is a commodity, just like any other resource. The price is determined by market conditions and equilibrium.
Why do women work for less pay than men?
Because they will.
Workers should be paid based on their market value.
Just what IS the going rate for a mommy and daddy made man goof?
No, because women are consistently undervalued in the workplace.
We have fought long and hard and we’re still not there yet.
” Minimum wage is an unnecessary government intervention into industry.”
Then make it your party’s mission to do away with it.
Put it on the bumpersticker’s
Palin 2012
You are only worth as much as your boss says.
One of the things cons tend to ignore is that when workers are paid more, they buy more and expand the market for more goods for companies to produce.
One of the early things Ford did was institute a minimum wage of $5 a day for his workers, and produced a car they could afford (a 1924 Model T Roadster listed for $225). The Model T held the record for most cars sold until the VW Beetle finally beat it near the end of it’s production. If Ford hadn’t set a minimum wage, you’d still be walking, and cars would only be for the rich.
“Workers should be paid based on their market value.”
Oh how the Cons miss the days of slavery where people were a commodity to be bought and sold.
An executive who works at a failed bank gets a $100 million bonus and he is worth more than than the people who build his car or manufacture his gasoline. Why? Because he writes his own paycheck therefore he has more value.
If it wasn’t for the minimum wage the Cons wouldn’t pay people anything at all.
Half the world’s population lives on less than $2.50 a day. How is their value as a human being any less than someone who inherits a billion dollars and lives off dividends from his investments?
There is a reason our society moved away from feudalism, but sounds like some people want to return to the days of master and slave.
MP,
Maybe the problem is that cons feel the need to be told what to do- less responsibility that way. Of course I’ve told some of them what to do (or where to go) on several occasions lately. Now I’m worried they might have actually done it, and even worse, enjoyed it!
I worked for a large corporation who made profits, in fact they had profit sharing. Without them making profits I would not have enjoyed all the benefits I do today. Profits are good words libs.
For george and his like-minded compatriots:
http://www.youtube.com/watch?v=01UipbZL3ww
“Rage” –
Thanks for the clip:
http://www.youtube.com/watch?v=01UipbZL3ww
Thing about Beatles stuff is how many textures there are in the multi-track production of George Martin. There’s a lot of different guitars in this track and George probably played all of ‘em. (Although that sounds like McCartney’s walking bass at times.)
I always wanted to be as cute as Paul, as funny as Ringo, as wise as John, and as spiritual as George.
I ended up as cute as John, as funny as George, as wise as Paul and as spiritual as Ringo.
Hey I just read on another thread Political Momma said that money doesn’t make happiness in life.
I wonder if we will hear more Beatles music now that Michael Jackson has died? Will his heirs sell his rights to 250 Beatles songs – for a quick and tidy buck?