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TechnoratiMinimum Wage Stuck in the 1950s
Are you better off than you were 40 years ago? Not if you're a minimum-wage worker.
It would take $9.92 today to match the buying power of the minimum wage at its peak in 1968, the year Martin Luther King died fighting for living wages for sanitation workers.
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.
"It is criminal to have people working on a full-time basis ... getting part-time income," King told workers in Memphis, Tenn., days before his murder. King said, "We are tired of working our hands off and laboring every day and not even making a wage adequate with daily basic necessities of life."
Imagine what King would say today.
The minimum wage is stuck in the 1950s. With the raise, the minimum wage is higher than 1950's inflation-adjusted $6.71, but lower than the 1956 minimum wage of $7.93 in today's dollars.
The long-term fall in worker buying power is one reason we are in the worst economic crisis since the Great Depression.
The federal minimum wage was not enacted during good times, but during the extraordinarily hard times of the Great Depression. When the minimum wage became law in 1938, one out of five workers was unemployed and job creation was crucial.
President Franklin Roosevelt called the minimum wage "an essential part of economic recovery." Roosevelt said, millions of workers "receive pay so low that they have little buying power. Aside from the undoubted fact that they thereby suffer great human hardship, they are unable to buy adequate food and shelter, to maintain health or to buy their share of manufactured goods."
Roosevelt said, "The increase of national purchasing power (is) an underlying necessity of the day." And so it is today.
Camille Caramor, owner of a Louisiana Christmas tree farm and paralegal service, says, "A minimum wage increase could be the most important factor in powering our economy out of the recession."
Consumer spending makes up about 70 percent of our economy. The minimum wage sets the wage floor.
We can't build a strong economy on poverty wages.
A growing share of workers make too little to buy necessities - much less afford a middle-class standard of living.
A growing share of business revenue has gone to executive pay and profits.
In 1968, the richest 1 percent of Americans had 11 percent of national income. By 2006, they had 23 percent - the highest share since 1928, right before the Great Depression.
We can't build a strong, sustainable economy on a 1950s' wage floor, 1920s' income gaps and ballooning Wall Street bailouts.
U.S. Women's Chamber of Commerce CEO Margot Dorfman says, "Now, more than ever, it's imperative employees are paid a fair minimum wage. It is an unsustainable and dangerous downward spiral to push American workers into poverty and expect taxpayers to pick up the bill for the consequences."
Dorfman is among 1,000 national business leaders and small business owners supporting the minimum wage increase in a statement at www.businessforafairminimumwage.org.
"Anyone who thinks the minimum wage shouldn't be raised should try living on it," says Phillip Rubin, CEO of Computer Software for Professionals in Oakland, Calif.
Michael Shuman, public policy director at the fast-growing Business Alliance for Local Living Economies, says, "Raising the minimum wage to $7.25 is an overdue step in providing a decent, fair livelihood to American workers and creating a truly 'living economy.'"
If the minimum wage had stayed above the nearly $10 value it had in 1968, it would have put upward pressure - rather than downward 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.
"A fair minimum wage protects the middle class and gives entry level workers some economic breathing room," says Lew Prince, co-owner of Vintage Vinyl in St. Louis, Mo. "Rebuilding our economy starts with showing hard-working Americans that their work will be rewarded."
43 Comments so far
Show AllCran Shaws makes a good point, but it may be warped by years of neocon misinformation. Most companies are already operating on shoe string budgets, or so we are told.
People are asked to give wage concessions 'for the good of the company'. But, is the boss taking any concessions? I say no. 'For the good of the company' means YOU take a pay cut so 'my bossman lifestyle' doesn't have to feel the effects of the economy.
I have worked for more than one of these 'small business dictators' in my lifetime. These are the people who think they are in that top 1% 'Good Ole Boy' club, but can't be because the top 1% are obscenely wealthy. I'm not against wealth unless it is earned off the backs of others disproportionately.
During the GWH Bush recession, a bossman actually pulled up through the company parking lot on a Saturday (it would be typical for me to put in some extra hours to try to look good and get ahead, but it never payed off) as I was walking out from a few hours of paper pushing in a brand spanking new blue Ferrari!! He asked me to not tell anyone about it because he had just told the employees at a company meeting that there would be a wage freeze instituted until the economy got better.
I and that bossman actually got into it about pay when he thought I was unreasonable for asking for a raise to $24,000 from the $20K I had been making (1991). I was managing $6 million of sales for him, no commission, and he thought I was just out of my mind for asking for what amounted to about $360 per week take home. He acquiesced, but took every opportunity to figure out how to get rid of me, which he eventually did.
I'm soooo unreasonable!! No, my mind hasn't been warped by years of neocon misinformation. I'm very reasonable...
...so do you think that if the gov't takes the yoke of the expense of health care off business' backs that any of those savings are going to 'trickle down' to you?
Don't bet on it. The dictators live in an environment where giving raises is anathema to their lifestyles. My most recent boss told me that certain employees would get a raise "when the minimum wage increases". That is their mindset.
This means that the minimum wage must be increased along with health care reform or millions of workers are SOL!
There is no trickle down, and if there is don't piss on my back and tell me it is raining!
My real wage earnings reflect what Ms. Sklar talks about. I have less buying power than ever. Oh yeah, I'm sure someone somewhere thinks my $270 sum per week Emergency Federal Unemployment Benefits is affecting THEIR standard of living.
2001 was the last time I earned a fair wage while working for the very largest telecom company in the USA and maybe the world (at the time), but I WAS A UNION MEMBER!!...
...who was eventually layed off and replaced with people earning $9.75 per hour, who were eventually layed off themselves. As we've seen, laying off people is not an effective long term strategy.
$10 per hour is not a good wage no matter where you live.
We need to get real in this country real fast.
People always say "if you don't like it, go live in another country". I would, but I've never really earned enough to visit any other countries.
Quinn - You make good points. How is that as a union member you could be laid off and replaced w/9.75'r. Where was the union to protect you?
I created a small distribution company at the end of the Carter years. An inventory loan had a 25% (2% over prime) interest rate at its highest %. Over the 15 yr run my few empl got paid b4 I did and they didn't have anything at risk nor their name on the loan nor door.
The good thing about employment-at-will is everybody is free to come-stay-go as they wish. No more indenture, no more debtors prison, etc
Hell my current p/t time hrly isn't very far north of the new minimum, but then I draw SS and medicare which you youngsters have to keep working to pay for.
You still cannot legislate wealth.
Cran
Surely, if 7.50/ hrs better < it, wouldn't 10.00, 20.00 etc/hr be even better?
Who or how does this get paid for?
Do we raise the income of some at the expense of the jobs of others?
I'm not sure of the answer, only the question.
Higher income = more purchases = more demand = more jobs. Simple enough?
Higher incomes are nice but they come from greater output for greater revenue. Not just conjured up.
Small Co's are greatly effected by legislative edicts. A pay raise commanded for say 10 workers could mean layoff one to control the increased cost.
And how do you think grater output for greater revenue comes about? Greater income, right? Far preferable to debt, IMHO.
If you can legislate wealth! Why stop at 9.00 +/- minimum wage, why not 100.00/hr or higher?
Of course we can legislate wealth, and we have...why, top marginal tax rates are nearly 1/3 of what they were a couple generations ago! Plus, income above $102,000 or so a year is not taxed for Social Security or Medicare. Sounds like the rich have had great success in legislating their wealth, don't you think?
And since the average American salary is around $45,000 a year, a minimum wage of $20 would put every American around that amount, to start...pretty close to the Danish minimum wage of $18 described in an earlier article. Why not?
Oh, since you seem to be worried about increasing wages means jobs are lost...European countries also have genuine safety net, so not having a job does not automatically translate into losing your home, family, health, and eventually life like it does here. We need one of those too.
In an article in Truthout, Thom Hartman states that the minimum wage in Denmark is equivalent to about $18 USD. They are taxed 52%, but receive FREE college education and FREE health care among other things.
America has hidden places in our economy where we are spending as much or more than the tax burden of Europeans. College tuition is one, health insurance is another. The article I was reading a while back had others, but I'm not sure where it is now.
The article is "The Great Tax Con Job" posted to CommonDreams on 7/21. Common Dreams won't allow me to put the URL into the body of the posting.
What is the minimum compensation for a CEO of Halliburton? Raytheon? What is the annual pay increase for a member of Congress? Until we change the way money works, we change nothing
someone mention mlk? if he were alive he might get violent
and bitch slap obama into next month!
Normally I have great respect for Ms. Sklar -- “Trilateralism,” the work she edited for publication in 1980, remains probably the best available reference-book on the lethally greedy subterfuge of the global ruling class -- but in this minimum-wage campaign she has allowed herself to be made into yet another shill for the status quo.
Yes, Ms. Sklar advocates progressive change, but the very fact of her advocacy implies that such change is still possible. Which deftly conceals the hideous truth that -- just as the Obama Administration is so vividly proving -- “change” has become impossible under the present U.S. system of governance.
Obama’s methodical betrayals of "hope" and "change we can believe in" have already become the signature policy of his administration. He has brazenly broken his promise to create more jobs -- note the emergence of the term “jobless recovery.” He has also broken his promise to protect us against usury and foreclosure; his promise to end illegal domestic surveillance; and his promise to stop the military’s theofascist persecution of homosexuals.
With the enthusiastic support of his DemoPublican colleagues, Obama has meanwhile rewarded the banksters and the Big Business aristocracy in general with the greatest looting of taxpayer money in U.S. history -- near-infinite beneficence for the ruling class even as the plight of the working class continues to worsen.
As Mussolini himself said, such transfers of wealth and power are the quintessence of fascism.
They are also quintessential proof that behind the deliberate deceptiveness of pseudo-controversies, the United States has become a one-party oligarchy.
Note too the purposefully Machiavellian inaction that ever more obviously lurks behind Obama’s eloquence. It has forever doomed not only meaningful healthcare reform but the all-important restoration of working-class power implicit in the Employee Free Choice Act -- the one measure that might indeed have forced “change we can believe in” on the ever-more-obviously tyrannical ruling class.
As we are learning, eloquence and erudition can mask oppressive intent just as effectively as ignorance and buffoonery does.
In either case, only an ignoramus -- or someone gripped by psychosis of denial -- can continue to imagine that the term "democratic process" describes governance of the United States at any level.
Even Bill Moyers has publicly denounced the fact our political institutions have become not only sham and but scam -- weapons by which the fat-cat plutocrats victimize every one of us who is not a member of their murderously selfish clique.
"American Democracy" is thus not only a contradiction in terms but the biggest Big Lie in history. As our sisters and brothers south of the border and among the aboriginal peoples of North America discovered at bayonet-point more than a century ago, the sole purpose of the United States is the perpetuation of capitalism: the absolute empowerment of the ruling class, the total subjugation of all the rest of us.
Now that the defeat of the Soviet Union has eliminated the strategic and tactical necessities for capitalism to maintain a facade of pretend humanitarianism -- now that the suppression of the Marxian alternative has again enabled the capitalists to unleash their tyrannosauric savagery inside the United States itself -- we too are discovering we are powerless as peons. The U.S. is being methodically transformed by Big Business into the Big Plantation of its United Estates; the numbers Ms. Sklar cites merely prove the extent to which we have already been reduced to slavery.
Though I long ago concluded we have been too inescapably conditioned to Moron Nation passivity to ever again muster effective rebellion against our ongoing enslavement, even amidst the innate pessimism of old age I retain the hope I am wrong -- that perhaps the ultimate “change we can believe in” will be a general awakening to our true circumstances.
But before such a widespread awakening can happen, Ms. Sklar and others like her will have to recognize that advocating for progressive change in the United States has become the political equivalent of writing letters to Santa Claus -- for sane adults, a pointless exercise in idiotic futility.
Instead Ms. Sklar and her colleagues should be teaching us to recognize our true circumstances. As John Paul Sartre so clearly understood, the first step toward empowerment -- toward freedom -- is the admission of powerlessness.
hmmm
These types of discussions of the minimum wage always illicit a laugh from me because they understate the inequities by such a large margin. Why? they are always based on the "official" government inflation rates. And as everyone now knows these figures are generated using formulas that are constantly being "revised" and "updated". Why is this done? Simply put to insure that the "inflation rate" is always artificially low. "revised" and updated" is a euphemism for screwing the working class. So in real terms where should the minimum wage be to bring us back in line with 40 years ago? I am not sure, but it is somewhere in the neigborhood of $20 per hour. NOT the $9-$10 that I have seen mentioned time after time.
Why is inflation alright for Stock Market prices, CEO salaries, and property values. But bad for workers wages?
Hey, at least the democratic congress raised the minimum wage. The Republican congress didn't raise it for 12 frigging years; while they gave themselves something like 12 pay raises. This hike is a step in the right direction.
At $7.25 an hour you can gross up $63,336 a year, sounds pretty good to me. Add it up:
7.25 X 8 X 3 X 7 X 365
Earl Simmins
Sure,
At $7.25 an hour you can gross $63,336 a year IF you steal about $48,000 from your local community after work. Check your math, friend.
Not even a robot can work 24/7. Even robots require downtime. Then again, if you own that robot and charge $7.25 an hour for a three shift production line with an average 20 hours a day, 7 days a week, you could very quickly make a fortune with enough robots. It's called the industrial revolution and how crooks like Carnegie became rich claiming they were "working their butts off". They now have robots that do everything but fuck. I'm sure they are working on the fucking robot too. Whores are kind of pricy these days. Anyway, the elit think they don't need us. Oh, you rich folks are in for some fascinating surprises. Madame DeFarge is coming soon.
Get a sense of humor - Earl was engaging in satire.
What GwNorth briefly says, just above, is the fuller, more important, more humane truth about wage income and personal wealth dynamics, than anything I said.
As such, it's also the more difficult truth to approach people with.
Sincere kudos therefore from me to Gw.
Conservatives argue that (and trust me, I get to hear all their arguments where I work) that a low minimum wage encourages people to push themselves to work better and get promotions or better jobs.
Except, erm...nobody's hiring? Not to mention the corporations' (and conservative governments') plans to keep nothing but the shittiest, lowest-paying jobs possible around for most of the population.
Next, they try to argue that most minimum wage earners are teenagers or college students and not really trying to support themselves or a family. Except that's most, not all. Some people are forced to rely on a minimum wage to raise a family. Not to mention that it'd be much easier for those teenagers to get into college if they could afford to actually work through college like so many of the past generations claimed to have done.
Personally, all of my jobs have been at or barely above minimum wage over the last 7 years. And trust me, it fucking sucks. I'm only able to make ends meet thanks to my parents' generosity.
Then again it has been a good experience for me personally, I have learned how empty the accumulation of material goods is. I do miss all my books an DVDs at home though.
I think it best to not forget the federal reserve's participation in the role of 'structuring' minimum wages using inflation as a means to control OUR money for THEIR benefits.
I don't know how much it would help but I do feel that if this country had some real balls and the federal reserve act of 1913 was struck down and our govenment through the treasury department managed our money(with regulations, oversight and all the rest of safe guarding the monetary system) this country would be a whole lot better off and next would be to start our own manufacturing over again because if all the jobs and businesses that left to 'cut costs in labor' and stop paying taxes, they should not be considered a part of the USA and to deal with the USA, they would be heavily taxed and tariffed.
Anyways, miguel from el salvador just showed up and will work for almost free.
YOUR HIRED!!!!!!!!!!
AND DON"T FORGET TO FAIL TO PAY PAYROLL TAXES, INCOME TAXES, AND HOSPITAL BILLS WHEN YOUR SENORITA PUSHES OUT ANOTHER ANCHOR BABY THAT YOU ALL WILL PAY FOR!
My friend’s husband is Salvadoran, and his life at home was destroyed by the good old USA. His mind was also destroyed, as he has severe PTSD from the war. So, STFU, paleomarc, you racist. He is as American as I am. My father was a wetback from Canada in 1920, my Mother's parents were illegal aliens from Germany a few years earlier. What is the difference, other than a bit of skin pigment? And what about the 10,000 to 20,000 year old claim of the previous inhabitants from whom we stole and whom we killed? We are the invading immigrants, you fool!!
Apologies to the other posters, and to the moderator. I usually try to be polite, but I am recovering from injuries without any medical help. I wish I had even a minimum wage job. This would seem like a fortune. With five in line for every job (the actual number is higher) immigrants are NOT the problem. I am too blind to drive, and too old to be of interest, despite high skills and education. The invasion of Chinese goods, not people, killed my livelihood in the end. My argument is with the corporations, not fellow workers.
You are an example of the success the rich have had pitting one poor group against another. It has worked since at least the eighteenth century and shows no signs of any of us soon-to-be literal slaves getting wise to it.
why settle for min. wage? Even if min. wage were $10 an hour what the F would that get you in NYC, Chicago, Miami, LA, Houston, or anywhere north of greenwich CT? Folks, wages must be tied to the location where you live. $10/hour in Benton KY is doing well, $10/hour in Rye NY is barely making ends meet. Reject a federal min wage, embrace a federalist min wage - that is one based upon each state. Do you all want to make yourselves in to serfs?
You seem to have confused "minimum" with "maximum" here. But then can you post and chew gum at the same time?
paleomarc,
You are absolutely right about the cost of living being different in every state and that wages should be tied to the location where you live. The real estate market alone is a good indicator.
Marc and Gail, there are state minimum wages that are higher than the federal now.I agree with your premise Mark but it took decades to get above $5, the $10 target would be a real good start for millions of Serfs and Proles now. pea$e
While I understand there has to be a more equitable distribution of wealth, what equally if not MORE important is what that extra wealth spent on and what is produced by that labor.
Again paying somone 50 bucks an hour to build Jets to drop bombs on people in Afghanistan is not "equitable" and people spending 200 bucks to buy a chunk of plastic that will end up in some landfill is NOT creating wealth even if that person can AFFORD that 200 bucks due to a higher wage.
"Consumer spending makes up about 70 percent of our economy. The minimum wage sets the wage floor.....We can't build a strong economy on poverty wages."
Try to explain that to the fools on Captiol Hill who continue to push jobs to China or anywhere else that offers slave wages to U.S. corporations.
.
+
Studies show that an extra money in the pocket of the worker produces a GDP multiplier of 2.5 or higher. Extra money in the pocket of the wealthy non-working investor class has a multiplier of less than one.
Even I know the truth of that. So what's going on here? Is Obama intentionally trying to bankrupt the US?
You know minimum wage laws come from Congress, not the President, right? All he can do is ask and push Congress to make it higher and sign it as soon as it passes.
You sound like you are living in the Fifties. The president can do nothing without congress? GWB declared a war for no reason that I believe and neither congress nor the supreme court said a word.
Obama with five times the brains can't initiate a system wherein a citizen who works full time need not be poor?
Gee, I seem to remember a Congressional resolution giving that schmuck the authority to use whatever force he deemed necessary against Iraq. Don't remember how Hillary Clintaon famously said she wouldn't change her vote on it? (At least I think that's what she said, it was over a year ago).
Thank you!
Finally, finally
someone gets that it matters WHERE
$timulus goes.
They cannot announce to us one day that we are all officially slaves. The frog must not notice the connection between his his rights being revoked and his money being stolen.
Thanks to the unprecedented post WWII assault on unions, first initiated big time by Reagan, then continued by [other] latter day neocons - and with no help from a Corrupt democratic Party-- millions of US wage workers lost any effective tool for organizing for decent pay and working conditions.
Scores of millions became, in effect, wage slaves -- and remain so to this day.
This is the duopoly's version of Morning in America -- more rightly termed Mourning in America.
That more US workers didn't then, and don't now, fight back, is amazing. It arguably defines an Era of Masochism among the people whose daily drudge makes everything else possible -- especially those unending goodies for the rich.
Is the Era of Masochism finally over, in our country?
It sure doesn't look like it.
And I don't think it ever will be, until we come to better understand what has made so many of us so incredibly passive.
Excellant Post, Holly is right "Consumer spending makes up 70% of our economy the minimum wage sets the wage floor."could there be any more obvious stimulus for the economy.Any builder knows that you start with the foundation,not the penthouse.I would like to Hear more about the" Let justice roll living wage campaign" peace