Do you think the federal minimum wage should be raised to $10 an hour?
I've heard many of the arguments against it:
(1) For low skilled workers, a minimum wage job is a starting point.
(2) It will create unemployment, because the business cost of labor increases. This will in turn result in their not hiring as many unskilled workers.
(3) The minimum wage is anti-American. It prohibits an employee from freely contracting with his employer -- in other words, from bargaining with the employer for their labor.
There are other arguments to be made against increasing the minimum wage and there are many good arguments for raising it (e.g. the median age of the fast-food worker is over 28), but I'm not going to argue the fine points today.
Instead, what I want to do is focus on two charts. The first is from the National Employment Law Project analysis of the Consumer Price Index.
What this graph shows is that the actual value of today's minimum wage is less than it was in every year from 1984 back.
Another way of saying this is to look at the actual figures:
So, in 1968 the minimum wage was $1.60, or $10.77 in 2013 dollars -- 77 cents higher than it would be if we raised it to $10/hour and $3.52 higher than it is now.
Comparing the 1968 figure to the average hourly earnings, if you double the minimum wage back then you'd be making 8% more than the average worker. Double today's and you'd be making $14.50, or 28% less than the average worker today.
And this is true even though the average hourly earnings (in the private sector) haven't changed much through the decades while the minimum wage has never been higher than in that golden year of 1968, where it reached peak value (in today's dollars).
And my whole point for this brief excursion today is:
Before we can even have a discussion, we should know what it is we're talking about!
Food for thought when discussing what the minimum wage has historically been (and meant in terms of buying power), and where it is today.
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