The real value of minimum wage – in terms of buying power for a minimum wage employee working 40 hours a week – peaked in 1968 and has eroded steadily. If costs of living had remain level with dollar inflation, todays minimum wage employee would need to make $10.55/hr. Nonetheless, even raising the hourly wage to $10.10/hr would lift a family of three with one full-time worker in the household out of poverty, which minimum wage currently cannot do.
However, that is realistically still a far cry from the 1968 minimum wage:
“If our standard for minimum wages had kept pace with overall income growth in the American economy, it would now be $21.16 per hour.Yes, had the US income distribution and US standards of decency remained exactly what it was in 1968, the minimum wage would now be $21.16 per hour. I grew up on the idea that America stood for progress, continual progress toward a better society. Even a $21.16 minimum wage wouldn’t represent progress. It would mean socially standing still, just with better technology and higher productivity levels. Progress would mean a minimum wage in excess of $21.16 per hour.”
In short, a minimum wage worker is making 1/3 of what he or she needs to be able to afford the kind of necessities and even luxury goods that a minimum wage worker was able to afford 45 or so years ago. Those minimum wage workers aren’t teenagers either. That is one of many MANY myths about minimum wage. In the real world “88 percent of those who would benefit from a federal minimum wage increase are age 20 or older, and 55 percent are women … 53 percent of all minimum wage earners are full-time workers, and minimum wage workers contributed almost half (46 percent) of their household’s wage and salary income in 2011.” Neither will raising minimum wage hurt businesses. That why “600 economists, seven of them Nobel Prize winners in economics, have signed onto a letter in support of raising the minimum wage to $10.10 by 2016” because raising minimum wage strengthens and revitalizes the economy.
When the minimum wage is increased, it not only strengthens the economy, it ADDS jobs: “In the 13 states that boosted their minimums at the beginning of the year, the number of jobs grew an average of 0.85 percent from January through June. The average for the other 37 states was 0.61 percent … Nine of the 13 states increased their minimum wages automatically in line with inflation: Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington. Four more states — Connecticut, New Jersey, New York and Rhode Island — approved legislation mandating the increases … The data runs counter to a Congressional Budget Office report in February that said raising the minimum wage to $10.10 an hour, as the White House supports, could cost as many as 500,000 jobs.”
Washington is the state with the highest minimum wage (well over federal minimum wage) and guess who had the best job growth?
Cities that have raised their minimum wages, like San Francisco and Seattle, have had more job growth and a stronger economy that cities that did not.
And then there is the real world example set by Minnesota Governor Mark Dayton. Even though Dayton is a billionaire heir to the Target fortune, he hiked taxes on the wealthy and raised the minimum wage. “When he took office in January of 2011, Minnesota governor Mark Dayton inherited a $6.2 billion budget deficit and a 7 percent unemployment rate from his predecessor, Tim Pawlenty … During his first four years in office, Gov. Dayton raised the state income tax from 7.85 to 9.85 percent on individuals earning over $150,000, and on couples earning over $250,000 when filing jointly — a tax increase of $2.1 billion. He’s also agreed to raise Minnesota’s minimum wage to $9.50 an hour by 2018, and passed a state law guaranteeing equal pay for women. Republicans like state representative Mark Uglem warned against Gov. Dayton’s tax increases, saying, “The job creators, the big corporations, the small corporations, they will leave. It’s all dollars and sense to them.” … Between 2011 and 2015, Gov. Dayton added 172,000 new jobs to Minnesota … Even though Minnesota’s top income tax rate is the 4th-highest in the country, it has the 5th-lowest unemployment rate in the country at 3.6 percent … the state’s economy was the 5th fastest-growing in the United States. Forbes even ranked Minnesota the 9th-best state for business (Scott Walker’s “Open For Business” Wisconsin came in at a distant #32 on the same list). Despite the fearmongering over businesses fleeing from Dayton’s tax cuts, 6,230 more Minnesotans filed in the top income tax bracket in 2013, just one year after Dayton’s tax increases went through … As of January 2015, Minnesota has a $1 billion budget surplus, and Gov. Dayton has pledged to reinvest more than one third of that money into public schools. And according to Gallup, Minnesota’s economic confidence is higher than any other state.”
Other countries with a high minimum wage, like Australia and France, are also economically stronger than the USA. Then there are the nations like “Denmark, Germany, Italy, Norway, Singapore, Sweden, and Switzerland, don’t have minimum wages at all. Most of them make up for it with widespread collective bargaining [unions], which sets de facto minimums.” Switzerland and Singapore both have more robust economies than the USA, even though the USA is the second largest economy in the world. It should also be noted that the USA ranks a pitiful 33rd in its ability to provide basic economic requirements, including infrastructure, health, and primary education. Chile, the worst economy in the world, beats us in provided basic economic requirements.
Anyone who tells you that raising the minimum wage “doesn’t help the poor” or “will cost jobs” is either woefully ignorant of the reality, or … nope, all I’ve got is woefully ignorant of the reality.