https://www.oftwominds.com/blogmay21/min-wage5-21.html
Why the Minimum Wage Should Be $18/Hour
May 31, 2021
What does it say about our “prosperity” if we can’t even afford to equal the purchasing power of the minimum wage paid 50 years ago? It says the 1% got the mine and the bottom 90% got the shaft.
Given the rising prosperity we keep hearing about, shouldn’t we be able to provide minimum wage workers the same purchasing power they enjoyed 50 years ago in 1970? This is a very simple proposition: either can provide minimum wage workers the same purchasing power they enjoyed 50 years ago or we can’t, and if we can’t, then all the claims about “rising prosperity” are revealed as false.
Since I was a minimum wage earner in 1970 at age 16, I have first-hand experience of the purchasing power of minimum wages in the 1970-1974 era. Let’s keep it simple: how many hours of minimum wage labor did it take to buy a new economy car, a new house and rent a studio apartment in one of the most expensive cities in the U.S.?
To keep it simple, let’s set aside taxes and just use the basic minimum wage, not the net wage.
Never mind all the fancy statistical footwork of hedonics, substitution and weighting that are deployed to arbitrarily lower the rate of consumer price inflation. In the real world, wage earners bought whatever cars and houses were available at the time, and rented whatever apartments were available at the time.
The only accurate way to measure the purchasing power of labor is to ask: how many hours of labor did it require to pay the rent, buy a new car or buy a new house? Any other measure is just sleight of hand intended to obscure the collapse of wages’ purchasing power.
In 1970, I earned $1.65 an hour. A new economy car (Ford Maverick or VW beetle) was $2,000, so it took about 1,200 hours of work to buy a new economy car.
A new house cost on average about $26,000 in 1970, so it took 15,750 hours of minimum wage labor to buy a new house.
At today’s federal minimum wage of $7.25/hour, it takes 3,000 hours to buy a basic 2021 Honda Civic or equivalent which costs $22,000. To buy a new economy car today with 1,200 hours of minimum wage labor, the minimum wage would need to be $18.30 /hour: 1,200 time $18.30 = $21,960.
At today’s federal minimum wage of $7.25/hour, it takes 56,000 hours to buy the average priced house which now costs $408,000. Let’s say there are houses available for $300,000, so it takes 41,380 hours of minimum wage labor to buy a house.
To buy a new house for $408,000 with 15,750 hours of labor, the wage would need to be $25.90/hour. To buy a $300,000 home with 15,750 hours of labor, the wage would need to be $19/hour.
Moving forward a few years to 1974, the minimum wage increased to $2/hour, and I rented a small studio apartment in Honolulu, one of the most expensive cities in the U.S. for $120/month. Thus it took 60 hours of minimum wage labor to pay the rent.
Studio apartments in Honolulu are now around $1,100/month rent, so to pay the rent with 60 hours of minimum wage labor, the minimum wage would need to be $18.30/hour.
In 1974, I paid $89.25 in tuition and $27 student fees per semester to attend the University of Hawaii at Manoa. (These numbers stick in your head when you’re paying for them in cash earned at low-paying jobs while you’re carrying a full five courses a semester.) That’s $233 per year. At a wage of $2/hour, it took 116 hours of labor to pay the annual tuition and fees.
The current cost of tuition and fees at the University of Hawaii at Manoa is $12,186 per year. To pay the tuition and fees with 116 hours of work, the hourly wage would need to be $105/hour. If America gets any more “prosperous,” I won’t know whether to puke or go blind.
To equal the purchasing power of minimum wages in 1970-1074, the minimum wage would have to be at least $18/hour. Anything less does not equal the purchasing power of the minimum wage paid 50 years ago, and no amount of statistical trickery can erase this reality.
What does it say about our “prosperity” if we can’t even afford to equal the purchasing power of the minimum wage paid 50 years ago? It says the 1% got the mine and the bottom 90% got the shaft.
sources:
https://www.dol.gov/agencies/whd/minimum-wage/history/chart
https://www.bls.gov/data/inflation_calculator.htm
http://www.1970sflashback.com/1970/economy.asp
http://www.thepeoplehistory.com/70scars.html
https://www.statista.com/statistics/240991/average-sales-prices-of-new-homes-sold-in-the-us/
https://files.eric.ed.gov/fulltext/ED086037.pdf
Out of curiosity, I looked at local real estate in my area. Most of the locals make 12.30 minimum wage and new modular homes on a lot are going for 300.000. (they are selling fast) Housing was already crazy expensive and now we have lots of folks from Ca. moving here and that drove it up even more. Yes, wages have not matched the cost of living. I recommend figuring out a way to have a paid for shelter. Maybe a lot with an RV trailer. An economic catastrophe is coming.
You’re right in the notion that bottom level workers should be paid more, but the situation isn’t simple and can’t be ‘made simple’, and a higher minimum isn’t the answer. It will probably be tried though, so we’ll get to see what happens. Wage pressure (from rising wages) is a large force for advancing inflation, which lowers the buying power not only from the new wages but also any money that has been saved. The ones running the show love it, but its hard on the rest of us.
When a system is as complex as ours is, and gamed as heavily as ours by the power brokers,
there isn’t a single response that would bring fairness to the table. As Jim has eloquently said, the system must be deconstructed far enough to uproot the entrenched interests before fairness becomes an option.
The minimum wage should be $0.00 per hour. Let the market set the value of your labor. With the current worker shortage, we are seeing the market in action. I have seen signs for Mickey D offering $17/hr. Almost every place of employment is offering $15 and last week FedEx advertised FLT operator jobs at $21.50, including their full benefit package.
For my idea to fully work, we would have to do away with welfare and reimplement Ike’s Operation Wetback program. Both of these need to happen anyway
In order for your 0.00 plan to work, lots of things need to change. Eliminate regulations for 1.
Eliminate any and all regulations that hinder entrepreneurship.
WIP, give this guy up. He’s poisoning your thinking. He gets stupider and stupider. The problem is not at the bottom. Having to pay some half-wit 40 grand a year to sweep a floor or pick weeds is not the answer to our country’s problems. The problem is at the top. Oligarchy. Monopoly. Antitrust is the answer. Competition is the answer. If you let people counterfeit trillions of dollars, they can and do buy everything. And they have. And then they raise prices. familiarize yourself with the concept of choke points. Think semiconductors. You can bring a whole lot of businesses to their knees just by denying them semiconductors. And they are doing it. The inflation we are seeing right now is not real inflation. It’s just price gouging. Raising the minimum wage will not change that. Minimum wage workers should be poor. Minimum wage should incentivize people to work more, work harder, work smarter. Monopoly. Oligarchy. Those are our real problems.
I mostly agree with you but I think the issue is multi pronged but, overall, I believe G.R.E.E.D is the biggest factor. Entrepreneurship and killing monopolies would be my focus.
You’d love the guy I met yesterday. He owns an Olympic equestrian center in VA. He also just won a contract with the IDF to supply them with his energy bar…Steady Energy/Soldier Fuel.
Choke points/Tolls? Yep….wildly profitable.
The problem is imbalance. When there is imbalance in nature it always ends up reducing the difference to maintain the biome.
Business is no different. If everyone had the balls to walk off of lines or whatever they work to prove how the top heavy companies with excess admin and 3 letter position holders soaking up wages that could leverage better production and job satisfaction as well motivating them to not lose said higher paying, with higher expectations, job would highlight just how useless the majority of upper echelon seat warmers are.
Shit heels are soaking companies dry of capital that is better used on front line assets. At least the ones that aren’t mouth breathers.
There is a correlation with top heavy companies that have shit front line wages being shit shows. At least the 2 fortune 100s I worked for were.
I am sure there are some with good upper tier management, but not many.
It is their chicken. They can fuck it how they want. Just dont be the wing holder.
ZFG, out.
P.S. Bob Nardelli is still a piece of whale shit.
Excellent point–and the vastly overlooked factor in healthcare costs. While GNA’s, CNA’s, LPN’s and even overworked RN’s, rehab teams and real treating physicians are paid paltry sums compared to the Admin people.
A medium sized Rehab company, dialysis company, lab/blood testing company ( often contracted and not part of the actual hospital staff)– these companies of 500-600 employees with contracts at several hospitals, nursing homes, ALF’s etc -they most often have redundant layers of “management.” They have a manager in bldg, a director, a regional director for each contract- PLUS they will have a VP of HR, VP of public relations, VP/CEO of finances, VP of marketing, VP of Corporate compliance, VP of public relations ( about 30 “vp’s” listed on some webpages)and all of their underlings in the office.. also an entire board of directors who does nothing except make irritating policy changes of issues that ain’t broke.. then you have the Owner/President who usually has a few made-up positions for family and cronies…. it’s ridiculous.
Meanwhile, a nursing assistant, for example.. may be changing patientssoiled linen, feeding the sick, changing briefs and dressing, bathing, distributing meds and answering call bells non-stop for $12 an hour ( often pulling double shifts.)
Patient care is going to crap as most of the ones who will slavishly labour like this for $350-400 take home a week are immigrants from Nepal/India/Bangladesh, Philippines, west africa, south america etc etc.
Meanwhile, people with no medical degree and/or have never treated a patient in their life are making 6 figure salaries because they know how to sit in the corporate office and bilk private insurance, managed care, TriCare, Medicare and Medicaid.
If the people who actually are up to their elbows in blood, feces, vomit, slough/eschar from wounds daily and hear the cries and moans of the sick and injured– if these people walked out like you said for a few days, things would change quickly. Unfortunately this can’t happen because people would die–lots and lots of people would die.
So we are stuck in a lopsided system and it’s not going to change until it crashes.
This whole country is about making money off the backs of the producers. Not to mention all the other fucken parasites bleeding the hosts dry. Always somw fuckers’ hands in other pockets.
ZFG, it’s happening already. Lots of businesses can’t keep their doors open because they can’t find workers, the welfare is just too rich. A Walmart had to close down in Chicago for Labor Day weekend because they didn’t have enough people to staff it. It never occurred to the Marxist crowd, that UBI meant that society could no longer function. And now it’s playing out in real time
UBI actually means universal basic idiocy. Nothing is free. Too bad most people learn the hard way.
All the fedgov lies about “prosperity” are just that – LIES.
$18 would not be above historical norms in terms of purchasing power for the basics. The case against minimum wage is one where the rest of society is far more functional than it is. The goal is to avoid exploitation and the current minimum does not achieve that.
Well…mightn’t no minwage speed up the coming of the lord cathartic rage, possibly?
Isn’t minwage, like stimmy checks, cheap bribery for the cheaply bribed?
Way less than 30 pieces of silver.
In which case, who really played-out-silver-mine shafted who? The cheaply bought & paid for is who puts the fix in.
Except, of course, that idée fixe is biological, already in, & so out it has got to come, in an endless gush.
In ’73 I was paid $1/hr. Cash.
Perchance, it were currency du jour?
Same machine ist nicht ‘per chance’ then, as now. Just smaller casino, ‘73.
Essential nature’s what scales up the servo-snake…& brings the drought…that dries up the medium…that overgrown & bloated serpent-servos outta’ davos, other OS’s, need to swim in.
Good friend & good guy Big Casino murders his good friend & good guy Little Casino. Every cops a criminal, & all the sinners saints – no honor among thieves (assuming LC was that…).
I’ve been saying this same thing since the 80’s – you will see a similar comparison in my TPB article :
BUT – my comparisons were made based on my own and my father’s professional wages, earned at around the same age but 30 years apart. The conclusion: its not just minimum wages, its ALL wages: minimum wages,working class wages,middle class wages, and even upper middle class wages whose real rate of return has fallen when measured by hours required to purchase the tangible (necessary) things in life. Only the 1% got ahead; 99% got the shaft.
Rising Prosperity.
Perhaps we don’t have rising prosperity, but rather Rising Debt! It’s a game, the 1% get it all through the fake currency system and the rest, well here you go.
Yes, why bother to address the criminal Federal Reserve, which has systematically transferred trillions upon trillions in wealth from the productive sector of society to the banksters, Wall Street, and other government-connected entities over the past 108 years. Let’s just pay everyone more from wealth we do not have, all to supposedly address a situation that cannot be repaired until those trillions are restored to the rest of society and the Fed is completely abolished along with all fractional reserve banking and central banking. If the wealthy were where it belonged, there would be more than enough money to pay people better, and likely it would already be happening. Two wrongs simply cannot make this right.
What do you call money?
Sound, market-based currency. Typically the market has chosen gold and silver over history. Eliminate the Fed and central banking, and that is what will be in circulation (though as I believe the market should decide, I don’t think that there should be any limitations other than enforcing laws against fraud).
My opinion is wages are stagnant because of stupid laws like minimum wage. But the elected fucktards are elected to control our lives, even though as a percentage most have never held a real job, where their pay is based on merit.
If I can mentally last, three more years and I’m done, whether I sell the business or not, done.
https://amac.us/bidens-killer-double-death-tax/?fbclid=IwAR31kshVfmWjoG-mqAMcpHWZ9m_YV3LlJqMEIjammENYDvYJ5SqojpwSRKw