I have mixed philosophical perspectives on the merits of a minimum wage, much less how much it ought to be. But this excerpt from Andrew Tobias gives a glimpse into how low the minimum wage is now relative to its level in years past.
It was $1.60 in 1968, equal to $9.33 in 2006 dollars and nearly $10 today in 2008. Except that it’s not nearly $10 today, it’s $6.50 . . . going to $7.25 September 1.Puts things in a different perspective, no?
So by September, when that final hike kicks in, the minimum wage will be about 27.5% lower, in real dollars, than it was in 1968.
Most know that the Republicans kept the minimum wage frozen at $5.15 for ten years and would have kept it there today if they still controlled the Congress. (“Good!” I hear some of you cry.)
Less frequently mentioned is that that comparison – the 27.5% drop in real purchasing power come September – is based on an adjustment for price inflation. Based on wage inflation – the increase not in average prices since 1968 but average wages – the working poor have fallen even further behind. Adjusted for wage inflation, the 1968 minimum wage was about $17 in today’s dollars, more than double what it will be in September.
This is not to say we could raise it anywhere near that high now.
But for those of you who believe, as I know many of you do, that even the hike from $5.15 was bad economics (but that cutting taxes on the rich and eliminating the estate tax on billionheirs is good economics), I thought these comparisons might provide additional perspective.