The liberal Democrats are making a major push for a "living" wage, which they say is $15/hour or roughly $31,200 a year, somewhat below what people responding to one of my hubs about the subject. Conservative Republicans oppose such an idea saying it will drive businesses under and then nobody will have a job.
Personally, I tend to side with the conservatives on this one, just without the hyperbole. I think the idea of a minimum wage, just like controlled rent, is very bad from an economic standpoint as it interferes too much with market forces.
But my liberal side won't accept a return to the terrible conditions prior to the minimum wage. When you read the history of that period, life simply wasn't worth living for many if you were a line worker.- there was no American Dream, just misery.
My solution for a long time now is an Earned Income Tax Credit much more robust than what exists today that provides a "living wage" to those on the lowest end of the pay scales.
What started this forum is the attached article. Specifically, a line from a business owner who said "... people should understand that some jobs aren't meant to provide a living wage." and that was a very jarring statement.
Fundamentally, many decades ago, I would have agreed with that, actually, I still agree but in today's world, that is not practical. He is thinking jobs for teenagers getting started or jobs for people just getting started with no experience do not need a "living wage". And I agree.
In practice, however, the people today who are making minimum wage are NOT those people by and large. They are people with families struggling to make ends meet. They are people in jobs where there is no possibility for wage increases no matter how much experience they have. If wage progression were fair, then maybe that business owner has a point - but not today.
Until the EITC can be improved or businesses start paying a "living wage" to experienced workers, then I am afraid the $15 minimum wage is a necessary evil.
https://www.cnn.com/2021/03/09/us/15-mi … index.html
Minimum wage jobs in our past were starter jobs, for people that were just starting out in the workforce. At this point, MW jobs have become jobs that are more permanent jobs, in many cases lifetime jobs. This is unfortunate, but must be realized.
In my opinion at this point, we need to raise the minimum wage. It's time America realizes we have over the past few decades become a caste system, and unfortunately, it may be time to realize we have a great divide in earning capabilities.
Why? In my view, it is a two-fold problem, partly due to growing social views of the more liberal ideologies and the race gap in higher education. These dual forces have worked to stagnant upward mobility, and rising inequality and the truth is damning. Five decades after the civil rights movement, American society remains hierarchical, exclusionary, and stubbornly resistant to change. So, we become a society that some can't get the proper education to strive, and some are provided wonderful educations but have ideologies that provide them an excuse not to strive.
In my view, we are quickly on the way to a society that has rich, poor, and few middle class. A very destructive caste system. But realistically at this point, we need the latter end earners that are becoming a larger percentage of our workforce to have higher wages to survive.
Will hiking the minimum-wage cause problems? Most likely it could. Snowballing into big business cutting the workforce, and sending many onto the welfare rolls, and also cause our economy to plummet. One has to make money to spend money... Plus would it be an incentive to some to settle for long-term jobs that pay the minimum? Will our country become a rich/poor system? Lot's to consider...
Take a look at my response with the BLS numbers and see if you still think the same about who, (MW), workers we are really talking about.
The report indicates that those MW jobs that do become permanent or lifetime jobs become such because of the worker filling them. Any other argument would demand that the conversation be about the workers' needs and not the workers' value.
I will read the article, and attempt to find something more current. I can see at a quick glance it has stats, and I love stats. I want to look up an article I read a bit ago on a study Brookings did in 2020 on low-wage workers in America. It was eye-opening.
I found the article, it was posted by Brookings. I read the informational article you offered, the stats shoot my theory out of the water. However, read the Brookings info.
Nov 2019 --- https://www.brookings.edu/research/meet … workforce/
A great article to dig deep. And, a lot to absorb. I think the only negative was they did not define what a low wage earner was by wage/hr.I did like the recommendations at the end What was revealing to me was this quote in one recommendation, "There are simply not enough jobs paying decent wages for people without college degrees to escape low-wage work." I will have to ponder that.
You pointed out something I also grab from the article. It is one reason I predicted the possibility of the country quickly moving into a caste system. I see fewer middle-class wage jobs due to the on slot of technology. And even then many tech workers are from other countries working here on H-1B visas.
https://www.mercurynews.com/2018/01/17/ … port-says/
Permit me to share --- My son owns a software company, his company employs about 800 employees, Many are working from other counties. He has Offices here in San fan, Michigan, and Philadelphia. A large percentage of his employees here in the US are from other counties working here with H-1B visas.. He pays them the same wage he would pay an American, which puts them in a high wage bracket. My son makes every effort to hire an American and has for years. He has a problem with their work ethic and showing up to work. Don't get me wrong, he has a majority of American workers. However, it took him some time to gather a dependable American staff of programmers.
He felt with some he had to let go that their ideologies played a big part in their work ethics and perhaps putting their livelihood second to their ideologies.
So, will the new ideologies add to eventually promote a caste system? Are some just opting out of jobs that demand more than they had hoped to give? Will we end up with those that strive to be part of a class that hopes to be wealthy and those that just don't care about anything beyond what minimum wage will provide them? Even scarier will some just hope for Federal support?
Time to admit Middle-class jobs are dwindling...
Most of my employees are liberal and they are very hard workers. Some are conservative, and they are very hard workers as well. Hell, I am socially liberal but my wife complains I am workaholic.
I don't think political ideology is a big factor at all. I think age has more to do with work ethic than ideology.
Studies consistently show that "those that just don't care about anything beyond what minimum wage will provide them" are few and far between. It is a conservative myth, that most people have no desire to improve there lot.
The reason capitalism works and socialism doesn't very well is by and large almost all people want to work and prosper. Socialism dampens the profit motive while capitalism promotes it. Capitalism works because almost all people want to work regardless of their economic (or political) status.
https://4thworldmovement.org/poverty-my … want-work/
https://www.theatlantic.com/business/ar … od/555119/
I found another source where Brookings defines "low wage" as: "low-wage workers by our criteria. They earn median hourly wages of $10.22 and median annual earnings of $17,950."
I will argue that a workers' wages have never been about workers' value to the business. Line workers, by and large, are paid less than their value and senior executives paid much more than their value to the company.
Now, if this were 1950s, 1960s or 1970s, I would not say that. Back then, wages at all levels were much more in line with what the workers' value to the company was. That is not even close to being true today.
It was interesting reading the comments in your link.
Bettie Douglas says she is earning enough to live, but wants more.
Andre Benoit says he only gets about 30 hours per week of work, so needs to be paid more per hour.
Latonya Jones-Costa loves her job, but only works 30 hours per week so must be paid more in order to live. Not work more hours, or get a better job, but be paid more for the same work.
Krista Melone has a plan to inflate her prices so she can pay more, saying that the country should do the same. She somehow forgets that this is called "inflation" and gets the wage earner nothing.
Reneen Muqbel wants a higher wage so she doesn't have to work full time.
Bottom line is that the minimum (though all earn more than minimum wage) workers want to keep their current job, work fewer hours and make more money doing it. I have trouble following this line of thought: if you don't make enough then find a job that pays more, don't demand more for the same task.
EITC: European countries have talked (seriously) about this and given it up as a bad cause, and for very good reasons. Beyond that there are several questions that have to be answered.
First, where does the money come from? Simply soak the rich some more, driving business offshore again and forcing them to pay ever more than "their share"?
Second, what about those on disability, social security, etc. - those that receive minimum wage (or less). Will they get that "free" money, too, or just the workers? Will welfare disappear, leaving those people with no additional income?
Once a "living wage" is handed out for no return, will we have millions happily living off of it rather than producing something of value and helping to support the needs of the country? I suggest we will.
"Bettie Douglas says she is earning enough to live, but wants more." - Try phrasing that more honestly - "Bettie Douglas says she is earning enough to barely live, but wants more. Belittling that desire is very conservative of you.
"Andre Benoit says he only gets about 30 hours per week of work, so needs to be paid more per hour." - AGAIN you try to deceive us? WHY?? He never said anything]/b] getting 30 hours per week. What he DID say was he "he works every hour he can,". So what are you suggesting? That he stop taking his medicine and stop going to college to make ends meet? Very conservative of you.
"Not work more hours, or get a better job, " - YOU do understand we are in the middle of pandemic-related recession, don't you? Guess not.
"Krista Melone has a plan to inflate her prices so she can pay more, " - AGAIN you deceive US, WHY?? What she [b]actually said was that as Oregon's minimum wage increases, she will increase her prices so that she doesn't go out of business. It sounds like you want her to go out of business - WHY??
"Reneen Muqbel wants a higher wage so she doesn't have to work full time. " - ONCE MORE you deceive US, WHY??? The fact is, she didn't say that at all, and you know it. What she did say is "... and still make enough to pay my bills and necessities and go to school," - GEE, isn't that so unAmerican.
I won't cover your comments about EITC since you clearly have no idea what that is.
BTW, are you going to burn, or send back your stimulus check? I seriously doubt it.
I'm at a loss to understand just how the COVID crises negatively impacted the finances of prisoners. With all their needs met by society, why do they need more? To buy "care packages" of junk food?
Although Democrats don't seem to realize it, this package is supposed to be about helping those suffered in the pandemic and get the economy started again. Not purchase luxuries for inmates.
"Although Democrats don't seem to realize it, this package is supposed to be about helping those suffered in the pandemic and get the economy started again. Not purchase luxuries for inmates."
Leftist ideology does not play well with common sense or finance. It's this kind of thinking that could crash our economy.
I do hope this bill fails. To much crazy pork.
It won't fail. And the Democrat pork will continue not only unabated but growing.
Yep, that way more people can suffer. They will love you for that, especially those whose unemployment runs out.
As for so-called Leftist ideology (not really sure what that is) and finance, you are provably wrong. The FACTs are, conservatives do a terrible job with economics.
From 1815 to 1933, with few exceptions, conservative economics ruled the day. During that time there were 25 or so major depressions, recessions, and panics, each one worse than 2008,
Then lo and behold, 1934 and liberal (that is how you spell leftist) economics (Keynesian) happened and all of those "major depressions, recessions, and panics,"? They stopped dead in their tracks until conservatives got hold the reins again in 2001.
Also, historically, job growth has been much better under liberal administration. GDP growth is generally more robust and long-term under liberal administrations. I have written a host of hubs and a book on the subject, all backed up by data.
Bottom line, conservatives are simply terrible at economics. All conservatives are good at is taking America backwards.
What "luxuries" are being purchased by inmates with what?
Perhaps you've never been either an inmate or a friend of an inmate. They can purchase "care packages" of chips, candy and such, they can purchase electronic tablets, and earbuds. They can purchase writing materials, and drawing equipment. They can buy books.
There is a lot of luxuries they can buy. And now they can do it at the taxpayers expense.
But you were OK when Trump did something similar?
https://www.cnn.com/videos/politics/202 … ot-vpx.cnn
BTW, Why do you so much enjoy finding a single bad apple and then concluding the whole barrel of them are bad, at least when it a Democratic initiative.
Yet, with Trump, you appear to do the exact opposite. You find one good apple in a barrel of bad ones and pronounce the barrel good.
Why do you treat the two situations so differently?
I find that totally amazing.
Some articles say there will be job loss and slow economy. Others say it will lift people out of need for public assistance and improve economy. Flip a coin, though I lean toward the latter. Forty million people will be affected. I think it is important to note what the proposed bill said.
2021 - $9.50
2022 - $11.00
2023 - $12.50
2024 - $14.00
2025 - $15.00
At Statista Median Hourly Earnings . . . the landing page shows the median hourly wage growth from 1979 - 2019 where for 2019 it is $15.35. So, seems to me many are already making over $15 much less $9.50. I think you will find $10/hr is common.
At Paycor it shows minimum wage by state (list & map) where it shows 20 states have a $7.25 minimum wage while 22 at or above $9.50. So, what will be the impact? Definitely for the states at $7.25 there will be a bigger economic impact, yet we don't know what their median hourly wage is. I am sure the climb from $9.50 to $15.00 will have the greatest impact.
I am not in agreement minimum wage is to support a family over time, yet in some cases that is reality. I do think $7.25 is outdated and needs to go up. To me a starting job in the labor market is paid by the value to the business and market value of labor to region. It is positional or job description. And, minimum wage. For instance I know I will get paid more in San Diego for the same job description than here 30 miles away, yet the cost of living is about the same. To me where the business sits in the free market for its region and labor market may determine whether minimum wage is used rather than above it.
"To me a starting job in the labor market is paid by the value to the business and market value of labor to region."
And there is the rub, for many do not agree that wage should equal value. Instead wage must equal need, without ever specifying what that need is to apply to. Whether a single person, a family of 4 or even more people; it is all "need" and must be paid regardless of value returned.
Doesn't work too well.
Nope, still wrong Wilderness. Historically, wages for the average worker in all but a few special economic situations, are determined by the employer who will pay the lowest possible amount they can get away with unless made to do otherwise.
That said, there are exceptions. Smaller businesses like mine or Ji Hye Kim's or Krista Melone's, when they can, often pay higher than minimum wage. I finally got everyone in the company up to $12/hr and are on a path to $15. You know who doesn't? Large companies who can afford to do so.
Then you aren't putting a market value on labor. Everything else, yes, but not on labor.
The "value" of labor is not, in my mind, determined by how much profit they produce (most produce no profit), but on what the cost of that labor is in the open market.
Example; I am currently looking for a specific car, one that is very scarce at this time. Market value is well above MSRP (the price, or value, set by the manufacturer, which is not binding), and if I want to buy I will have to pay that. If it is worth that to me, I will do so; if it is not I will not. If I do, though, I will purchase it at the lowest price I can find.
There is zero wrong with that; it is how things work all over the world - until government sets artificial prices having nothing to do with value. Whether labor or products this is true; everyone will purchase at the lowest price they can find commensurate with the effort they are willing to put into the search. Labor is not some vastly different "product"; it is an item for sale and the buyer will purchase at the lowest price they can.
Another example - at the height of the recession the workers in the company I worked for took a pay cut. The option was to take a job cut, so we all took the cut in pay. Eventually, competition dictated a raise in pay as the economy improved and jobs returned, and that's the way of it; in a free enterprise economy it will swing one way to a sellers market, then back to a buyers market in a never ending cycle.
It's what keeps prices affordable, for just as an employer will pay the minimum amount possible, (s)he will also charge the maximum amount possible. If competition for raw materials (labor) increases so will the cost, and the price, of the finished product. If it stays low then competition will dictate that the cost of the finished product also be low; if the price is set too high (perhaps because of labor costs out of line with the competition) then the product will not sell.
I am putting a market value on labor. Except in the few instances of when there is an undersupply of labor, business, especially large ones, will pay the lowest possible wage to line workers and the highest possible salary to senior executives.
In economies such as ours is now for low paid workers, which is similar to the days before minimum wage, workers can and are being had a slave labor rates, which is anti-social and darwinistic. Conservatives see no problem with that, the best I can tell, but the rest of us do.
Are you one who suggests morality and ethics do not belong in the business world? Both of those characteristics work against a better bottom line and interfere with a pure market economy. Are you one who believes a person should not be paid according to how much they actually contribute to the bottom line based on their skills and abilities? That also works against a better bottom line and interferes with a pure market economy.
And btw, automobiles are a poor substitute for peoples lives, from a liberal perspective.
Here is some data that might help focus your topic.
A BLS report on 2017's numbers found that there were about 165 million workers in that year and about 80.4 million workers are paid by hourly rates. Meaning that you are talking about approximately one-half the U.S. workforce.
The report found that approximately 542,000 of those 80.4 million earned exactly the $7.25 federal minimum wage. That's about .006% of the hourly workforce.
Would it be safe to say this topic concerns about .006% of the workforce?
The report also says this:
"Age. Minimum wage workers tend to be young. Although workers under age 25 represented only about one-fifth of hourly paid workers, they made up about half of those paid the federal minimum wage or less. Among employed teenagers (ages 16 to 19) paid by the hour, about 8 percent earned the minimum wage or less, compared with about 1 percent of workers age 25 and older."
That would seem to support that the near-majority of minimum wage workers are teenagers, or young folks most probably beginning their entry into the workforce.
The report tables show that the next largest percentage is 25 - 34 yrs-old, at 14%, , then the numbers drop to single digits through the work years until you get to the 65 and older group which is also about 14.2%
If we remember that it is the Federal minimum wage being discussed, this report says that we are talking about young entry-level workers and older income-subsidizing workers.
Do you think those numbers "are NOT those people by and large," when discussing the context of how commonsensical it is to apply those presumptions, (aka Wilderness' position), to this "Living wage" discussion?
Here is the report link: Characteristics of minimum wage workers, 2017
I led will all that because I agree with most of your thoughts—before you noted the "liberal" considerations that caused you to change them.
If it can be accepted that we are talking about only 37% of that minimum wage workforce in an age bracket that would align with families and other financial responsibilities, then aren't we also talking about a segment that would be very much affected by life choices?
GA, I'll need to read the report, but to establish a baseline, let me offer some results from a long-running hub I have on wages.
The question I ask is:
"What Do You Think is the Minimum Annual Income a Working Family of Three Needs to Barely Survive With Dignity In America Today" and I tell them to think of the family living in Omaha, NE. I am also think the family is made up of one parent and two kids.
First, I pose the question looking for a single answer - I haven't updated it in a while but currently stands at $33,975 or $16.19/hr. At the time I last updated these numbers, there were 90 respondents of which 13 identified as being on the Right, 40, on the Left, 24 in the Middle and 13 something else. Male and female were about evenly split.
Now in an attempt to validate the point estimate, I had the respondents say how much is needed in 13 major spending categories. The sum of those averages totaled $37,884 a year or $18.21/hour. The median wage in America at the time was $16.87/hr while the mean wage is $22.33/hr.
Keep in mind that my question was oriented to Barely Survive With Dignity
Also, don't be fooled by what seems to be a low sample size. As the data came in, after about 40, it stopped taking wild swings with each update and started setting down to a meaningful average.
A while back I did a good sized spreadsheet comparing prices from the 60's to today's costs. Except that I used hours worked rather than dollars to figure costs, both at minimum wage and mean wages in both time periods. Two separate comparisons.
The results were instructive. In nearly all categories it is cheaper to live today than it was then, and that includes a big improvement in standard of living. Most day to day costs showed that, with only the cost of college going up, and that wasn't by much. As colleges have gone from a institution of higher learning to 4 years of play time PLUS that higher learning that wasn't much of a surprise. Health care rose as well, but then the health care in the 60's is hardly comparable to what we expect today.
Nearly all big expenses, from cars to refrigerators to TV's went down, and electronics of all kinds fell drastically. Housing went up...until I figured the cost per square foot rather than per house or apartment, and that doesn't figure in the much higher quality of today's homes and the addition of many accessories (wall to wall carpeting, built in appliances, air conditioning, etc.). Groceries have fallen nearly across the board.
While I didn't expect to see a large increase in cost of living, I certainly didn't expect it to fall...but it has. And it has done so while improving how we live.
How did you normalize hours across time? In the same fashion that a dollar in 1960 does not have the same value as a dollar in 2021, neither do labor hours.
I presume you did something like use the number of labor hours to produce a pound of cabbage in 1960 and compared it to the effort to produce the same pound in 2021? The idea being that if it took fewer labor hours in 2021, then the cost went down?
The problem I found was that I could find no definitive method of converting 1960 dollars into 2020 dollars. Lots of calculators, none of which agreed with each other.
So I used the minimum wage from the time periods to calculate how many hours of work was required to buy a gallon of milk, a car, whatever. Then did it again using mean wages, assuming that the figure for that would be more correct than a correction to today's dollars.
Yes, hours ARE the same over time; whether in 1960 or 2020, we each have 24 per day to spend. If it takes 3 of them in 1960 to purchase a day's housing and 2 in 2020 then the cost went down. Keep in mind I wasn't looking for the value of labor (what workers should be paid) but the value of everything else, relative to a workers time.
But not produce a pound of cabbage in 1960; to buy that pound of cabbage.
There were problems of course. Not every web site agrees that a gallon of milk cost the same in 1960, but most were close to each other. I used WalMart prices from a dozen different cities across the nation for today's groceries and many household items - easy to do with a WalMart app (again, it was interesting to see that it did not vary much even between NYC and Kalamazoo). But some things, like car insurance, I finally gave up on and didn't include it. Clothing I did, but only very basic (jeans and a T shirt kind of thing) - OK as I wanted the cost of living, not the cost of luxuries. Cell phones, even though much more expensive than land lines, I figured simply as phones. Some things virtually everywhere today were not available then - cable TV, for instance, and a microwave oven was hideously expensive then.
"If it takes 3 of them in 1960 to purchase a day's housing and 2 in 2020 then the cost went down. " - Here is the logic problem I have with that. Let's say today you are earning $10/hr today and tomorrow you get a raise and earn $12/hr. Are you saying housing got cheaper in that 24 hour period?
I am just asking the question but am still contemplating the implications. I have googled the subject but just keep coming up with "how to calculate direct labor hours". Have you got a source that discusses you application?
No, I'm saying you had to work fewer hours at $12 per hour to pay your rent than you did at $10 per hour. Which is just what I found using national averages over 40 years; the hours needed to purchase every day things went down.
I guess you could say it got cheaper...for a single individual (you) if not for the average person. Of course, that's a key consideration; I wasn't looking at individuals but the average wage earner throughout the country. We DO see things go down in price (average) though; one example is a TV. Or most electronics, for that matter; they have all fallen in real dollars, or in hours worked to buy, while at the same time increasing in quality/performance.
No source; I just made a spreadsheet, using several sources for prices in the past, WalMart prices for today's things (mostly - they don't sell houses, education, major appliances or cars) and govt. sources for average incomes then and now. A little further examination showed that many people back then worked considerably more overtime than is common now, and that will make their total purchasing power greater.
One more thing I should mention; after I was finished another thought occurred; that minimum wage jobs used to be commonplace, but are quite rare today (didn't GA give the figure of .06% of the workers somewhere here?).
Perhaps I should have anticipated the results; we now "waste" a great deal of money buying luxuries that few could afford years ago. Boats, RV's and other big toys. $10 coffee at Starbucks. We have a restaurant (usually fast food) on every street corner; someone is supporting those and it isn't just the rich. Housing has nearly doubled in size. Vacations, with long travel distances, is far more common. Just look at the popularity of storage locations; we can't even keep all our junk in the bigger houses we buy! We are buying "luxuries" - items not necessary to live a minimal lifestyle - far more than we ever did half a century ago, even as we work fewer hours. And that includes all but the very poorest (think homeless on the streets).
"No, I'm saying you had to work fewer hours at $12 per hour to pay your rent than you did at $10 per hour." - Yes, that is true, but I fail to see how that is relevant.
Pardon me while I think out loud.
Let me go back to your original thought - You wanted to compare "prices" of goods and services between two points in time. You were not satisfied with using the official inflation rates to do that so you thought "hours worked rather than dollars to figure costs" might be a more useful denominator, putting the result into "$ per hours worked". units.
That is also the units for "productivity". It seems, then, that you are looking for changes in productivity to make an assessment of whether something is more or less expensive today when compared to yesterday. Which brings me back to the cost to produce a widget (or cabbage in my earlier example). The question is, does that work? Is that the complete story? I am not sure it is.
You said "that minimum wage jobs used to be commonplace, but are quite rare today (didn't GA give the figure of .06% of the workers somewhere here?)." - The figure GA gave is the number of people earning exactly $7.25. The same article pointed out there were a few million people earning less than the federal minimum wage. Not included in the BLS numbers are how many millions of people are earning at or below the various State minimum wages (none of which was higher than $12/hr in 2017, I think) but above $7.25. Consequently, that .06% is an extremely deceptive number.
An interesting fact that if you put federal minimum wages into 2011$ you find this anomaly: In the 1960s, the $7.25 minimum wage was worth $7.91. But, in the 2000s the average was $6.46 - a significant decrease over that period. So people earning $7.25 today are much worse of than the same person earning $7.25 when it was first establish!
"Let me go back to your original thought - You wanted to compare "prices" of goods and services between two points in time."
Not precisely, but not entirely untrue, either. The goal was to see if it is true that it is much more difficult to "make a living" today than it used to be. It's not about productivity (although that has certainly lowered "prices"), though.
Centuries ago the work day was dawn to dusk, and when candles came around, longer. That bought enough to eat, clothing and a roof but not any more. Then came the industrial revolution and things got easier, with shorter work periods. But now we see so many making the claim that they can't live on minimum wage for 40 hour weeks, where it used to be that "living wage". Is it true? That was the question I set out to find an answer for, and I believe I did.
Your last paragraph illustrates why I chose to use the "work hour" as a gauge rather than dollars, for nowhere did I find agreement on the conversion factors. Your final statement is just not true, and I believe that the primary reason is that conversion. It can only come from a collection of prices compared over time, but just what collection? I chose the basics - food, housing, transportation, etc. - while others choose different items to determine what a dollar would buy then and now.
Wasn't, and still am not, interested in various state minimum wage figures; only that of the federal government. And while I am aware that there is a tiny portion of the population (not "millions") that actually earn less than minimum, that number is truly minute when compared to the rest of the country. Never forget that "earn" means every dime taken in during the job; it includes things such as tips and can even include perks such as company cars. Mostly not those perks, but sometimes the tax code requires they be included. (If tips were gifts rather than earnings, the recipient would not owe taxes on them.)
"The goal was to see if it is true that it is much more difficult to "make a living" today than it used to be. " - On that score, if you earn federal minimum wage now ($7.25) and you earned federal minimum wage in 2009 when the current rate was established ($7.25), you are clearly worse off today. Why? Inflation. An hour of work would buy you more in 2009 than it will today.
Tell, why do all financial institutions, gov'ts, businesses use the BLS CPI (or some commodity specific variant of it) to do their calculations? BTW, BLS uses similar methodologies as you describe to figure the CPI - a "basket" of goods.
Why aren't you interested in state minimum wages? Isn't that what people earn there?
( I put this here so I can easily refer back to it on my next comment this evening. "So I used the minimum wage from the time periods to calculate how many hours of work was required to buy a gallon of milk, a car, whatever. Then did it again using mean wages, assuming that the figure for that would be more correct than a correction to today's dollars.")
You are correct that one was worse off now than in 2009. Why? Because the minimum wage was far too high in 2009? Because in our zeal for "helping" the poor we lifted them considerably higher than they were in 1960?
What is in that "basket" of goods? Lobster meals, Cadillacs and yachts that normal people don't buy? To some degree I have zero doubt that it is - that's the purpose of the CPI. Too look at ALL the products, not just those that are needed to live on.
But that's not what I wanted - I wanted to know if the man in the street, and the man at the bottom of the income ladder, had it worse. Not the guy earning 100,000 per year - the lower half or quarter of the nation. That's who gets that minimum wage, after all, and even who gets the median wage. It serves no purpose to add in the cost of a maid or butler for the rich when the people I'm interested in will never purchase those services. I don't care what the cost of a Caddy is, not when the people I'm concerned with will buy a Ford Pinto. I don't care what the cost of attending Princeton is when they will only go to a state university.
At least that's what I came up with when considering why those conversions from past to present dollar values varied so much and didn't match the reality of what I saw happening. Do you disagree? Do you think that the CPI only fills the "basket" with common, everyday products the poorer of the country will buy? Does it contain only the Ford Pinto's or an average of ALL the vehicles, from the Pinto to a Rolls Royce?
First. there is this about the CPI
"The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a representative basket of consumer goods and services. The CPI measures inflation as experienced by consumers in their day-to-day living expenses. Indexes are available for the United States and various geographic areas. Average price data for select utility, automotive fuel, and food items are also available. CPI indexes are used to adjust income eligibility levels for government assistance, federal tax brackets, federally mandated cost-of-living increases, private sector wage and salary increases, poverty measures, and consumer and commercial rent escalations. " - I am surprised you did not know this.
Here, you can do some research, I am sure the answer to your question is in here somewhere. - https://www.bls.gov/opub/hom/cpi/
Second, you never answered my question about why does everybody else but you use the CPI or one of its components?
Third, I will test your theory:
In 1970, a pound of apples cost $0.1475. In 1970, the minimum wage was $1.0 and the mean hourly wage in 1970 was roughly $3.00 (I couldn't find a median wage, but back then, the mean and the median should be roughly the same since wage inequality was nowhere near as extreme as it is today). So to do your conversion, that means in 1970 you had to work 0.15 hours to buy a pound of apples at minimum wage and 0.05 hours at the mean wage.
Now let's look at 2019. Apples cost $1.62/lb. Minimum wage was $7.25 and the median wage was $23.40. Converting you had to work 0.22 hrs to buy that pound of apples at minimum wage and 0.07 hours at the median wage (and 0.06 hrs if I use the higher mean wage.
Note that in all cases, using your method, apples cost more in 2019 than they did in 1970. Would you expect other fruits to behave any differently?
Next we will look at a different type of common product whose form, fit, and function is roughly the same over time..
Sorry, picked off the wrong number for 2019 median wage. It is $15.35 according to https://www.statista.com/statistics/185 … 20dollars.
That makes the conversion to needing to work 0.11 hours in 2019 to buy a pound of apples. Isn't that much worse than the 1970 rate of 0.05 hours per pound?
Using the WalMart price of $1.03 for apples, the cost today is .067 hours, just above what it was in 1970. Which ties in with what I said before; the price of apples went up slightly.
Eso, there are problems with whatever method is used. But I do stand by what I chose as the closest I can come to what the poor/middle class paid, then and now, for everyday living expenses. It is much closer to what I see happening today, and what I lived through then.
And I see the biggest difference in that "basket" of goods (which goods are chosen to include) and the price used to cost them out (average nationwide for every store). While that is most reasonable for average costs of everything, too much of it is not applicable to the people I'm concerned about.
LOL Coincidentally, you picked one of the few things that increased in price on my spreadsheet! But there are still problems. First, I think you have the wrong minimum wage in 1970 (didn't check the average). Second, the price of gala apples, from the WalMart app for Meridian Id. is $1.03, giving a price today of 0.14 hours worked: it is actually a little cheaper than what you show for 1970.
It is this kind of thing that makes me do my own research where I can. Your price of apples is likely an average country wide for ALL stores selling apples, including the high priced ones, but that is not where the poor shop. It thus gives a very false picture of what it actually costs to live.
" from the WalMart app for Meridian Id. is $1.03, giving a price today of 0.14 hours worked: it is actually a little cheaper than what you show for 1970." - which is my point regarding the weakness in your methodology. My price was from California
As far as the official federal minimum wage, you might find this useful
https://www.dol.gov/agencies/whd/minimu … tory/chart
I understand that prices vary from different locations. But I found it wasn't a whole lot; I used Meridian, Id. (Boise), Richmond, Va., Anaheim, Ca. and Alexandra, La. Looking for different locations as well as different city sizes, then averaged them for a general price Country wide. I just got lazy for here on this thread and used what was set up on my phone )
On the spreadsheet from the past I also used various sites for various prices through the 60's, not one particular date. I was unable to find much range of products for a single year. As I recall, all the groceries were from one site, but other things - vacuums, cars, TV's, etc. came from a variety of sites. Again, best I could do.
The minimum wage chart agrees with what I used, but then that is a pretty fixed thing, without the need to interpret, choose (except for a handful of minor things) or anything else.
So, I found at least one example of where your methodology ends up with a different answer than you suggest. In looking at other commodities, I found their prices vary so much over time that that I can make a case for or against you, depending on what timeframes I chose.
Which is why I leave it to the economists to do a proper job of figuring out the CPI which is validated by the fact that everyone else but you uses it.
Your response is the reason I offered my original 'focusing' comment. You are mixing apples and oranges; minimum wage vs. living wage, minimum income vs. living income.
I would not argue the points made in your response above, relative to the real cost of living, (aka a "living wage"), but I would argue that they are unrelated to a "minimum wage" discussion.
Your topic is about a Federally mandated minimum wage. I think the first important consideration is who is that minimum wage intended to apply to. I have previously felt that it primarily applied to those just entering the labor force, (teenagers and young folks), and those older folks, (65 and over), working to supplement their income. It was never, and should never be, intended to apply to workers with other financial responsibilities. I think the quoted BLS report supports this concept.
I agree with the thought that a minimum wage concept is the first step of a climb, not the plateau of a stair landing somewhere along the climb.
I think this is the most misrepresented point in the $15 minimum wage argument. In reality, every increase in that first step that is the minimum wage will have to be replicated in all of the other steps in the climb to the landing.
As has been noted before, if you worked your way up from $7.25 an hour to a current level of $15 an hour, and then a new worker came into your old position with a starting boost of $15, aren't you going to be justified in demanding you get the same boost? Or is it equitable to just wipe out the effort it took for you to get from $7.25 to $15?
The minimum wage increase will not just affect the minimum wage worker, it will affect all hourly workers.
Opposition to a $15 minimum wage is not a conservative fight against the poor getting a little more money, it is about the misapplication of the concept.
Following the thread and still researching here and there I found a great article sharing differences between minimum wage and living wage. Its emphasis is a family of four. It opened my eyes to how much it varies by state. Maybe that adds to the arguments between red and blue states regarding support of it. Anyway the article is Many Americans, especially families, can’t live on a $15 minimum wage by CNBC Feb 2021.
And for a deeper look there is an MIT.Edu calculator for state then by county for living wage needed. It is for single, two/one working, and two/two working for one through three kids. Living Wage Calculator.
I checked for where I live San Diego county and living wage for a single person no kids is $21.26, so $15 minimum wage won't reach living wage needed. Then I checked for Brazos county in TX where family lives and it is $13.36, so $15 would exceed living wage for a single person.
I never cease to be amazed at how much angst conservatives feel when a poor person receives a few hundred dollars from the government. Those same conservatives blithely ignore the wealthy buying their way into bailouts and tax breaks that put hundreds of millions of dollars in their pockets.
For the record, I would be opposed to prisoners receiving stimulus checks, but in the grand scheme of injustices it ranks really, really low.
Just look at the petty focus of the GOP lately. It's not only the the party of Q but also the party of Waaaaahhh!
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