$9 Minimum Wage Not A Living Wage

Minimum wage
Source: Washington Post

President Obama’s proposed $9.00 minimum wage (by the end of 2015) would still not be a living wage, and would even leave families below the poverty line.

In other words, raising the current minimum of $7.25 an hour by so little does almost nothing to address the problem of rising income inequality in America. If you adjust for inflation (see graph), you see that the minimum was around $10 an hour in current dollars in the late 1960s. Dean Baker:

It is important to realize that this was not always the case. The federal minimum wage was first put in place in 1938. From that year until 1968 when its value peaked, the purchasing power of the minimum wage increased by more than 140 percent. As a result, minimum wage workers saw a sharp increase in their living standards. Over this 30 year period, low wage workers shared in the gains of the economy as a whole as the minimum wage rose in step with productivity growth.

If workers at the bottom had continued to share in the economy’s growth in the years since 1968 as they had in the three decades before 1968, we would be looking at a very different economy and society. If the minimum wage had risen in step with productivity growth it would be over $16.50 an hour today.That is higher than the hourly wages earned by 40 percent of men and half of women.

It’s important to remember that as long as the minimum wage is not a living wage, taxpayers make up some of the difference in terms of social safety net programs like SNAP (food stamps), and low-income rent subsidies. This is, in effect, a gift to employers who pay poverty wages.

More info:
The Minimum Wage: Myths & Facts

UPDATE: Half of us are poor or barely scraping by.

The latest Census Bureau data shows that one in two Americans currently falls into either the “low income” category or is living in poverty. Low-income is defined as those earning between 100 and 199 percent of the poverty level. Adjusted for inflation, the earnings for the bottom 20 percent of families have dropped from $16,788 in 1979 to just under $15,000. Earnings for the next 20 percent have been stuck at $37,000.

  1. #1 by brewski on February 19, 2013 - 2:58 pm

    “President Obama’s proposed $9.00 minimum wage (by the end of 2015) would still not be a living wage, and would even leave families below the poverty line.”

    Factually untrue.

  2. #2 by Richard Warnick on February 19, 2013 - 3:10 pm

    No, it’s true. Read the link.

  3. #3 by Larry Bergan on February 19, 2013 - 5:59 pm

    It’s already started.

    Every time this issue comes up, the business owners start making threats, but after so many years of people not being able to support businesses they otherwise would, it just may be difficult for those companies to up the wages.

    Personally, I’ve become accustomed to not spending money on anything.

  4. #4 by brewski on February 19, 2013 - 6:05 pm

    I did. It’s false. Obviously. It’s arithmetic.

  5. #5 by Richard Warnick on February 19, 2013 - 6:51 pm

    Oh, come on, brewski.

    40 x 52 = 2080
    2080 x $9 = $18,720

    Projected 2015 poverty line = $24,635

    $18,720 < $24,635 QED

  6. #6 by brewski on February 19, 2013 - 7:19 pm

    Why are you assuming that in a family of 4 that there is only one person working?

    What sort of sexist Leave it to Beaver world do you live in?

    $18,720 x 2 = $37,440

    $37,440 > $24,635
    QED

  7. #7 by Larry Bergan on February 19, 2013 - 8:26 pm

    June Cleaver seemed to be happy enough raising the boys. Ward wasn’t a bad man. I don’t remember any beatings.

    If Ward HAD beat June, she could have left him if she could earn a living wage.

    No?

  8. #8 by brewski on February 19, 2013 - 9:30 pm

    Sexists always want to control women and keep them cooking and cleaning. Your true colors come out.

  9. #9 by Larry Bergan on February 19, 2013 - 10:46 pm

    Stop flailing brewski.

    It’s ugly and it makes me sad.

  10. #10 by brewski on February 19, 2013 - 10:58 pm

    You said it, not me. “June Cleaver seemed to be happy enough raising the boys”

    There there little dearie. Why don’t you get your nails done and not worry about all that thinking and stuff.

  11. #11 by brewski on February 19, 2013 - 11:06 pm

    “In areas of low immigration, only 2 percent of the wage change can be attributed to increased
    immigrant representation in the work force. In areas of medium immigration, 14 percent of
    the wage drop is due to the larger immigrant share among the low skilled, while in areas of
    high immigration, the influx of immigrants accounts for 43 percent of the 7-percent decline
    in wages experienced in these areas…. In Los Angeles [an example of a high-immigrant area], the change in the proportion of natives and immigrants accounted for more than half of
    the 9-percent decline in real wages of low-skilled workers.”

    Maria E. Enchautegui, Monthly Labor Review, October
    1997, p. 8.

  12. #12 by Larry Bergan on February 20, 2013 - 12:17 am

    Oh God! Here we go!

    Right from June Cleaver to those evil immigrants who came over here, specifically to drive down our wages and get healthcare in the country that doesn’t have healthcare.

    You’re killing me, brewski.

  13. #13 by brewski on February 20, 2013 - 7:47 am

    The lefties keep arguing for lower wages. I don’t know why.

  14. #14 by Richard Warnick on February 20, 2013 - 8:30 am

    brewski–

    You might want to get in touch with reality. A second minimum-wage job in a low-income family doesn’t make up for the additional costs – a second car, day care, etc.

    And $24,000 is an absurdly low poverty threshold. Barely covers rent and food, let alone utilities and gas.

  15. #15 by brewski on February 20, 2013 - 8:53 am

    They get free day care. Plenty of kids at my kid’s school get free day care.

    Ah, so now you are moving your own goal posts. Nice trick.

  16. #16 by Richard Warnick on February 20, 2013 - 9:36 am

    Not moving post at all. Read the post.

    President Obama’s proposed $9.00 minimum wage (by the end of 2015) would still not be a living wage, and would even leave families below the poverty line.

    This means $9 is not enough, regardless of where you put the poverty line. America is a wealthy country. I just don’t accept that anyone with a full-time job ought to be poor.

  17. #17 by brewski on February 20, 2013 - 11:10 am

    You moved your own goal posts as to what the poverty rate is. First you quoted it and used it in your own sexist offensive calculations. Then later you said that number was wrong. That is called moving your own goal posts.

  18. #18 by brewski on February 20, 2013 - 11:11 am

    ” I just don’t accept that anyone with a full-time job ought to be poor.”

    You don’t accept that 1 person with a full time job can’t support 4 people. You need to start being honest, for a change.

  19. #19 by Richard Warnick on February 20, 2013 - 12:25 pm

    No, even two people with full-time minimum-wage jobs can’t support a family of four. That’s a fact. The official poverty level, like the official unemployment rate, doesn’t reflect the real-world experience of people trying to survive in America.

  20. #20 by brewski on February 20, 2013 - 12:27 pm

    So you are backing away from your own numbers above?

    Priceless.

  21. #21 by Richard Warnick on February 20, 2013 - 12:56 pm

    No. I never said there was anything sacred about the poverty line. The point was, and I quote again (with emphasis):

    Obama’s $9 minimum wage “would even leave families below the poverty line.” The word “even” signifies that the $9 minimum would still be inadequate by the government’s own inadequate standards.

  22. #22 by brewski on February 20, 2013 - 1:38 pm

    Richard,
    We already disproved your false statement about about being below the poverty line.

    Then you distanced yourself from you own statement saying that even above the poverty line was not enough.

    Can you stick with any one point of your own or do you just like to bounce around disagreeing with yourself for sport?

  23. #23 by Richard Warnick on February 20, 2013 - 3:09 pm

    brewski–

    1. Not a false statement at all. It’s true, and the numbers plainly back it up.

    2. From the very first sentence of this post, I said that being above the poverty line is not enough.

    Now, would you care to say something worthwhile? You can’t use the same old “let ‘em eat Twinkies” right-wing arguments because… no Twinkies. ;-)

  24. #24 by Richard Warnick on February 20, 2013 - 3:39 pm

    Care to comment on this?

    5 Signs Extreme Wealth Deadens the “Empathy” and “Honesty” Parts of the Brain

    Despite the logic and fairness of sharing record profits with low-wage workers who helped to make it all possible, a minimum wage increase has long been rejected because of the claim that it will increase unemployment. This has been refuted again and again and again. Yet well-positioned people persevere, armed with the same excuse. Says Paul Ryan: “I think it’s inflationary. I think it actually is counterproductive in many ways. You end up costing jobs from people who are the bottom rung of the economic ladder.”

    The Economic Policy Institute calculated that a minimum wage increase would actually CREATE up to 100,000 jobs by the middle of 2014.

  25. #25 by Larry Bergan on February 20, 2013 - 3:46 pm

    That’s not true. I saw some Twinkies on sale at the gas station. They’re just not called Twinkies any more. They even have Cupcakes that look just like the ones Hostess made.

  26. #26 by Richard Warnick on February 20, 2013 - 3:49 pm

    Why did I never see this quote before? Classic.

    “I want my fair share — and that’s all of it.”

    Charles Koch

  27. #27 by brewski on February 20, 2013 - 7:58 pm

    ” Among white males in this group, the authors find that each 10 percent increase in a federal or state minimum wage decreased employment by 2.5 percent; for Hispanic males, the figure is 1.2 percent.

    But among black males in this group, each 10 percent increase in the minimum wage decreased employment by 6.5 percent.”

    http://epionline.org/study_detail.cfm?sid=137

    Do you love losing all the time?

    Just shows how the Progressive agenda which was founded on reducing the population of those darkies has not changed much at all.

  28. #28 by brewski on February 20, 2013 - 8:14 pm

    In sum, we view the literature—when read broadly and critically—as largely solidifying the
    conventional view that minimum wages reduce employment among low-skilled workers,

    Moreover, when
    researchers focus on the least-skilled groups most likely to be adversely affected by minimum wages, the
    evidence for disemployment effects seems especially strong.

    longer panel studies that incorporate both
    state and time variation in minimum wages tend, on the whole, to find negative and statistically
    significant employment effects from minimum wage increases,

    the estimates from
    this line of research tend to support the notion that employers replace their lowest-skilled labor with close
    substitutes in response to an increase in the wage floor. As a result, minimum wages may harm the leastskilled
    workers more than is suggested by the net disemployment effects estimated in many studies.

    But
    given that the weight of the evidence points to disemployment effects, the wisdom of pursuing higher
    minimum wages hinges on the tradeoffs between the effects of minimum wages on different workers and
    other economic agents, and on whether other policies present more favorable tradeoffs.

    http://www.econstor.eu/bitstream/10419/34012/1/543453804.pdf

  29. #29 by Richard Warnick on February 20, 2013 - 8:37 pm

    Minimum Wage: Beggaring Workers does not Help Employment (Infographics)

    Check out the maps at this link. Also:

    High minimum wage doesn’t always track with high employment, but… Economists have repeatedly found that increases in minimum wage often track with subsequent rises in employment.

  30. #30 by brewski on February 20, 2013 - 8:38 pm

    You are Sarah Palin

  31. #31 by Richard Warnick on February 20, 2013 - 8:43 pm

    I don’t remember Sarah Palin ever being concerned about economic inequality.

  32. #32 by brewski on February 20, 2013 - 8:45 pm

    So in response to actual evidence by actual labor economists in actual peer reviewed and cited research papers you give me what amounts to an opinion piece by someone who has no background in labor economics at all.

    Juan Ricardo Cole is a public intellectual, prominent blogger and essayist, and the Richard P. Mitchell Collegiate Professor of History at the University of Michigan.

    What the fuck is a “public intellectual” other than someone who thinks highly of himself and goes to a lot of sherry parties wearing a tweed coat with elbow patches?

    Thanks for the laugh.

  33. #33 by brewski on February 20, 2013 - 8:46 pm

    Sarah Palin, according to you, is a science denier. As are you.

  34. #34 by Richard Warnick on February 20, 2013 - 8:48 pm

    You didn’t go to the link, which is an entire page of economic references entitled “The Job Loss Myth.”

    What’s your bottom line, brewski? You want a lousy minimum wage below poverty-level? NO minimum wage? What? How desperate do working people have to be to make you happy?

  35. #35 by brewski on February 20, 2013 - 8:59 pm

    I did.

    First of all that is an advocacy group run by a bunch of kids with degrees in French and other non labor economics subjects.

    Second of all, they cite papers written by non-economists and lie that they are economists.

    Third, yes, there are some papers which have come to the conclusion that higher minimum wages don’t hurt employment. The flaws in those papers have already been described in detail in my citations above, if you would bother to read them.

    Fifth, those papers represent the outliers of all labor economics research on this issue. They are dwarfed by the consensus. You can find papers that say there is no global warming. The global warming MTYH as you would say. This is why you ARE Sarah Palin.

  36. #36 by brewski on February 20, 2013 - 9:01 pm

    I have never worked for minimum wage in my entire life including when I was 16. Why is that?

    If you were earning less than what you needed to live, what would you do about it?

  37. #37 by Larry Bergan on February 20, 2013 - 9:12 pm

    What else ARE you going to do brewski?

    Pull yourself up by your bootstraps!

    Get a job from the job creators, while losing your mind.

  38. #38 by brewski on February 21, 2013 - 3:36 am

    Steps not to be poor:
    1. Find out what are the well paying professions
    2. Become that

    • #39 by Cliff Lyon on February 21, 2013 - 8:04 am

      Brew, You missed steps 3, 4 and 5.

      3. Make sure you come from a decent family that can feed and protect you and send you to a decent public school.

      4. Make sure your skin is White.

      5. Make sure as you grow, that thing conspire around you such that college becomes a reasonable possibility.

      • #40 by Bob S. on February 21, 2013 - 8:56 am

        So Cliff,

        Are you saying after decades of government spending billions, — trillions of dollars on welfare, free education, etc that it still comes down to skin color? And family?

        Thanks for admitting that the system you advocate for is a failure.

  39. #41 by brewski on February 21, 2013 - 8:52 am

    Cliff,
    As you know, my wife is a tenured professor at one of Utah’s state universities. Easily her favorite students are the “non-trads” or non-traditional students who are often in the 40’s or older who realize they need to do something to change their lives. They are almost always poor, have a poor educational background and often not white. She has a favorite one now who is black, in his 40’s, not a native English speaker, with a poor educational background. He is on his way to being a pharmacist.

    So much for your tired disproven static assumptions.

    So you can take your 3, 4 and 5 and stick it up your donkey cock.

  40. #42 by Richard Warnick on February 21, 2013 - 9:25 am

    An Increased Minimum Wage Is Good Policy Even During Hard Times
    Recent Studies Point to Higher Pay but No Job Losses

    There is …a growing consensus among economists and academics that raising the minimum wage does not kill jobs even during periods of recession.

    We reviewed academic research that examines the effects of minimum wage increases during a recession or stretch of time with high unemployment and found significant evidence that even during hard economic times, raising the minimum wage is likely to have no adverse effect on employment.

  41. #43 by Cliff Lyon on February 21, 2013 - 11:30 am

    Brewski, Are you asking me to ascribe to you, selected traits of your also anonymous wife?

    Or was that fluff to distract from your anecdotal and deficient; “not a native English speaker.” argument against my 3 and 4.

    Every African refugee community with which I have WORKED CLOSELY, hold education has a singular goal.

    Perhaps I should have qualified my addendum as referring to poor White and minority American children.

    Please explain.

  42. #44 by brewski on February 21, 2013 - 12:00 pm

    Explain what? Explain why you used caps to type the words WORKED CLOSELY as though you want a gold star or something? I can’t explain you.

  43. #45 by brewski on February 21, 2013 - 12:12 pm

    Cliff,

    Feel free to argue your position with:
    D. A. Robin
    http://www.thefamuanonline.com/opinions/race-is-no-excuse-for-failure-1.2693123#.USZv4qVlwdI

    And this man, your worst nightmare:
    http://www.youtube.com/watch?v=PFb6NU1giRA

    I believe both of them are more qualified to opine on the topic than either you or I.

  44. #46 by Larry Bergan on February 21, 2013 - 5:43 pm

    Sorry brewski, but I learned all I needed to know about “The National Prayer Breakfast” from reading “The Family: The Secret Fundamentalism at the Heart of American Power“. It deeply disappoints me that our most powerful leaders participate in something that strikes at the heart of American progress.

    I couldn’t help but notice that your esteemed Dr. Benjamin Carson showed up on the Hannity show to further his nonsense and listen to Hannity blame the deficits on Obama without blinking an eye. Wow.

    Had to turn my head away from both events/farces.

  45. #47 by brewski on February 22, 2013 - 9:15 am

    Have you listened to the speech or not?

  46. #48 by Richard Warnick on February 22, 2013 - 11:14 am

    Economist to Moyers: Minimum wage hike would benefit economy

    On this week’s edition of “Moyers and Co.,” host Bill Moyers spoke with economist Richard Wolff about the U.S. minimum wage, and how raising it would not just benefit workers at the bottom end of the economic spectrum, but rather the entire economy.

    …[W]hen economists work out the math, Wolff maintained, they find that ultimately, raising the minimum wage has “very little” overall effect on the economy at large, but, he said, it will make life better for working people.

    “At the very least, we’ll have transformed the lives of 15 million Americans,” he said.

  47. #49 by brewski on February 22, 2013 - 1:37 pm

    Richard Wolff is a Marxist. That is not some right wing name-calling hyperbole. That is what he calls himself. If that is not enough to discredit anything he says let me explain to you why he is wrong.

    First of all, he doesn’t address my point at all. He says “raising the minimum wage has “very little” overall effect on the economy at large, but, he said, it will make life better for working people.”

    This isn’t the point. The point is how does it affect the very lowest of the lowest skilled workers. High school drop outs. Non English speaking. Not fast food workers but even less skilled than that. As I already showed you, minimum wage may lift wages for some workers, but not for the lowest skilled. For the lowest skilled it will cause them to lose their jobs all together.

    Let me show you the math. If you pick strawberries for a living and you can pick $8.50 worth of strawberries in an hour, and the minimum wage is $7.50, then a farmer can hire you and you make $7.50 and hour and she makes $1.00 per hour of profit by hiring you. But if the minimum wage is raised to $9.00/hour, then the farmer won’t hire you and pay you $9.00 to pick $8.50 worth of strawberries. She won’t hire you at all. So at a minimum wage of $9.00 you wont get hired at all, the farmer won’t make a profit of $1.00 per hour at all. The farmer won’t pay taxes at all.

    That is how marginal economics work.

  48. #50 by Richard Warnick on February 22, 2013 - 2:23 pm

    brewski–

    Explain where Marx got it wrong. After all, parts of the “The Communist Manifesto” are consistent with current U.S. law. The Federal Reserve, progressive income taxation, public education, etc.

    So what if in some instances marginal jobs disappear? The point is, why not have the equivalent minimum wage we already had in 1968? It worked then. There is no justification for why the gains from productivity have all gone to the top in the decades since.

  49. #51 by brewski on February 22, 2013 - 2:46 pm

    “So what if in some instances marginal jobs disappear?”
    Because it makes the poorest people suffer more. Why are you in favor of more suffering?

    “The point is, why not have the equivalent minimum wage we already had in 1968? It worked then.”
    World conditions are not the same now as in 1968. If you agree to other factors now as they are in 1968 then it would work. If you want 1968 then we tell women to stay in the kitchen. We can forcibly conscript 2,215,000 able body men into the military. We can reduce the percent of foreign born population by 70%. Do you think any of those factors having to do with the supply of labor had anything to do with wages in 1968?

    “There is no justification for why the gains from productivity have all gone to the top in the decades since.”
    Yes. Supply and demand. See above.

    “Explain where Marx got it wrong”.
    Almost all of it. So you think your home should be owned by the State? You think a doctor should earn the same income as a strawberry picker? You think the quantities and types of computers should be mandated by the State and made in State owned factories only in a State monopoly? You think there should be no banks and all credit is owned by the State?

  50. #52 by Larry Bergan on February 22, 2013 - 6:53 pm

    I was proud of KBYU for broadcasting Bill Moyers’s excellent program every Sunday here, just like KUED, but they stopped carrying it about three weeks ago.

    Every American should watch every episode!

  51. #53 by brewski on February 22, 2013 - 8:17 pm

    Yes, so they can watch someone who has never had a real job and someone who has never put out his own money to hire other people and put his own family at risk opine about things that he knows nothing about.

  52. #54 by Larry Bergan on February 22, 2013 - 11:34 pm

    brewski:

    I told you I had to turn my head away from the “prayer breakfast” video, but I tried to watch the speech again and only got about 15 minutes in.

    I didn’t like it when republicans started to bitch about political correctness in the 80,s and I don’t like it now. To say that liberals stifle the speech of republicans is just ludicrous.

    Bill Maher lost his great show called “politically incorrect” FOR BEING politically incorrect.

    Rush dirtbag and the rest are still on the air after decades of lies that hurt the country and yourself. That is, if you even live in this country.

    Could you just wake up.

  53. #55 by brewski on February 23, 2013 - 6:03 am

    So you didn’t watch it yet you criticize it. Priceless.

    The Left does stifle free speech. Truth hurts.

  54. #56 by Larry Bergan on February 23, 2013 - 8:29 am

    It was boring and lackluster. I didn’t watch any paint dry yesterday either. I also don’t plan on falling asleep in church today, because I don’t go to church or prayer breakfasts.

  55. #57 by brewski on February 23, 2013 - 8:40 am

    So your criticized something you haven’t seen and then tell me it wasn’t entertaining enough for you. Go back to watching Jerry Springer.

  56. #58 by Larry Bergan on February 23, 2013 - 8:56 am

    Come on brewski, you didn’t watch the damned thing all the way to the end either. You just defend it because Sean Hannity told you to.

    Jerry Springer is so boring, it makes me gag.

  57. #59 by brewski on February 23, 2013 - 10:19 am

    I don’t watch Hannity. Why do you?

  58. #60 by Larry Bergan on February 23, 2013 - 11:11 am

    I can’t watch Hannity, and if I still had cable, I wouldn’t watch him now. The only way I would see Fox “news” is if I was flipping my remote and passed by it. Thank goodness I can’t afford that crap.

    Your link to the horrible speech given by your black hero who spoke at the prayer debacle included a video list which included Dr. Carson’s appearance on Hannity’s parrot show. – no offense to parrots.

  59. #61 by Richard Warnick on February 23, 2013 - 11:40 am

    brewski–

    The thing about minimum wage jobs, is nearly all of them that remain in this country are not the kind you can outsource. Examples: strawberry pickers (as you mentioned), landscapers, restaurant workers, hotel maids, nursing assistants, babysitters, automobile service technicians, lifeguards, etc.

    So why not pay them more? As the graph above indicates, $9 would not even be the equivalent of the 1968 minimum wage.

  60. #62 by Larry Bergan on February 23, 2013 - 11:53 am

    In other words:

    Until a Chinese drone can deliver a plate of salmon to your table, American waiters/waitresses will have jobs.

    Until then…?

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