econscius

Minimum Wage Much Higher, Adjusted For Inflation, Than In 1938

In Uncategorized on July 28, 2013 at 2:28 pm

Joe Biden and others on the Left speak with reverence of 1968.  Is it the Summer of Love and urban riots they speak of?  No, the minimum wage, which adjusted for inflation, was higher than today.  “Just pay me what you paid folks in 1968”, Joe recently said. [1]

Biden is cherry-picking the year, though.  The minimum wage peaked in 1968, and today’s minimum wage is higher than it was in 2007, 1938, 1947, 1953, 1988 and plenty of other years.  And excellent graph that shows how today’s minimum wage is not particularly low by historic standards, and certainly much higher than was intended when introduced in the 1930s, can be found at CNN Money: http://economy.money.cnn.com/2013/02/14/minimum-wage-history/. [2]

A minimum wage increases unemployment, for teenagers and others with low skills and a lack of experience; workers whose productivity is worth less than $7.25 are priced out of a job.   The 2007-2009 minimum wage increases were, for example, a time of increasing unemployment.  The impact of the minimum wage, of course, is greater the higher it is.  A 25 cent increase will have a sight effect on employment; whereas a large increase, to say, the $22 per hour Senator Elizabeth “Big Chief” Warren (D-MA) demands, would impact a large number of workers and greatly disrupt the labor market.

Sadly, though, minimum wage tends to be an emotional issue, rather than one which is debated logically.  Joe Biden, Barrack Obama and others who want a higher minimum wage tend to use deceptive evidence when they claim today’s minimum wage is supposedly so low by historic standards.  It’s not.  And they use the absolute high point, 1968, as their reference.  This is no surprise, since they conveniently ignore that minimum wage earners are, disproportionately, teenagers, college students, and others looking for part-time work.  Few are raising families, whereas Biden, Obama and their ideological soul mates falsely imply everyone on minimum wage is a sole-breadwinner of a big family.  In the real world, too, even mediocre employees receive pay raises.

[1] http://blogs.wsj.com/capitaljournal/2009/03/17/a-history-lesson-for-vice-president-biden/

[2] http://economy.money.cnn.com/2013/02/14/minimum-wage-history/

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