40% Of Americans Now Make Less Than 1968 Minimum Wage: News of the Day
Forty percent of Americans now make less than the 1968 minimum wage, according to a recent study out from the Center for Economic and Policy Research (CEPR). Had the minimum wage kept pace with gains in the country's productivity since 1968, it would be $16.54 an hour today, as opposed to the current level of $7.25 per hour. That is higher than the hourly wages earned by 40 percent of men and half of women. Study authors Dean Baker and Will Kimball elaborate:
The purchasing power of the minimum wage peaked in the late 1960s at $9.22 an hour in 2012 dollars. That is almost two dollars above the current level of $7.25 an hour. Most of the efforts to raise the minimum wage focus on restoring its purchasing power to its late 1960s level, setting a target of around $10 an hour for 2015 or 2016, when inflation will have brought this sum closer to its previous peak in 2012 dollars
....the minimum wage generally was increased in step with productivity over these years [1947-1969]...This link between productivity and the minimum wage ended with the 1970s. During that decade the minimum wage roughly kept pace with inflation, meaning that its purchasing power changed little over the course of the decade. The real value of the minimum then fell sharply in the 1980s as we went most of the decade without any increase in the nominal value of the wage, allowing it to be eroded by inflation. Since the early 1990s the real value of the minimum wage has roughly stayed constant, which means that it has further fallen behind productivity growth.
Had minimum wage kept up with economic productivity, the living standards of millions of workers who are currently paid at or near the minimum wage would be greatly improved. Instead, middle class Americans and those hovering closer to the poverty line are more acutely feeling the pinch of the country's economic struggles.
President Obama’s call for an increase to the federal minimum wage in his State of the Union address is one step toward alleviating this pressure. Sen. Tom Harkin, chairman of the Senate Health, Education, Labor and Pensions Committee, and Rep. George Miller (D-CA), senior Democrat on the committee, have been working together on legislation to increase the minimum wage to $10.10 an hour and provide for automatic future increases based on changes in the cost of living.
"The two of us have a long track record of working together on this issue in Congress, and we have been working together again this year on our own new legislative proposal to raise the minimum wage to $10.10," Sen. Harkin and Rep. Miller said in a joint statement last month. "Our proposal would ensure that minimum wage workers, often in difficult and dangerous jobs, will not fall into poverty."
Raising the minimum wage is a necessary step in the effort to grow our economy and strengthen middle class. It is long overdue.