Anyone who’s ever held a minimum wage job (which is a lot of people) knows that it’s impossible to support a family solely on $7.25 per hour. With an average monthly rent of somewhere around $700, you would have to devote nearly one hundred hours of work each month solely to keeping a roof over your head. Given that a number of these jobs are often available only part-time, the financial plausibility of it becomes ever more remote. In an economy that makes it so hard for individuals at the lower end of the economic scale to meet their basic needs, any argument like “take personal responsibility for your financial situation” or “pull yourself up by your bootstraps” rings woefully hollow.
Of course, it wasn’t always this way. The United States has not always had a minimum wage, so it’s important not to take it for granted. Furthermore, the minimum wage has not always been as high as $7.25 an hour (the amount that Congress only slated it to become in 2007). I trust that this fact is obvious enough to be self-evident, but what might be surprising is that the first minimum wage was a mere $0.25 per hour. Compared to today’s minimum wage, this seems laughably—perhaps even impossibly—low.
Except for one thing: it’s not. We don’t have to go back very far to see a similar rate. In today’s money, 25 cents in 1938 would have been equal to almost $4 an hour—not so drastically far away from what the minimum wage was before being raised in 2007.
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Looking at the chart, you can see the historical data of minimum wage’s effective value. Even today’s recently increased rate is relatively unimpressive:
President Franklin Roosevelt made [the minimum wage] law in 1938, that any hourly worker had to be paid at least 25 cents an hour. It was revolutionary, and very few countries had anything like it. … Fast-forward to today. The minimum wage is currently $7.25. But in 1968, you’d make the equivalent of $10 an hour in today’s money.
Since then, the value of minimum wage has clearly dropped substantially. Ten dollars an hour isn’t enough make you rich, but there can be no question that it would give you a far better shot at financial stability than what we have now. For a full-time employee, that’s a difference of over $5,500 per year (and if you don’t think that’s significant, I’ll invite you to begin sending me that much money every year).
Take a moment to store this figure in the back of your mind: since 1938, the value of minimum wage has risen by around 85% (from almost $4 to $7.25).
Now let’s look at the overall national economy. In terms of today’s dollar (that is, adjusting for inflation), the US GDP per capita in 1938 was $7,637.21. If we compare this to the federal minimum wage, we might expect this figure to be something like $14,128.84—85% more than the 1938 figure. Is this what we see?
No. Not even close.Today’s adjusted GDP per capita is a whopping $48,372. That’s over six times higher. Since the time of minimum wage’s implementation, the country has seen a massive increase in economic productivity. The federal minimum wage, however, is nowhere near so valuable.
Since 1938, GDP has risen by 630%. Minimum wage has risen by only 85%.
Since 1968, GDP has risen by 230%. Minimum wage has fallen by 30%.
Can there possibly be any excuse for this?
The disparity does not stop there. For the past 40 years, the earning power of the bottom 80% (that’s the vast majority) of US households has been relatively stagnant (granted, with a very slightly positive trend) while the top 20% of earners show a substantial overall increase in income. Simply put, individuals at the bottom earn less while those at the top earn more—lots more.
Those top earners are offered as examples of people who have “pulled themselves up by their bootstraps” while those on the bottom are condemned for allegedly bearing deep moral faults—they are blamed for their poverty.
The so-called “culture war” is real, but it isn’t being fought over whether shop clerks should say “Merry Christmas” or “Happy Holidays” to customers; this is a distraction. No, the war is being fought over money by corporate lobbyists who represent the wealthiest households against the interests of everyone else. It’s being fought by members of Congress who rely on their corporate donors to fund their political campaigns. It’s being fought by people like Grover Norquist, who has successfully sold the Republican party en masse on the idea that raising taxes even a little bit is completely unacceptable—to him and his anti-revenue brigade, the richest Americans (who have seen the most significant increases in income) should actually be made to contribute less to the running of the country.
How this constitutes that richest quintile’s “pulling themselves up by their bootstraps” is anyone’s guess. On the contrary, the rest of the country is doing all the pulling.
Who’s supposed to pick up the tab for their decreased tax burden? Well, no one, actually. The Republican message is that government should “cut spending,” which effectively means the reduction or cessation of services. Which agencies should be eliminated to compensate for the rest of the country giving the richest group an even bigger increase in spending power? The USDA, which works to ensure safe and effective farming practices? The Department of Education, which works to make quality education available to all Americans? The Department of Energy, which works to keep the lights on in American homes? How about the FDA, which works to make sure that foods and medicines don’t kill people? Perhaps the USDOT—after all, we don’t really need drivable roads between states, right?
Government agencies provide services, and Republican politicians* apparently often forget this. These people cannot possibly be conceived of as agents of responsible governance.
Alas, the message we are meant to receive is that this decrease in wages from the 1960s is actually a good thing because it leaves the richest individuals (oh sorry, the “job creators”) with more money. If you are struggling to make ends meet, stop buying luxuries. Pick up another job. Get a roommate. Stop having children. Work harder. But don’t expect any help from anyone else, least of all the government.
The mind recoils at the sheer idiocy of it.
* Sure, Democrats sometimes do this too, but let's not pretend that both parties do so at equal rates. Both parties have their faults and their strong points, but the national Republican party exhibits a distressing disregard for the public well-being. At least the Democrats pay lip service to it.