Friday, May 24, 2013
Letter to the Editor
I've always liked round numbers. Let's imagine that an indexed-for-inflation $10 per hour minimum wage had been instituted at the turn of the millennium. We would now be at about $13.50.
It actually would be imprudent to raise minimum wages 86 percent from today's $7.25, in any single moment, and actually might result in some firings and net disemployment.
Meanwhile, here in the real-world of 2013 USA, essentially every scrap of the 24 percent raise represented by going to $9 would be spent immediately by the ordinary Americans of modest means to whom it would apply. Even indexed for inflation, as President Barack Obama proposes, the minimum wage would never again reach 1968's $10.68 equivalent. That would take another raise of about 20 percent, provided it was undertaken within a couple of years.
On a per-hour-worked basis, productivity, which reflects the actual value of labor, has more than doubled since 1968. And compensation for that productivity is down by a third.
How can this be in a just USA? The answer is that in economic terms, the USA is not just, but is all about a lack of political power for those ordinary Americans, who are now being paid about two-thirds of what they made in 1968, for labor that is worth more than twice as much.
Even if you were earning the "extravagant" $13.50 per hour mentioned above, at 40 hours per week and 50 weeks per year, you'd be earning just $27,000 per annum, arguably underpaid, and failing to set the proverbial woods on fire with your wealth.