“After a month dominated by the crisis in Ukraine and final weeks of ObamaCare open enrollment, President Obama will look to return focus to the economy as he travels to Michigan on Wednesday.
During an event at the University of Michigan, the president will reiterate his call on Congress to raise the federal minimum wage from $7.25 per hour to $10.10 per hour.
So far, Senate Democrats have struggled to gather enough votes to pass a bill that would set the minimum wage to $10.10 per hour. Senate Democrats indicated they could target a lower rate that would not open them up to charges that the hike would costs jobs.
A nonpartisan Congressional Budget Office report released earlier this year estimated half a million jobs [500,000] would be lost if lawmakers passed the president’s proposal. The White House has disputed the analysis, arguing it does not account for enough factors and pointing out similar hikes in the past have not reduced employment levels.”
The above was taken from an article titled “Obama shifts focus back to economy” by Justin Sink for The Hill’s Briefing Room website (April 2, 2014).
My minimum wage and my daughter’s minimum wage
A few years ago, my daughter entered the workforce full-time. We had several conversations on her experiences and those of mine when I first took a job at 17 in the summer of 1969. I explained that while she was being paid considerably more per hour in dollars than I had been, these dollars had lesser purchasing power than those of my youth.
Based on memory and no research, I told her that the cost of everything needed on a daily basis by Joe Average had increased by a factor of ten to fifteen, with twelve a safe average. Meaning that those things that a consumer needs or wants on a regular basis had increased in cost by an average of 1,200%! Everything, that is, except workers’ wages: the minimum wage had increased by a factor of approximately 6, or 600%.
Meaning that she could purchase half as much with her dollar in 2009 than I could in 1969! Plus she paid more taxes than I did . . .
This conversation caused me to do some research that reflects upon Mr. Sink’s article above: using the official Consumer Price Index calculator, $1.30 in 1969 is worth $8.32 in 2014. Which means anyone working for the current minimum wage of $7.25 is working for less than minimum wage in 1969 dollars!!!
The Consumer Price Index versus the Hershey Bar Index
Now, anyone old enough to remember earning and spending money in 1969 knows that that the CPI figures are ludicrous. Things cost a whole helluva lot more today than then, period. The CPI takes into account countless items that simply do not figure into the everyday spending needs or habits of the vast majority of Americans.
A more realistic assessment can be found using the unofficial “Hershey Bar Index” for comparisons of this sort. The HBI measures the growth of an item that is a staple of virtually every grocery store, supermarket, drug store, gas station, etc. in the country and is consumed by the millions every day of the year.
Using the HBI, we find that their candy bar weighed 1.5 ounces and cost 10¢ in 1969. That same bar in 2014 weighs almost the same (1.55 ounces) but costs 99¢, essentially a 1000% increase in cost. Thus that $1.30 minimum wage then translates to a $13.00 today.
The President’ proposal appears to be a compromise of the two. The real problem is that the 1,000% increase really isn’t enough—it should be higher, perhaps as high as 1,500%. The other problem is that the 1969 minimum wage was insultingly low even then. But we could go on forever teasing the numbers.
Those pesky Europeans and their high tax rates for workers
A few years ago, I was listening to a program on the radio (no doubt a progressive talk show), and the issue of comparing the US minimum wage to that of the more enlightened countries of Europe was the topic.
Apparently, a Republican congressperson had made a remark that while yes, in certain European countries (Finland, perhaps), workers were paid more but they paid 52% of their income in taxes! Read that agin: these supposedly “enlightened” European countries were gouging their workers with a 52% income tax! Did Americans want this?
Of course, that was only part of the story: the politician failed to note that these workers were often paid a minimum wage that approximated $23 in US money. That means that after the 52% was taken out, these workers were left with more than $11/hour, more than $3 more than the American worker’s minimum wage before their taxes are stolen, er, taken out.
And, needless to say, a major secondary fact was also ignored: these European workers received universal health care—they had no medical bills!!! Or that they received six weeks of paid vacation per years, etc etc yadda yadda blah blah.
Finally, raising the minimum wage in the past has never cost the country jobs. What it has always done was spiked the economy with billions of “new” dollars being spent vigorously the first few years after the wage increase . . .
President Obama, the minimum wage, and his fellow Democrats (part 2)
Part 1 of this two-part piece (above) was written between 2:00 and 4:00AM this morning. I finally got a few hours sleep and this was in my email:
“Reid and the bill’s chief sponsor, Sen. Tom Harkin of Iowa, both say they won’t budge on a rate of $10.10 an hour, even as Sen. Susan Collins (R-Maine) tries to write a proposal that Republicans can support. ‘I was told by two leading Republicans two nights ago that we are not going to get 60 votes on minimum wage and so we’re sticking with 10.10,’
[Sen. Chuck] Schumer said, adding that he expects more than 50 Democrats to support the bill next week. And if Collins’s package could draw some fence-sitting Democrats, Reid won’t be one of them. He said on Tuesday he is ‘wedded to $10.10′ and reiterated his hard line on Wednesday.”
Perhaps I am cynical here (the complete article reads somewhat differently), but doesn’t this sound like now that the Dems know they CAN’T win they are growing the balls to finally stand their ground and fight for what they believe in and what’s good for the country?