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A FEW YEARS AGO, my daughter entered the workforce. 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, I told her that the cost of everything needed on a daily basis by Joe Average had increased ten to fifteen times what it was in ’69. Meaning that those things that a consumer needs or wants on a regular basis had increased in cost by an average of 1,200-1,300%.
Everything, that is, except workers’ wages: the federal minimum wage in 1969 was $1.60 per hour; in 2018, it is $7.25. So, the minimum wage has increased by approximately 450%.
Using the official Consumer Price Index (CPI) calculator, $1.60 in 1969 is worth $11.19 in 2018. This means anyone working for the current minimum wage of $7.25 is working for about 60% of the minimum wage of fifty years ago!
The CPI vs the HBI
Now, anyone old enough to remember earning and spending money in 1969 knows 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. Hence their figures are so low that they don’t rate even being called ‘conservative.’
Using the real-world inflation reflected by the Hershey Bar Index, we find that the minimum wage in 2018 should be at least $20 an hour.
A more realistic assessment can be found using the wonderfully 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 2018 weighs almost the same (1.55 ounces) but costs $1.29-1.49, essentially a 1,300-1,500% increase in cost. Many food and sundry items have increased since then at a similar pace.
Using that rate of inflation, that $1.60 minimum wage then translates to a $20.00 an hour today!
Obama wants to raise minimum wage
The following paragraphs were lifted from an article titled “Obama shifts focus back to economy” by Justin Sink for The Hill’s Briefing Room website (April 2, 2014).
“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.
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 President’s 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.
Fellow Democrats sticking with raise
Part 1 of this two-part piece (above) was written between 2:00 and 4:00 AM 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?
A protracted fight over workers’ income
The following paragraphs were taken from an article titled “Leaders of both parties resist wage compromise” by Manu Raju and Burgess Everett for Politico (April 3, 2014).
“The small number of senators who are open to compromise on a minimum wage hike are facing stiff resistance: their own party’s leadership. On the Democratic side, moderates like West Virginia’s Joe Manchin and those facing reelection like Mark Begich of Alaska are open to finding a middle ground with Republicans.
But they are up against Senate Majority Leader Harry Reid and his leadership team, who are refusing to entertain any wage increase below their party’s target of $10.10 per hour.
Many wealthy Republicans “philosophically” oppose any minimum wage!
A similar dynamic is unfolding on the GOP side where lawmakers like Bob Corker of Tennessee are willing to at least open debate on the plan. But he’s not finding a receptive audience from GOP leaders, who are signaling they are prepared to block the measure from even coming to the floor. ‘I can’t imagine not wanting to debate the best way to improve wages in America.’
Top Republicans, however, said blocking a minimum wage bill is the best way to telegraph the party’s frustration with the Democratic-led Senate’s priorities.
But there are political reasons on both sides for refusing to compromise. Many Republicans, who philosophically oppose the minimum wage, would rather just take one unpopular vote now—and litigate the rest of the election year over more politically palatable fights over Obamacare—rather than engage in a protracted fight over workers’ income.”
Rep*blicans not interested in compromise
The following paragraphs were taken from an article titled “Centrist Republicans cool to minimum wage hike compromise” by Andrew Bolton for The Hill website (April 4, 2014). Click on over to The Hill and read the entire piece.
“Senate Republican centrists are reacting coolly to Sen. Susan Collins’s (Maine) effort to reach a compromise on the minimum wage, imperiling progress on President Obama’s top economic agenda item. Collins needs to bring along at least four Republican colleagues and perhaps five—depending on how Sen. Mark Pryor (D-Ark.) votes on the issue—to move a minimum wage boost through the Senate.
Centrist Republicans who teamed up with Collins to forge a bipartisan deal to extend unemployment benefits for five months say they are not interested in another compromise to boost the minimum wage. . . . Sen. Dean Heller (R-Nev.), who spearheaded the negotiations on unemployment assistance, said the minimum wage is an issue best left to the states instead of the federal government.
One Rep*blican said the minimum wage is an issue best left to the states instead of the federal government.
Sen. Rob Portman (Ohio), another centrist Republican who supported this week’s agreement on unemployment benefits, said he would not be inclined to support a minimum wage compromise. ‘I don’t think so. Ohio has a higher minimum wage actually indexed to inflation.’
The first hurdle to passing the Democratic legislation will be to muster 60 votes to proceed to the measure. Collins warned that Reid will not get enough Republican support unless he promises to allow amendments to the minimum wage bill. ‘That depends on whether or not Sen. Reid is going to allow amendments and so far he hasn’t said.’
Sen. Charles Schumer (D-N.Y.), Reid’s deputy, said Democratic leaders have yet to decide how to handle the process for considering the bill.”