$12.50 was 40 percentile wage then meaning 54 million workers (.4 X 136 million) at half (average raise) + 6 million at minimum wage level (who get the full raise or another half raise) = 60 million half raises.
Half raise = $7500/yr (average raise or half-raise = $7.50/hr X 1000 hours -- 1000 hours being half a work year).
60 million workers X $7500 average raise = 45 million at $10,000 = $450 billion added to the cost of GDP output. GDP at the time was $12.5 trillion. $450 billion is about 3 1/2% of that year's GDP.
GDP last year -- and when output returns to normal -- was about $14 trillion; minimum wage is now $6.55/hr: so, I figure (without actually figuring) knock off 1% inflation for 2 1/2% direct inflation -- about how much we grow every couple of years.************How much "skill" does it take to be a taxi driver? The reason taxi drivers can no longer earn a living is that American labor has sleepily given up all power to protect itself in the market place.
In Chicago where I hacked for 20 years they allowed on 30 cent mileage raise over the 16 years (!!!) from 1981 to 1997 (at which point I was hacking in SF where they are so liberal they treat you like you have a union even if you don't) -- at which 1990 midpoint they started cutting the business in half with subways to both airports, unlimited limo licenses and (the shot in the head, not just the last straw) free trolleys between all the hot spots in the downtown -- AND at which 1990 midpoint the city began adding 40% more cabs (now on its way to 50% more as the city likes the money from selling the medallions).
Which is why I had to move 2000 miles to get a job driving a cab (while some drivers moved 10,000 miles to drive a cab in Chicago not Pakistan -- low pay outsourced my job to Pakistan and fast food jobs to Mexico). Not lack of skills the problem -- lack of power to maintain labor's fair share of the pie.
There is no reason any 2 unskilled people cannot earn $1000/wk working fast food -- with universal medical insurance. We are clearly that rich. Any 2 WOULD have earned $800/wk in 1968 (adjusted) -- at half today's average income. We are incredibly rich: why our top 1 percentile households can average $1.2 million/yr.
Posted by: Denis Drew | Link to comment | May 05, 2009 at 07:38 AM
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