MY MINIMUM WAGE COMMENT ON THE AFL/CIO BLOG

 Re:  http://www.aflcio.org/Blog/Political-Action-Legislation/10-Not-So-Fun-Facts-About-the-Minimum-Wage

Small stat error -- BIG STAT MISSING: The minimum wage was $10.74 an hour 45 years ago, not 40; tiny -- AVERAGE INCOME (per capita economic output, productivity, whatever) DOUBLED since since 1968; giant omission.

If economic growth does not matter, why not go by the $4.25 an hour minimum wage of 1938, or the $7.25 an hour of 1950, or $8.50 an hour in 1956 instead? Did something happen between 1956 and 1968 that allowed the minimum wage to go to $10.75 an hour? It is something called growing productivity -- which is why the minimum wage could be $20+ now if you ask US Senator Elizabeth Warren. By 1978 the minimum wage would have reached $14.11 an hour -- if indexed for both inflation and per capita income growth (see table in comment just below). 

(Note: fast food workers did not have to get more productive -- they just had to live in a more productive economy that can pay them more -- will pay them more before they stop going to McDonalds. Barbers in France make more money than barbers in Poland because France has more ability to pay. Ditto for 2013 compared to 1968.)

This (giant) omission reminds me of the old Republican saw: "Why not make the minimum wage $100 an hour?" Same answer: ECONOMIC GROWTH! When output per person grows enough -- about five times today's -- we can do it. Since output per person doubles about every forty years, come back in about a hundred years. :-)

But, $15 should be a breeze.

* * * * * * 

My minimum wage worksheet -- my easily-could-have-been minimum wage double-indexed for inflation and per capita income growth:
yr  per capita    real     nominal  dbl-index   %-of
68    15,473    10.74      (1.60)     10.74      100%
69-70-71-72-73              [real, low point -- 8.41]
74    18,284      9.47      (2.00)     12.61          
75    18,313      9.11      (2.10)     12.61
76    18,945      9.44      (2.30)     13.04        72%
77                                                               [8.86]
78     20,422     9.49      (2.65)      14.11
79     20,696     9.33      (2.90)      14.32
80     20,236     8.78      (3.10)      14.00     
81     20,112     8.61      (3.35)      13.89        62%
82-83-84-85-86-87-88-89                          [6.31]
90     24,000     6.79      (3.80)      16.56  
91     23,540     7.29      (4.25)      16.24        44%
92-93-94-95                                                [6.51]
96     25,887     7.07      (4.75)      17.85
97     26,884     7.49      (5.15)      19.02        39%
98-99-00-01-02-03-04-05-06                      [5.97]
07     29,075     6.59      (5.85)       20.09
08     28,166     7.10      (6.55)       19.45
09     27,819     7.89      (7.25)       19.42        40%
10-11-12                                                      [7.37]  
13    29,209?    7.25      (7.25)      20.20?     36%?