Wednesday, February 18, 2015
My short-hand, shore up of $50K minimum needs (poverty) line for a family of three -- detailed in chart 3-2, on p.44 of the MS Foundation book Raise the Floor.
(You may want an inflation calculator -- I possess the 2001 book: http://data.bls.gov/cgi-bin/cpicalc.pl)
My quick look:
$11,000 Obamacare for a family of four (not three), $498 a month (after $541 subsidy) + $4900 deductible (from Brill, p. 346, close enough);
$4,000 payroll taxes (not even counting all those regressive taxes that we take for granted in consumer prices);
$15,000 rent and utilities for any place decent;
leaving a big $400 a week to feed, cloth, transport (entertain?; MS does not allow a cent for entertainment) four people. I would call that minimum needs.
Meanwhile the median income is $26,000.
3.5% shift in income would pay for a $15 minimum wage (half the workforce is seriously treading water between $300 a week (assuming min wagers get 40 hours; most may not) and $500. If the 16% of income that shifted to the top 1% after the mid-seventies had instead shifted to the bottom 90% (the top 10% mostly held on to their income share until recent years) the latter would be swimming in money (and FICA collections would be going through the roof -- would stop diverting funds to over bloated TF at some point).
Thursday, February 5, 2015
Governor Bruce Rauner wants to raise the minimum wage from $8.25 to $8.75 – if adjusted for expected inflation -- over seven years.
The fed inflation target is 2% – compounded over 7 years that comes to 15%. Which would chop 13% off the $10 (100% inflation cuts buying power 50%). Round off to $8.75.
This amounts to about a 6% increase in real buying power after 7 years – about half the expected rate of average income growth in the US –for people who work two jobs for the pay of one now.
1956’s per capita income was about 40% of 2015’s – back when the US Senate Majority Leader took advantage of a few opponents missing from his chamber to quick on the sneak, slip through an $8.75 federal minimum wage (in today’s dollars). In 1956.
12 years later, that same leader, now president of US, steamrollered a $10.75 minimum wage through Congress – in step with 23% increase in per capita income over the same span. We knew LBJ, and Rauner’s no LBJ.
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E.I.T.C., $55 billion out of a $16,000 billion economy – 1/3 of 1% of GDP – is too small to have a measurable effect on poverty; lost in the noise.
$15 is the 45 percentile US wage -- $26,000 is the median income (must have lost some hours in there somewhere). Table 2-3 on p. 44 of the Ms Foundation Book Raise the Floor calculates the minimum needs of a family of three that has to pay its own health insurance at $1,000 a week. (Quack fed poverty line is based on three X price of an emergency diet, dried beans, no expensive canned!).
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The Governor wants a low minimum wage to keep Illinois competitive – with whom? Basket weaving factories in Estonia? Illinois ranks sixth best out of fifty-one states and D.C. on high income and low local prices.