Saturday, February 23, 2013

A hike to $15/hr in the federal minimum wage -- spread over 45 years -- would anyone have even noticed?

Could it plausibly
cause such a small economic hiccup, to more than double
the federal minimum wage, in just one, single year -- in, say, three quick jumps -- from $7.25/hr to $15/hr ... 

 ... 70 million workers (half our work force -- $15/hr being today's median wage) X average raise $8,000 (half the full $16,000 minimum wage jump) = a mere $560 billion increase in the cost of $15.6 trillion GDP output: yielding a piddling 3.6% direct inflation ...

 ... as to be barely noticeable

Now, imagine instead that starting from an even higher minimum wage (say, $10.50/hr -- just to pick a number out of a hat), we had spread the same raise to $15/hr over a whole 45 years (say, from 1968 to 2013 -- just to pick "arbitrary dates") -- and, that, per capita income grew 100% in the same 45 years to  further cushion the "shock" of 2% direct increase in GDP output costs (2% assuming the minimum wage would never sink back to, say, an "unthinkable" $8.00/hr by late 2007 -- or an "impossible" $5.75/hr in early 2007) ...

 ... would anyone have barely noticed a $30,000/yr minimum wage, today?

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