Monday, February 18, 2013

American minimum wage might have been $20/hr with double-indexing!

If the minimum wage had gradually grown 50% from 1968 to present (from $10.50/hr to $15/hr) as per capita income grew 100% I don't think anyone should have objected strenuously to $15/hr today. In many economies the minimum wage is indexed to automatically grow in step with both inflation an increases in average income -- in which case the American minimum wage would be even higher than that ...

... depending on whose growth and income numbers you go by. The most commonly accepted inflation measure (CPI-U, used by the BLS) says the minimum was $10.50 in 1968. Another (sounds like CPI-U-RS, used only by the Census) say it was only $9.25/hr. Double-indexing (inflation and growth) would not give a much different overall index result however because when inflation registers lower, growth registers higher (because money is worth more) ...

... in which double-indexing case the American minimum wage would be closer to $20/hr.

1 comment:

Owen Paine said...

We optimally need a algorithm that adjusts the minimum wage
Using several indices

Median value added per hour

Participation rare

Median hours bought

Targets for the part and the med hours rates
Overtly discussed

Your $15 per hour is a great goal demand

The whole campaign
just like sectoral negotiation campaign
Needs web sites you can link to when commenting some where etc