Monday, October 28, 2013

Trickling down the trickle down -- US and California's very minimal minimum wage increases


If Obama gets his (not very fervent) wish to raise the federal minimum wage by $2 an hour over two years that should shift an incredibly small (almost unbelievably small) ONE-QUARTER OF ONE PERCENT per year of overall income in this country from the top 80 percentile to the bottom 20% …
… as per capita income grows TWO PERCENT, P-E-R Y-E-A-R*. Talk about-trickling the down the trickle-down.
*http://money.cnn.com/2013/08/29/news/economy/gdp-report/

Which is about what California’s raise from $8 an hour to $10 an hour spread over two years will also achieve. (California income numbers only 5% higher than national averages so the comparison should hold.)
http://www.cpec.ca.gov/FiscalData/50StateEconGraph.asp?Type=MedIncomeAverage&Gender=Total
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ABYSMAL ASSUMPTIONS:
$9 an hour is about the 15 percentile wage. 5% of work force at minimum wage. So 20% of national workforce gets a raise to $9 an hour.
 


To do our average (half) raise math we will add 5% -- to account for the 5% at the minimum wage who get a full raise.

25% of the national workforce = 35 million people. Average pay raise (half the dollar per year raise) 50 cents an hour. Assume a 2000 hour work year.  35 million X average $1,000 raise = $35 billion out of a $15.8 trillion dollar economy = .0022151 = about one-quarter of one-percent price rise -- or shift of income from top to bottom per year.   

Nearby wages should be pushed up but not much.  In societies with high minimum wages (e.g., the US in 1968) even the median wage is not that much higher. 
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I AM  GETTING SO TICKED OFF AT PEOPLE WHO ARE SUPPOSED TO BE OUR FRIENDS ADVOCATING NOTHING BETTER THAN TRICKLING DOWN THE TRICKLE DOWN  -- STEP BY STEP, BY STEP, SNEAKING UP ON 1956 ($8.50 AN HOUR MINIMUM WAGE) OR ON 1968 (ALMOST $11 AN HOUR MINIMUM WAGE) THAT I AM GOING TO START CALLING ANY ELECTED REPRESENTATIVE WHO DOES THAT GOVERNOR STEPIN FETCHIT (BROWN) OR PRESIDENT STEPIN FETCHIT (OBAMA).  THEY MOVE STEP-BY-STEP-BY-STEP AND WE FETCH IT.

ANOTHER BIG MISTAKE THAT TOO MANY SUPPOSED FRIENDS MAKE -- ROBERT REICH MAKES IT HERE -- IS NOT TOUTING THE DOUBLING OF PER CAPITA INCOME SINCE 1968.  SEE THE WORKSHEET ABOVE -- IF THE MINIMUM WAGE WERE DOUBLE-INDEXED FOR INFLATION AND PER CAPITA INCOME GROWTH IT WOULD HAVE  GROWN TO $14+ AN HOUR BY 1978.  BARBERS IN FRANCE GET PAID MORE THAN BARBERS IN POLAND BECAUSE FRANCE HAS MORE TO PAY BARBERS WITH FOR THE SAME WORK.  HINT!!!!!!!!!!!!!!!!!!!

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