GOP attacks on minimum wage workers

Posted by AzBlueMeanie:

During the past year's election a number of Republican and Tea Party candidates revived an old attack that we have not heard in some years — an attack on the federal minimum wage.

The attack is rooted in two arguments: free market conservative economics that rejects government regulation – wages should be determined by the invisible hand of the free market; and secondly, the cost of wages reduces competitiveness and prevents businesses from hiring more employees – or some businesses will go out of business.

Real wages in 1973 dollars have been stagnant or declining since 1973 with only a brief upturn in the late 1990s. Economy’s Gains Fail to Reach Most Workers’ Paychecks:

Figure A plots low, middle, and high wages, corresponding to the 10th, 50th (median), and 95th percentiles, with each series indexed to 100 in 1973.

While the real wages of low and middle earners were stagnant or falling for much of the period covered by the figure, they rose smartly in the latter 1990s, as the tight job market forced employers to bid wage offers up. Productivity also accelerated in the second half of the 1990s, and the persistently tight job market helped ensure that the benefits of growth were broadly shared.

However, these positive trends flattened in the recession of the early 2000s, and despite even further acceleration of productivity growth, real wages have remained relatively stagnant for many workers. [With the Great Recession that began in 2007 and depression level long-term unemployment, real wages are again declining.] As the figure demonstrates, the gap in wages between high-wage workers and both middle-and low-wage earners has grown significantly and now stands at a historical high.

While real wages have remained stagnant since 1973, the federal minimum wage has declined in value. Life Inc. – Good Graph Friday: Minimum wage is worth less than in 1968:

If you’re one of the several million Americans earning minimum wage, here's a sobering fact: Your grandpa had more spending power earning minimum wage four decades ago.

Adjusted for inflation, the minimum wage was worth $8.54 per hour in 1968, according to calculations by the Economic Policy Institute. The current minimum wage is $7.25 per hour.

The value of the minimum wage has risen in the last few years, following a three-year government effort to boost the lowest allowable hourly wage in the United States. The final stage, which took effect in July of 2009, brought the minimum wage up nearly 11 percent to its current rate.

In addition, some states have mandated that minimum wage be higher than the national rate.

Still, the data from EPI show that the value of minimum wage has not, in the long-term, kept up with rising inflation, which boosts what things cost and lowers the value of money.

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About 3.6 million workers earned wages at or below the minimum wage in 2009, according to the Bureau of Labor Statistics. That equates to nearly 5 percent of all hourly paid workers.

And yet Republican and Tea Party radical conservatives have rediscovered the federal minimum wage as a boogeyman during this struggling economy. I suspect it is primarily ideological — these radical conservatives want to revise American history by erasing any remaining vestiges of FDR's New Deal — minimum wage, labor protections, social security, etc. because they view it as "socialism."

At a time when corporations are making record profits and corporate executives are receiving record compensation and bonuses, radical conservatives want to scapegoat minimum wage workers struggling to survive. Evil has a name and it is radical conservatives.