Posted by AzBlueMeanie:
If the current federal minimum wage of $7.25/hour was inflation adjusted to 1968 dollars, when the minimum wage was at its peak in real value, it would have to be raised to $10.74/hour. Raise The Minimum Wage.
If you think this seems "high," the Economics Policy Institute in its report The Unfinished March found that "After adjusting for inflation, the minimum wage today—$7.25—is worth $2.00 less than in 1968, and is nowhere close to a living wage. In 2011, a full-time year-round worker needed to earn $11.06 an hour to keep a family of four out of poverty." This amount would be somewhat higher today.
The Huffington Post reported in June 2013, "Over the past 50 years, the minimum wage has seen little to no growth as worker productivity has surged. In fact, if the minimum wage kept pace with increases in worker productivity, it would now stand at $21.72 per hour."
Democrats in Congress today are proposing a modest increase in the federal minimum wage to $10.10/hour, which is still not a living wage, but at least comes closer to the 1968 peak of the minimum wage adjusted for inflation. $10 Minimum Wage Proposal Has Growing Support From White House:
The White House has thrown its weight behind a proposal to raise the federal minimum wage to at least $10 an hour.
“The president has long supported raising the minimum wage so hard-working Americans can have a decent wage for a day’s work to support their families and make ends meet,” a White House official said.
President Obama, the official continued, supports the Harkin-Miller bill, also known as the Fair Minimum Wage Act, which would raise the federal minimum wage to $10.10 an hour, from its current $7.25.
The legislation is sponsored in the Senate by Tom Harkin of Iowa and in the House by George Miller of California, both Democrats. It would raise the minimum wage — in three steps of 95 cents each, taking place over two years — to $10.10, and then index it to inflation. The legislation will probably be coupled with some tax sweeteners for small businesses, traditionally the loudest opponents of increases to the minimum wage.
“The combination of an increase to $10.10 and some breaks for small business on expensing unite virtually the whole Democratic caucus, and we are prepared to move forward shortly,” said Senator Charles E. Schumer of New York, the Senate’s third-ranking Democrat.
Jason Furman, the chairman of the president’s Council of Economic Advisers, attended a Senate luncheon on Thursday with a focus on raising the minimum wage. One official at the luncheon said that some Democratic senators from more conservative states favored an increase to $9 an hour, but including the expensing provision was enough of a sweetener to bring them behind the $10.10 proposal.
Under that provision, small businesses would be able to deduct the total cost of investments in equipment or expansions, up to a maximum of $500,000 in the first year. Including such a provision helped persuade the Senate to vote overwhelmingly in favor of the last two minimum wage increases.
Democratic strategists say they are backing a higher minimum wage to help lift millions of low-wage workers at a time of increasing income inequality.
* * *
In his State of the Union speech in February, Mr. Obama called for a federal minimum wage of $9 an hour. But there has been little movement in Washington on that front, despite action at the state level. Some states set their minimum wage above the federal minimum, and in September, California passed a law that will steadily raise its minimum wage to $10 an hour by 2016.
Washington State currently has the highest state minimum wage at $9.19 an hour, a level indexed to inflation. Some cities have higher wages, including San Francisco, where the wage minimum is $10.55. On Tuesday, New Jersey voters approved a constitutional amendment, by a margin of 61 percent to 39 percent, that will raise the minimum wage to $8.25 an hour on Jan. 1, from $7.25. That measure includes annual increases based on inflation.
* * *
In July, on the fourth anniversary of the most recent minimum wage increase, Mr. Harkin and Mr. Miller stepped up their effort, citing a poll by Hart Research that found that 80 percent of Americans support increasing the minimum to $10.10. The Hart poll found that 92 percent of Democrats, 80 percent of independents and 62 percent of Republicans backed their proposal.
A well-regarded study (.pdf) by David Card and Alan Krueger found that raising the minimum wage increases employment of low-wage workers. This is because when workers have more expendable income, there is more demand, and where there is more demand than current productivity, employers must hire more employees to keep up with demand.