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04-05-2012, 04:46 PM   #1
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What minimum wage buys you 1950-2010

Kind of an interesting perspective on how life was in the 50's verses today.

Minimum Wage and What It Buys You: 1950s to Now

04-05-2012, 05:12 PM - 2 Likes   #2
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I make minimum wage and work 35-40 hours per week.

However, I don't go to the movie theater, and I ride a bicycle. I live in a small college town in a slightly economically depressed region, so my rent works out to about 40 hours of work (after taxes). Next year it will be even less, since I'll be splitting with a (beautiful, wonderful) roommate. My spending on groceries probably equals my monthly rent; I eat local, pastured meat, eggs, and raw dairy and organic crops from farmers I know, and tend to reach for the higher-quality stuff when I'm at the grocery store. I brew my own high-end coffee at home, 4 or 5 cups for the same cost as a cup of starbucks, and cook better meals than can be bought (regardless of price) at the nicest restaurant in town every night, at home, for rarely more than $7 per meal. Since it's all carefully selected for nutrition and I can competently treat wounds and illnesses myself, the doctor and dentist rarely get a cent out of me. I manage to live a relatively high-end lifestyle (at least in the areas that I value) on my meager income.

By making some better decisions on where and how to live, a lot of people who struggle could be living better, more fulfilling lives, providing the sort of atmosphere needed for the personal growth that will let them someday move above the minimum-wage-slave position. Admittedly I have it easier than someone with kids or a disability or who suddenly lacks relevant job skills at age 50, but there is unnecessary suffering in this country that could be alleviated through a willingness to make less "popular" or conventional lifestyle choices, like ditching a car or moving out of the city.
04-06-2012, 05:27 AM   #3
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This report confirms my sense from living in some of these times with minimum wage. I worked in a factory in the early '70s at the minimum wage ($1.60) to get money for college. I could work a summer living with my parents and pay most of my living expenses for college. Lead workers on the line who made about $2 per hour were buying new homes and helping their own kids in college. It's the prices, especially for housing. In the early '70s, a home cost about a tenth of what it does now. A nice new home in my part of Texas could be had for around $20k. My family sold our older home in '71 for much less than that. That house payment (~$100 per month) we got from the purchaser was doable on something near minimum wage. There is no way our current wages and prices come close.

Wages never kept up with the inflation of the late '70s and all of the '80s, and workers have been behind the curve ever since. Then professor Warren explained it well, and we may have discussed this in another thread.

Last edited by GeneV; 04-06-2012 at 05:57 AM.
04-06-2012, 08:37 AM   #4
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Middle class in amercia barely exists.

Here are some more interesting numbers though...

That a majority of americans above age 35; will in face never be able to fully retire. Even for the ones that are under age 35; do they really have a way of investing their money??

... That social security (ie the united states federal government) is considering a type of system to completely replace social security in entirity. Think of it this way... If the average american were given housing, a type of food allowance, and some form of healthcare (with medicine) - then it wouldn't take much of a fund to give them spending money. The answer for renters would be a type of rent rebate or even "senior living facilities". For home owners - it would depend on how much they had left of their mortgage. For people with the ever rare paid in full mortage (actually no mortage just a deed) nothing would really change. For most people with a mortgage - they could be offered a few options... Get a reverse mortgage and really send the kids into financial oblivion, etc...

It is in fact doable and being worked on right now. It's highly unliely social security will be around in any form in the next five to six years

04-06-2012, 07:10 PM - 1 Like   #5
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I think the question is what a persons time is worth. If somebody goes out and works 40+ hours a week, they should be able to pay for living expenses and probably have a bit leftover to save (at minimum).

The trend in this country concerns me. Recently it seems there has been a large push to bust unions and lower the pay of people such as factory workers, teachers, and government workers who were making a living wage (not a high wage, but a living wage), and trying to decrease it to match private industry (who often does not pay a high enough wage). I I think we as a nation need to learn that paying a lower wage does not equal efficiency.
04-07-2012, 06:20 PM   #6
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QuoteOriginally posted by kswier Quote
I think the question is what a persons time is worth. If somebody goes out and works 40+ hours a week, they should be able to pay for living expenses and probably have a bit leftover to save (at minimum).

The trend in this country concerns me. Recently it seems there has been a large push to bust unions and lower the pay of people such as factory workers, teachers, and government workers who were making a living wage (not a high wage, but a living wage), and trying to decrease it to match private industry (who often does not pay a high enough wage). I I think we as a nation need to learn that paying a lower wage does not equal efficiency.
I'll agree with that. We made some great progress in the last century in favor of workers right's, and more recently it's been slipping away. A lot of those rights and concessions were won through hard fought battles and protests involving militias, dynamite, and radical orators from all over the spectrum. People died, workers and owners alike, and rather than getting thrown in gitmo to disappear, the accused parties were given due process of law and even in guilty verdicts, the hard questions raised by such acts led to larger-scale societal shifts in favor of the working class.

Our culture seems to forget that; a lot of what we now consider middle-class values were attained in part through domestic acts of violence then labeled "terrorism." And that's what scares me- in order to retain those things that we value, like a living wage for people who carry out real work (thus allowing them to be vital participants in the economy), is a return to the violence of the past going to be required? And if so, is it even possible, in this age of heavy surveillance and superior military technology? In the early 1900s, dynamite was a great leveler. No more. But it's not like you can just go vote between "fix it" and "break it;" both parties are just after the decisions labeled "profit."
04-10-2012, 08:15 AM   #7
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QuoteOriginally posted by kswier Quote
I think the question is what a persons time is worth. If somebody goes out and works 40+ hours a week, they should be able to pay for living expenses and probably have a bit leftover to save (at minimum).
This is the real point to me. We can either have employers pay a wage that lets one live decently, or we can pay taxes and redistribute it back. It is much simpler and better for all involved to pay a decent wage.
04-10-2012, 11:12 PM   #8
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i think the labels are a little off,today i count the middle class as making $200-$500,000.00 they create jobs.under $100,00.00 are working stiffs. under $50,000.00 middle working stiffs,under $25,000.00 lower working stiffs under $15,000.00 working poor and the rest just poor.many are 2 income familys.the rich want more and more and more plus power,and to keep the rest of us off balance.

04-17-2012, 06:46 AM   #9
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america citizenship is made up of a majority of surfs
04-17-2012, 08:53 AM   #10
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QuoteOriginally posted by bull drinkwater Quote
i think the labels are a little off,today i count the middle class as making $200-$500,000.00 they create jobs.under $100,00.00 are working stiffs. under $50,000.00 middle working stiffs,under $25,000.00 lower working stiffs under $15,000.00 working poor and the rest just poor.many are 2 income familys.the rich want more and more and more plus power,and to keep the rest of us off balance.
The American "middle-class" terminology is a totally ambiguous term and therefore almost meaningless in my opinion.

Who is middle-class?

QuoteQuote:
............Most of those with households income between $40,000 and $95,000 identify as "middle class."........
American middle class - Wikipedia, the free encyclopedia

Politicians use the term and listeners interpret it to mean themselves, unless they are obviously wealthy, even by their own definition.
04-19-2012, 12:01 PM   #11
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Prior to the establishment of minimum wage laws in American we had several years on unemployment rates below 2% and many years of less than 3% unemployment. With the passage of minimum wage laws 5% has become the target rate for unemployment.
Prior to the establishment of minimum wage laws in American the unemployment rate for African Americans was lower than for White Americans. Within a few years of the law being enacted those number flipped. Currently the unemployment rate for young black males is 55%.
Williams: Minimum wage law hurts young black males most | Lubbock Online | Lubbock Avalanche-Journal


Who pays for the wage increase?
Let's look at fast food. Fast food employs a large number of minimum wage workers. If wage rates rise then McDonald's will raise prices to cover the cost or reduce the number of people employed. Let's say that demand for Big Macs is inelastic and McDonald's can raise the price of Big Macs to cover the cost. The consumers end up covering the cost of the wage increase and everyone (except consumers) wins. Sound great, but who are the consumers of Big Macs? Do you think Bill Gates, Warren Buffet, or Larry Ellison are big consumers of Big Macs? The primary consumers of Big Macs happen to be lower wage earners. Politician have created the illusion of helping the poor, but the poor are the ones absorbing the cost of the wage increase. This is one example, but when we look at low wage jobs we see they primarily provide goods and services to other lower wage segments of society. The burden of paying the cost of minimum wage is placed on people in lower income classes.

What about high school dropouts?
There are multiple studies that show that higher minimum wage rates encourage poor & boarder-line students to dropout. These kids come from poor families and they don't need a high school degree to make almost as much as their parent. We are providing incentive's for poor children to dropout of high school. Several people have proposed requiring a high school diploma to qualify for minimum wage to take away the incentive to dropout California Journal of Politics and Policy, Vol. 3, No. 1, 2011. Once these kids dropout and work for a little while they find they can't advance in the work force and become frustrated and demand more money. They end up losing their jobs to the next wave of dropout who are willing to work for the minimum wage.

Who has benefited the most from minimum wage? The college age children of middle class white families have done very well. They have seen the most gains in employment with each increase in the minimum wage. The second group to have done very well is organized labor. By introducing a wage price floor they have effectively increased the cost of hiring non-skilled workers who they often compete with for contracts. Labor unions have been a driving force behind minimum wage laws even though none of their members work for the minimum wage. Politicians would be the third group who have benefited from promising to make people better off. A minimum wage increase is a great way for a politician to get more votes from the uneducated .

Prior to the implementation of minimum wage laws people with no job skills could get a low paying job and learn a trade. On the job training has all but disappeared in this country. Minimum wage has also raised the minimum skill level required to get a job. This has had the effect of locking unskilled people out of the job market and increasing unemployment among the demographic it was designed to help. The idea that minimum wage helps the poor is an illusion.
04-19-2012, 02:06 PM   #12
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QuoteOriginally posted by Winder Quote
Politician have created the illusion of helping the poor, but the poor are the ones absorbing the cost of the wage increase. This is one example, but when we look at low wage jobs we see they primarily provide goods and services to other lower wage segments of society. The burden of paying the cost of minimum wage is placed on people in lower income classes.
The politicians understand this very well, but there is a sociopathic element to a politician campaigning, introducing legislation, and voting to increase the minimum wage because if a politician with poor constituents succeeds he will take credit for going to bat for them and getting them the raise they were never able to get for themselves while the lost jobs and increased prices will be blamed on a-hole bosses and greedy businesses. Then the cycle of populist anti-business rhetoric gets used in their next campaign.
04-19-2012, 03:13 PM   #13
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QuoteOriginally posted by Winder Quote
Who has benefited the most from minimum wage? The college age children of middle class white families have done very well. They have seen the most gains in employment with each increase in the minimum wage. The second group to have done very well is organized labor. By introducing a wage price floor they have effectively increased the cost of hiring non-skilled workers who they often compete with for contracts. Labor unions have been a driving force behind minimum wage laws even though none of their members work for the minimum wage. Politicians would be the third group who have benefited from promising to make people better off. A minimum wage increase is a great way for a politician to get more votes from the uneducated .
Correlation is not causation. What you say may be correct, but there is a lot more going on. A lot of it revolves around the increase in automation (more engineers needed of design it, and less factory workers needed because of it). There used to be secretaries, factory workers, people to pump your gas, etc. Many of these jobs required a low amount of skill (and some of them paid pretty good). Now the low skill jobs available are retail and fast food (there are others also, but the pool is much smaller). Since these used to be the jobs of kids, they were accustomed to paying a small wage (and that carries over to today). Yes, the increase in wages has helped this transition, but I believe it would have happened anyway.

QuoteOriginally posted by Winder Quote
Prior to the implementation of minimum wage laws people with no job skills could get a low paying job and learn a trade. On the job training has all but disappeared in this country. Minimum wage has also raised the minimum skill level required to get a job. This has had the effect of locking unskilled people out of the job market and increasing unemployment among the demographic it was designed to help. The idea that minimum wage helps the poor is an illusion.
If you don't get paid enough to pay the bills, whats the point? If I was offered $5/hour to do a job, I would laugh at the person. That is just enough to pay rent in many places. If I had no choice but to take it, I would probably have to begin a life of crime to put food on the table. In total, I agree with a lot of what you said (raising the minimum wage does have some adverse effects), but I do not think paying our lowest income workers less is going to fix anything (except increasing crime). I think our nation has three choices. We can tax the rich and give welfare to the poor, we can find a way to give companies incentives to pay a living wage, or we can forget about the poor and not provide for them at all (which would be very sad for one of the richest countries in the world).
04-19-2012, 04:27 PM   #14
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QuoteOriginally posted by kswier Quote
If you don't get paid enough to pay the bills, whats the point? If I was offered $5/hour to do a job, I would laugh at the person. That is just enough to pay rent in many places. If I had no choice but to take it, I would probably have to begin a life of crime to put food on the table. In total, I agree with a lot of what you said (raising the minimum wage does have some adverse effects), but I do not think paying our lowest income workers less is going to fix anything (except increasing crime). I think our nation has three choices. We can tax the rich and give welfare to the poor, we can find a way to give companies incentives to pay a living wage, or we can forget about the poor and not provide for them at all (which would be very sad for one of the richest countries in the world).
A big question that needs to be answered is what kind of lifestyle a full-time minimum wage job should cover?

I think it could be argued that it does cover a humble lifestyle for someone young, single, childless, and healthy in a low cost of living locale especially if they are willing to live with a roommate. When you change parts of that forumla, the minimum wage is no longer a living wage but increasing it will adversely affect those people who do fit that profile. If the federal government wanted to set the minimum wage such that one minimum wage earner could support a family of four in a high cost place like NYC or San Fransisco they would probably need to set it around $100,000 and that would harm everyone living in the rest of the country. Thats why places like San Fransisco set their own local minimum wage, but they still do not base that minimum on someone other than a single, childless, healthy renter with a roommate.

The idea of having minimum wages based on family situation such as whether or not your married, you have dependents, home ownership status, or health problems has its own complications since disclosing any of those to a potential employer would possibly make you a less desirable employment candidate in addition to the higher minimum wage requirements.

Is there a problem with the FEDERAL government basing it's minimum wage rate on anything less than the lowest common denominator?
04-19-2012, 07:14 PM   #15
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QuoteOriginally posted by mikemike Quote
Is there a problem with the FEDERAL government basing it's minimum wage rate on anything less than the lowest common denominator?
I agree with this. There is nothing wrong with the current minimum wage. My comment in the post above was that getting rid of the minimum wage would not be a good idea, because corporations and businesses will likely take advantage and pay a very low wage (I think minimum wage right now is about right, and we should tack it to inflation).

My comment further above was that the political conversation should should change from this strange idea of efficiency we have (i.e. that it is inefficient for a person to make $12.00 if they are a janitor, and thus we must bust unions and decrease their pay). If there is a janitor that works hard 8 hours a day, 40 hours a week, I think they deserve more money than minimum wage. This does not have to be done through an increase in minimum wage, and I do not think that an increase in minimum wage is necessarily the correct way to go about it. However, I would like to see the government instinctive companies in the service industry, and other industries who pay a very low wage to pay a bit better (so create incentives instead of a mandate).

Basically, I would like to see the conversation changed from whether or not we should give the poor different forms of welfare to how we can give businesses incentives to pay them a bit more so that they do not need welfare, and so that people have a sense of ownership over there money (i.e. when you feel you earned something you generally take more pride in it than something you are given). My understanding is that years ago low skilled worker could work in a factory and live a pretty pretty comfortable life. I think we need to find a way of creating more low skill jobs that pay enough to provide a comfortable life.
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