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Bill USA

(6,436 posts)
Mon Jul 15, 2013, 04:12 PM Jul 2013

Lagging minimum wage is one reason why most Americans’ wages have fallen behind productivity

http://www.epi.org/publication/lagging-minimum-wage-reason-americans-wages/

The figure shows the real (i.e., inflation-adjusted) value of the minimum wage, plus what the minimum wage would be if it had kept pace with productivity growth since 1968, as it did for the two decades prior. If the minimum wage had kept up with productivity growth over this period, it would now be $18.67 per hour. That sounds shockingly high—it is two-and-a-half times as high as the current minimum wage and is actually higher than the median wage, which is $16.30 per hour. But it’s important to keep in mind that the primary reason a minimum wage of $18.67 sounds so high today is because the wages of most workers are so low. Most workers have not reaped the benefits of productivity growth for the last four decades. If the median wage had kept pace with productivity growth over the last 40 years, it would now be $28.42 instead of $16.30. In other words, an $18.67 minimum wage sounds shockingly high because the already affluent have captured most of the economic growth in the last 40 years, not because the economy hasn’t seen the kind of productivity growth consistent with that kind of minimum wage growth.

Of course, no one is suggesting a current minimum wage of $18.67 per hour. But this comparison does underscore the fact that the proposal by Senator Tom Harkin (D-IA) and Representative George Miller (D-CA) to raise the minimum wage to $10.10 by 2015 is a modest proposal indeed. Further, this recent EPI analysis shows that across the country families living on minimum-wage jobs are unable to make ends meet, more proof that an increase is necessary. Also, visit EPI’s new site, inequality.is, which details how wage growth stagnation has contributed to the rise of inequality.

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Lagging minimum wage is one reason why most Americans’ wages have fallen behind productivity (Original Post) Bill USA Jul 2013 OP
HUGE K&R Trajan Jul 2013 #1
ALL the prosductivity gains over the last 30 or so years went to capital and the top 1%. Bill USA Jul 2013 #2
the whole Free Trade gambit was mostly to make workers here compete with third world labor. Thus Bill USA Jul 2013 #3
Yet ... it was high wage jobs that fueled the markets Trajan Jul 2013 #4
It's also a factor in growing inequality tjwmason Jul 2013 #5
 

Trajan

(19,089 posts)
1. HUGE K&R
Mon Jul 15, 2013, 04:37 PM
Jul 2013

It's important to note the the high band of wages has also stagnated, and that fact more than any other indicates why working families have had such a hard time ....

NOTE how the divergence began during the Nixon era ... I'm not surprised ...

Bill USA

(6,436 posts)
3. the whole Free Trade gambit was mostly to make workers here compete with third world labor. Thus
Mon Jul 15, 2013, 05:36 PM
Jul 2013

the objective was to hammer down wages. ... and also pick up some markets for our high-end products (which are very capital intensive - i.e. lighter on the labor input). Gains to companies, losses to workers - hold down wages at the same time jobs go overseas.

this is how the top 1% (large stock holders, CEOs, financial marketeers, e.g. hedge fund managers) picked up most of the income gains over the last 30 - 40 years.

 

Trajan

(19,089 posts)
4. Yet ... it was high wage jobs that fueled the markets
Mon Jul 15, 2013, 06:55 PM
Jul 2013

it is the middle class that bus the millions of cars, homes , washing machines and fancy computers that helped make the entrepreneurs very wealthy ....

By denying reasonable wages gains for workers. THEY are restricting the markets and killing their own cash cow - the middle class ...

Cutting off their noses to spite their face ...

tjwmason

(14,819 posts)
5. It's also a factor in growing inequality
Thu Jul 18, 2013, 05:58 AM
Jul 2013

Many jobs' wages will be scaled-up from the minimum wage, and so if the minimum rises it's not only those who earn it whose pay rises.

By contrast the pay of the highest executives is created in a bizarre bubble of how much they consider that they're worth.

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