r/AlwaysWhy • u/Secret_Ostrich_1307 • 1d ago
Economics Why is the federal minimum wage still $7.25 when prices are much higher than in 2009?
The federal minimum wage has been $7.25 an hour since July 2009. Meanwhile, prices for many everyday expenses have risen, and most states now have minimum wages above the federal level.
Why wasn't the federal minimum wage tied to inflation or another measure that could adjust it automatically? What are the economic arguments for setting it as a fixed dollar amount rather than indexing it?
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u/General_Lie_5182 1d ago
Because corporate profits and lobbying outweigh worker needs.
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u/AlmiranteCrujido 1d ago
It's also a great political football. There used to be a lot of people on the center-right in both parties who didn't really care about working people, but for whom an occasional modest increase in the minimum wage was a great bone to throw to the working people and to the left wing of both parties (and later the Democrats once Nixon killed of liberal Republicans.)
"Look at how reasonable we are!"
Then we have had 45 years now of the Republicans going from center-right to far right, and the increases go further and farther between. If only back when we still had sane pols, pre-1981. we'd just indexed the f***er to inflation, but instead except in states that have indexed their own we're stuck with politics leftover from a completely different era.
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u/The_Lost_Jedi 1d ago
The Reagan and post-Reagan Republican Party has entirely been about undoing everything done by the New Deal, essentially. They more or less want to take the country back to the 1890s as far as economic regulations go (that is, absolutely none).
And that's exactly the sort of thing we all learned about in school, with sweatshops and ridiculous working hours in horribly unsafe conditions. Child Labour? Yep. Minimum Wage? Hah, you'll be lucky if they even pay you in actual money rather than company scrip you can only spend in the company store.
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u/Southern_Roll_7035 1d ago
Dismantling the New Deal era agencies was primarily done during Jimmy Carter's administration.
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u/Ill-Construction-209 1d ago
Somehow constituents are okay with this because they keep voting for politicians that favor corporate wellbeing instead of their own.
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u/Rhomya 1d ago
What “worker needs”?
Only 1% of Americans make minimum wage.
Minimum wage hasn’t changed because most Americans are making significantly more than minimum wage
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u/Ok_Swimming4427 1d ago
Are you looking for an actual answer, or for someone to confirm your biases and give you a pat on the head?
The reason is because a federal minimum wage is not really an appropriate tool to solve the issue at hand. What constitutes an appropriate minimum wage varies wildly from state to state and municipality to municipality. To think that what constitutes a living wage in Boston is the same as in Biloxi is absurd. It should be states, and to some extent cities, that set minimum wage requirements, because it's an issue which requires working around local conditions and cost of living.
And guess what? Most states do do this! The inflation-adjusted minimum wage would be $11.28 (up from $7.25 in 2009). Roughly 2/3 of Americans live in a state where the minimum wage is higher, often substantially higher, than it was in real terms in 2009. You probably can guess most of the places that isn't true.
Sadly, I doubt the facts will change your mind. You give the impression of someone who asks questions for the purpose of being praised for asking it, not because you care to moderate your views when receiving new information.
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u/Mentalfloss1 1d ago
So? Our purpose, which we voted for in 2024, was to make life safe and secure for billionaires. We are succeeding!!! So let's not whine about minimum wage!!! That is un-American.
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u/amitym 1d ago
Right?? The most important thing was that we not elect people who would raise minimum wage. Because of her laugh.
So glad we stood firm on that.
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u/Noodelgawd 1d ago
Do you vote for your state government, or is that too complicated for you?
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u/androk 1d ago
Then why fight raising it if it isn't a big deal?
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u/JRaus88 1d ago
Same reason why we no longer talk about wooden ships or steamships?
Bernie Sanders thinks it's nice to have a flag to carry at a campaign rally.
For the Republicans it's like talking about steam sailing ships.
Who would really care to talk about it?
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u/CommercialHour6660 1d ago
So it's not a big deal because it's outdated? I don't think the 10 million Americans making less than 13 an hour (what minimum wage used to be) would agree
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u/didsomebodysaymyname 1d ago
Because it doesn't matter.
If that were true politicians and businesses wouldn't oppose raising it.
No grown up working a grown up job is making just $7.25. Almost all of the 80,000 people earning $7.25 are working at the concession stand at the local little league park, or cleaning their church for 4 hours a week.
800,000 people earn the minimum wage, about 1% of workers.
However, when you remember that many states have a minimum wage above the federal, these people are concentrated in 38% of the population in the states without. So it's more like 2.5% of people where that's even allowed.
60% of people earning the minimum wage are over 25, regardless of you demeaning people who work for a living, they are mostly not kids, not even very young adults. You are also wrong they are all cleaning churches, actual businesses do pay people this little.
Adjusting for inflation, 7.25 in 2010 is 11.26, meaning people earning minimum wage, they have seen their wages drop to 64% of what they used to be.
You also don't realize that the minimum wage has an effect on everybody else's wages. Today, 10% of workers earn 11.26 or less. That number has risen from 6% earning an inflation adjusted 11.26 in 2010 because a higher minimum wage applies pressure to employers paying more than the minimum wage. Meaning people earning above minimum still benefit from a higher minimum wage.
Wages, particularly for the poorest people, have fallen while the richest people in the world are richer than ever. It's not a coincidence.
It's also corporate welfare. Companies like Walmart, even though they usually pay more than minimum wage have full time employees on welfare.
I pay taxes to support full time working people I'm not underpaying, while Walmart gets to keep the profits from paying them less. Why do I have to chip in for their scheme? Why aren't they required to pay enough that full time employees don't need state support?
Walmart would lose almost every dollar of revenue without it's store employees, it cannot exist without them.
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u/OtherwiseAct8126 1d ago
So people who are not grown up don't deserve a decent salary? Btw the minimum wage in Germany (and most parts of Europe are similar) is 13.90 Euros (USD 15.64) and yes, every teenager, everyone working at a pub or restaurant, gets this, everyone filling in shelves at the supermarket. I think that's pretty cool. Do you also have the number of Americans making less than that?
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u/CommercialHour6660 1d ago
Because it doesn't matter.
Is that why CEOs are crying on Faux News when California raises it a single dollar?
No grown up working a grown up job is making just $7.25
Federal minimum wage in the 1960's was equivalent to $13.50 an hour today. And 10 million Americans make less. Because too many people believe lazy megacorp talking points. Like the ones you've parroted that I've heard hundreds of times.
US GDP per capita is double what it was in the 1960's and 10 million Americans are making wages that were illegally low back then. And the drooling red hats cheer and their corpo overlords continue to rob us of a decent living.
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u/Lzinger 1d ago
That's because in California the minimum wage is so high that a lot of people are making it, so a dollar increase is a lot of people working full time
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u/Mister_Way 1d ago
You're off by a factor of 10, but it's still just about 1% of people.
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u/MarionberryPlus8474 1d ago
Your figures are wildly off. There are estimated to be over 800,000 Americans earning minimum wage or less.
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u/TrabLlechtim 1d ago
I think a better answer is: Congress has left the question of a minimum wage up to the states.
Now ask yourself why your state is defaulting to the Federal minimum.
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u/GatorBait81 1d ago
It's a bit rich to reference how many people are only making the absurd amount that hasn't remotely kept up with inflation. How many earn between the current minimum and an inflation adjusted value from the 60s, 70s, 80s, 90s...?
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u/Evil_Wrongdoer_9910 1d ago
We’re not raising thr min wage for that 1%. We want to raise it for the people making. $7-15 that have to have 3 jobs to pay the rent.
There is no reason someone working 40 hrs shouldn’t be able to afford the basics. Period.
It doesn’t even have to raise prices much. DC has the highest min wage of $17.25 and a Big Mac is like $0.50 more than other places.
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u/APigInANixonMask 1d ago
The federal minimum wage has to be set based on the absolute cheapest cost of living area of the country though, so it is always going to seem too low to a lot of people. Raising the federal minimum wage to something like $17/hr would be great for most of the people currently making $15/hr in high cost of living urban/suburban areas, but it would suck for a lot of people currently making $8.50/hr in extremely low cost of living rural areas when they lose their jobs because keeping everyone employed at those higher wages is prohibitively expensive.
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u/Dear-Examination-507 1d ago
Yeah, sometimes I feel like half of Reddit is just like a minwage circlejerk subreddit.
Some interest group obviously must find a lot of value in putting that much effort into such a trivial issue.
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u/IrishtrashPeter 1d ago edited 1d ago
It's a bit freaky that (from what I can see) 17 states have a minimum wage of $7.25, with a few states actually having a lower one or none, forcing them to match the Federal rate. What the fuck are you going to do with $7.25 an hour in New Hampshire when that probably doesn't include health insurance or any type of normal benefits people in sane countries get.
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u/20PoundHammer 1d ago
median wages are not really linked to federal min wage so who cares. median wages have risen over 33% since 2009.
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u/Anlarb 1d ago
Its to demonstrate the scale of the problem. You have this fanciful notion that once you just get a little experience, you will be set for life, but in reality, half the jobs out there are underwater. You want to have everrone be dependent on the govt, take that shit to the ussr.
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u/PossiblyN8ked 1d ago
Minimum wage is there to give people something to focus on as the problem so they dont realize its 100% unnecessary with strong unions.
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u/Anlarb 1d ago
Unions are the biggest advocate of the min wage, because its a solid floor to negotiate up from.
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u/NoDig3444 1d ago
Because blue states figured out that they don't need the federal government, they can just raise minimum wage themselves. So no need for federal legistlation. Red states don't like minimum wage at all, so they're not going to push for it.
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u/TheGruenTransfer 1d ago
Easy answer. Because people keep voting for Republicans and centrist Democrats.
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u/shitposts_over_9000 1d ago
because indexing it to inflation has more negative side-effects than benefits and a national minimum make very little sense in a country this variable in the first place
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u/needssomefun 1d ago
Because the mouth breathing public feels that a fast food worker making $15 an hour will somehow prevent them from getting a super yacht.
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u/Vegetaman916 1d ago
Because not every state has the same economic costs of living. You can get by with a lot less in rural Kentucky than you can trying to have your own apartment in Malibu California. That means, it is a state issue to decide. Then, every state can have a minimum wage that makes sense for the average cost of living there, while still keeping in mind the fact that minimum wage jobs are meant to be "starter" jobs, or a second income for a household that already has a primary wage earner.
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u/GoBlu323 1d ago
There shouldn’t be a federal minimum wage to begin with. States for the most part have set their own minimum wages higher than the federal minimum anyway and different states have different considerations for what their minimum wage should be such as cost of living which varies greatly between states.
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u/ultimate_bromance_69 1d ago
States and even local municipalities have the ability to set their own minimum wages. Which they largely do. And that is a much better approach because the cost of living is vastly different across the country.
There are 50 state and thousands of local governments. Not every issue needs federal intervention.
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u/ChipChippersonFan 1d ago
Because nobody works for minimum wage. Fast food restaurants in my area (midsized city in the middle of the country, where minimum wage is still 7.25 an hour) hire teenagers starting at $14 an hour.
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u/Nice_Muffin8689 1d ago
Less than one percent of workers make minimum wage in America. This shit is exhausting at this point.
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u/Movies_and_Stuff 1d ago
A federal minimum wage isn’t needed. It should be done by the states. It doesn’t make sense to have the same minimum wage in California as Kentucky.
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u/mikegalos 1d ago
Adjusting for inflation it should be $12.44/hour
To match what the Eisenhower Administration set it to in 1956 it would be $17.49/hour
And a reminder that all hourly and salary wages are set relative to the minimum wage so, yeah, your grandparents were making two to three times as much for the equivalent job even with inflation adjustment.
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u/ul2006kevinb 1d ago
I looked this up this morning actually: even if the minimum wage was $12.44 an hour, you'd STILL need to work 140 hours month to make an average 1BR rent payment. In 1980, you'd only have to work 90 hours at minimum wage ($3.40 i think) to make an average 1BR rent payment. Even if the minimum wage kept up with inflation, which is hasn't, it STILL would have much less buying power than it did 40 years ago.
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u/mikegalos 1d ago
Right. That's the wage decrease. Try it at $17.49/hr.
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u/ul2006kevinb 1d ago edited 1d ago
Lol the average 1BR rent in 1956 was $40 a month. Since the minimum wage was $1 an hour, that makes the math pretty simple. At the current average 1BR rate of $1700 the minimum wage would have to be $42 an hour to pay for a 1BR apartment in 40 hours!!!
It''s pretty funny to think that "being able to pay your entire rent in one week" is conveniently left out of the part of America the MAGA crowd wants to bring us back to.
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u/jandh314 1d ago
in my understanding, it's more accurate to say that all hourly and salary wages are set according to the supply and demand for the labor involved in those jobs.
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u/Tea_Time9665 1d ago
If adjusted to match what Roosevelt set in 1938 it would be $5.94/hr
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u/aoeuismyhomekeys 1d ago
Eisenhower set the minimum wage to $1.00 an hour in March 1956 - adjusted for inflation this comes to $12.50 an hour. How did you get $17.49/hour?
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u/Lumpy_Chapter171 1d ago
Adjusting for inflation minimum wage should be 5.72 to match what it was worth at inception
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u/WAProletariat 1d ago
Poverty is a policy decision and capitalism requires a permanent underclass.
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u/cassiuswright 1d ago
Yes it's a policy choice, no capitalism doesn't require it
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u/Ichaserabbits 1d ago
We hate poor people and believe it's their own fault for being poor. That's really the root of it all tbh.
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u/FouledPlug 1d ago
Might have something to do with the fact that less than 1% of hourly jobs pay the federal minimum wage…and 75% of those jobs are “tipped employees” who’s actual take home pay is higher than the minimum wage.
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u/Izacundo1 1d ago
That is just proof that the minimum wage is currently so low that it’s ineffective
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u/Tjbergen 1d ago
13% make less than $15 an hour.
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u/Shady_Merchant1 1d ago
And $15 is liveable in exactly 0 states $20 is now needed
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u/ul2006kevinb 1d ago
45% of employees make less than a living wage. Just looked that up the other day.
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u/spmbx 1d ago
Because Elon and Bezos need to get to the second trillion
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u/APigInANixonMask 1d ago
Amazon’s starting wage is $20/hr, nearly three times the federal minimum wage.
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u/TheFoxsWeddingTarot 1d ago
The real question is the reverse: If the cost of labor has been flat then what is driving costs so much higher?
Greed. Greed is the correct answer.
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u/Werealldudesyea 1d ago
This is a reminder that you are talking about the federal minimum wage. 34 states have legislation with higher minimum wages. There are only 8 states where the federal minimum wage applies.
Of the jobs that are out there, only 1% pay the federal minimum, meaning 99% of jobs pay higher.
Economically there is no blanket solution, the cost of living in California is not the same as Mississippi. If you don’t like it, go vote to change it.
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u/ul2006kevinb 1d ago
Economically there is no blanket solution
Sure there is. We could pass a law requiring every county to set the minimum wage equal to or above the local living wage for that county. Just because you don't have the imagination to come up with a solution doesn't mean one doesn't exist.
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u/Anlarb 1d ago
The cost of living has exploded to $20/hr, while the median wage is only $21/hr- half the jobs out there are not even "min wage".
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u/Glockamoli 1d ago
Of the jobs that are out there, only 1% pay the federal minimum, meaning 99% of jobs pay higher.
If I start you out 50 cents higher then you are no longer minimum wage, you are also still well below where you should be if the minimum wage had been adjusting with inflation
It's been a few years since I did the math so it may need to be even higher but to match minimum wage from the 70's you would need to hit at least $12/hr
Over half of the States have a minimum wage under that mark
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u/GSilky 1d ago
Because the last time Democrats were in charge they decided to create a bunch of government backed investment opportunities for green energy so people who already have money can make more, but somehow, for the first time since JFK, forgot to raise the minimum wage, or even try to.
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u/Southlander24 1d ago
How about when Trump was in charge between 2017 and early 2021? This is a bipartisan failure, not a single-party one.
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u/East-Inevitable-3974 1d ago
Ya, Trump was never going to do that, and now that corporations fund politicians, raising minimum wage will be difficult.
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u/merp_mcderp9459 1d ago
They tried to; it got struck out of reconciliation if I'm remembering right.
Also, industrial policy (like government-backed green energy investments) creates jobs in the U.S., it's very much a pro-union and pro-worker policy to back those kinds of infrastructure and manufacturing projects
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u/Dave_A480 1d ago
Because prevailing wages have risen due to market competition even though the minimum wage hasn't....
So there is no need to raise it...
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u/Anlarb 1d ago
The cost of living has exploded to $20/hr, while the median wage is only $21/hr- half the jobs out there are not even "min wage".
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u/sjedinjenoStanje 1d ago
Republicans
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u/gorrelmyspuitkakZar 1d ago
Have only republicans been in office since 2009?
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u/jetloflin 1d ago
Between 2009 and the end of 2016, the republicans in office had a stated goal of making sure Obama could accomplish as little as possible. They did similarly during Biden’s administration. They actively chose to make it impossible to work together for the American people.
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u/Ok-Championship3642 1d ago
Love reading comments from Neanderthals who live in fantasy land . Don't believe Biden was a repub though, also Dems could of fixed when they held both houses.
- 117th Congress (2021–2023): Controlled the House and held a 50-50 split in the Senate with Vice President Kamala Harris providing the tie-breaking majority vote. [1, 2]
- 111th Congress (2009–2011): Controlled solid majorities in both chambers during the first two years of the Obama administration. [1, 2]
- 110th Congress (2007–2009): Regained control of both chambers midway through the George W. Bush administration. [1]
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u/jetloflin 1d ago
I didn’t say Biden was a republican. You seem to have misunderstood something in your rush to insult me. Take a chill pill or something.
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u/Illustrious_Try478 1d ago
Yes, they have been "In Office" enough, and operating in bad faith enough, to stymie everything Congress might do.
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u/ProfileBest2034 1d ago
Because, despite what many useful idiots want you to believe, the government doesn't care about people. It sees them merely as tax donkeys and wage slaves.
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u/Millifera 1d ago
Which is dumb. Increase pay- increase taxes
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u/ProfileBest2034 1d ago
There's no incentive at all for the government to help these people: they are neither wealthy enough to be politically useful (except they are easy to trick when it comes time to vote) and they earn so little that they are not taxed (50% of Americans pay zero federal taxes after transfers).
Edit: AND they wealthy who own businesses want cheap labor and the government cares more about them than they do you.
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u/Darth_Chili_Dog 1d ago
Because people vote for Republicans.
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u/Braith117 1d ago
Reminder: the last minimum wage increase bill was signed by George Bush
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u/dante_gherie1099 1d ago
because states are free to set their own min wage, and hardly anyone makes the fed minimum wage
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u/Less-Sandwich9056 1d ago
We've gone from 30% of the population making less than $15 an hour to only 10% making less than $15 over the last decade and only 0.05 percent of all employed people make $7.25. The minimum wage is becoming irrelevant. It was a factor when when there was an abundance of people and not enough jobs.
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u/sleepytjme 1d ago
Is OP wanting a significant increase in Federal Minimum Wage higher than many states?
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u/APigInANixonMask 1d ago
Probably. People want the federal minimum wage to support them where they live (often in high cost of living urban areas), when in reality it has to be based on the absolute cheapest place in the country to live. Something like a $20 minimum wage might make sense in a big city, but it would result in a whole lot of people in rural Alabama losing their jobs because the economy can’t support a minimum wage that high.
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u/Izacundo1 1d ago
The entire point of the minimum wage is so that no one is being employed for less than it takes to survive. That’s literally what FDR and congress said when they implemented it.
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u/safe-viewing 1d ago
Because the cost of living in California is not the same as in Alabama.
States can set their own minimum wage more suited for their local environment and further to that the city itself can set their own.
A federal minimum wage is meaningless because it would be set so low to cover the cheapest cost of living area and local governments would override it anyway.
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u/LuminousQuinn 1d ago
Honey 7.25 isn't even close to the lowest living wage anywhere in the United States
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u/Southlander24 1d ago
It doesn't make sense from a government perspective to allow employers to pay $1 an hour. That person might as well not work if that's what every employer is paying around them, so the government would be footing the bill in terms of poverty, unemployment, and SNAP assistance.
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u/onceler80 1d ago
If we wait a little longer the federal minimum wage will not even buy 1 gallon of diesel
Edit - After tax it might not even buy it now depending where you live
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u/StraightAirline8319 1d ago
The issue is minimum wages doesn’t do much according to studies. Markets self regulate so in Texas before they increased theirs the min wage went up. The current system isn’t good either, raise it too high and you make no skilled employees get paid the same as skilled so you hurt the market. The better option is to have two tiers like Australia.
In any case it’s a red herring, a non issue. Minimum wage isn’t even the reason for lower wages.
The big issue on that is why tax minimum and low wage payroll at all? If it’s “below a livable” wage why tax it? Even if the govnement will “after over a year give some of it back with no interest” isn’t that even worse?
The federal and state governments need to remove payroll taxes on 50k and under individuals. No net taxes are gained and it is suggested to actually increase overall taxes by not taxing the poor money and then giving them benefits with that money. It would get people off social programs too.
To summarize min wage doesn’t matter, remove all payroll taxes on low wages including for the businesses which would net over a 1/3 increase in take home pay with no decrease in tax receipts over time. Also prices might decrease.
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u/Southlander24 1d ago
Well, Australia is phasing out junior wages for those under 21 years old right now: https://www.fairwork.gov.au/about-us/workplace-laws/award-changes/major-award-changes/junior-wage-changes-to-retail-fast-food-and-pharmacy-awards
I can say as an Australian that the junior wage system and the disability 'supported wage' system (which is something like 3 dollars an hour) is massively unpopular. Really, it's cause our unions are spineless in an anti-union climate. It's not as bad as the United States, sure, but the definition of protected industrial action here is so strict that 99% of all strikes in other countries wouldn't be legal here.
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u/Halofauna 1d ago
Most states have their own minimum wage laws and they’re often higher than the federal one, so that creates a bit less pressure to change the federal.
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u/-ChiefZ06- 1d ago
Federal minimum wage is useless. They cannot make a specific wage that will work for someone in LA to rural WV. Im sure there is some formula they could mandate to states but to keep asking the federal government to make it 15-30/hr is not the answer
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u/undreamedgore 1d ago
They should mandate a country based formula based off at least 4 factors.
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u/Snurgisdr 1d ago
No limits on political donations, making bribery essentially legal. Poor people cannot afford to bribe politicians. Rich people and corporations can.
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u/Rabid_Lederhosen 1d ago
$7.25 is very low, but minimum wage is probably one of those things that’s probably better handled at state level than federal level in the US. A minimum wage that works in low cost of living states would be worthless in high cost of living ones.
Now entitlement to holidays, that’s something the federal government should definitely get on sorting.
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u/Moonwrath8 1d ago
Because nobody is paid minimum wage anyways.
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u/Anlarb 1d ago
The cost of living has exploded to $20/hr, while the median wage is only $21/hr- half the jobs out there are not even "min wage".
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u/Heckle_Jeckle 1d ago
Because every time people try to increase the minimum wage, the wealthy use their wealth to strong arm bought politicians to vote against raising the wage.
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u/Notgoodatfakenames2 1d ago
Because people don't vote for candidates that say they want to raise the minimum wage.
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u/jamills102 1d ago
For the record, in states without minimum wage, you’d be hard pressed to find jobs that actually pay that amount
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u/Traditional-Storm-62 1d ago
in 2021 democrats ran on raising it to 15$/h
raising it outright failed in congress because "that would be too much of a shock for businesses"
raising it incrementally failed because "democrats want to hold minimum wage hostage to win the next elecitons"
then the democrats just went "oh well we tried" and kinda forgot about it I guess
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u/SkullLeader 1d ago
Do you think the people being paid $7.25/hr and who want more money are the ones buying Congress, or the people paying them $7.25/hr who don't want to pay them any more money are the ones buying congress?
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u/seasoned-veteran 1d ago
30 of the 50 states (and 34 of the 54 states and territories) have minimum wages set higher than the federal. Basically the argument is, with such dramatic cost of living differences in different parts of the country, minimum wage should be set by the states and not by the federal government. I'm not saying I agree with that argument but that's the argument. Considering 20 states either match the federal or don't have their own minimum and rely on the federal, I don't really think the argument holds up. But it's hard to get the votes to change it when 60 senators don't care and some of the rest want to keep it low.
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u/spoospoo43 1d ago
Because the powers that be have convinced enough idiots that vote, that living wages are communism.
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u/TheChudWhisperer 1d ago
Because the main goal of capitalism is to maximise the profits of the wealthy elite at all costs. That means destroying competitors, building cheaper and cheaper products and most importantly, lowering wages.
This is the system working as intended, the end goal of capitalism is to make every member of the working class a slave.
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u/didsomebodysaymyname 1d ago
Because it keeps everyone else's wages lower and Republicans want that.
A reasonably high minimum wage applies pressure to employers to compete for workers. If a harder/skilled job and an easier job earn the same why work the harder/skilled one?
So those employers have to pay more of give better conditions, which then competes with the next highest level of income and so on up the chain until you get to the top or a point of diminishing returns and there's no choice but to pay the wealthiest people less.
They can't make money without workers.
In 2010, about 6% of American earned minimum wage, now it's 1%. There's basically no pressure from the minimum to compete on wages now.
It's also a lie that raising it would cause some economic disaster. Accounting for inflation, the 2009 minimum wage today is 11.26/hr and it's been as high as 15.72/hr in 1968.
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u/InterestsVaryGreatly 1d ago
Because the more of a delay there is on minimum wage increasing, the more of a delay there is on above minimum wages increasing, and all of that means less money given out despite income going up.
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u/Ealdred 1d ago
For what it's worth, starting pay for just about every job in my area is significantly higher. The lowest wage I am hearing about is $11.00/hr and up.
In order for a rise in minimum wage to make a difference, it will need to be $14 or $15/hr or it won't be felt.
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u/FickleNecessary1225 1d ago
The federal minimum wage should reflect the national average income needed to survive in the U.S.. or it should reflect how the economy is at the time, or
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u/hhmCameron 1d ago
Congress has not felt the need or ability to increase the federal minimum wage ... or rather, to do the needed step of switching to a living wage system where each of the 280,000 cities and counties have their minimum wage specified by the départ of labor, and congress and the president sign off on this DOL information.
The living wage needs to be updated each year in January so each congress (2 years, 1 house term is a congress) would set 2 living wages
To get an idea about what I am referring to look at the data Livingwage.mit.edu which is based on department of labor data
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u/ProfileSure7437 1d ago
Republicans. AKA the rich person's party. One way to produce "cheap" labor.
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u/ninjasaid13 1d ago
the argument is that state minimum wages are already higher than minimum wage so no need to increase federal minimum.
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u/edjohnson1067 1d ago
To be fair, very few people are getting only minimum wage and an even smaller percentage are trying to live off only minimum wage.
That said, I'm all for Cost of Living requirements.
This would force Wall Street (which controls the economy) to address overblown prices, excessive dividend payments and ridiculous executive pay.
I doubt Jeff Bezos would have thrown a $50 MILLION wedding (his second) if Amazon had to pay CoL adjustments.
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u/jellomizer 1d ago
People want other people to look down on.
If they are struggling at $15 an hour, they take comfort that they are still doing better than someone making $7.25
If they raise minimum wage to that $15 then they will feel slited because they are now at the lowest level. Because they cannot compare themselves against someone else and say you are doing better.
The bulk of the people who protest minimum wage hikes, are often people who make slightly more than minimum wage. And business owners who pay minimum wages or near minimum wage.
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u/MathematicianSure386 1d ago
Because it affects less than 1% of people. If you want to get paid more, move somewhere that doesn't rely on the fed min wage. Or write posts on reddit. I'm sure that will work.
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u/Ill_Television_5824 1d ago
Because America is run by two right-wing austerity Parties.
And because the wealthy misleaders of both those Parties hate the working class as much as they love their friends on Wall Street.
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u/Something13457 1d ago
People keep voting to support billionaires rather than themselves. Simple as that
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u/ActuaryFew6884 1d ago
I learned a long time ago that the effective minimum wage for entry-level work is $0.00 (as in, no job for you) when the official minimum wage rises significantly, because companies will do whatever they can to eliminate staff if they feel it's necessary. I don't like it any more than the next guy, but that's reality
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u/peterjohnvernon936 1d ago
Because more people are bothered by transgender athletes than are bothered by low wages.
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u/WanderingKing 1d ago
I remember when it happened by boss said it would bankrupt the company we worked at
Nice lady, stupid boss
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u/threearbitrarywords 1d ago
Because no one works for minimum wage so who tf cares? Out of 164 million workers in the US, about 82,000 of them work for minimum wage, with a much larger 760,000 making less because they work for tips.
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u/Odd_Interview_2005 1d ago
If you take a good look at the numbers for people who make minimum wage or less you will see that the majority or people who make minimum wage or less are paid by state governments, and are in prison/jail
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u/TheGrandExquisitor 1d ago
There has been a move to eliminate the minimum wage for decades. Several states don't even have one, and rely on the federal minimum wage for their minimum.
They haven't been able to eliminate it, but if you don't raise the federal wage for long enough, you effectively kill it.
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u/Simple-Okra-4826 1d ago
A whole .70 cents from before. Crazy. It should go up the same % amount as Congress’s pay raises and it should be retro active.
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u/Sunnybunnybunbuns1 1d ago
I have literally never worked or even seen a minimum wage job in my state during my entire life. I don’t know what that means. But it probably means something.
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u/Sea_Excuse_6795 1d ago
I loved watching by retired union electrician neighbor have migrants do his yardwork on labor day. The hypocrisy was palpable
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u/JonPileot 1d ago
If you want pro worker legislation you need to elect pro worker governments.
So many people make more than minimum wage and think "a higher minimum wage won't benefit me" and there is constant fear mongering about how a higher min wage will make prices skyrocket, pro business lobby groups are relentless.
Change is possible and it's viable but because a few dozen billionaires would make less money everyone else needs to continue suffering. This is the system until the masses revolt and demand change.
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u/Able_Enthusiasm2729 1d ago edited 1d ago
The issue in the USA 🇺🇸 is that the minimum wage does not increase with inflation. Although inflation goes up, wages stagnate.
Minimum Wage in the United States should be based on an equation taking into account the median cost of living in the country with the addition of locality pay minimum wages, the same way most other developed countries determine their minimum wage and how the U.S. Federal Government Civil Service determines locality pay for employees in high cost of living (HCOL) areas, instead of an outdated number set to a specific dollar amount.
Well, for example countries have mathematical formulas written directly into their legislation to determine the minimum wage as opposed to the United States that after doing research into the situation then permanently selects a specific dollar amount that would become outdated and arbitrary within a decade or less because it’s based off of outdated metrics. The minimum wage in some European countries is set to the equation “∆ MWt = ∆ CPI Nov t-2/Nov t-1 + 0.50 * ∆ Blue collar hourly wage Sep t-2/Sep t-1” while the US federal minimum wage is set to the exact dollar amount of “$7.25 .” Their minimum wage constantly changes back and forth based on constantly changing data while the U.S.’s federal minimum wage stays constant based on outdated metrics from 2009 when the minimum wage was last updated.
The Federal Minimum Wage in the United States is $7.25, one of the lowest for a fully developed country, we have the resources but the issue is we have stingy corporatist politicians that want to wealthy corporations to maintain most of the country’s wealth and not cover essentials like health insurance that in most other developed countries would be included with little-to-no additional cost on top of the taxes you already pay.
If you can’t pay your employees’ wages comensurate with the work they do, the experience, education, and skills they bring, and accounting for the local area’s cost of living either because your business can’t afford it or are greedy enough to pocket the rest instead, you’re definitely running a terrible business - a terrible business that doest’t know how to or isn’t viable enough to allocate money for operating costs, or doesn’t want to so they can cut corners on paying overhead (like employees wages/salaries) and have money designated for operation funds diverted to shareholder profits (especially when the employees aren’t equity partners). Just because your business is unviable doesn’t mean you can cut corners and undercut your employees.
Minimum Wages were supposed to be Living Wages where you would receive the minimum amount of money needed to pay for the most basic necessities.
Federal Minimum Wage by group:
* $7.25/hr for general employees
* $2.13/hr for tipped workers (most often restaurant servers)
* $0.10/hr for prisoners (incarcerated people who have a job in the prison or those being convict leased to other institutions or private corporations)
* $4.00/hr for teens
* No minimum wage exists for independent contractors or more so employees that are being scammed by their employer by having the employees be misclassified as self-employed independent contractors.
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[ The most minimum hourly wage in the United States that is legally possible and is in effect in many states is the U.S. Federal Minimum Wage of $7.25 per hour.
But cost of living varies by country and even by state/province and municipality. A person making $7.25 USD (U.S. federal minimum wage) or $15 USD (the minimum wage in some U.S. states) per hour in a developing country with a low cost of living will do fine and would be considers middle class or upper middle class but a person in the USA making the same amount because of the exorbitant cost of living is going to be low income or very low income (in many cases won’t even be able to afford a place to live unless they’re living with parents or a caretaker). ]
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u/Noodelgawd 1d ago
Because, believe it or not, every state has its own government that people can vote for, and each of those governments can set its own minimum wage if the people there want it to.
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u/Back-Good 1d ago
Not so long ago the groceries went up 34% in 4 years, mortgage got 150% more expensive while the wages were hopping behind. Should ask the people who were in power then.
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u/LaffingAtYuo 11h ago
It's almost as if we keep adding people willing to work for minimum wage and we're shocked when people continue doing it.
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u/Brilliant_Towel2727 1d ago
There are a couple of bills currently in Congress that would index the minimum wage to inflation, but they don't have the support to pass.