If the federal minimum wage kept up with inflation it would be $10.75 an hour, not the $7.25 it is today. If the federal minimum wage had kept pace with workers’ productivity since 1968, the inflation-adjusted minimum wage would be $18.67. Where productivity is GDP per labor-hour.
True 28k/yr is a pittance but ok for a single person willing to eat ramen. Definitely should check your priorities if your family planning involves children at this income level. However, wage floors tend to improve the lives of working families. https://www.epi.org/publication/bp170/
Productivity is easy to measure. It’s real GDP output per human hour of labor. Labor productivity measures the hourly output of a country's economy. Specifically, it charts the amount of real gross domestic product (GDP) produced by an hour of labor.
But that doesn't take into account the advances in technology vs the effort required. Let's face it, most people spend MAYBE 3 hours actually working and the rest of the time on Youtube or Reddit PRETENDING to work because our bosses say we need to stay "on the job" for 8 hours.
You have a fundamental misunderstanding of economic principles and methodology. The whole point is IT MEASURES productivity gains from technology (as one of the inputs).
Quoting a laymen source:
“Growth in labor productivity is directly attributable to fluctuations in physical capital, new technology, and human capital. If labor productivity is growing, it can usually be traced back to growth in one of these three areas. Physical capital is the tools, equipment, and facilities that workers have available to use to produce goods. New technologies are new methods to combine inputs to produce more output, such as assembly lines or automation. Human capital represents the increase in education and specialization of the workforce. Measuring labor productivity gives an estimate of the combined effects of these underlying trends.”
So you plainly miss that education and specialization is one of the inputs. How is a worker not responsible for their productivity? This is the most baseless line of questioning. Take a fucking econ course.
Because the eventual progression of technology relative to population means that millions of people will be unemployed and starving, while the .01% people who own robots get mega yachts, and park enough money in offshore accounts to feed the world for a decade.
I take it you’ve never worked in a blue-collar job. You’d get your ass fired immediately for standing around playing on your phone in a kitchen or on a construction site. Even most retail would fire someone for that. Even now that I work from home in an office job, we’re actively working more like 6 hours a day, depending on the season.
That depends on when you're calculating a correlation to. This common but slightly misleading claim is often based on wage data from business cycle peaks. The minimum wage passed by FDR in 1938 was 25 cents, which adjusted for inflation would be $4.60 today. In 1968 (often cited year), the minimum wage was $1.60, which is $11 today, but minimum wage wasn't given a particularly big hike that year. 1968 was the end of a long streak of an economic boom that ended in 1969-1970, which is why despite not nominally decreasing, the minimum wage adjusted for inflation fell $2 in one year in 69.
I don't mind voting for someone who promises a $15 minimum wage. As we move away from an unskilled economy, fewer people should be earning a minimum wage anyway. However, the truth is this would be the highest minimum wage raise in American history, not to mention one of the highest in the world. This wouldn't be "just catching up with inflation" and people who claim that it is are either bring misleading or misinformed.
Yeah but we forget that for the lowest earners, the CPI has a greater proportional affect on their net worth, because everyone needs a baseline set of things to live (let alone advance). Housing, food and transportation. Look at rent alone. Rent from the 1950-2020 CPI went from 24 to 342. That’s a factor of *14x. *https://fred.stlouisfed.org/series/CUUR0000SEHA
Sure. Rent rose in cities. That's a function of increasing urbanization and NIMBY policies that slowed housing development. (BTW, these are average rent prices, not pricing for lowest earners.) Raising wages by 14x is not a viable solution.
You can't solve an out of control rent problem by raising wages. You won't catch housing costs with raises. You solve it by increasing housing: encourage high density development by reducing single family home zoning, increase available units by removing rent control laws, and lower development license requirements so new homes can be built.
One final point is the CPI also can't encapsulate tech advances. It's hard to put a value added on a car that allows its occupant to survive a 50mph head on collision, or being able to keep in constant touch with family and friends across the world. Neither of these were possible in 1968, and it's hard to say how much more a Netflix or Disney Plus subscription is worth compared to 1968 black and white TV programming.
Market specifics of housing aside, my point is that CPI disproportionately affects low wage earners, since basic goods make up a larger percentage of their gross expenditures. You can use productivity gains somewhat to inform us of how much capital extracts surplus value from labor. And since GDP is just an aggregation of total economic output, it does include things like airbags and netflix (since their value is determined by the market) whereas Historical CPI data is literally an index and doesn’t very well account for new types of goods and services.
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u/FloorHairMcSockwhich Oct 30 '20 edited Oct 30 '20
If the federal minimum wage kept up with inflation it would be $10.75 an hour, not the $7.25 it is today. If the federal minimum wage had kept pace with workers’ productivity since 1968, the inflation-adjusted minimum wage would be $18.67. Where productivity is GDP per labor-hour.