The U.S. economy can afford a $15 minimum wage

From the Economic Policy Institute

The federal minimum wage was established in 1938 to help ensure that regular employment provided a decent quality of life. By making periodic increases in the minimum wage, Congress also guaranteed that the country’s lowest-paid workers would share in the benefits of broader improvements in the economy. For the first 30 years of the minimum wage’s existence, regular raises allowed the minimum wage to keep pace with growth in economy-wide productivity. But, as the graph shows, since the 1970s Congress has failed to adjust the minimum wage to match the economy’s capacity for higher wages—leaving low-wage workers behind.

The bottom line shows how inflation has eroded the buying power of a minimum wage income even as the economy grew and was able to afford a higher minimum wage. If you were paid the $7.25 minimum wage in 2017, you made 27 percent less—in inflation-adjusted terms—than someone who earned the minimum wage in 1968 (when the value of the federal minimum wage peaked, at $9.90 in 2017 dollars). The middle line shows that if the minimum wage had kept up with average wage growth for typical U.S. workers (specifically, production and nonsupervisory workers, who constitute essentially the bottom 80 percent of the workforce) since 1968, it would be $11.62 an hour. But even that would not have been sufficient to distribute the fruits of economic growth equitably. If the minimum wage had kept pace with rising productivity since 1968, someone earning the minimum wage in 2017 would have received $19.33 an hour—and millions of people earning above the minimum wage today would also be getting higher wages than they currently do.

The expectation that the minimum wage rise in step with broader trends in the economy would not have been unreasonable for previous generations—that was the trend throughout the 1950s and 1960s. Today’s minimum wage workers have been harmed both by the failure to raise the minimum wage in step with pay for typical workers and by the huge and growing gap between these nonsupervisory wages and economy-wide productivity. The Raise the Wage Act of 2017 would raise the federal minimum wage to $15 by 2024. Such a raise would certainly bring the pay of minimum wage workers closer to providing a decent quality of life, even though it would still fall short of what the economy could have delivered for low-wage workers over the past 50 years.

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Reposted from EPI

Posted In: Allied Approaches

Union Matters

He Gets the Bucks, We Get All the Deadly Bangs

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Sam Pizzigati Editor, Too Much online magazine

National Rifle Association chief Wayne LaPierre has had better weeks. First came the horrific early August slaughters in California, Texas, and Ohio that left dozens dead, murders that elevated public pressure on the NRA’s hardline against even the mildest of moves against gun violence. Then came revelations that LaPierre — whose labors on behalf of the nonprofit NRA have made him a millionaire many times over — last year planned to have his gun lobby group bankroll a 10,000-square-foot luxury manse near Dallas for his personal use. In response, LaPierre had his flacks charge that the NRA’s former ad agency had done the scheming to buy the mansion. The ad agency called that assertion “patently false” and related that LaPierre had sought the agency’s involvement in the scheme, a request the agency rejected. The mansion scandal, notes the Washington Post, comes as the NRA is already “contending with the fallout from allegations of lavish spending by top executives.”

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Corruption Coordinates

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