What Minumum Wage Buys, then and now

[tytlyf]

This should give everyone a perspective into why the minimum wage needs to be increased to keep up with the cost of daily life in America.

The federal minimum wage was first set in 1938, at 25 cents an hour. Here's a decade-by-decade look, starting in 1950, at the buying power of minimum wage.

1950

Often looked to as a model era, the 1950s may have been nearly as picture-perfect as "Leave it to Beaver" seemed to suggest -- minimum wage workers could pay rent for a month for less than a week and a half of full-time work -- or catch Disney's "Cinderella" for just over a half-hour of labor.

• Minimum wage: $0.75 per hour
• Gas: $0.27 or 22 minutes
• Movie ticket: $0.48 or 38 minutes
• Rent: $42 or 56 hours

1960

By 1960, the minimum wage of $1 an hour had not quite kept up with inflation, making rent a bit less affordable -- though still not quite two weeks of minimum-wage work. On the other hand, filling up the Corvette was actually relatively cheaper -- it took just under 20 minutes of work to get a gallon of gas.

• Minimum wage: $1 per hour
• Gas: $0.31 or 19 minutes
• Movie ticket: $0.69 or 41 minutes
• Rent: $71 or 71 hours

1970

In 1970, the outlook for minimum-wage workers was about as bright as a spinning disco ball. Compared with 10 years before, the cost of rent and gas had actually decreased. Getting in to the movies was the one exception. With films gaining in both popularity and breadth (31 movies were released in 1970, compared with just 19 in 1960 and 11 in 1950), the cost of a ticket saw a big jump to the equivalent of nearly an hour of work.

• Minimum wage: $1.60 per hour
• Gas: $0.36 or 14 minutes
• Movie ticket: $1.55 or 58 minutes
• Rent: $108 or 67.5 hours

1980

The beginning of the Reagan era marked the end of even the semi-feasibility of paying the median rent on a single minimum-wage income. A minimum-wage worker could still pay rent with just under two weeks of work (double the recommended ratio). Of course, if you lived in a more-affordable area, you'd be in better shape. In Mississippi, for example, you'd have to put in only 58 hours of work to pay the median rent.

• Minimum wage: $3.10 per hour
• Gas: $1.25 or 24 minutes
• Movie ticket: $2.60 or 50 minutes
• Rent: $243 or 78 hours

1990

By 1990, renting an average place on minimum-wage pay became nearly impossible. Employees would need to work 118 hours (that's nearly 70% of gross monthly pay) to get shelter. And entertainment was no easier. You'd have to work more than an hour to see "Home Alone" or "Pretty Woman." The one bright spot was gas -- prices were actually down from 10 years prior, meaning earners had to put in less than 20 minutes of work to afford a gallon.

• Minimum wage: $3.80 per hour
• Gas: $1.13 or 18 minutes
• Movie ticket: $4.23 or 1 hour, 7 minutes
• Rent: $447 or 118 hours

2000

By the time George W. Bush got to office, things were no better -- though arguably, no worse than a decade earlier. With a minimum wage of only $5.15 (it hadn't risen since 1995, and wouldn't again until 2008) workers still had to work nearly 120 hours to afford median rent and more than an hour for a trip to the cinema.

• Minimum wage: $5.15 per hour
• Gas: $1.49 or 17 minutes
• Movie ticket: $5.39 or 1 hour, 3 minutes
• Rent: $602 or 117 hours

2010

Though the housing crash actually made rent more affordable, minimum-wage workers still had to put in 109 hours of work (or more than 60% of monthly income) in 2010. Of course, in cities like New York, the numbers are much higher. In 2010, the New York City-Northern New Jersey-Long Island area had a median gross rent of $1,125, which equals 155 hours of work. Basically, if you worked full-time, didn't eat, commute or pay utilities, and you gave nearly every penny to your landlord, you could just make it in the Big Apple.

• Minimum wage: $7.25 per hour
• Gas: $2.78 or 23 minutes
• Movie ticket: $7.95 or 1 hour, 6 minutes
• Rent: $789 or 109 hours

As you can see, people today work much much harder and longer hours for much less. In the old days, hard work wasn't needed to make it ahead.


What minimum wage buys, then and now - Your Money - MSN Money

 

[Poeticus]

Today, there's more competition - labor-wise.

 

[Skwim]

Inflation on $20.00

source and calculator

Also interesting:

A gallon of regular gas in

1950 was $.27 which would be $2.62 in today's money

1960 . . . $.31 ....................$2.45.....

1970 . . . $.37.....................$2.23......

1980 . . . $.86.....................$2.44......

1990 . . . $1.00....................$1.70......

2000 . . . $1.51....................$2.05 .....

2010 . . . $2.79....................$2.99......

2013 . . . $3.55....................$3.55......

source
​

 

[Reverend Rick]

I think the real issue here is folks trying to make a living off minimum wage jobs. Minimum wage jobs have never been a living wage nor should it.

If you could live off minimum wage, people would try to make careers out of these jobs.

They are starter jobs where non experienced people can gain some experience.

If you had to pay a living wage to folks with no work experience, these folks would never get their first job.

 

[Falvlun]

I think the real issue here is folks trying to make a living off minimum wage jobs. Minimum wage jobs have never been a living wage nor should it.

If you could live off minimum wage, people would try to make careers out of these jobs.

They are starter jobs where non experienced people can gain some experience.

If you had to pay a living wage to folks with no work experience, these folks would never get their first job.

According to the article, it does seem like minimum wage did offer a living wage in the 1950s-- you'd have enough for food, a place of your own to live, and transportation money.

A dumpy apartment, enough to eat, and the ability to get to work, with a little pocket change to grab a beer every now and then may be all a few people aspire to, but most would use such a job as a stepping point for something bigger and better. Most people don't want that forever, hence, your proclamation that we'd have nothing but people who want minimum wage for the rest of their lives is a bit unrealistic.

 

[Revoltingest]

This should give everyone a perspective into why the minimum wage needs to be increased to keep up with the cost of daily life in America.
As you can see, people today work much much harder and longer hours for much less. In the old days, hard work wasn't needed to make it ahead.
What minimum wage buys, then and now - Your Money - MSN Money

You could make an even stronger case if you factored in the tax increase on those wages due to bracket creep, ie, the fact with inflation you must earn more just for the same economic status, yet you find yourself in a higher marginal tax bracket.

 

[LuisDantas]

I fail to see why minimum wage can not or should not be enough to earn a decent living. There is no upside to having the multitudes of less skilled people being unable of sustaining themselves. One might as well voice a demand that they turn to crime.

People are not often satisfied with earning little, anyway. Particularly these days, when there is such an impressive social demand for doing so much more than just surviving. That is an important factor that is ignored by the study in the OP.

 

[Revoltingest]

I fail to see why minimum wage can not or should not be enough to earn a decent living. There is no upside to having the multitudes of less skilled people being unable of sustaining themselves. One might as well voice a demand that they turn to crime.
People are not often satisfied with earning little, anyway. Particularly these days, when there is such an impressive social demand for doing so much more than just surviving. That is an important factor that is ignored by the study in the OP.

What is a living wage?
(I've asked this before, but found no consensus among the very very few answers.)
Let's consider the consequences of allowing no employer to pay less than this figure.

 

[collectivedementia]

So what should the minimum wage be? The industries who only pay minimum are generally those that employ teenagers and immigrants as a majority of thier workforce. Fast-food joints,for example. If these employers had to pay,say $12 per hour to every worker, we could be faced with much higher prices for the,um, food they sell. Is anybody really willing to pay $10 for a Taco Bell burrito, or a similarly priced Big Mac? Think of the cost of some of these items when purchased at higher-end eateries even now....combined with included tips. I totally agree that current minimums should be raised, but without some sort of restraint on the prices that may be charged as a result, it may be like a one-legged man at a butt-kicking contest.

 

[Falvlun]

So what should the minimum wage be? The industries who only pay minimum are generally those that employ teenagers and immigrants as a majority of thier workforce. Fast-food joints,for example. If these employers had to pay,say $12 per hour to every worker, we could be faced with much higher prices for the,um, food they sell. Is anybody really willing to pay $10 for a Taco Bell burrito, or a similarly priced Big Mac? Think of the cost of some of these items when purchased at higher-end eateries even now....combined with included tips. I totally agree that current minimums should be raised, but without some sort of restraint on the prices that may be charged as a result, it may be like a one-legged man at a butt-kicking contest.

I agree there needs to be some sort of restraint mechanism. Someone has suggested tying top tier wages (including bonuses) to that of the average worker: In other words, the top guy can't give himself a million dollar bonus without also giving all the workers a percentage of that. Maybe something could be set to profits, too: X amount of profits need to be reinvested back into the worker. That way, raising prices to increase their bottom line won't work indefinitely, since they'd have to just turn around and sink it back into higher wages again.

I really don't know. It is definitely something to consider, re raising minimum wages and the effect it will have upon business and ultimately the consumer.

As has been shown, businesses were able to give their workers better wages than they currently do now without going out of business.

However, due to current trade agreements and the cheapening of shipping costs, competing with the extremely cheap labor of third world countries is a very real problem. The U.S. would likely have to revisit trade agreements and tax imports or something to level the playing field.

 

[LuisDantas]

What is a living wage?
(I've asked this before, but found no consensus among the very very few answers.)

Pretty difficult question actually. It depends a lot on what one is willing to consider decent living and how directly one deals with the consequences.

A particularly thorny part of it is: should people be expected to earn enough to keep a full nuclear family of four? Because anyone who does not is essentially becoming extinct through the generations.

And then there are the questionable yet significant matters of entertainment and education expenses. How optional exactly are they these days?

Let's consider the consequences of allowing no employer to pay less than this figure.

Not very easy to predict, but probably some combination of:

- Higher emphasis on job training before applying for a first job.
- Higher unemployment, at least at first.
- Less of a variation in earnings in each job, at least at lower levels (which is a very positive change IMO).
- More creative freedom and better efficiency at the frontline levels of work.
- More employers closing their doors (which can be argued as either a good or a bad thing. Hard to tell IMO).
- Carrer advancement would be far more guided by actual vocations and personal interests than it is now.
- A few profesions might well diminish significantly, particularly lawyering and military.
- Drug use and traffic would diminish significantly as well.

 

[Mercy Not Sacrifice]

Excellent thread, tyt.

Minimum-wage jobs have become a way of life for some people. Indeed, this is a contributing factor to the growing divide between the rich and the poor. It would be one thing if minimum-wage workers had at least a couple options regarding food, clothing and shelter, but this shows that such choices are not to be found.

People who deride poor people as "moochers" simply do not understand the system. It is the rich who mooch off the poor, by exploiting cheap labor, not the other way around.

 

[Revoltingest]

Pretty difficult question actually. It depends a lot on what one is willing to consider decent living and how directly one deals with the consequences.
A particularly thorny part of it is: should people be expected to earn enough to keep a full nuclear family of four? Because anyone who does not is essentially becoming extinct through the generations.
And then there are the questionable yet significant matters of entertainment and education expenses. How optional exactly are they these days?

This is the 500# gorilla in the room. A "livable wage for all" sounds so relentlessly positive, how can anyone but those fringe libertarians (me) argue against it?
But put a number to it....say $20/hr, & practical problems loom even for leftish folk.
What would happen to Obama's interns who already make less than the fed min wage?

Not very easy to predict, but probably some combination of:
- Higher emphasis on job training before applying for a first job.
- Higher unemployment, at least at first.
- Less of a variation in earnings in each job, at least at lower levels (which is a very positive change IMO).
- More creative freedom and better efficiency at the frontline levels of work.
- More employers closing their doors (which can be argued as either a good or a bad thing. Hard to tell IMO).
- Carrer advancement would be far more guided by actual vocations and personal interests than it is now.
- A few profesions might well diminish significantly, particularly lawyering and military.
- Drug use and traffic would diminish significantly as well.

There would also be greater outsourcing to private contractors, & greater impetus for automating newly expensive unskilled labor.

 

[tytlyf]

What is a living wage?
(I've asked this before, but found no consensus among the very very few answers.)
Let's consider the consequences of allowing no employer to pay less than this figure.

In public policy, a living wage or subsistence wage is the minimum income necessary for a worker to meet basic needs. These needs include shelter (housing) and other incidentals such as clothing and nutrition

Living wage - Wikipedia, the free encyclopedia

Poverty is the state of one who lacks a certain amount of material possessions or money.[1] Absolute poverty or destitution refers to the deprivation of basic human needs, which commonly includes food, water, sanitation, clothing, shelter, health care and education. Relative poverty is defined contextually as economic inequality in the location or society in which people live

Poverty - Wikipedia, the free encyclopedia

http://livingwage.mit.edu/states/26

So as you can see, the minimum wage is essentially a poverty wage. That's without children. People rely on food stamps to help get closer to a living wage. If you increase the minimum wage to say the 'living wage', that would allow you to live with basic essentials, but not be able to attain any assets.

I predict raising the minimum wage in America will have the following effects:
-Less people on food stamps
-Less people on welfare
-Less Crime
-A happier society

just to name a few off the top of my head.

 

[tytlyf]

I think the real issue here is folks trying to make a living off minimum wage jobs.

Shame on them for trying to survive! Who do they think they are?! Work 12 hours a day, 7 days a week, sleep 8 hours and enjoy your 4 hours of 'you' time a day (about $2,000 after taxes) Woohoo!!

 

[Skwim]

Per hour Minimum wage in 1950: $0.75 In current dollars this would be: $7.27

.................................1960: $1.00 ........................................$7.89

.................................1970: $1.60 ........................................$9.63

.................................1980: $3.10 ........................................$8.79

.................................1990: $3.80 ........................................$6.79

.................................2000: $5.15 ........................................$6.99

.................................2010: $7.25 ........................................$7.77

.................................2013: $7.25 ........................................$7.25

In as much as 1970 was the best year of those listed here, to match those good times today's minimum wage would have to be $43.35 Not going to happen.

 

[Me Myself]

According to the article, it does seem like minimum wage did offer a living wage in the 1950s-- you'd have enough for food, a place of your own to live, and transportation money.

A dumpy apartment, enough to eat, and the ability to get to work, with a little pocket change to grab a beer every now and then may be all a few people aspire to, but most would use such a job as a stepping point for something bigger and better. Most people don't want that forever, hence, your proclamation that we'd have nothing but people who want minimum wage for the rest of their lives is a bit unrealistic.

"a bit unrealistic" is very generous of you

 

[DallasApple]

According to the article, it does seem like minimum wage did offer a living wage in the 1950s-- you'd have enough for food, a place of your own to live, and transportation money.

A dumpy apartment, enough to eat, and the ability to get to work, with a little pocket change to grab a beer every now and then may be all a few people aspire to, but most would use such a job as a stepping point for something bigger and better. Most people don't want that forever, hence, your proclamation that we'd have nothing but people who want minimum wage for the rest of their lives is a bit unrealistic.

Agreed.IOW what some are saying is minimum wage jobs should never afford you to live basic and even poorly but independently .Minimum wage jobs then by "design" require support to survive by a 2nd party.

 

[DallasApple]

In as much as 1970 was the best year of those listed here, to match those good times today's minimum wage would have to be $43.35 Not going to happen.

How about "closer' to $43.25???

 

[DallasApple]

All I know is 7.25? Is a joke.