40% Of Americans Now Make Less Than 1968 Minimum Wage

[kpete]

Economist Dean Baker describes one effect of this in Minimum Wage: Who Decided Workers Should Fall Behind?

“If the minimum wage had risen in step with productivity growth (since 1968), it would be over $16.50 an hour today. That is higher than the hourly wages earned by 40 percent of men and half of women.”

Baker is referring to this CEPR study: The Minimum Wage and Economic Growth.
http://www.cepr.net/index.php/blogs/cepr-blog/the-minimum-wage-and-economic-growth

40% Of Americans Now Make Less Than 1968 Minimum Wage

Read what Baker wrote again. The minimum wage would be $16.50 an hour — $33,000 a year — if it had kept up with the growth of productivity since 1968. To put the effect of this a different way, 40% of Americans now make less than the 1968 minimum wage, had the minimum wage kept pace with productivity gains.

To put this even another way, the average American’s living standard would be much, much higher today if wages had not decoupled from productivity gains – with the gains all going to the 1% instead of being shared by We, the People. If wages had kept pace we wouldn’t feel the terrible squeeze that everyone in the middle class is feeling. (Never mind what has happened to those below the middle class.)

This is one more way to understand the effect of income and wealth inequality on each of us. The 1%/99% thing is real. When you hear that the 6 Walmart heirs have more wealth than 1/3 (or more) of all Americans combined, it is real. When you hear that the people on the Forbes list of the 400 wealthiest Americans have more wealth than half of all Americans combined, it is real.

And the effects on the rest of us are real.

http://seeingtheforest.com/40-of-americans-now-make-less-than-1968-minimum-wage/

[HughBeaumont]

1. K & R & Spread.

. . . for the suddenly Cato-loving DUers who think $15 an hour is some extravagant wage only meant for degreed individuals who "WORKED HARDER". News Flash: It's what ALL of us should AT THE VERY LEAST be making. What's wrong is degreed professionals who wear their disgustingly low wage on their sleeves like some badge of honor finger wagging "berger flippers wantin' fifteen an HOUR" not realizing . . . HEY, shouldn't you be in the streets DEMANDING MORE???

[leftstreet]

2. +1

[Liberal_in_LA]

3. that's an amazing stat

[closeupready]

6. +1. It's very revealing.

[daleo]

4. And one percent make more than the 1968 maximum wage

Much more.

[Tuesday Afternoon]

38. Much More.

[hotrod0808]

5. I'm in that 40%

and not happy about it.

[bemildred]

7. In 1968 I was married with two children (age 23) making $1.65 an hour, as a janitor.

And we lived on that, got medical care, had our own apartment, a car. Really. Now, I don't think you could eat on that, that's about $10 a day.

I know, it's just an ancedote.

[mountain grammy]

19. But not just an anecdote, that was a living wage then..

I paid for my first year of college (private college) on a $1.25/hr waitressing job.

The minimum wage should be a living wage.

[bemildred]

24. Yes, so you know too.

And that was the high point, it's been all downhill since then as far as a living wage for all.

[Art_from_Ark]

68. Prices from 1968 that I remember

Ice cream bar-- 10 cents from the ice cream truck
Chocolate bars-- 10 cents each
Saturday matinee-- 25 cents
Bowling-- 35 cents/game, 25 cents shoe rental
Roller skating-- 25 cents admission, 25 cents skate rental
Gasoline-- around 25 cents, sometimes as low as 19 cents/gallon during "gas wars"-- and service stations would also check oil and tires and clean the windshield for free.

Our house (3 bedroom, one bath, built in 1940, on 1/8 acre lot near schools)-- $8,000

Monthly take-home pay-- $320

[bemildred]

70. Yes, I remember having a couple bucks was gas money for the week.

"Can I borrow a quarter to get some gas Mr?"

[Art_from_Ark]

71. A quarter was real money back then

It could also buy 4 1st class postage stamps, 2 1/2 local phone calls from a pay phone (5 in Louisiana), a hamburger at the drive-in, 3 (sometimes 5) plays on a pinball machine...

[reformist2]

8. We are in the dark ages when it comes to wealth/economics. We dumped royalty 200 years ago, but we

but we tolerate - no, we still worship! - an economic royalty today, on some bizarre notion that such is the reward of "hard work," or "resourcefulness," or "business savvy," or whatever. It's so exaggerated, and mostly nonsense.

[99th_Monkey]

20. We pretty much ignored de Tocqueville on this, so are now paying dearly for it.

"The manufacturing aristocracy of our age first impoverishes and
then debases the men who service it, and then abandons them to
be supported by the Charity of the public. ... The friends of democracy
should keep their eyes anxiously fixed in this direction; for it ever a
permanent inequality of conditions and aristocracy again penetrate into
the world, it may be predicted that this is the gate by which they will
enter". ~Alexis de Tocqueville (1832)

[reformist2]

21. First they impoverish them, then debase, finally they abandon them. That's a deep thought there.

And so true!

[Enthusiast]

61. That is some quote! nt

[99th_Monkey]

62. Yes. I ran across it in graduate school in the 80s

and knew it was a keeper.

Sure wish we'd listened-up better.

[on point]

9. Factual error. Keeping up with inflation not th same as keeping up with productivity

Just saying.

I agree that wages should have risen with productivity, as they did in fifties.

[demwing]

17. thank you

I think that keeping up with inflation, the MW would be about $10-$11

ON EDIT: $10.74 - according to the 'Raise the Minimum Wage' website
(http://www.raisetheminimumwage.com/facts/)

[jtuck004]

35. True. So the banker used to pay you $1 to mow his yard in 1968. Today he pays you $10, and you mow

his entire estate, and the lawns of the 42 houses that he repossessed after marketing mortgages that he knew couldn't be paid back, while he was financing the place you worked to offshore the job you worked at for 27 years, the job you were fired from 3 years short of retirement. And that $5 barely buys enough gas for the mower.

[Tuesday Afternoon]

42. now That is ON POINT!!

thank you.

[dickthegrouch]

10. Fair warning to the rich:

We want our money back ... with interest!

[indepat]

11. And the Reagan revolution continues with brute force under administration after

administration and Congress after Congress as laws and policies are promoted that exacerbates this gross wage inequity and corresponding concentration of wealth among a relative few. Our society will soon be unrecognizable if these gross inequities continue for it's like the bidness of America is only bidness, that the purpose of government is primarily to assure that capital is rewarded far in excess of its contribution to the wealth created and labor adds very little to that wealth.

[socialist_n_TN]

18. In the dictatorship of capital it's ALWAYS capital that's rewarded....

far in excess of it's contribution to the wealth created. Always! The time of the New Deal era was an historical blip on the radar, a reaction to a serious threat to the entire system of capitalism. If they hadn't thrown out a few more crumbs for the working class, there would have been a revolution that would have attempted the overthrow of capitalism. So the New Deal was instituted. And a SECOND attempt was made to regulate capitalism.

Think of it like this. This is the third time that capitalism has shook off regulations that have tried to humanize the system and make it fairer. REGULATING CAPITALISM WILL NEVER WORK OVER A LONG TERM. The system itself DEMANDS to be loosened from regulation. Ergo it doesn't make sense to regulate it so that our grandchildren will have to fight this same battle that our grandparents and great grandparents had to fight.

It's time to try something else.

[indepat]

22. TPTW refuse to reign in capitalism because too many elected officials have garnered a taste

of wealth and they like it and can be bought. Neither is a Russian-styled revolution and communism the answer. What is urgently needed is a government of, by, and for the people that promotes the general welfare rather than corporate welfare, but, that sadly is not in the offing.

[socialist_n_TN]

25. A Russian style revolution..........

WITHOUT THE PARASITIC STALINIST TYPE BUREAUCRACY is the answer. And if it's not the answer then we're in REAL trouble because the only OTHER answer on the horizon is open fascism.

Trotsky- the Marxist road not taken.

[indepat]

27. Lucky us that the U.S-styled fascism, which abounds with a zeal, is wrapped in the flag and carrying

a cross of Jesus.

[daleanime]

53. ........

[SunSeeker]

12. The 1% hoovered up all the money from workers' incresed productivity.

The 1% are the real "takers."

[AnnetteJacobs]

41. Which Hoover?

This


or this?



I suppose it doesn't matter in the long run...the result is pretty much the same.

[SunSeeker]

67. Yes, pun intended. nt

[Spitfire of ATJ]

13. Just posted this...

http://www.democraticunderground.com/1017142482

[Populist_Prole]

14. To the PTB, this is a feature, not a bug

A population spending nearly every waking moment just trying to survive isn't a threat to oligarchy.

[Curmudgeoness]

15. If minimum wage kept up with inflation

from the 1968 rate of $1.60 an hour, that same amount would be $10.74 today using the consumer price index. And we all know that the CPI does not show a true picture of what inflation has done to our buying power.

Productivity increases have been on the backs of the workers, who work harder to produce the same amount as they did in the past, but all the benefit of those increases have gone to the 1%.

[gulliver]

16. Vote out all Republicans. nt

[Dustlawyer]

44. And all bought off Democrats as well! We need to get politicians who will pass real

campaign finance reform to keep them from being bought! Then we can pass a livable minimum wage and many other long over due things for the people!

[JDPriestly]

23. Now people can understand that when those of us who finished college before 1968 say that

"we worked our way through college," we are telling the truth.

We worked part-time for a minimum wage, got a little help from scholarships and our families, and we could earn enough to eat and maybe even pay tuition and get a bed in a dorm if we borrowed a tiny bit.

Our parents didn't have to throw in more than they would have paid to feed us if we had stayed at home.

And many of us did not need help from our parents at all.

Nowadays, people who work part-time have to get food stamps just to eat.

Students, families, no matter who, if you earn minimum wage, you can barely make it to the end of the month, if at all.

This has to change.

[Enthusiast]

65. This has to change.

Yes it does.

[riverbendviewgal]

26. Well, maybe some wages went up

I worked in Florida as a waitress for a few months in 1968. I made 50 cents an hour.

In 2011 I visited Florida and went to restaurants...Servers there made, if they were lucky, $2.00 an hour. no benefits of course or sick days .

[Scuba]

28. Elizabeth Warren takes this issue to the Senate ....

http://www.democraticunderground.com/?com=view_post&forum=1002&pid=3557827

[NealK]

31. I hope that she won't do an Obama when she'll be at the White House.

[demosincebirth]

29. I wonder what states have the lowest earnings per family? I could take a wild guess and

probably be right Just curious.

[NealK]

30. Thanks kpete!

[Phlem]

32. but, but,

everything's just fine!



Sorry just came off of one of those threads.

-p

[gopiscrap]

33. that is so fucked up

we need to be out in the streets fucking up business as usual til things get better

[jtuck004]

34. “The way to make money is to buy when blood is running in the streets.” John D. Rockefeller

Many of the 1% would welcome people doing that...They would see it as opportunity

[King_Klonopin]

36. And the Republican Caucus rejoiced... huzzah!!!!

[bhikkhu]

37. True, but there really isn'a any basis for expecting wages to track productivity

Productivity gains are not a matter of people being more productive, really, but a matter of automation and so forth allowing greater efficiency and faster production as industries have modernized and jobs have changed.

on edit - I'm all for raising the minimum wage; their is an an abundance of argument that could be made in favor of raising it, based on inflation, and the positive effects to the economy of people being able to afford food and things like that. There is no argument I can think of based on productivity, however, and the OP seems like the kind of confusing and misleading use of statistics that the other side is prone to.

[Half-Century Man]

50. I think if the company becomes more productive that all participants...

...should share in rewards.
The addition of automation to production results in fewer participants in the corporate dance.

I say this as a twenty + years veteran of industry. I have seen the jobs change, generally the work load increases.

[bhikkhu]

56. It is a complicated argument, not nearly as simple as the OP would indicate

Looking at bookkeeping, for instance, as an example, which is one area I have worked for 25 years. When I started, a medium-sized company did most of their bookkeeping in ledger-books, with mountains of paper for receiving, payables, payroll, etc. It was tedious and labor-intensive, and more than one person might be required for each area, including sometimes a person dedicated to answering and directing phone and mail correspondence, and a person dedicated to filing and pulling files, and keeping everything in order. Of course, its completely different now - most of that is automated and managed by computers; even the data-entry is often automated all the way through, from sales to bill payments and receipt of payments.

Should the former pay of the entire staff now be directed to the two or three individuals needed to print reports and handle exceptions? Or, in other words, should the current staff of 3 receive the full pay of the former staff of 20? Its easy to argue that wages can be higher, but there's no direct connection (or necessary justification for a direct connnection) between the scale of the productivity increases due to technology advances and what people should be paid.

Realistically, I can do the work of 4 people now, but I don't think I work harder and I don't think my employer would be competitive if he paid me 4 times what I made 25 years ago.

Or something in another area - cranberries used to be picked by hand by teams of farmworkers. Now the fields are flooded and a specialized machine runs through and picks the berries quickly and efficiently. Should the person driving the machine now be paid what the entire team of farmworkers was paid previously? Skilled labor deserves a fair wage, and everybody deserves a living wage, and productivity makes that wage possible, but there is still not a reasonable argument that says the way we used to have to do things should determine the wages for the current modern methods.

[Half-Century Man]

58. I'm a Journeyman Electrician specializing in Automated CNC Machining cells...

...So I like to think I have a passing understanding of automation.

If X amount of employees produced Y amount of product and earned Z rate in 1980; and now less-than-X produces 300(+) times Y product, it is within the realm of possibility that the rate Z might increase by say 40%.

[bhikkhu]

59. That sounds reasonable

I think a 40% increase in the minimum wage is a do-able proposition, and would benefit the economy as a whole.

What we have is very unbalanced, where all the gains go to the top and government is relied on to provide all the balance - through food assistance, healthcare subsidies, housing subsidies, etc, for people who are simply paid too little to otherwise provide for themselves.

[Half-Century Man]

60. I think 40% is the bare minimum

At this point, without delving to far into what can be harvested from the office doinks.

[CANDO]

72. Isn't it Econ 101?

Wages rise with productivity. It was never parsed or watered down to exclude automation. No matter how you slice it, if wages don't rise with productivity, you get wealth inequality and overall economic stagnation because more people with more money to spend are taken out of the equation. Talk economics with an educated wing nut in regards to raising the minimum wage, and the first thing they'll tell you is there must be productivity gains to justify it. Now it seems there are people trying to rip the carpet out from under that!

[bhikkhu]

73. On an individual basis, yes

but much of the rise in productivity has to do with the replacement of workers by machines. Much of the losses of workers in manufacturing and other areas also has to do with the replacement of workers by machines.

That does lead to it being easily possible to pay remaining workers more, but it also leads to a "soft" employment market, where there are so many people looking for jobs that employers can lowball wages and get away with it...another ECON 101 thing. To balance things (somewhat) is left to the government, which establishes the minimum wage.

Productivity gains should make that practical for businesses to do, but the minimum wage has much more to do with what people need to make a living than productivity itself.

[CANDO]

74. Thank you for fleshing out the argument.

That makes sense.

[blkmusclmachine]

39. Savvy!

[Divernan]

40. Of course the Gang of Cheerleaders is missing from the recommendation list.

Any facts which can - in even the most remote manner - be perceived as a criticism of their superhero must be disputed, or, as in this case, when that is impossible, just ignored.

By "Gang of Cheerleaders", I refer to the chunk of posters I've put on ignore. They're prolific in promotional posts for all things White House/DLC/Third Way, etc..; missing in action when it comes to most everything else, like empathy for the struggling masses, or individual DUers. They are the epitome of the "pay no attention to the man behind the curtain" spinmeisters.

[Enthusiast]

66. Great post.

I really like this-the "pay no attention to the man behind the curtain" spinmeisters.

[matt in france]

43. no wonder....

Wow.... No wonder so many 30 somethings i know have to sell drugs or steal food on top of working. You older folks had it good. Today with a masters degree i get 18000 us dollars per year to feed my family...legally anyways....and i do what i gotta do above that to eat n have a roof. it must have been nice to have been able to feed a family legally back in the day

[uppityperson]

47. Welcome to DU, where in France do you live?

[matt in france]

57. the Var

In the south but i will be moving to find work when my wife finishes law school. Thanks for the welcome

[uppityperson]

63. That's Nice. Nt

[matt in france]

64. about 1hour

From Nice

[Octafish]

45. Happy Labor Day!

How's that New New Deal for the 21st Century working out for ya?

[rhett o rick]

46. k&r thanks for posting. nm

[Quixote1818]

48. Not sure this is right. The minimum wage in 1968 was only $1.60 an hour

$1.60 an hour in current dollars would be $7.21 today we are at $4.97 in constant dollars


http://www.infoplease.com/ipa/A0774473.html

[reformist2]

51. "1996 dollars"... that's already 17 years ago!

[Quixote1818]

54. Wow! How did I miss that? Thanks for pointing that out. nt

[Quixote1818]

55. This says $1.60 would be worth $10.74 today

http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1.60&year1=1968&year2=2013

But I see your numbers are based on productivity.

[bklyncowgirl]

49. The problem is, many working class people will not support this.

I had a discussion with some co-workers about this. These were, for the most part people who make quite a bit more than $16.50 an hour but to a person they were against low skilled workers making more because they knew damn well that their own salaries have not gone up and likely will not go up. Their argument was, why should these people who did not go out and get an education or certifications like I did make as much as me?

The answer is that their pay should go up too but what should happen and what will happen are two different things in our global, high unemployment economy.

How can we counter this argument in order to get those a step up the ladder from the minimum wage workers on board with these sort of changes.

[Skidmore]

52. Why aren't we asking why pricing never

comes down with wages?

[Safetykitten]

69. More republican lies, from republican lie central. All Lies!