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  1. #1
    VIP Member Smokey's Avatar
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    What minimum wage buys, then and now

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

    (All figures represent the average cost of a movie ticket, a gallon of gas, and the median rent.)

    1950

    •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

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

    1970

    •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

    •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

    •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

    •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

    •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

    A gallon of gas is $3.79 in 2012. I wonder what it would be in 2020.

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

  2. #2
    Stereo value > car value texlle's Avatar
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    Wow, startling figures especially when described with respect to units of hours worked.
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  3. #3
    RGA
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    So the issue is - how will all the people get together to increase minimum wage? Unions don't seem too popular.

    And businessmen want the min wage lowered not raised. Give them a tax break and they buy a nicer car for their wife and season tickets to their sports teams - what they're not doing is hiring more people or paying them more. Indeed, they may invest in a sophisticated computer program to lay off half the staff they already employee. Greed is good - so screw the min wage people - they're barely considered human by the rich.

    Rich people view poor people like a 6 year old views and ant.

    Go to the 2 minute mark - that is the way rich view their employees. The Third Man (1949) - If one of those dots stopped moving forever - YouTube

  4. #4
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    Very good! So often, people fail to look at the big picture. An employer may think if only he/she could pay less in wages, cost would go down and profit would go up. This might be true if the competitors still had to pay a higher minimum wage, but in reality, they are subject to the same rules, and the employer has gained no competitive advantage.

    From the demand side, it is quite clear that people on minimum wage can buy less than they used to. They have less money to spend on the employers' goods and services. Oops! In the big picture, that means less demand for goods and servies, which means there is no use hiring more workers since the demand is not there, which means higher unemployment.

    Robert Reich (How to Create More Jobs By Lowering Wages: Texas and America)

    Robert Reich (THE SEVEN BIGGEST ECONOMIC LIES The President

    Would cutting the minimum wage raise employment? - NYTimes.com

    Dave Johnson: To Fix the Economy, Raise Wages

    The bogus case against the minimum wage hike - U.S. Economy - Salon.com
    "Opposition brings concord. Out of discord comes the fairest harmony."
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  5. #5
    Shostakovich fan Feanor's Avatar
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    Quote Originally Posted by Pat D View Post
    Very good! So often, people fail to look at the big picture. An employer may think if only he/she could pay less in wages, cost would go down and profit would go up. This might be true if the competitors still had to pay a higher minimum wage, but in reality, they are subject to the same rules, and the employer has gained no competitive advantage.

    From the demand side, it is quite clear that people on minimum wage can buy less than they used to. They have less money to spend on the employers' goods and services. Oops! In the big picture, that means less demand for goods and servies, which means there is no use hiring more workers since the demand is not there, which means higher unemployment.

    Robert Reich (How to Create More Jobs By Lowering Wages: Texas and America)

    Robert Reich (THE SEVEN BIGGEST ECONOMIC LIES The President

    Would cutting the minimum wage raise employment? - NYTimes.com

    Dave Johnson: To Fix the Economy, Raise Wages

    The bogus case against the minimum wage hike - U.S. Economy - Salon.com
    Reich and Paul Krugman are heros of mine. Would that one of them were US Secretary of the Treasury instead of that proven Wall Street lackey, Tim Geithner. Reich and Krugman are among the few who will clearly state what is true, which is that what the economy needs is consumer demand, and that the way to get that is through government demand creation such as infrastructure renewal, etc.

    Perhaps the saddest failure of Barack Obama was to be charmed by Geitner rather than listening to Larry Sommers and Paul Vocker who wanted to discipline the Big Banks when the Government actually had the upper hand. Too late now -- Wall Streets lobby machine has kicked and is spending hundreds of millions to buy off Congress.
    Last edited by Feanor; 05-07-2012 at 05:12 AM.

  6. #6
    Shostakovich fan Feanor's Avatar
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    Minimum wage efficacy is undermined in the USA by the huge supply of illegal workers.

    Make no mistake: illegal immigration is here to stay, (though reduced during the recession), because it provides small & medium (especially) business with a supply of worker to whom they can give low wages, no benefits, and poor/illegal working conditions

  7. #7
    VIP Member Smokey's Avatar
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    Quote Originally Posted by Feanor View Post
    Minimum wage efficacy is undermined in the USA by the huge supply of illegal workers.
    Not really

    By law any business in US have to have proof that their emloyees are legal or face stiff fine as will be employer's responsibility. So businesses tent to want miltiple documents to put in their files mandated by federal law.

    Most illegals tend to freelance in construction, farming and seasonal jobs. It's hard life neverthless.

  8. #8
    I put the Gee in Gear.... thekid's Avatar
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    The concern here should not be the amount of or the buying power of minimum wage. the issue should be the % of people in jobs that only pay minimum wage.

    Because the US has become a service based economy the skills neeeded to work jthese obs has becomes less technical/specific. Service based business are not competing globally or in many cases not even nationally.

    It is not as simple as the "rich" wanting to hold onto their money that drives wage stagnation as much as low-skilled service based jobs are more subject to the competition of the local market. In most cases the biggest component of these business overhead is labor. Thus if the business wants to remain competitive they have to keep wages low.

    The birth of the multi-national companies however have also put a strain on the wages of even the most technical jobs because workers are now competing against each other on a global basis and the labor market is now international. A country with lower living standards and a relatively well-educated labor force is able to attract jobs for around the globe. Unless governments alter tax policy or even in some cases excercise some protectionist policies they will find their best paying jobs constantly going overseas which then reduces their labor force to compete for those most menial jobs.

    That does not mean there is not room for labor reform so that some of the wage inequity which exists is addressed. However it does mean that there are no simple answers like just raising the minimum wage everytime the buying power of minimum wage is reduced.

  9. #9
    Shostakovich fan Feanor's Avatar
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    Quote Originally Posted by thekid View Post
    The concern here should not be the amount of or the buying power of minimum wage. the issue should be the % of people in jobs that only pay minimum wage.

    Because the US has become a service based economy the skills neeeded to work jthese obs has becomes less technical/specific. Service based business are not competing globally or in many cases not even nationally.

    It is not as simple as the "rich" wanting to hold onto their money that drives wage stagnation as much as low-skilled service based jobs are more subject to the competition of the local market. In most cases the biggest component of these business overhead is labor. Thus if the business wants to remain competitive they have to keep wages low.

    The birth of the multi-national companies however have also put a strain on the wages of even the most technical jobs because workers are now competing against each other on a global basis and the labor market is now international. A country with lower living standards and a relatively well-educated labor force is able to attract jobs for around the globe. Unless governments alter tax policy or even in some cases excercise some protectionist policies they will find their best paying jobs constantly going overseas which then reduces their labor force to compete for those most menial jobs.

    That does not mean there is not room for labor reform so that some of the wage inequity which exists is addressed. However it does mean that there are no simple answers like just raising the minimum wage everytime the buying power of minimum wage is reduced.
    Excellent comments, Kid.

    First, I have to agree that individual companies need to be competitive and can't be blamed for doing what is necessary to stay that way. This doesn't entirely explain why quite profitable & competitive companies shaft employees. In plainer words, it isn't so much about remaining competitive as it is about maximizing profits. A recent example being Caterpillar closing a locomotive plant in Ontario and moving production to Indiana. Caterpillar demanded a 50% wage reduction for Ontario workers though the operation. As I recall, the Indiana operation would have significantly lower labor costs, possibly because it isn't unionized.

    Secondly I agree that raising the minimum wage is simplistic and far from the whole answer to poverty.

    Global competition is inevitable. Changes in electronic communication and also greater efficiency in physical transportation have enabled it. In case of physical transportation, it's been things like the use of standard shipping containers, and larger ships and ports to accommodate them. Higher fuel prices, however, will work against the transportation advantage.

    My son has a very decent job working as software developer. But he's aware, as I pointed out to him, that he is competing with developers in India working for maybe 10-20 cents on the dollar.

    As I said to E-Stat recently, globalization is the elephant in the room, but we don't have to feed him. The challenge for countries like the US, Canada, and in Europe is the adapt to global competition gracefully and not merely join the race to the bottom. We need to find useful ways to sustain domestic demand such as by investing in infrastructure, green energy, and education. Programs like these would support specifically workers and small & medium businesses, and help our countries remain broadly competitive. Money for this ought to come from the wealthier segments of society who would otherwise hoard the money or invest it offshore. A phased-in fossil fuel tax would help funding while modifying consumer & business behaviour in a positive direction.

  10. #10
    Music Junkie E-Stat's Avatar
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    Quote Originally Posted by Feanor View Post
    As I said to E-Stat recently, globalization is the elephant in the room, but we don't have to feed him. The challenge for countries like the US, Canada, and in Europe is the adapt to global competition gracefully and not merely join the race to the bottom.
    I agree with the kid - that means that a discussion of how much workers earn at McDonalds is irrelevant to the notion that folks need to start thinking about careers - not jobs.

    Quote Originally Posted by Feanor View Post
    A phased-in fossil fuel tax would help funding while modifying consumer & business behaviour in a positive direction.
    I have no problem with that concept. You'll find others, however, who point out that is a highly regressive tax.

  11. #11
    Man of the People Forums Moderator bobsticks's Avatar
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    Quote Originally Posted by E-Stat View Post
    ... You'll find others, however, who point out that is a highly regressive tax.
    And they'd be right because it is.

    Not for nothing but Americans already pay a significant amount of tax per gallon at the pumps:
    Gasoline tax information - North Carolina Gas Prices

    Further, it's a pretty hard sell trying to convince anyone with over an Eighth Grade education that the best way to get more money and greater purchasing power into the hands of the people is to tax them.

    It's probably important to note that the suggested tax would also effect the ability of agribusiness/food concerns to reliably transport groceries. In the real world this tends to raise retail prices.
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  12. #12
    Shostakovich fan Feanor's Avatar
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    Quote Originally Posted by E-Stat View Post
    I agree with the kid - that means that a discussion of how much workers earn at McDonalds is irrelevant to the notion that folks need to start thinking about careers - not jobs. ...
    There won't be careers without investment in public education. Not everybody will be going to Harvard on Daddy's dime or a scholarship.

    Quote Originally Posted by E-Stat View Post
    ...
    I have no problem with that concept. You'll find others, however, who point out that [a fossil fuel tax] is a highly regressive tax.
    It's a sort of sales tax so of course it's regressive. However it's necessary as a behaviour modifier as well as a revenue source, and it's a pure supply/demand free market operator vs. fleet mileage maximums for instance.

  13. #13
    I put the Gee in Gear.... thekid's Avatar
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    Quote Originally Posted by Feanor View Post
    There won't be careers without investment in public education. Not everybody will be going to Harvard on Daddy's dime or a scholarship.
    Recent cuts in public education by states across the country is just one more example of the short-sighted/easy fix solutions that our politicians have been taking to address more deeply seated problems in their local, state and national economies. It is an easy fix for politicians to layoff teachers in an effort to trim budgets.

    I am not saying that spending large amounts of money on public education equates to a quality education or that public school systems do not suffer from the some of the same bloat that can exists in other government agencies. However their is a correlation with classroom size and student performance and truancy rates.

    The majority of people (except those laid off) don't see the impact of these cuts. However it is already clear in large sections of inner cities and even rural areas what happens to the living standards of an area where a large segment of the population is poorly educated. Higher crime rates, increased medical problems and of course higher unemployement and lower wages. All of which eventually impacts government spending at a greater rate than the short term budget savings gained from gutting education.

    I heard someone once say you can build/maintain schools and pay for teachers now or you can build prisons and Section 8 housing later.

    As for college costs don't even get me started. My kids are not going to "Harvard on Daddy's dime" but we are footing the cost with a minimum amount of student loans and increased personal debt but we are fortunate. My son still has 3 years to go but my daughter graduates this weekend so hopefully it will get a bit easier.

    The balloning student debt is the next financial crisis on the horizon. In many cases the same flawed thinking and predatory lending practices that created the mortgage/financial crisis has moved over to student loans. With the sky-rocketing costs of college education (in part fueled by state budget cuts) students are now graduating with debt levels equal to a small mortgage. In an economy based on consumer spending, it does not bode well that our newest consumers enter the economy saddled with relatively large debt to income ratios.

  14. #14
    Shostakovich fan Feanor's Avatar
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    Quote Originally Posted by thekid View Post
    ...
    As for college costs don't even get me started. My kids are not going to "Harvard on Daddy's dime" but we are footing the cost with a minimum amount of student loans and increased personal debt but we are fortunate. My son still has 3 years to go but my daughter graduates this weekend so hopefully it will get a bit easier.

    The balloning student debt is the next financial crisis on the horizon. In many cases the same flawed thinking and predatory lending practices that created the mortgage/financial crisis has moved over to student loans. With the sky-rocketing costs of college education (in part fueled by state budget cuts) students are now graduating with debt levels equal to a small mortgage. In an economy based on consumer spending, it does not bode well that our newest consumers enter the economy saddled with relatively large debt to income ratios.
    I hear you. My kids are finished college now. They each cost me about $40k to educate. At least my son has decent job.

    My daughter, however, is a case where a kid went to college but not can't find a job. Partly it's the recession. Partly it's the private education business flooding the market with graduates, many with dubious training. My daughter hooked one of 33 slots at a highly-rightly regarded public college that got 1100 applications; she graduate with a 4.1 average but still can't find a full-time job. Kind of pisses me off.

  15. #15
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    I am not sure where this is supposed to go.....

    Our darling daughter went to Hampshire College in MA. 84% or their grads go for graduate degrees and the rest go into business for themselves.

    DD became a Dr and for many years now she has saved $80,000 a year. Of course she & her husband do not live the BIG life. Her husband is a bankster & I do not know what he saves....

    We had accumulated no debt from her education....

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