It’s all pretty simple really. American workers are producing more at work and bringing less dough home.
If we started in 1960 and we said that as productivity goes up, that is as workers are producing more, then the minimum wage is going to go up the same. And if that were the case then the minimum wage today would be about $22 an hour.
Here are a couple of graphs that back up that claim:
You see the gap between productivity and the real minimum wage in the bottom graph? Who reaps the benefits of that gap? And as for the top graph, Elizabeth Warren wants to know:
…with a minimum wage of $7.25 an hour, what happened to the other $14.75? It sure didn’t go to the worker.
The what? The worker? Someone in Congress is worried about the worker? Yes, it’s true. In fact, there are more than a few of them and guess what? They’re all liberal, I said, liberal, Democrats! Imagine that. Have you ever heard a conservative Republican wonder out loud why workers aren’t getting more of the benefits of the ginormous increase in productivity? Huh? Of course you haven’t.
In any case, Warren made her remarks last week during a Senate subcommittee hearing and they were directed to Dr. Arindrajit Dub, a professor from UMass who happens to know something about the minimum wage because, uh, he studied it. As HuffPo notes:
Dube went on to note that if minimum wage incomes had grown over that period at the same pace as it had for the top 1 percent of income earners, the minimum wage would actually be closer to $33 an hour than the current $7.25.
Of course, even liberal Democrats aren’t quite bold enough to ask for the whole enchilada, only this:
Warren went on to argue that raising the federal minimum wage to over $10 an hour in incremental steps over the next two years — a cause championed by President Barack Obama in his State of the Union address and since taken up in the Senate — would not be as damaging for businesses as some critics have argued.
As the Center for Economic and Policy Research pointed out in another piece (Minimum Wage Raise is the Least We Can Do to Civilize America”), the minimum wage is not just a kid’s wage:
Contrary to prevailing myths about who would benefit from a proposed increase in the minimum wage, 88 percent of the 28 million workers affected are not teenagers. As the Economic Policy Institute has shown, the majority are full-time workers, and on average they earn about half of their families’ income. And 28 percent of the nation’s 76 million children would have a parent who would benefit from the raise.
Another minimum wage myth that needs a dose of reality is this one:
And raising the minimum wage doesn’t only cut into profits, it also increases demand in the economy by moving income to workers who spend more than those who receive profit. The Economic Policy Institute estimated that the proposed increase in the minimum wage would actually increase employment.
And dispelling the largest myth of all:
Although it is theoretically possible to raise minimum wages enough to cause employers to hire fewer workers, there is hardly any indication from economic research that the proposed increase in the minimum wage would have this effect.
So, under the Warren proposal, almost 25 million folks, many of them with kids, would get a raise which would in turn benefit the entire economy and would not increase unemployment in the slightest.
Who could be against that?
Oh, I forgot.
The mainstream press is too busy worrying about reforming the Republican Party and the Republican Party is too busy worrying about keeping tax rates low on rich people.
Only liberal Democrats have time to celebrate and promote the interests of the American worker.