Thursday, June 22, 2006

Debunking Republican Minimum Wage Bunk

I saw a comment over at the Gun Toting Liberal's blog about a post regarding that Congress has increased their pay by $31,000 in the past 9 years, but has done nothing to increase the minimum wage in the same amount of time.

Raising minimum wage has almost always been connected to cost of living hikes.
Raising the minimum wage is good for a minute, then the cost of groceries goes up and boom, everything is back where it started, in the crapper. Good initiative,bad judgement. [sic]

It might seem that this would be common sense. Increase the rate of pay and inflation spikes. But it is untrue.

First of all, it needs to be pointed out that a person working for minimum wage is 27% under the poverty level in the united states and has, due to inflation, become worse and worse each and every year. Think about that. You could work 40 hours a week, 52 a year, and earn only $10,712 for the year. In the 1960's and '70's minimum wage kept a family of three out of poverty and off the public dole.

Now, lets look at historical trends after minimum wage increases. Does inflation really go up?

The answer is no.

In 1996, the year before the last time that the minimum wage was increased, inflation was at 2.93%. In 1997, the year the wage increased, inflation was 2.34%. In 1998, it was 1.55%. In 1999, it was 2.19%

The minimum wage was increased in 1990-91 also. Inflation went from 5.39% and decreased every year over the next 4 years to be at 2.61% in 1994.

The minimum wage was also increased in 1974 and inflation again went down every single year for the next 4 years.

In 1963 when the minimum wage was increased, inflation held steady for the next 3 years. And the same thing in 1961.

The only time that inflation increased after a minimum wage increase was in 1968 and that was only by a little more than 1% over 3 years, and that was during the height of deficit spending on the Viet Nam war.

The other argument is that an increase in the minimum wage kills jobs. In 1996, Republican Representative Jim Saxton led a battle to stop Clinton's initiative to increase the minimum wage. He claimed that a hike in the minimum wage would lose 600,000 jobs in the united states. In actuality, the ranks of the employed continued to grow over the next 2 years (including adjustments for population growth).

In fact, the last 5 years have had the least job growth since 1964, down 1.6% from the years right after our last minimum wage increase.

So, all the GOP talking points about inflation and unemployment are just a bunch of myths cooked up to save their hides from the fact that they are not doing what they should be doing - raising the minimum wage to a respectable level.



Economic Policy Institute

Fiscal Policy Institute

US Department of Labor statistics

Job Watch

1 comment:

Internet Esquire said...

How would you respond to the position that an expansion of the Earned Income Tax Credit would be a much more efficient and equitable way of helping the working poor than raising the minimum wage?