Minimum Wage, the Poverty Trap, and America’s Imperative (Part I)

Minimum Wage, the Poverty Trap, and America’s Imperative (Part I)

Sanjay Sanghoee

After having had the luxury this Thanksgiving of consuming liberal amounts of turkey and stuffing with our families, it is worth remembering just how lucky most of us are, or at least those of us who are over the poverty line.  For the ones below it, life is truly miserable and not just because of their circumstances but because of a lack of hope on the horizon.  If Groundhog Day was a horror movie, these people would be the stars.

At the heart of the poverty challenge lies the controversial concept of the minimum wage.  First introduced through the Fair Labor Standards Act by FDR, the federal minimum wage has slowly risen from $0.25/hour in 1938 to $7.25/hour today.  That looks impressive in nominal or absolute dollar terms but is misleading from a “real” perspective — the wage in terms of its actual buying power in today’s world.  In fact, taking inflation into account, the highest minimum wage occurred in 1968, when it was the equivalent of $10.38/hour in today’s dollars, which means that the real minimum wage has actually declined.

This presents three big problems.

the rest of the article at link above

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s