Basic Math on the Minimum Wage

shortlink:  mnemonic:

People say that a minimum wage increase to $12 an hour in 2014  is a “massive increase” but in fact it represents a mild 4.48% annual rise over the 46 years since 1968 when it stood at $1.60. At $10 an hour the “mass” is reduced to 4.07% annually. At today’s $8.00 an hour that increase is a decidedly mild 3.56% over a 46 year period, including the massive inflationary periond we endured post-Vietnam War. (See WIN, ie “Whip Inflation Now”)

You can do the math yourself, just massage the figures, 46 periods, set the interest and the future value and try it til you get it right. Its an estimation technique familiar in numerical analysis.

Really at this point the issue that the raise has gone unaddressed for so long overshadows the interest rate. Because although these are numbers on a screen, it is our brothers and sisters who are feeling the pain in real life. And they will go on suffering until we raise their wages.


Right Wing Dark Money Steps into California Minimum Wage Fight

By Adolfo Flores, Los Angeles Times   March 27, 2013
Proposed legislation to raise the state minimum wage could eliminate tens of thousands of jobs and harm the California economy, a small-business advocacy group said.

The measure, AB 10, could wipe out more than 68,000 jobs over 10 years and cost $5.7 billion in lost production of goods and services, according to a study released Tuesday by the National Federation of Independent Business.

The bill, introduced in December by Assemblyman Luis Alejo (D-Salinas), would increase the minimum hourly wage to $8.25 in 2014 from $8 now. The legislation would further increase it to $8.75 in 2015 and $9.25 in 2016.

In 2017 and annually thereafter, the minimum wage would be adjusted to keep up with inflation.,0,5034816.story

Huffington Post:

WASHINGTON — The same group that exposed the previously little-known American Legislative Exchange Council (ALEC) as a dominant force advancing corporate interests at the state level has now turned its sights on exposing the National Federation of Independent Business (NFIB).

NFIB is hardly operating in near-secrecy, like ALEC was. The organization, which describes itself as “the voice of small business,” was the lead plaintiff in the ultimately unsuccessful lawsuit against the Affordable Care Act, taking it to the Supreme Court.

The left-leaning Center for Media and Democracy has posted on, its new website, a study that reveals how consistently the NFIB lobbies on issues that favor large corporate interests rather than small-business interests; its thoroughly partisan agenda; and the millions it receives in secret contributions from groups associated with Karl Rove and the Koch Brothers.


On its website, the National Federation of Independent Business states that it is a “nonprofit, nonpartisan organization founded in 1943” and “represents the consensus views of its members in Washington and all 50 state capitals.”[2] Its PAC is called Save America’s Free Enterprise Trust (SAFE).[3] The organization’s donations tend to strongly favor Republicans.[4]

In 2010, 25 of its members, all Republican, were elected to the 112th Congress.[5] A number of them, such as Rand Paul, Jeff Duncan, Paul Gosar and Kristi Noem, are affiliated with or endorsed by the Tea Party movement. The same year, the NFIB opposed the Patient Protection and Affordable Care Act health care reform legislation while some other small business advocates supported the measure.[6] The organization joined 26 states in the lawsuit challenging the constitutionality of the Act. The case was picked up by the Supreme Court, which issued its ruling on National Federation of Independent Business v. Sebelius on June 28, 2012, upholding most provisions of the Act.


National Federation of Independent Business

The National Federation of Independent Business (NFIB) is a lobbying group that calls itself “the voice of small business.”[1] However, the group has been shown to lobby on issues that favor large corporate interests and run counter to the interests of small businesses.[2][3] News reports have also found that NFIB, which claims to be non-partisan, engages in partisan politics, and receives millions in hidden contributions.   Small business owners run the gamut politically. For instance, 33 percent identify as Republicans, 32 percent as Democrats, and 29 percent as Independent.[4] However, NFIB accepted a $3.7 million gift in 2010 from Crossroads GPS, a group affiliated with Republican political operative Karl Rove that overwhelmingly endorses and financially supports Republican candidates.[5] According to new data compiled by the Center for Responsive Politics (CRP), in 2010 the NFIB Small Business Legal Center (SBLC) received $1.15 million from “conservative 501(c)(3) conduit group” Donors Trust, a major contributor to the Koch brothers’ Americans for Prosperity Foundation. Other contributions include the Lynde and Harry Bradley Foundation, which gave to a wide range of conservative groups including the American Legislative Exchange Council (ALEC).[6][7][8][

crossposted to: or:


David Cay Johnston Exposes Shocking Income Inequality Facts

David Cay Johnston shows the disparity between the gains in incomes of the average taxpayers and those in the top 10 percent.

David Cay Johnston received the Pulitzer Prize for his coverage of tax policy while at The New York Times. He now teaches at Syracuse University College of Law and is the author of three books about taxes — Free Lunch, Perfectly Legal, and The Fine Print.

In 2011 entry into the top 10 percent, where all the gains took place, required an adjusted gross income of at least $110,651. The top 1 percent started at $366,623.

The top 1 percent enjoyed 81 percent of all the increased income since 2009. Just over half of the gains went to the top one-tenth of 1 percent, and 39 percent of the gains went to the top 1 percent of the top 1 percent.

Ponder that last fact for a moment — the top 1 percent of the top 1 percent, those making at least $7.97 million in 2011, enjoyed 39 percent of all the income gains in America. In a nation of 158.4 million households, just 15,837 of them received 39 cents out of every dollar of increased income.

That extreme concentration, however, is far from the most jaw-dropping figure that can be distilled from the new Saez-Piketty analysis. That requires a long-term comparison of those at or near the top with the bottom 90 percent.


In 2011 the average AGI of the vast majority fell to $30,437 per taxpayer, its lowest level since 1966 when measured in 2011 dollars. The vast majority averaged a mere $59 more in 2011 than in 1966. For the top 10 percent, by the same measures, average income rose by $116,071 to $254,864, an increase of 84 percent over 1966.

the entire article may be explored at

My Word: Workers’ pay should be tied to inflation: Back the Fair Wage Act

Kimberly Starr and James Decker/for the Times-Standard
Posted: 03/20/2013 02:39:27 AM PDT

We are long overdue for a raise in the minimum wage. Working class people  of Eureka need a victory that will improve their lives — and the Fair  Wage Act will be that victory. The minimum wage must be indexed to  inflation to insure that those at the bottom share in the growth of our  economy. We must reverse the trend of 2 percent of the people in the  U.S. solely capturing all the benefits of improved productivity and  innovation. It is theft of peoples’ time, labor and ideas.In  Eureka, we cannot rely on politicians. We’ve come together and created  an ordinance to strengthen our community by giving the lowest paid  workers a long overdue raise.

The federal minimum wage was  first established in 1938 when FDR signed the Fair Labor Standards Act,  which also established the 8-hour day, paid overtime, and child labor  protections. The FLSA emerged, over the violent opposition of  businessmen, due to strikes, pickets and other actions of brave working  people. In 1938, and with every worker-benefiting amendment to the FLSA  since, politicians, business leaders, and think tanks have opposed the  minimum wage, claiming myriad suffering the “minimum wage horror” would  cause the fall of the American empire, devastation of businesses, “more  misery and unemployment than anything since the Great Depression” (Ronald Reagan, 1980). However, the minimum wage and its increases  improved economies of all sizes, holding only benefits for employers and workers alike.

From 1938 to 1968 , the purchasing power of the minimum wage increased by  over 140 percent. Minimum wage workers saw a positive upgrade in their  living standards as wages rose in step with productivity growth.

If the federal minimum wage kept pace with improved productivity of  workers it would now be over $20 an hour. Had it increased with the  rising cost of living, even by conservative calculations, it would be  over $10.50. California is a high cost-of-living state with the lowest  minimum wage on the west coast, $8 an hour. It’s time to raise wages and tie them to inflation.

As we circulated the Fair Wage Act  throughout Eureka, the responses were no surprise: People want and need  to bring home decent pay. People know their time and labor are valuable. Corporate profits are at record highs; it is past time for those  profits to be shared with the workers who produce them.

Forces  that oppose higher wages say they’re concerned about job loss — never  considering job loss when it comes to raising CEO pay. Increasing the  minimum wage, especially during high unemployment times, has been found  throughout various geographical areas and time periods, to either have  no effect on employment or, more often, stimulate job growth. We have 75 years demonstrating that as wages rise, employment rises.

Humboldt folks might find relevant a study by Princeton economists comparing the effect on employment in New Jersey to employment across the river in  eastern Pennsylvania, after New Jersey raised the minimum wage and  Pennsylvania did not. The border there is slight, neither a barrier to  commerce nor employment. Employment rose in New Jersey when wages rose.  Employment stayed the same in Pennsylvania with the stagnant minimum  wage. This pattern happens throughout the U.S. where one county raises  wages and the neighbor county does not. Employment improves where the  minimum wage is higher.

Recently, calling for too small a  raise, the president nevertheless spelled out a strong case to the  nation for raising the minimum wage: “ … our economy is stronger when  we reward an honest day’s work with honest wages. But today, a full-time worker making the minimum wage earns $14,500 a year. … still liv[ing] below the poverty line. That’s wrong. Tonight, let’s declare that in  the wealthiest nation on Earth, no one who works full-time should have  to live in poverty … . It could mean the difference between groceries  or the food bank; rent or eviction; scraping by or finally getting  ahead. For businesses across the country, it would mean customers with  more money … . Let’s tie the minimum wage to the cost of living, so  that it finally becomes a wage you can live on.”

People and the economy need a boost in Eureka. Most minimum wage workers, a majority  of whom are women, support households. Too many households are  struggling on low wages to meet rising food, housing, transportation and health care costs, with no retirement fund. A higher minimum wage is  just. It will help start an economic surge in our communities,  increasing spending, business viability, and creating new jobs. Support  the Fair Wage Act.

Kimberly Starr and James Decker, Eureka residents, are signatories to the Fair Wage Act initiative. For more information, visit

KIEM ch3 nbc Eureka Interviews Eureka Fair Wage Act Proponent James Decker

KIEM asks Eureka Fair Wage Act proponent James Decker some pertinent questions about raising the minimum wage to $12 in Eureka – and gets some straight answers.
While you are there take the poll!

Senator Elizabeth Warren’s Q&A on the Minimum Wage at the March 14, 2013 Senate HELP Committee

Published on Mar 15, 2013

Senator Elizabeth Warren’s Q&A at the March 14, 2013 Senate HELP Committee hearing titled “Keeping up with a Changing Economy: Indexing the Minimum Wage.” Witnesses include Brad Avakian , Commissioner, Oregon Bureau of Labor and Industries, Portland, OR; Dr. Arindrajit Dube , Department of Economics, University of Massachusetts Amherst, Amherst, MA; Lew Prince , Managing Partner, Vintage Vinyl, St. Louis, MO; Carolle Fleurio , Restaurant Worker, Jonesboro, GA; Melvin Sickler , Franchisee, Auntie Anne’s Pretzels and Cinnabon, Williamstown, NJ; David Rutigliano , Owner, Southport Brewing Company, Trumbull, CT

The Laboratory of Life

shortlink here:  mnemonic here:

It is said that we don’t need a minimum wage, that a minimum wage causes unemployment, that if the minimum wage were lower – or completely eliminated – then employers could afford to hire more workers.  It is said often that this is “supply and demand” and an ironclad “law of economics.”  It is of course an argument designed to appeal to the simpler minded half of the gene pool.

Yet two facts confront us.  

One, the real purchasing power in constant dollar terms of the minimum wage has declined for 45 years, so there has been a de facto “lowering” of the minimum wage, and Two, we currently have a very persistent and high level of unemployment.  

The laboratory of life has proved this favorite Chamber of Commerce meme to be a fabrication that is nowhere near real life economics.

We conclude that the theory that lowering the minimum wage increases employment is FALSE.

shortlink here: