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Protesting the minimum wage
- By Eric Lundin
- December 5, 2013
The federal minimum wage goes back to 1938 when it was initiated 25 cents per hour. Adjusted for inflation, that was equal to $4.14 per hour (in 2013 dollars). Since then Congress raised the minimum wage at varying intervals, some as short as a year and once more than nine years. For decades the minimum wage tended to grow faster than inflation, and it hit its inflation-adjusted peak at $10.74 per hour in 1968 ($1.60 per hour back then). Since then it has lost quite a bit of ground. It hit bottom in 2007 when it was $6.59 per hour. It has made up some of that, growing to $7.25, but it’s still about 30 percent below the high-water mark in 1968.
It’s probably a bad idea to compare today’s minimum wage with that of 1938 because too many economic factors have changed since then. Even a comparison to 1968 is a little dicey. Foremost is the demographic of minimum-wage earners. As pointed out by Chris Kuehl, Ph.D., in years gone by most these positions were just temporary jobs filled by teenagers and college-age workers. These days many adults rely on such positions to feed their families.
Second, lifestyles have changed quite a bit. In 1938, the family car was becoming fairly common; these days it seems that nearly every American of driving age owns a car, and many of us own two or three. Internet service, cell phones, cable television – modern life if full of conveniences and costs that simply didn’t exist in 1968. Should the minimum wage be an austerity program for a single person, or should it be high enough that the minimum-wage earner can raise a family and afford a few little luxuries?
Having said all that, it’s understandable that the inflation-adjusted peak is a rallying point. What would happen if Congress were to increase the minimum wage to $10.74 in one step (or to the $15.00 many are demanding)? I don’t know the cost structure of a fast-food meal, but my guess is that increasing the labor component that much, that suddenly, would leave more than a few balance sheets in tatters. Not just fast food, but a multitude of good and services would suddenly be much more expensive, and more than likely the employers would start cutting where cutting is easiest, by reducing labor.
This is a difficult issue, at best. Advocates claim a higher minimum wage would help the economy by putting more money into many workers’ pockets, and this much is true, but it’s also true that many minimum-wage workers would find themselves suddenly unemployed.
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The Fabricator is North America's leading magazine for the metal forming and fabricating industry. The magazine delivers the news, technical articles, and case histories that enable fabricators to do their jobs more efficiently. The Fabricator has served the industry since 1970.
start your free subscriptionAbout the Author
Eric Lundin
2135 Point Blvd
Elgin, IL 60123
815-227-8262
Eric Lundin worked on The Tube & Pipe Journal from 2000 to 2022.
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