If the minimum wage had kept pace with gains in the economy's productivity over the last 50 years, it would be nearly $26 an hour today, or more than $50,000 a year in annual income, one economist notes.
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Among hourly-paid workers in 2016, 701,000 earned the federal minimum wage and about 1.5 million earned wages below the minimum. Together, these 2.2 million workers represented 2.7% of all hourly-paid workers.
If our standard for minimum wages had kept pace with overall income growth in the American economy, it would now be $21.16 per hour. Yes, had the US income distribution and US standards of decency remained exactly what it was in 1968, the minimum wage would now be $21.16 per hour.
Even a $21.16 minimum wage wouldn’t represent progress. It would mean socially standing still, just with better technology and higher productivity levels. Progress would mean a minimum wage in excess of $21.16 per hour. Of course, a minimum wage in the mid-20s is politically inconceivable.
Our country’s productivity gains in recent decades should have translated into a minimum wage today of $24 an hour — and by 2025, it should be almost $30. This may sound preposterous. But in fact, U.S. society was once on a path to this destination.
But shortly after the 2021 Autumn Budget, the Living Wage Foundation announced a new rate of £9.90 across the UK, and £11.05 for London. The Labour party last year voted to put the minimum wage up to £15 if they are elected into government.
7.25When adjusted for inflation, the 2022 federal minimum wage in the United States is around 40 percent lower than the minimum wage in 1970....CharacteristicUnadusted wage (real U.S. dollars)Inflation adusted wage (nominal U.S. dollars)20227.257.2520217.257.8720207.258.0820197.258.29 more rows•May 10, 2022
Where are $15 minimum wages? Besides California and New York, nine states are headed to a $15 pay base over the next four years – Connecticut, Delaware, Florida, Illinois, Maryland, Massachusetts, New Jersey, Rhode Island and Virginia.
The federal minimum wage of $7.25 per hour has not changed since 2009. Increasing it would raise the earnings and family income of most low-wage workers, lifting some families out of poverty—but it would cause other low-wage workers to become jobless, and their family income would fall.
If the federal minimum wage had grown at the same pace as productivity, Baker said, "We'd be over $27 an hour, if you added in inflation and productivity growth." (Editor's note: Baker is referring to his analysis for the Center for Economic and Policy Research that miscalculated that the productivity-adjusted minimum ...
Historical experience with minimum wage hikes show they do in fact cause prices to rise, which in turn most directly affects lower to middle income people who spend a larger proportion of their earnings on goods affected by inflation such as groceries.
As of January 1, 2022, the District of Columbia had the highest minimum wage in the U.S., at 15.2 U.S. dollars per hour. This was followed by California, which had 15 U.S. dollars per hour as the state minimum wage.
The two states with the lowest minimum wage are Georgia ($5.15) and Wyoming ($5.15). However, employers in Georgia and Wyoming who are subject to the Fair Labor Standards Act must still pay the $7.25 Federal minimum wage.
The only cities with higher statutory minimum wages are Seattle, Washington ($17.27) and San Francisco ($16.32). Thus, though the cost of living in Denver is about 14% higher than the national average, the real minimum wage is $13.84.
Raising the federal minimum wage to $15 an hour would improve the overall standard of living for minimum wage workers. These workers would more easily afford their monthly expenses, such as rent, car payments, and other household expenses.
Companies charge more for their goods to pay higher wages, and the higher wages also increase the price of goods in the broader market.
Opponents of increasing the minimum wage to $15 argue that it will burden small businesses—which make up 99 percent of all employers—with increased labor costs and result in layoffs, expediting automation or going out of business.