The Federally mandated minimum wage today is $7.25 per hour. This is not enough for anyone to live on, anywhere in the country. To put into perspective just how desperate the plight of the American worker has become, consider the following:
In 1968, the minimum wage was the equivalent of $11.17 in today’s money, taking into account CPI based inflation. However…
- The average University Education in 1968 cost the equivalent of about $1400 in today’s dollars, per year. But in-state tuition at public colleges in 2017 average $9,650. Out of state students will pay an average of $24,930. And a private institution averages $33,480 in just tuition and fees!
- In California, in 1968, the median home price would be approximately $163,000 dollars in today’s money. Today the actual median home price is $497,500!
- In 1968, the average California Apartment cost approximately $687 per month (in today’s money). The average one- and two-bedroom apartments in the Golden State today now cost about $1350 and $1500!
And all of these values take inflation into account! So while the real cost of education has increased by 589%, housing by 205%, and rent by 96%, the minimum wage has FALLEN by 35%! And this in a time when workers are more productive than ever! So what is happening? Where is that money going and who is buying all of these expensive things?!
In 1965, the average CEO made about 20 times that of the average worker, according to a 2015 report by the EPI. But today the average CEO of a Fortune 500 company makes over 300 times what his workers do. (And over-sized executive paychecks are not limited to just the CEO!) What’s more, this is being enabled not only by the workers getting paid so little, but it’s being subsidized by the U.S. TAXPAYER!
A recent study by the Berkeley Center for Labor Research and Education found that over half of all fast food workers required some form of public assistance, such as SNAP, to make ends meet. Now I support these programs to help people makes ends meet, but NOT to subsidize the labor rate of a Fortune-500, Multinational, For-Profit Corporation! A company making billions of dollars in profits while their workers live in poverty was EXACTLY what the minimum wage was intended to prevent! No one who works a 40-hour per week job should require government assistance. And as so many DO, this should be indicative that something has gone seriously wrong with the labor market, and that there exists an inbalance of economic power that is untenable and downright inhumane.
In California, we are already in the process of raising the minimum to $15/hour, and other cities have followed suit – to great economic benefit. I propose that all of America should follow suit. Those workers across the country deserve a life of independence and dignity in exchange for their 40 hours of labor. Companies may need to readjust their pay structures, sure. And if this is handled poorly there may even be a one-time hit to profits. But that is NOT a recession. Not when so many people are newly empowered to make a better life for themselves and their families. The resulting increase in DEMAND is what will create jobs. It has ALWAYS been what creates jobs. Not only have the trickle down economic promises of the Right failed to deliver, but if one has a proper understanding of Economics, one can only conclude that there exists no mechanism in theory or in practice for this to EVER work.
And to avoid such disproportionate gaps between the cost of living and the minimum wage, I propose that the minimum wages be indexed to inflation on an annual basis. No hard working American should ever see their pay go down (in terms of real value) when their labor creates so much income and wealth for the ones who employ them.