The argument for the minimum wage is that, without it, people will be unable to keep up with the essentials of life. Let’s check that out.
In 1956 the minimum wage was $1.00 American. One WHOLE dollar. However, that translates into a whopping $7.93 today. Which, by the way, is more than than current minimum wage set forth by the Federal Government; $7.25.
Let’s see how we compare:
|Comparison of Prices: 1958 and 2008|
|Product||Price in 1958||Inflation Price||Real Price Today|
|8 Cup Coffee Maker||$15.50||$114.17||$19.99|
|AM Table Radio||$13.95||$102.75||$29.00|
|Starter Guitar||$17.95 with case||$132.22||$99.99|
|Globe of the World||$12.95||$95.39||$39.97|
So, what does this tell us? It tells us, that while wages have not kept pace with inflation, the cost of goods has also not kept pace with inflation. In fact, the real price of goods has actually become cheaper, much cheaper, in terms of today’s dollars.
An interesting experiment conducted by Mark Perry in a post found here shows how many hours a worker would have to work to afford a defined set of products.
Again,we can do the same:
|Comparison of Hours Worked: 1958 and 2008|
|Product||Hours Worked in 1958||Hours Worked in 2008|
|8 Cup Automatic Coffee Maker||38.75||2.75|
|AM Table Radio||34.87||4|
|Globe of the World||32.4||5.5|
And again, we see that it’s not even close. Not only have the products that we have to choose from expanded, but the cost of those products, in terms of real dollars AND hours worked have plummeted.