The Power of the Non-Minimum Wage

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
Automatic Toaster $12.95 $95.39 $15.88
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
Flash Camera $5.90 $43.46 $45.88
Child’s Bicycle $18.45 $135.90 $59.00
Pup Tent $13.92 $102.53 $38.88

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
Automatic Toaster 32.375 2.19
8 Cup Automatic Coffee Maker 38.75 2.75
AM Table Radio 34.87 4
Starter Guitar 44.87 13.8
Globe of the World 32.4 5.5
Flash Camera 14.75 6.3
Child’s Bicycle 46.1 8.1
Pup Tent 34.8 5.4

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.

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