HuffPo
Study: Minimum wage would be $21.72 if it kept pace with productivity
But $9 an hour is still a far cry from what workers really deserve, a 2012 study finds.
The minimum wage should have reached $21.72 an hour in 2012 if it kept up with increases in worker productivity, according to a March study by the Center for Economic and Policy Research. While advancements in technology have increased the amount of goods and services that can be produced in a set amount of time, wages have remained relatively flat, the study points out.
Even if the minimum wage kept up with inflation since it peaked in real value in the late 1960s, low-wage workers should be earning a minimum of $10.52 an hour, according to the study.
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Let’s do it!!
besser tot als rot on February 15, 2013 at 12:12 AM
I’ve baked pies for pocket change. I now maintain trails and check on hikers to pay for school. My labor, to this point, has NEVER been worth $20 an hour. I would not have a job if I demanded $20 an hour.
Insanity.
Atlas on February 15, 2013 at 12:14 AM
I thought they should make it $14 an hour, but $21 works fine too.
El_Terrible on February 15, 2013 at 12:16 AM
It’s the technology bought by capital. Employees are probably worse than they used to be.
forest on February 15, 2013 at 12:21 AM
Go ahead- and the jobs suddenly are occupied by 20 million new illegal immigrants- with a better work ethic at half that rate under the table, with no benefits, insurance, disability or other employee expenses.
There won’t be any fulltime low wage jobs at ALL by the end of the year, thanks to Obamacare. They will ALL be part-time to eliminate massive increased health care costs and the fines.
michaelo on February 15, 2013 at 12:31 AM
How about sales tax going straight to employees pockets? Thats a tax return that would be bigger than their salary.
Mormontheman on February 15, 2013 at 12:33 AM
So?
theperfecteconomist on February 15, 2013 at 12:46 AM
This. And we don’t pay people for “productivity”. We pay people based on how easily they can be replaced. Sounds callous, perhaps, but it’s called the law of supply and demand, and it applies to labor too.
Mullaney on February 15, 2013 at 12:47 AM
It’s the technology bought by capital. Employees are probably worse than they used to be.
[forest on February 15, 2013 at 12:21 AM]
Bingo. It’s also tech the employers pay for. If the employees want the return on the increased productivity, let them buy the tech and bring it to work with them.
As it is, the slowest, most error prone and antiquated piece of tech at a fast food joint are the humans.
Dusty on February 15, 2013 at 12:50 AM
I’d imagine the left would attribute the increase in productivity to a more educated workforce (hey, I’d even buy that a bit), but spiking the minimum wage to match would completely devalue the benefits of education.
Their tactic here is to throw out a huge number just to make their actual proposal seem nearly reasonable, but it’s really quite insipid.
theperfecteconomist on February 15, 2013 at 12:57 AM
Agreed. But where do they not play that game. It’s in gun control, taxes, spending, Barry’s played it with the birth control mandate, waivers or postponements for this or that as long as the base demand is accepted.
Dusty on February 15, 2013 at 1:07 AM
And a Pizza would cost $73.50.
eaglephin on February 15, 2013 at 1:10 AM
That’s later this year…
trigon on February 15, 2013 at 1:15 AM
You got it.
If you have to pay a sandwich maker $21 per hour, you’re sure as hell not going to pay $7 for the sandwich.
KingGold on February 15, 2013 at 1:16 AM
Yes. Consider that it’s not only the sandwich maker whose labor goes into the sandwich but every person that touched every ingredient in the sandwich, the janitors who clean the sandwich shop, the security guard, etc.
eaglephin on February 15, 2013 at 1:26 AM
It’s ludicrous we are even having this discussion.
The minimum wage should be at least $100 an hour. That way everyone will have good living conditions.
For that matter, why doesn’t the UN set a minimum wage for member nations? They could easily set it to $1000 an hour.
/s
Nephew Sam on February 15, 2013 at 1:38 AM
Raise the Min Wage to $550 per hour, and everyone’s a millionaire!
chimney sweep on February 15, 2013 at 1:45 AM
Return on investment – that’s all she wrote, folks.
OldEnglish on February 15, 2013 at 2:05 AM
Well make it $21.75 then! That kind of stimulus should really get the Obama economy roaring!
DarkCurrent on February 15, 2013 at 4:29 AM
The comment thread over at HuffPo reads like another Occupy manifesto – down with business, up with unions, give us free money.
Quisp on February 15, 2013 at 6:10 AM
Wasn’t that Paul Krugman’s follow up article to his “Alien Invasion” solution?:)
Clink on February 15, 2013 at 6:46 AM
PS-If I disappear from HA comment section it’s because the “Submit Comment” button has finally been totally “consumed” by the Hot Air logo. Anyone else having this problem?
Clink on February 15, 2013 at 6:49 AM
Make sure you use plenty of soap and hot water to clean up. You can catch your death over there.
Yup. For what its worth, I’m on a MacBook running Safari. Submit Comment button about half obscured.
turfmann on February 15, 2013 at 6:54 AM
BS.
Economic growth would not have been what it was if the minimum wage tracked up to $21.72. What would a Big Mac and fries cost if the burger flipper was making $21.72 an hour? What would the prices at Walmart be? And so on and so forth. The price of goods and services would have tracked the minimum wage. Many things would cost twice as much or more.
What would real productivity be if everything cost two or three times more? The whole point of increasing productivity is to produce more for the same cost. That’s how wealth is created and the pie made bigger. That’s what capitalism is all about — investing capital in machines and processes to increase productivity.
Marxists/socialists are ignorant of economics. For them wealth is never created and the pie never gets bigger. All that matters is how the pie is distributed. And, of course, they think they should be the ones deciding how that happens and who gets what. Because they know what is best for us all.
farsighted on February 15, 2013 at 6:55 AM
The bottom line is this: there are many, many people in this nation that make $21.72 per hour ($45,178 annually) and many more that make a great deal more than that.
They make that amount because they are worth it in the open marketplace.
Not because the government deems it so by fiat.
The government should have no say in the matter whatsoever – there should be no minimum wage at all.
Once again, if it is left to the tyrants in Washington, the minimum wage will be raised and those who can least afford to lose their jobs will be the victims.
Are they trying to eliminate employment in the inner cities completely?
turfmann on February 15, 2013 at 6:59 AM
this
cmsinaz on February 15, 2013 at 7:00 AM
Yes. It been happening off and on for a couple of weeks.
farsighted on February 15, 2013 at 7:04 AM
This is a great point. I really doubt that this study really says the minimum wage workers’ own productivity has risen compared to the 60s. There ain’t no way. The conclusions of the study ignore economic reality. I doubt they understand supply and demand.
The unions of course love this idea. Think about what a skilled pipe fitter would make if they can point to Joe working at Burger King making nearly 22 an hour.
CW on February 15, 2013 at 7:29 AM
Tip: Log in on one of the stories with just a couple comments. Logo eats it when it gets near the “bottom” of the comments for a page.
———-
As to the topic: Calculating things in a vacuum will always give you interesting results. How about calculating, with inflation, what housing and a loaf of bread should be too.
ProfShadow on February 15, 2013 at 7:44 AM
Thanks for the tips. Mac Air using Firefox here.. I did notice that it only occurs when comments are ready to go to next page, like right now:)
Clink on February 15, 2013 at 8:07 AM
Employment would be half what it is today if minimum wage kept up with productivity as everything would be produced in another country that could be produced at a lower cost.
By the way, if minimum wage kept up with productivity gains, cost of living would increase as steadily.
Another by the way… if the government was not manipulating our currency our money would be worth far more, likely far surpassing the value of $22 per hour for minimum wage jobs.
astonerii on February 15, 2013 at 8:26 AM
So, the real reason for gas price increases is that my car goes farther on a gallon of gas now?
Got it.
Someone tell these morons that costs, and therefore prices in a competitive marketplace, go down when productivity goes up.
TexasDan on February 15, 2013 at 8:33 AM
You know of a clean sandwich shop? Do tell.
TexasDan on February 15, 2013 at 8:36 AM
Lol wasn’t this some “progressive” group? I’d sure take economic advice from them….
Anyway, everyone knows that the reason the wages are so low is because the corporations are acting all corporation-y and stealing all money from the 99%!
/s
specialkayel on February 15, 2013 at 8:41 AM
“Step away from the krug-pipe…”
HarneyPeak on February 15, 2013 at 8:50 AM
Don’t unions base their pay off of minimum wage?
Notorious GOP on February 15, 2013 at 8:56 AM
PS-If I disappear from HA comment section it’s because the “Submit Comment” button has finally been totally “consumed” by the Hot Air logo. Anyone else having this problem?
Clink on February 15, 2013 at 6:49 AM
It happens to me all the time. But usually when I try to log in. I can’t because of this giant HotAir logo. SO I just go over to another thread and log in there.
IdrilofGondolin on February 15, 2013 at 9:23 AM
Do you ever notice how in all minimum wage discussions the assumption is made that people are spending their careers at minimum wage, and that minimum wage should be whatever it takes to support a family?
Even if you support having a minimum wage — and I don’t — the idea is not that it’s the wage folks should expect to be making while putting their kids through college. It is an entry level wage.
The burger flipper at McDonald’s or the cashier at Target may not be making enough to support a family, but most of them also do not have a family to support. While there are certainly some people who make careers out of those jobs, the vast majority of people who work there — and I know, as I did HR at Target for a couple years — are high school and college kids who are working part-time while going to school, older people who have retired from careers and want something to do, and people who are the 2nd income in a household with someone who already has a good job.
Not every job is meant to be a career. Not every job is meant to support the head of a household. And people can and should aspire to move upward in their careers and not remain stuck at the government-mandated minimum level for the rest of their lives.
Shump on February 15, 2013 at 9:39 AM
*Auctioneers Voice* Do I hear $22.00, $22.00, $23.00? Did I hear $23.00? $23.00. Let me hear $24.00………………………………………..Gone! $29.99!
Bmore on February 15, 2013 at 9:46 AM
This huffington post, supposedly “business” article is only 4 paragraphs long? and has more than 5,000 comments on that website. It contains no data. What you read here is excerpted from the column, without even a link to the study.
They suggest minimum wage should be in the ten dollar range according to to way of figuring and $21 for some other way of figuring.
A two parent family, according to this study could make 30K for the year at current minimum wage. The correctly at one point call the minimum wage worker a LOW WAGE worker, which actually shocked me. That is what minimum wage means.
The people pushing the $21 figure do not take into account the other costs of workers that have risen steeply since the 1960′s. It is roughly 50% of the cost of a minimum worker that is actual wages. Each employee costs the employer certain amounts of benefits plus costs that don’t make it on to the paycheck. Unemployment charges from the state, matching FICA, and health insurance benefits if you qualify for them, plus other insurance a company holds for liability for that worker, lest something happen to him/her or the employee causes some harm, all add up to actual costs. That is not mentioned in this article.
Fleuries on February 15, 2013 at 9:47 AM
.
In addition to your correct observation, the study does not mention regulatory regimes which cost resources in compliance activities. Government Regulation and taxes are not mentioned as line items which add to costs, just as labor adds to costs.
ExpressoBold on February 15, 2013 at 10:01 AM
Oh, what nonsense. A technological advance that makes workers more productive does *not* make the workers’ time more valuable unless there’s some new skill required to operate the new technology.
LukeinNE on February 15, 2013 at 10:29 AM
Yeah, all the time. I open a new tab, type in “login” and the login page url comes up in the drop down. I click on that to log in.
Dusty on February 15, 2013 at 10:31 AM
Workers get what they deserve when they are able to negotiate freely with their employer. When laws interfere – minimum wage, required benefits, etc – workers no longer get what they deserve.
“You! Get back to work! You aren’t being paid to realize your dreams!”
GWB on February 15, 2013 at 10:34 AM
Even Krugman admits raising the minimum wage has a price (more unemployment, higher prices). You know you’re out in loony land when you’ve lost him.
LukeinNE on February 15, 2013 at 10:36 AM
I was surprised to see that they lurched into the truth with the phrase Low Wage Worker, because what I am hearing from the Obama administration is that he thinks minimum wage workers are Middle Class or ought to be.
When really, what is missing is the ladder of promotions, based on merit and skill out of some of these jobs, he is not really in favor of a ladder out, he wants to have everyone paid the same.
$21. an hour is $35K per year, well on your way to being in the middle class, except for one thing: If everyone gets that, it won’t be middle class anymore, it will be The Rich and The Poor, the thing they say they hate, with a giant gap in between. It will look like what we have right now for our young people. Graduate from college, make minimum wage no matter what job you choose or how smart or skilled you are.
A two parent family where both parents make $35K is starting to look middle class at $70K combined income. But really the only thing you get from this scheme is immense price inflation.
We have too many minimum wage workers…and the liberals are happy to transform that base to a permanent one wage society that is FAIRER than the merit based society we live in.
Fleuries on February 15, 2013 at 11:21 AM