Minimum wage

Why is it so hard to agree on a minimum wage? Perhaps because you can pretty much justify any number you want.

One thing is clear, an amount higher than $7.25 is justified, but an increase needs to be gradual with consideration of the possible consequence in low income areas of the Country.

Below is the inflation adjusted amounts from the actual MW in the years shown to 2020.

1938 $0.25

1956 $1.00

1963 $1.25

2009 $7.25

2020 $4.61

2020 $9.56

2020 $10.62

2020 $8.78

5 comments

  1. With respect to the minimum wage, did you know that less than 100 years ago, minimum wage laws violated the constitution? In fact, the constitution prohibited interference with the right to contract. It still says that: Article I, Section 10, Clause 1 of the United States Constitution, known as the Contract Clause, imposes certain prohibitions on the states (and, in effect, local governments as well). These prohibitions are meant to protect individuals from intrusion by state governments. It actually says: “… No State shall … pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts …”

    What happened? No, there wasn’t any amendment to the constitution that added minimum wage laws.

    No, instead, a la the Democrats of 2020, FDR made threats to “reform” the courts. Threats were made against justices … including packing the court, etc.

    So, in 1923, the court said NO! https://en.wikipedia.org/wiki/Adkins_v._Children%27s_Hospital

    In 1935, they again said NO! https://en.wikipedia.org/wiki/A.L.A._Schechter_Poultry_Corp._v._United_States

    But, a few threats later, in 1937, somehow, the answer was YES! https://en.wikipedia.org/wiki/West_Coast_Hotel_Co._v._Parrish

    It’s kind of how Health Reform was found to be constitutional in 2012. Here’s is what then President Obama said to the Roberts court: “Ultimately, I am confident that the Supreme Court will not take what would be an unprecedented, extraordinary step of overturning a law that was passed by a strong majority of a democratically elected Congress, … And I’d just remind conservative commentators that, for years, what we have heard is, the biggest problem on the bench was judicial activism, or a lack of judicial restraint, that an unelected group of people would somehow overturn a duly constituted and passed law,” … “Well, this is a good example, and I’m pretty confident that this court will recognize that and not take that step.”

    Remember that there were multiple opinions on Health Reform at that 2012 Supreme Court decision. Only Chief Justice Roberts found the individual mandate penalty to be a tax. None of the other 8 justices joined him in his opinion – none found it to be a tax.

    So, President Obama threw John Roberts a curve ball with a nasty break (a clear threat to undermine the Supreme Court unless they upheld his signature law). Roberts buckled at the knees … made excuses in his opinion that was the “majority” opinion (with no other justices joining him) and he’s had trouble with the curve ever since.

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  2. Labor’s value depends on the supply and the skills. So what is the right number? The lowest wage anyone is willing to work for. Illegal and people who work under the table for less only hurt getting minimum wage raised.
    So, should the minimum wage be raised? Less see how inflation affect very important product for daily life.

    A gallon of gasoline in:
    1938 $0.20 2020 $3.69
    1956 $0.56 2020 $2.77
    1963 $0.31 2020 $2.85
    2020 $2.27 2020 $2.27

    Note: gasoline in 2020 cost 20% less than it did in 2009. Currently in NJ, of that price, $0.30 is state fuel taxes which is set to go up to $0.40 on October 1st. What is the true cost of a gallon of gas?

    I got these figures from a DOE website. Currently in my area, gasoline is $2.239 / gal

    My point is not everything is going up, except for taxes. It is all depended on the supply and demand. With covid-19 killing the hospitality industry, where there are a lot of unskilled low wage jobs, is raising the minimum wage to $15 the right thing to do? Would you rather being working for something less or be still unemployed going to a food pantry?

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    1. Actually, only a few years ago, we were paying $3.99 a gallon for gas here in Ohio. I remember paying $1.299 a gallon at the U Totem at Fairmont Parkway and Beltway 8 in the southeastern part of Houston/Pasadena in July 1982. My car, a 1980 Mazda 626, got just over 20 miles to a gallon on average (lots of highway miles). Today, I’m paying $2.09 a gallon, and my car gets an average of 30+ miles a gallon (not so many highway miles). Average wages have increased (measured by average indexed monthly income, per Social Security) from $14,531 to over $52,000 in 2018. That’s about 3.6% per year. So, adjusting for the mileage difference and the wage difference, it means that, relative to average income, the 1.299 had an effect on my financial situation the same as about $7.00 a gallon would in 2020.

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      1. Around the early 1980, gas went over $2 / gal. I thought it was the end of the world. Then in the 2000’s it went over $3 and was approaching $4. So as far as I am concerned, we are living in good times now. Of course, I am retired now and I fill up only once or twice a month. But when I was working, I was filling up every three days and that hurt and it wasn’t like I could take a bus or something either.

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