Minimum wage lags behind
A little more than half a century ago, I had summer job at a factory. The work was unskilled manual labor, and the job paid $1.98 per hour. Gasoline was 30 cents per gallon. An ice cream cone sold for nickel a scoop, and coffee was a nickel per cup.
Today, prices for the things we buy are 10 to 20 times higher than they were when my unskilled manual labor job paid $1.98 per hour. Minimum wage, however, lags far behind. The federal minimum wage is $7.25 per hour. State minimum wages are higher in some states, but not much, except in Oregon ($9.10) and Washington ($9.32).
How did the minimum wage fall so far behind rising prices? Three things come to mind.
Most of the manufactured items that most of us buy are imported from ultra-low wage countries. That allows the importing company to sell the products at low prices and still make a handsome profit. The availability of those low priced goods helped minimum wage employees survive, but it obscured the fact that the minimum wage was not keeping pace with the American economy.
Secondly, taxpayers subsidize employers who pay minimum wage. Minimum wage employees, not always employed full-time, often require assistance: unemployment compensation, food stamps, aid to families with dependent children, or other financial assistance.
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