40% Of US Workers Now Earn Less Than 1968 Minimum Wage

a reply to: Boadicea

The 'red flags' are still available to the small business owner and I used many of them while I had my businesses.

originally posted by: AugustusMasonicus
a reply to: Boadicea

The 'red flags' are still available to the small business owner and I used many of them while I had my businesses.

Okay. And I will even assume that you never abused or violated those "red flags"... but I also have no doubt that plenty of others do, aided and abetted by our congress critters. Which brings us right back to the mess we're in now.

originally posted by: Boadicea

Okay. And I will even assume that you never abused or violated those "red flags"... but I also have no doubt that plenty of others do, aided and abetted by our congress critters. Which brings us right back to the mess we're in now.

You cannot violate a legal loophole.

originally posted by: AugustusMasonicus

originally posted by: Boadicea

Okay. And I will even assume that you never abused or violated those "red flags"... but I also have no doubt that plenty of others do, aided and abetted by our congress critters. Which brings us right back to the mess we're in now.

You cannot violate a legal loophole.

Then I guess I assumed right, eh?

But seriously, I get that you don't like what I'm saying... but you also agreed that our tax code needs a complete overhaul. So while it's easy to nitpick everything I say, what is your solution? What do you see the problem as being? And how do we fix it? Skool me.

originally posted by: Boadicea

Then I guess I assumed right, eh?

If there was a way for you to save on your taxes would you use it or pay more?

But seriously, I get that you don't like what I'm saying... but you also agreed that our tax code needs a complete overhaul. So while it's easy to nitpick everything I say, what is your solution? What do you see the problem as being? And how do we fix it? Skool me.

It is not about 'not liking' what you are saying, I just find it a bit naïve. You do not go into business to run a charity and if there are avenues for you to keep more money with your business you take them.

There is no easy solution and I do not think my ideas would ever be applied. We would not tax reform, both personal and corporate with a much more streamlined code. We would need lobbying reform while also cutting redundant agencies and extraneous regulations. We would need to relink the dollar to gold or a basket of commodities.

Those are the main line items and I expect zero of them to come to fruition since all of them limit the size and scope of government which is anathema to what government want, they never want to relinquish any power or authority which they have consolidated.

originally posted by: Aazadan

originally posted by: beezzer
a reply to: onequestion

I'll wager that 15 years ago, the figures would be identical.

Why is it an issue now?

Because the only jobs left are minimum wage jobs. High paying jobs don't exist anymore. companies are burdened by higher taxes, Obamacare, union demands so they down size or go overseas.

This is the new normal for America. Might as well get used to it.

15 years ago it was an issue, it just wasn't publicized as much. In fact if you go back to 1992, 23 years ago Clintons labor secretary Robert Reich was given his job specifically because he recognized this issue and was very vocal about it.

Why are people yelling now though? Because it's getting worse. The wage has been declining by a few percent per year for 35 years now and it's hit the point where it's critically low. Did you know we have less purchasing power today than the average person had in colonial times? Aside from a stint in the late 1800's we have less purchasing power for an hour worked today than at any other point in our nations history including during the depression. It is that bad.

originally posted by: AugustusMasonicus

If there was a way for you to save on your taxes would you use it or pay more?

That depends. I had no problem claiming my kids as dependents... but this year, I took the hit for not having health insurance although I qualified for a hardship waiver, because in order to claim the waiver I would have had to give too much info to the feds to get their approval for the waiver. In other words, the cost for the tax reduction was too high. Money is a tool... not the end game.

You do not go into business to run a charity and if there are avenues for you to keep more money with your business you take them.

I guess it's all a matter of priorities. I make money... money doesn't make me. I have to be able to live with myself and my deeds at the end of the day. If I have to violate my principles and ethics, then the cost is too high -- no matter how much I profit monetarily.

There is no easy solution and I do not think my ideas would ever be applied. We would not tax reform, both personal and corporate with a much more streamlined code. We would need lobbying reform while also cutting redundant agencies and extraneous regulations. We would need to relink the dollar to gold or a basket of commodities.

Agreed.

Those are the main line items and I expect zero of them to come to fruition since all of them limit the size and scope of government which is anathema to what government want, they never want to relinquish any power or authority which they have consolidated.

They may or may not be possible... but it's also true that whether we think we can or think we can't, we're right. If we don't even try, then of course it will never happen.

originally posted by: beezzer
a reply to: onequestion

I'll wager that 15 years ago, the figures would be identical.

Why is it an issue now?

Because the only jobs left are minimum wage jobs. High paying jobs don't exist anymore. companies are burdened by higher taxes, Obamacare, union demands so they down size or go overseas.

This is the new normal for America. Might as well get used to it.

no, nafta sent large scores of family wage manufacturing jobs to mexico. TPP and Fast Track will send the remainder of the manufacturing jobs, except those fought for by union action, to slave labor countries that have ZERO environmental laws.

even worse, nafta actually had job retraining money specified in it, TPP removes all retraining money. so expect everyone who loses their jobs to be on the unemployment lines.

the only thing saint ronald did was make it a law that foreign auto makers could sell as many cars as they wanted to here, but they were limited to the number they could import, they had to build the rest here in north america. how much do you want to bet that TPP removes that protection and the robust auto industry here moves over to asia.

take your head out of the sand

originally posted by: onequestion

What we really need to do is to return to the principles that once made this country great. In early America, we protected our markets with high tariffs. Access to the U.S. market was a privilege. Foreign domination was kept out, and our economy thrived.

Just thought I would throw this in the mix for someone to comment on later.

Another thing we could do to turn this around would be to get rid of the IRS and the income tax. Did you know that the greatest period of economic growth in U.S. history was during a time when there was absolutely no income tax? If you doubt this, just read this article.

As H. L. Mencken said, "For every complex problem there is a solution that is simple, neat, and wrong."

Please check out the following graph of long term real growth of per-capita GDP, from 1871 to 2009.

Long Term GDP Growth

It seems pretty clear that for the period of time being reported on, per-capita GDP in the US has been growing exponentially. The only short term deviations from this pattern that are significant were the Great Depression beginning in 1929 and the Great Recession in 2009. The article that claims that the greatest period of growth "in US history" occurred between the end of the Civil War and 1913 (the introduction of the income tax) does not show any figures or graphs that would support that claim. It simply refers to an "explosion" of economic activity.

As with any variable that is experiencing exponential growth, the greatest rate of growth is right now, not early on.
Moreover, there doesn't seem to be any change in the curve associated with the introduction of the income tax. Whatever set of forces is producing this remarkably stable exponential growth, protectionist tariffs and income taxes don't seem to have much to do with it.

Depends on which State you're currently living, the situation could be a lot worse.

If you're in the mid west, you're lucky right now. As far as I know, I have a friend who lives in Houston, Texas right now and the housing there is still relatively cheap.

If you roll over to California, I don't know how anyone can survive here.

The typical, average White Collar makes about $3000/month here in SoCal. That is before TAX. So, you're most likely going to net $2,500 or less depending on your tax conditions.

The apartments here in SoCal, runs in between $1,100 to $1,800/month for a Single Bed/Single Bath room, depending on which city you live in.

So, quite literally, it's almost impossible to live. Considering the fact that you have utility bills, such as Electric, Water, Gas, Cable, Cell Phone, Sewage, Grocery, Car Insurance and etc. etc.

It's actually quite absurd if you ask me, but.. a lot of people that I know, who lives in California, generally either share a room with someone or still lives with their families. Not because they want to, it's because literally no average worker can afford to have their own place.

This is the America we live in today.

originally posted by: FyreByrd
Interesting - I find several 'different' values at:

www.measuringworth.com...

Based on $1.60 as the minimum wage in 1968 the results I find are:

In 2014, the relative worth of $1.60 from 1968 is:

$10.90 using the Consumer Price Index
$8.40 using the GDP deflator
$11.10 using the unskilled wage
$13.40 using the Production Worker Compensation
$18.60 using the nominal GDP per capita
$29.60 using the relative share of GDP

Data for the consumer bundle is only available through 2013.

See the website for details on how the 'value' of $1.60 in 2014 dollars was calculated.

I'll give you another, it's about $24/hour if you go by purchasing power... how many minutes of work it takes to buy the same or equivalent goods. The $10/hour wage is already making a lot of concessions as to what minimum wage was actually worth back then. And despite those concessions 40% of people are still making less than that value.

a reply to: Aazadan

24 sounds like a lot i'd like to see an example of that metric applied to a good

originally posted by: onequestion
a reply to: Aazadan

24 sounds like a lot i'd like to see an example of that metric applied to a good

It varies from product to product. In 1967 it took 15,928.57 hours to buy a home. A similar home today (similar amount of land, sqft, and rooms) is 42,951.72 hours. That would translate to a $20.09 wage today if you were trying to bring it down to the same time to work.

A gallon of gas took 13 minutes 12 seconds to buy. Today (as of 2014 numbers... that doesn't account for the recent fracking surge) it's 34 minutes 48 seconds. That's $19.64 if it were to keep pace today.

A year of college tuition took 1264 hours, today it's 5648 hour, minimum wage would need to be $33.29 to keep pace.

A new car took 1764 hours to purchase, today it's 4698 hours. Minimum wage would need to be $19.84 to keep pace.

The big one however is rent, and that's what raises values. In the 60's you could comfortably pay rent with no more than 30% of your income. Today low income households spend closer to 60% on rent. I don't have exact numbers on this one but lets use the anectode earlier in this thread. $60/month split 4 ways for what I would call young person housing. That's $15/month or 10.5 hours of work. I live in a pretty low cost of living area and nearly moved into a similar living arrangement when I moved here last year the rent would have been $400/month (that's for a 13x13 room in a house shared with 5 people and 1 bathroom), that's 54 hours of work, up from 10.5. The wage would need to be $38.31 to compare.

originally posted by: FyreByrd
Instead of 'planned obsolence' or 'rent seeking' or other forms of consumption only to enrich the wealthy.

Build things to last, take care of them, reuse and repurpose.

That requires setting up an economic system that favors not making repeat purchases which requires creating a resource scarcity. It would be a significant change from how things are now. Capitalism encourages waste because resources become abundant.

originally posted by: peskyhumans
I blame a combination of the following:
1. Taking our currency off the gold and silver standards, and allowing unchecked inflation
2. The rise of mega-corporations that can produce goods outside the country and sell them here. Local businesses who hire US citizens can't compete.
3. Increasing taxes on the Middle Class while simultaneously lowering them for the extremely rich.

I blame something else.
1. Women entering the workforce doubled the labor supply. Rather than letting individuals decide who would stay at home we put everyone to work. This drove down wages significantly.

2. Free trade with developing countries. If a job can be done elsewhere for a fraction of the cost, the person who has to charge more simply can't compete.

3. The CPI changes in 1980 which only removed inflation on paper, it didn't actually address the cause. With 35 years of inflation that wasn't accounted for in wages people simply aren't making enough money anymore.

a reply to: onequestion

Its not a coincidence that the gold standard ended in 1971 and the quality of living started to shrink about that same year. For as long as governments can print their way to whatever they wish, this will be a problem.

originally posted by: Aazadan

originally posted by: onequestion
a reply to: Aazadan

24 sounds like a lot i'd like to see an example of that metric applied to a good

It varies from product to product. In 1967 it took 15,928.57 hours to buy a home. A similar home today (similar amount of land, sqft, and rooms) is 42,951.72 hours. That would translate to a $20.09 wage today if you were trying to bring it down to the same time to work.

A gallon of gas took 13 minutes 12 seconds to buy. Today (as of 2014 numbers... that doesn't account for the recent fracking surge) it's 34 minutes 48 seconds. That's $19.64 if it were to keep pace today.

A year of college tuition took 1264 hours, today it's 5648 hour, minimum wage would need to be $33.29 to keep pace.

A new car took 1764 hours to purchase, today it's 4698 hours. Minimum wage would need to be $19.84 to keep pace.

The big one however is rent, and that's what raises values. In the 60's you could comfortably pay rent with no more than 30% of your income. Today low income households spend closer to 60% on rent. I don't have exact numbers on this one but lets use the anectode earlier in this thread. $60/month split 4 ways for what I would call young person housing. That's $15/month or 10.5 hours of work. I live in a pretty low cost of living area and nearly moved into a similar living arrangement when I moved here last year the rent would have been $400/month (that's for a 13x13 room in a house shared with 5 people and 1 bathroom), that's 54 hours of work, up from 10.5. The wage would need to be $38.31 to compare.

originally posted by: FyreByrd
Instead of 'planned obsolence' or 'rent seeking' or other forms of consumption only to enrich the wealthy.

Build things to last, take care of them, reuse and repurpose.

That requires setting up an economic system that favors not making repeat purchases which requires creating a resource scarcity. It would be a significant change from how things are now. Capitalism encourages waste because resources become abundant.

originally posted by: peskyhumans
I blame a combination of the following:
1. Taking our currency off the gold and silver standards, and allowing unchecked inflation
2. The rise of mega-corporations that can produce goods outside the country and sell them here. Local businesses who hire US citizens can't compete.
3. Increasing taxes on the Middle Class while simultaneously lowering them for the extremely rich.

I blame something else.
1. Women entering the workforce doubled the labor supply. Rather than letting individuals decide who would stay at home we put everyone to work. This drove down wages significantly.

2. Free trade with developing countries. If a job can be done elsewhere for a fraction of the cost, the person who has to charge more simply can't compete.

3. The CPI changes in 1980 which only removed inflation on paper, it didn't actually address the cause. With 35 years of inflation that wasn't accounted for in wages people simply aren't making enough money anymore.

Very nice post. Agree 100%

Do these figures include benefits? Back in the 1960's many minimum wage jobs did include health insurance and at least some vacation. Plus many were full-time and not as short-term. So people didn't have huge gaps of unemployment.

a reply to: onequestion

I have thought for years that a "maximum wage" (based on the original Ben & Jerry's pay model) would do far more good than the minimum wage has. What Ben & Jerry's basically did was cap the highest paid employee's pay in direct proportion to the lowest paid employee. So if the lowest paid employee only earned $10,000 per year, then the highest paid employee could only earn $50,000 per year. As profits rise, so does the pay for all employees.

A Sweet Solution to the Sticky Wage Disparity Problem

Many states like California tax executive salaries at 50% or more, with the intention that these taxes would go to help pay for the education and social security of the poorest in the state. So the state couldn't afford to cap these salaries. With those high taxes. Attempts to raise taxes ever higher have just forced these workers and jobs out of the state.

a reply to: stormcell

Totally agree.

The companies profit margin can't increase unless everyone does their part.

It's in an injustice.

originally posted by: Daughter2
Do these figures include benefits? Back in the 1960's many minimum wage jobs did include health insurance and at least some vacation. Plus many were full-time and not as short-term. So people didn't have huge gaps of unemployment.

No. I'm not sure on an objective way to compare them. Benefits were better back then, but at the same time they also cost less. Insurance was actually used for catastrophic coverage rather than routine doctors visits and doctors themselves charged less for a variety of reasons. So it could be said that back then you had more of a lesser coverage but today you have less of a greater coverage. Without being an expert on historical insurance rates I'm not sure I could make a valid comparison.

One that I do know (but I don't know by how much) however is that paid time off was greater back then. Pretty much anyone could get two weeks vacation per year, and they could even use it during the holidays. It's not quite the same today.

a reply to: stormcell

Japan actually practices maximum wages to an extent. They've risen a bit over the past decade, but it's rather engrained in their culture that it's shameful for the CEO to massively profit while the employees starve. They have no laws about it, but it's just how they do things.

There's actually a lot of things the Japanese do business wise that we could learn from. Not too far from where I used to live a Japanese truck manufacturer opened a factor few years back, Hino motors. They paid the best wages in the area, they only built to order (their parking lots of trucks were ones already sold, no back stock), and from talking to their employees they were always well treated.

A few miles down the road would be a Walmart, I didn't look at it with nearly the same amount of respect.

a reply to: Aazadan

While going through old family papers in my parents' attic, I found their financial records of 1963. My dad paid $36.17 for full-coverage Blue Cross and Blue Shield hospital and health insurance for a family of four. That was for a private policy, so I'm sure group rates were lower at that time. When he left his former employer to form a handshake partnership with his brother-in-law, he continued the family health care coverage he'd had as a benefit of his employment with the Tennessee Valley Authority.
As you pointed out, insurance was rarely used in those days unless it was for hospitalization. If the doc came to the house, you just paid his fee as he left. One of the receipts I found is for a house call when I was sick with pneumonia-like symptoms. The doc's visit, a shot and three bottles of medicine were a total of $4.12!!
My grandparents paid their doctor bills with produce from the farm. It was the doctor's preference.
It is really difficult to compare the levels of health care then and now. In those days about the only thing that got you to the doctor's office or hospital was copious bleeding or a broken bone---if you were a kid. We relied heavily on "folk remedies" that our grandmothers trusted. Today a child must see a doctor a minimum of every six months or the doc will be inquiring why.