What’s Minimum Wage Really Worth?

Posted on 14. Aug, 2006 by in Economy, News

I’m sure that you’ve heard about the recent debate surrounding the House of Representatives who passed a bill last week authorizing an increase in the minimum wage for the first time since 1996. The bill, which was supported by 230 Representatives, raised the minimum wage from $5.15 per hour, the current rate, to $7.25 over the next three years.

There are economists on each side of the aisle debating whether or not the increase in minimum wage actually benefits the people who are earning minimum wage. Not being an economist, my opinion is that the wage hike will benefit the economy overall – partially because of a neat little graph I found which shows the comparative buying power of the minimum wage.

minimumwage.jpg

As you can see from the graph (which also compares the minimum wage between states if you click through), the buying power of today’s minimum wage is the lowest since 1949! It is inevitable that the wage increase will force some businesses to fire low-wage workers, but I think that the lower-income bracket will benefit as a whole by an increased buying power. The biggest problem with the low-income bracket isn’t the lack of money, but the fact that the comparative buying power has decreased to a pathetic level!

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One Response to “What’s Minimum Wage Really Worth?”

  1. tim

    14. Aug, 2006

    the biggest financial problem with many people earning minimum wage full-time is that they lack marketable skills and dedication to upgrade much beyond minimum wage.

    if a person is driven to make something of themselves, they won’t make minimum wage for long.

    if a person complains “i’m not getting paid enough” more than they try to improve their employability, no hike in the minimum wage will make them successful enough to be satisfied.

    nowhere in the consitution, the bill of rights, or any holy book i know of does it say, “life is fair.”

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