Trends in the Minimum Wage Impact on Purchasing Power for the Working Poor
By Allen Stansbury, Senior Associate, Center for Community Futures, Berkeley,
CA
During the 70’s the minimum wage was $1.60 rising to
$2.90 in 1979. During the 80’s it was
$3.10 rising to $3.35 in 1981 staying that way until 1990.
During the period of 1997 to 2006 (10 years) the
minimum wage remained at $5.15 rising to $6.55 in 2007, $6.85 in 2008 and to the
current rate of $7.25 in 2009. Adjusted
for inflation using 1996 dollars, the $5.15 wage decreased in value from $5.03
to $4.04 by 2006. The $7.25 rate adjusted for 1996 dollars went from $5.30 to $4.97.
In 2012, the annual salary a full time employee
working a 40 hour week, 50 weeks during the year, earning minimum wage is just
about $14,500.
So, why should we be concern? Why, because according
to the U.S. Bureau of Labor Statistics about half of minimum wage workers in
2012 were older than 25, the median age for a fast-food worker now is 29.
In other words, many of these jobs are not taken by a high school or college
student, but older workers, many with degrees, who cannot get into higher
paying jobs.
The official poverty rate for 2013
for one is $11,490, 133% of poverty is $15,282, meaning that these low wage
earners qualify for a number of federal/state programs such as food stamps and
the earned income tax credit.
Even so, what could be bought with this small sum of
money? Below is a hypothetical grocery list comparing prices between 1980 with
2012. Below is a comparison table listing a few of the typical items used by an
average family. Price information was from various sources, most useful being
Morris County, NJ compiled by the Daily Record newspaper.[1]
The chart below shows the range in percent increase of
a few typical grocery items ranged from 187% to over 10 times that they were in
1980. It is acknowledge that this is not
precise and that prices vary during the year and regionally, but this only
confirms what everyone has known all along, wages are simply not keeping up with
the cost of living.
Sample list of typical grocery items[2]
|
1980 sample prices
|
2010 sample prices
|
Percent Change
|
Loaf Bread
|
$.50
|
$2.50
|
500%
|
Lb Potatoes
|
$.20
|
$.49
|
245%
|
Gal Milk
|
$1.60
|
$2.99
|
187%
|
Lb Bacon
|
$1.69
|
$3.44
|
204%
|
Doz Eggs
|
$.25
|
$2.29
|
916%
|
Lb Tomatoes
|
$.39
|
$2.48
|
636%
|
Lb Margarine
|
$.50
|
$2.68
|
536%
|
Lg Cereal (Cornflakes/Cheerios)
|
$1.19
|
$3.79
|
318%
|
5 Lb Bag Sugar
|
$.39
|
$3.99
|
1023%
|
5 Lb Bag Flour
|
$.99
|
$2.49
|
252%
|
Lb Ground Beef
|
$1.39
|
$4.28
|
308%
|
Detergent Laundry Powder (Tide-49oz vs 75oz liquid)
|
$1.99
|
$8.61
|
433%
|
Lb ground Coffee
|
$1.99
|
$5.55
|
279%
|
Lb Green Grapes
|
$.59
|
$1.96
|
332%
|
Toilet Paper (4 roll package)
|
$1.09
|
$3.98
|
365%
|
Chicken Soup (4/pack)
|
$.49
|
$2.10
|
429%
|
Peanut Butter 16oz
|
$1.29
|
$4.39
|
340%
|
Lb Cheese block
|
$1.30
|
$3.89
|
299%
|
Lb Apples
|
$.39
|
$1.00
|
256%
|
Lb Bananas
|
$.33
|
$.68
|
206%
|
Can Tuna
|
$.69
|
$1.41
|
204%
|
Frozen Orange Juice (Minute Maid)
|
$.79
|
$3.29
|
416%
|
 |
|
Chart 1
Median Income Rises, but Is Still 6% Below Level at Start of Recession in ’07 NY Times August 21, 2013 |
[1] A
more complete comparison can be found at http://www.gti.net/mocolib1/prices/1980.html
and http://www.gti.net/mocolib1/prices/2010.html.
No comments:
Post a Comment