$15 minimum wage

[GT]

Anyone have any data of what the long term effects of a $15 minimum wage increase - double from where we are now.

My total guess is it would act as a form of inflation on old (401K) money

Prices would go up to offset the dominion effect of the minimum wage increase.

Current retirees would have less spending power going forward.

If this has already been discussed just move the post

[sophie]

Per an article I read somewhere: CBO says it would lift 800K people out of poverty, but at the cost of 1.4 million jobs. Didn't specify whether the 800K figure was net of the job losses, or if the 1.4 million jobs lost would plunge some large number of people into poverty that would have to be subtracted from the 800K figure.

Sounds like an awesome plan, doesn't it? Especially combined with the open borders plan, which will put enormous downward pressure on low-end wages. The likely result of that will be a big increase in people working for cash paid under the table. And more and more automation, like self-serve checkout at stores. Way to make a feudal society, Mr. Biden.

[GT]

Per an article I read somewhere: CBO says it would lift 800K people out of poverty, but at the cost of 1.4 million jobs. Didn't specify whether the 800K figure was net of the job losses, or if the 1.4 million jobs lost would plunge some large number of people into poverty that would have to be subtracted from the 800K figure.

Sounds like an awesome plan, doesn't it? Especially combined with the open borders plan, which will put enormous downward pressure on low-end wages. The likely result of that will be a big increase in people working for cash paid under the table. And more and more automation, like self-serve checkout at stores. Way to make a feudal society, Mr. Biden.

Agree Sophie - automation of entry level jobs will rapidly increase. The break even point of the upfront cost of automation just got a lot shorter.

I think it pushes more jobs overseas as well - if minimum is now $15 - the person currently making $15 will want more and so on...

[Tortoise]

The increased unemployment caused by minimum wage hikes also increases the number of people on the government dole, which increases the government's power by making more people dependent on it.

[InsuranceGuy]

[deleted]

[Xan]

Using BLS data it is pretty easy to see that minimum wage arguments for the most part are silly as basically no one works for minimum wage (1.1% of workers make minimum wage).

Not surprisingly the demographics of those 1.1% who make minimum wage are largely:
16-24 years old
Less than high school education
Food service and other personal service related (tips make up the large portion of their earnings)
Part-time workers

Minimum wage was never intended to be a living wage, which is why almost no one works for that little except for young unskilled workers. Everyone has to start somewhere, but once a worker has any skills at all they are immediately more valuable and have little issue increasing their paygrade.

What would those numbers look like if the minimum wage were $15?

[InsuranceGuy]

[deleted]

[vnatale]

Using BLS data it is pretty easy to see that minimum wage arguments for the most part are silly as basically no one works for minimum wage (1.1% of workers make minimum wage).

Not surprisingly the demographics of those 1.1% who make minimum wage are largely:
16-24 years old
Less than high school education
Food service and other personal service related (tips make up the large portion of their earnings)
Part-time workers

Minimum wage was never intended to be a living wage, which is why almost no one works for that little except for young unskilled workers. Everyone has to start somewhere, but once a worker has any skills at all they are immediately more valuable and have little issue increasing their paygrade.

What would those numbers look like if the minimum wage were $15?

Unclear, I'd have to play with the dataset a little more. It is not as readily available as those that are at minimum wage. I would guess it is not that much more, maybe in the 2-6% given that many high cost of living states already have minimum wages that are near or at $15/hr.

That said, $15 would be significantly higher than any other time in history even adjusting for inflation (which I believe is $10 in todays dollars from back in 1980. This would likely make it much more difficult for unskilled workers, especially young or uneducated in low cost of living areas trying to get started in life.

It is high.

I started working in 1967 at the then minimum wage of $1.40 an hour. Subsequently I've many times read that that was one of the peak minimum wages in terms of buying power. It would be worth $10.96 today.

$15.00 today would be worth equal to $1.91 then. Next year I got a job with the post office (as a 17 year old) making $3.05 an hour. That was equivalent to $22.93 today.

[InsuranceGuy]

[deleted]

[Mountaineer]

I started working in 1967 at the then minimum wage of $1.40 an hour. Subsequently I've many times read that that was one of the peak minimum wages in terms of buying power. It would be worth $10.96 today.

$15.00 today would be worth equal to $1.91 then. Next year I got a job with the post office (as a 17 year old) making $3.05 an hour. That was equivalent to $22.93 today.

Thanks for the history, I had not looked much prior to the early 1970 at minimum wage levels.

1963 - $1.00

I was relatively rich - $1.25 working in the summer of 1963 for the State Road Commission. I remember one $1.00 guy who walked 10 miles to and from work each day. We patched pot holes, painted guard posts and cut brush along the roads. And were thankful for the work. And the pay. Have times changed?

[vnatale]

I started working in 1967 at the then minimum wage of $1.40 an hour. Subsequently I've many times read that that was one of the peak minimum wages in terms of buying power. It would be worth $10.96 today.

$15.00 today would be worth equal to $1.91 then. Next year I got a job with the post office (as a 17 year old) making $3.05 an hour. That was equivalent to $22.93 today.

Thanks for the history, I had not looked much prior to the early 1970 at minimum wage levels.

1963 - $1.00

I was relatively rich - $1.25 working in the summer of 1963 for the State Road Commission. I remember one $1.00 guy who walked 10 miles to and from work each day. We patched pot holes, painted guard posts and cut brush along the roads. And were thankful for the work. And the pay. Have times changed?

The $1.00 and $1.25 today would be worth $8.55 and $10.69.

My $1.40 an hour job was absolutely horrendous.

It was a food catering place. It was the type of job that people would start in the morning and quit by noon. I lasted six weeks.

It was a 47 1/2 hour a week job. From 8 AM to 6 PM, five days a week. Two ten minute breaks and a half hour lunch. All of them to the second.

My job was washing trays. No one to talk talk to. No music to listen to. Just me and those trays. At about 3 PM each day I'd be near a mental breakdown due to the complete lack of mental stimulation. I'd always wonder how I was going to put up with three more hours of it.

The water I was using would spill over on to my blue jeans, making them smell like garbage. And, they'd still smell like garbage after they went through the washing machine.

The next year I get that post office job, paying more than twice as much and, in comparison, easy, easy, easy, easy work.

As a 17 year old with a two job experience I concluded that the more you got paid the less you had to work!

[D1984]

I started working in 1967 at the then minimum wage of $1.40 an hour. Subsequently I've many times read that that was one of the peak minimum wages in terms of buying power. It would be worth $10.96 today.

$15.00 today would be worth equal to $1.91 then. Next year I got a job with the post office (as a 17 year old) making $3.05 an hour. That was equivalent to $22.93 today.

Thanks for the history, I had not looked much prior to the early 1970 at minimum wage levels.

1963 - $1.00

I was relatively rich - $1.25 working in the summer of 1963 for the State Road Commission. I remember one $1.00 guy who walked 10 miles to and from work each day. We patched pot holes, painted guard posts and cut brush along the roads. And were thankful for the work. And the pay. Have times changed?

The $1.00 and $1.25 today would be worth $8.55 and $10.69.

If anything this actually understates the matter quite a bit. It is indeed true simply in pure CPI inflation-adjusted terms that a minimum wage of $1.25 an hour in 1963 was equal to around $10.65 in today's dollars; the minimum wage of $1.40 in 1967 and $1.60 in 1968 was also pretty much at its peak in purely inflation adjusted terms (this being equal respectively equal to approximately $11.13 and $12.20 in January 2021 dollars). However, historically the minimum wage from circa 1938 (when it was first passed at the Federal level) to around 1969 or so tracked not only inflation over time but also productivity growth above and beyond inflation. Actually, if you adjust minimum wage levels from every year in, say, the period of 1960-1970 into today's dollars using both a CPI deflator and a measure of productivity/output per worker you would get a minimum wage that in early 2021 dollars varied from around $20 to over $24!

[InsuranceGuy]

[deleted]

[Mountaineer]

A few more thoughts after my $1.25/hour job in the summer of 1963:

It helped pay for my fall semester at the university - tuition was $90; my 2 room plus bath appartment cost $45/month and I split the cost with one other person. I can't remember food costs, but I recall eating a lot of Banquet pot pies at 5 for $1.00. I've never eaten another one since then! The next year my appartment went up to $60/month when the landlord added a second room and my tuition increased to $120/semester. My entire 5 years at the university cost about $5,000 for tuition, books, food, transportation, and rent. Summer jobs, scholarships, and a wife who worked my last year of school covered it all. I graduated with a couple of bucks in the bank, no debt, a wife, and a job making $830/month when I moved to Texas a couple of weeks later. I still have that same wife, a pension from that same company, and that same debt-free life. Soli Deo gloria!

[pp4me]

I got to see what a high minimum wage does to the restaurant business when I visited Australia a few years ago. The only thing left of "local cuisine" in the small towns we drove through was getting an egg on your hamburger at McDonalds. A lot of times McDonalds was the only restaurant in town but occasionally there would be a Burger King (Hungry Jack's they called it) and once, for a rare treat, we found a KFC.

I'm sure all those chains loved the minimum wage, which I think is now over $19. Yes, it increases their costs but it more than offsets it by putting their competitors out of business.

[vnatale]

A few more thoughts after my $1.25/hour job in the summer of 1963:

It helped pay for my fall semester at the university - tuition was $90; my 2 room plus bath appartment cost $45/month and I split the cost with one other person. I can't remember food costs, but I recall eating a lot of Banquet pot pies at 5 for $1.00. I've never eaten another one since then! The next year my appartment went up to $60/month when the landlord added a second room and my tuition increased to $120/semester. My entire 5 years at the university cost about $5,000 for tuition, books, food, transportation, and rent. Summer jobs, scholarships, and a wife who worked my last year of school covered it all. I graduated with a couple of bucks in the bank, no debt, a wife, and a job making $830/month when I moved to Texas a couple of weeks later. I still have that same wife, a pension from that same company, and that same debt-free life. Soli Deo gloria!

Here are some amounts from six years later. As I stated, I was at $1.40 an hour in 1967 but went to $3.05 in 1968 with the post office. The summer of 1969 which was my summer before my freshman year of college was I was again with the post office and being paid about $3.25 an hour.

You must have gone to a public university? I went to a private one. The tuition was $2,400 a year. With room and board the total cost was $4,000. That $4,000 would be equivalent to $28,500 now. My father worked at the local electric company and with a lot of overtime was making $15,000 a year. I had always thought that would be like $75,000 to $80,000 a year now but I see it'd be equivalent to $107,000 now, which is shocking to me because we certainly did not live that type of lifestyle (my mother, father, myself).

The next year the tuition went up $300 to $2,7000. That $300 increase in 1970 would be equivalent to $2,000 now.

The only financial aid I had was a $500 scholarship for the first year but which they took away for the second year, saying we did not need it. I always thought the $500 for the first year was an enticement to get me there (they'd offered me early decision, which I accepted, meaning I only applied to one college and by the day after Thanksgiving of my senior year of high school I knew where I was going).

Getting back to that $300 increase. I'd dropped out of that school after two years but four and one-half years later (fall 1975) went back to school - the University of Massachusetts. I remember looking upon with disdain some of my fellow students protesting because the tuition was being raised to $300 total. I said to myself you don't know what a bargain you are getting.

Getting back to prices in 1969. I know that Wrangler and Lee blue jeans were $4 while the superior Levis were $5. That'd be equal to $28.50 and $35.60 now.

I could actually look up what I spent on a other lot of things in 1969 but I will not. Except that I am remembering that a bleacher ticket in Fenway Park cost $1.00, equal to about $7 now.

[flyingpylon]

You must have gone to a public university? I went to a private one. The tuition was $2,400 a year. With room and board the total cost was $4,000. That $4,000 would be equivalent to $28,500 now.

Of course, that's what public schools cost now and private schools are 2-3x that amount.

[vnatale]

You must have gone to a public university? I went to a private one. The tuition was $2,400 a year. With room and board the total cost was $4,000. That $4,000 would be equivalent to $28,500 now.

Of course, that's what public schools cost now and private schools are 2-3x that amount.

You are correct for the University of Massachusetts!

Vinny

In-State

Tuition/Fees: $16,676
Room/Board: $14,147
Total: $30,823

[pp4me]

I made 85 cents/hr + tips on my busboy job in high school (circa 1965-67). And like Mountaineer and Vinnie I made enough to pay for my own tuition and books at O.S.U. I think tuition was around $250/quarter. That was actually expected by my parents. If we wanted to go to college we had to pay for it ourselves.

Also managed to buy a car ($75) and 2 motorcycles (a lot more than $75 but don't remember how much) on those wages.

[vnatale]

I made 85 cents/hr + tips on my busboy job in high school (circa 1965-67). And like Mountaineer and Vinnie I made enough to pay for my own tuition and books at O.S.U. I think tuition was around $250/quarter. That was actually expected by my parents. If we wanted to go to college we had to pay for it ourselves.

Also managed to buy a car ($75) and 2 motorcycles (a lot more than $75 but don't remember how much) on those wages.

In 1968 my father bought me my first car for $100. It was one of his "customer's" cars (he worked on cars on the side). That would be $750 now.

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Not the greatest looking car for a kid. But as now I was never one of those people who has been into the looks for a car. My philosophy was that it was far better to have "a" car than to have "no" car.

Two years later he sold it for $200 ($1,350 now).

[Mountaineer]

I made 85 cents/hr + tips on my busboy job in high school (circa 1965-67). And like Mountaineer and Vinnie I made enough to pay for my own tuition and books at O.S.U. I think tuition was around $250/quarter. That was actually expected by my parents. If we wanted to go to college we had to pay for it ourselves.

Also managed to buy a car ($75) and 2 motorcycles (a lot more than $75 but don't remember how much) on those wages.

In 1968 my father bought me my first car for $100. It was one of his "customer's" cars (he worked on cars on the side). That would be $750 now.

Capture.JPG

Not the greatest looking car for a kid. But as now I was never one of those people who has been into the looks for a car. My philosophy was that it was far better to have "a" car than to have "no" car.

Two years later he sold it for $200 ($1,350 now).

My friend had one of those I think - Plymouth Valiant? Slant six engine? Seemed like a decent car.

[vnatale]

I made 85 cents/hr + tips on my busboy job in high school (circa 1965-67). And like Mountaineer and Vinnie I made enough to pay for my own tuition and books at O.S.U. I think tuition was around $250/quarter. That was actually expected by my parents. If we wanted to go to college we had to pay for it ourselves.

Also managed to buy a car ($75) and 2 motorcycles (a lot more than $75 but don't remember how much) on those wages.

In 1968 my father bought me my first car for $100. It was one of his "customer's" cars (he worked on cars on the side). That would be $750 now.

Capture.JPG

Not the greatest looking car for a kid. But as now I was never one of those people who has been into the looks for a car. My philosophy was that it was far better to have "a" car than to have "no" car.

Two years later he sold it for $200 ($1,350 now).

My friend had one of those I think - Plymouth Valiant? Slant six engine? Seemed like a decent car.

Yes. 1961 Plymouth Valiant. Don't know about the engine. The notable thing about it was that it had push buttons for the transmission.

Strange looking car.

Looks like you may be right about the entire. On the left are the push buttons it had for the transmission.

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