“Follow the money” is perhaps the single most important rule to remember when trying to comprehend politics, IMHO, and nowhere is this more true than when it comes to matters of pay.
In 1963, one of the largest political assemblies in American history met together on the National Mall in Washington DC. Fifty years later, Bill Moyers asked: “Have the Demands of the March on Washington Been Met?”
This August marks the 50th anniversary of the March on Washington for Jobs and Freedom. While perhaps the most celebrated aspect of the March is Martin Luther King Jr.’s poetic cry for freedom, dignity and unity, the march’s organizers also had very concrete political demands that were as much about economic justice as racial equality.
In this Group Think, we ask: Have the demands of the March on Washington been met? How far have we come — and what remains to be done? [all emphasis mine]
| Did you know that today’s federal minimum wage has a real value that is lower than the one that was in effect in 1963, after Martin Luther King, Jr. led the March on Washington? |
Please take a minute to think about what this means.
The awful truth is that minimum-wage workers in 1963 were actually economically BETTER OFF than similar workers are today.
And even worse: this situation is actually quite normal. In all of the years since 1963 (fifty-three of them, I counted), the federal minimum wage has only had a real value higher than the one Congress granted in 1963 for four short years: 1967, 1968, 1969, and 1970.
| The sad reality is that the March on Washington only had a small and temporary effect on the wages that this nation’s poorest workers receive. |
How horrified do you think the old Civil Rights leaders would be if they only knew that the crumbs they had been tossed by Congress after their awe-inspiring march might be viewed with relative envy by later generations who have been
forced to work for decades at EVEN LOWER real wages than those in effect in 1963?
We are a nation that for the most part does not “speak math,” especially those on the lower rungs of the economic ladder. For the most part we are not outraged by the economic injustice that has existed in America for multiple decades, I think for the simple reason that many of us do not comprehend the reality of how we as a country have been treating our lowest-wage workers. Friends, the current offer of a $12 minimum wage by some in Congress is a ploy, the latest move in a never-ending game of keeping wages for workers as low as possible. The question is, will they get away with it? Will “we the people” fall for this ploy?
i recently connected the dots … and finally realized we are still discussing the very same issues, in the land of the free and the home of the brave, that were being discussed during the Civil Rights movement more than fifty years ago.
We are discussing … we are actually discussing … in America, in the year 2016 ... whether or not full time workers should be given sufficient wages that will allow them to live.
The people we are discussing are not lounging in hammocks and living the good life; no, they are working incredibly hard, but being given miserly wages so that those who employ them can increase their own profits.
Follow the money if you want to know the truth of any situation. Who gains the most dollars? and who loses?
Who is earning real wages, in the year 2016, that are LOWER than the ones called “starvation wages” back in 1963? ANSWER: primarily women and people of color. |
Please look at the following graphs; they were created by taking the minimum wage value in effect each year, then using the Bureau of Labor Statistics’ CPI Inflation Calculator to determine what that wage would have been worth in 1963 — when Martin Luther King, Jr. was still alive.
From our perspective today, “money was worth more a long time ago” due to the effects of inflation. For example, in years past people bought cars for $3,000, and even houses for $20,000. Things cost much less, but people also earned much less — the value of money was different: money was “worth more”.
From Dr. King’s perspective, “money is worth less” in our day than it was in his. In 1963, the minimum wage was $1.15, and Dr. King was fighting to raise it to $2.00. Today the minimum wage is $7.25, which would have sounded like an unbelievable fortune to someone in 1963; that is, until they realized that everything else today is also much more expensive. We earn more, yes; but things also cost much more — and the reality is that the effective buying power of a minimum wage worker back in 1963 was greater than the effective buying power of a similar worker today. I created these graphs to help others see this shocking truth for themselves.
Below you can see both:
the minimum wage value that has been in effect each year since 1955 (“Nominal Dollars”), and what that wage would have been worth in the year 1963 (“1963 Dollars”). The orange line shows what the minimum wage would have been worth in 1963. In other words, it shows what the values each year would have looked like at the time of the March on Washington. The best year to be a minimum wage worker? 1968. The worst year? 2006.On this next graph, we zoom in a bit to better see the fluctuations around the orange line:
In reality, the March on Washington only had a small and temporary effect on the wages that this nation’s poorest workers receive.Key points:
On the left side of the graph you see values in “1963 Dollars”; on the right side you see the equivalent values today (“2015 Dollars”). In 1962, before the march, the minimum wage was $1.15 ($8.92 in 2015).| John Lewis referred to it as a “starvation wage.” |
“anything less than $2.00 an hour fails to do this.”
After the march, Congress raised the minimum wage from $1.15 to $1.25 ($9.70 in 2015), an increase of about 9%. Over time, the real value of any new minimum wage gradually declines due to the effects of inflation. In 1964, the real value of the minimum wage had already fallen. You can see this pattern again and again on the graph: a local peak, followed by a gradual decline at the right. As the real value erodes, the effective buying power of every minimum wage worker also erodes. Smart businessmen know that the “costs” associated with worker pay “naturally” decrease over time, due to inflation; in other words, the overall system is rigged in their favor. In 1966, Lyndon B. Johnson signed a bill to increase the minimum wage. It was because of this new law that the real value of the minimum wage increased and reached its highest values from 1967 to 1970.| After 1970 the buying power of minimum wage workers was never again as high as it had been in 1963. |
In 2013, Bernie Sanders organized a group of 15 senators (including Elizabeth Warren) to urge Obama to issue an executive order to set the minimum wage for federal contract workers to $10.10 an hour. In early 2014, Obama issued the Executive Order that accomplished this goal.
Because of the efforts of Bernie Sanders, and the cooperation of Obama, federal contract workers now earn a wage that is at least comparable to the one that all minimum wage workers earned in 1963 — more than fifty years ago.
Today the minimum wage is $7.25 an hour (equivalent to $0.93 in 1963)| The real value today is about 26% lower than it was in 1963. |
| The real value today is about 20% lower than the level described by John Lewis as a “starvation wage” |
| There is almost universal agreement among progressives that the minimum wage needs to be increased. The only question: what should the new wage be? |
March 18, 2013 - “Elizabeth Warren: Minimum Wage Would Be $22 An Hour If It Had Kept Up With Productivity
Sen. Elizabeth Warren (D-Mass.) made a case for increasing the minimum wage last week during a Senate Committee on Health, Education, Labor and Pensions hearing, in which she cited a study that suggested the federal minimum wage would have stood at nearly $22 an hour today if it had kept up with increased rates in worker productivity.
"If we started in 1960 and we said that as productivity goes up, that is as workers are producing more, then the minimum wage is going to go up the same. And if that were the case then the minimum wage today would be about $22 an hour," she said, speaking to Dr. Arindrajit Dube, a University of Massachusetts Amherst professor who has studied the economic impacts of minimum wage. "So my question is Mr. Dube, with a minimum wage of $7.25 an hour, what happened to the other $14.75? It sure didn't go to the worker." ”
[all emphasis mine]
- July 22, 2015 - Bernie Sanders introduced S.1832 - Pay Workers a Living Wage Act, to raise the minimum wage to $15; On August 8, Elizabeth Warren became one of the bill’s cosponsors. Sanders also has provided a signed petition from 208 professional economists, which states
“... the weight of evidence from the extensive professional literature has, for decades, consistently found that no significant effects on employment opportunities result when the minimum wage rises in reasonable increments. This is because the increases in overall business costs resulting from a minimum wage increase are, for the most part, modest. [...]
The economy overall will benefit from the gains in equality tied to the minimum wage increase and related policy initiatives. Greater equality means working people have more spending power, which in turn supports greater overall demand in the economy. [...]
In short, raising the federal minimum to $15 an hour by 2020 will be an effective means of improving living standards for low-wage workers and their families and will help stabilize the economy. The costs to other groups in society will be modest and readily absorbed.”
x YouTube Video“The Minimum Wage - Published on Jun 26, 2013
Senator Bernie Sanders discusses the middle wage at a Senate Health, Education, Labor, and Pensions Committee hearing.”
x YouTube Video“Bernie Sanders Tells The Truth About The Minimum Wage - Published on Aug 7, 2013
Vermont Senator Bernie Sanders appeared on CNN's "The Situation Room" with the former director of the Congressional Budget Office and John McCain economic advisor Douglas Holtz-Eakin and told the truth about the minimum wage.”
- November 3, 2015 — Over three months after Sanders introduced his bill, Hillary Clinton was finally ready to make a statement on her views about the minimum wage.
Up until this day, Clinton has made supportive comments about the need to increase the minimum wage, but not much in the way of other details. On November 3rd, It has been about
3 years since Fight for $15 was launched, 1.5 years since Seattle passed a $15 wage ordinance, 1 year since San Francisco passed a $15 wage ordinance, 6 months since Los Angeles passed a $15 wage ordinance, 3 months since Sanders, Warren, and 208 professional economists put their names on a bill to raise the federal wage to $15.… and New York, Oregon and Massachusetts were still actively debating measures to raise the minimum wage to $15 in their states. (FYI: List of $15 Laws & Current Campaigns)
Clinton now reveals,
“’I want to raise the federal minimum wage to $12, and encourage other communities to go even higher,’ she said.”
“Pressed on whether $12 was better than a competing Democratic proposal of $15, Clinton suggested the more modest increase is also the more viable one politically … Her hesitance on the $15 issue may come as a relief to businesses that have been getting bowled over by wildly popular minimum wage campaigns … Despite the success of local campaigns, there's no clear indication that a $12 federal proposal would be any more viable in the near future than one for $15.
In recent sessions, the GOP-controlled House has refused to bring any such bills to the floor for a vote, including one that would have raised the minimum wage to an even more modest $10.10.”
x YouTube VideoHillary Clinton talks passionately about lifting people out of poverty, especially women, and especially women of color, when she is working her magic on a crowd in the room.
However, when discussion turns to details about raising the minimum wage (see clip below), notice that the word poverty disappears from the discussion:
x YouTube VideoInstead, a very technical explanation is given about how the number $12 has been picked after talking with “a lot of economists, and a lot of members of Congress” … “The reason is, that would be setting it at a level that would be equivalent to the point in our history where the minimum wage was at its highest, and in inflation adjusted terms that was in 1968.”
Please don’t be fooled by this answer. Yes, it sounds reasonable on the surface - that is what a politically acceptable answer must do in order to appeal to (/mislead) voters. Please look deeper.
Question 1: In all of the times that the minimum wage has been raised after 1970, has the “logic” behind the $12 proposal ever been put forward before?
In 1968, the minimum wage reached its historical peak when it was $1.60 (equivalent to $1.41 in 1963 dollars, and $10.91 in 2015). Why isn’t Clinton advocating a minimum wage of $10.91? That is the “actual, inflation-adjusted value today” of where the minimum wage was at its highest in 1968. Using an “actual, inflation-adjusted value today” is the typical logic that is used when discussing increases to the minimum wage. But Clinton is not advocating $10.91, she is advocating $12. Where does the number $12 even come from? Holy crap, I just determined that even the mathematical logic behind $12 does not hold! If there is not actual logic that justifies the number, on what basis is that number even being considered as an appropriate minimum wage?I submit to you that savvy politicians know that an offer of $10.91 in today’s political environment would be perceived as “too low” a number to receive popular support. And they are right. Politicians know that today, businesses “have been getting bowled over by wildly popular [$15] minimum wage campaigns.” So they had to come up with a rarely used (if not flat out new) kind of logic that would generate a slightly higher number if they are to be able to generate “relief to [these] businesses.” Why they want to generate relief for large businesses is another fascinating question, but I will leave that for other diaries.
Friends, I have looked high and low to try to find out the logic behind the $12 number. And I thought I had found it in a ThinkProgress article dated April 30, 2015: Democrats Propose Most Ambitious Minimum Wage Bill Yet.
The new benchmark, [economist David Cooper with the Economic Policy Institute] said, is to “return the minimum wage to where the distance between the lower paid worker and typical worker is no greater than it was back then.” If lawmakers use a ratio of the minimum wage to the median wage for all workers, which was 52 percent back in 1968, then a $12 wage by 2020 makes a lot of sense, as it would bring the minimum up to 54 percent of the median wage, which today stands at just over $17 an hour. “It’s essentially returning the minimum wage to the same value it had in 1968 in relative terms,” he said.
But I just checked out that argument, and find that the mathematics do not generate $12 as the result:
| 52% of $17.09 (the actual value shown at the link) = $8.89 |
Using Clinton’s “logic” the correct value she should be advocating for is be $8.89, not $12.
As I said earlier, we are a nation that for the most part does not “speak math,” and this exercise goes right to the heart of it. The logic regarding the minimum wage of $12 advocated by Hillary Clinton does not hold, but one must be sufficiently mathematically sophisticated in order to recognize the deception for what it is.
Is it reasonable to ask, on what basis is the $12 number being offered as an appropriate and fair minimum wage?
I submit to you that politicians know that an offer of $10.91 in today’s political environment would be perceived as “too low,” and so another “logical” argument is needed that would both
sound reasonable to typical, well-intentioned Democrats, and generate a slightly higher number that would be more tolerable to big businesses that rely on starvation wages for their employees in order to increase their own profits.I submit to you that these politicians came up with an argument that sounds logical and reasonable, but unfortunately is not mathematically sound. In other words,
The number $12 appears to have been pulled out of thin air, but then given a deceptive cover story that most voters will unwittingly accept. |
Question 2: Setting the minimum wage to a level that is equivalent to the point in our history where the minimum wage was at its highest sounds really nice, doesn’t it? But when we are then told that this happened in the year 1968, shouldn’t we detect a bit of a problem?
Shouldn’t we notice that the minimum wage was at its highest close to 50 years ago? And then shouldn’t we say, WTF? |
Imagine if we told any other workers that their wages would be set to “inflation-adjusted equivalent values” from almost 50 years ago? What kind of logic and reasoning is this? That is, other than the comforting words of politicians who are out to tell “reasonable-sounding” stories that confuse innocent voters?
Words from Sen. Ted Kennedy: “If there is one cause the Democrats should stand for it is improving the wages of working people. If we are not going to fight for the wages of working people, who will fight for them?” “We know [the minimum wage] works, it doesn’t cost jobs, it helps women, who make up 65 percent of the minimum wage work force. Who are we afraid of?” x YouTube Video[Transcript]: ""What is the price, we ask the other side? What is the price that you want from these working men and women? What cost? How much more do we have to give to the private sector and to business? How many billion dollars more, are you asking, are you requiring? "When does the greed stop, we ask the other side? That's the question and that's the issue, Mr. President. Make no mistake about it." [all emphasis mine] |
One key difference between the two leading presidential candidates in the 2016 Democratic primary is their stance on the minimum wage.
Fast-food workers and child-care workers have been fighting for $15, not $12, for several years; It is not so much of a leap to suspect that their goal of $15 is related to the $2 an hour wage that Dr. King and other Civil RIghts leaders fought for back in 1963. Fast-food workers and child-care workers represent two of the most common types of minimum wage workers. According to the Bureau of Labor and Statistics, food-preparation and serving-related occupations account for about half of all such workers; personal care and service occupations account for another 7%.“Fast food workers and workers in other low-wage industries are keeping up the pressure on the Democratic presidential candidates. The Fight for 15 campaign is staging a strike in Charleston, South Carolina, on Sunday [Jan 17, 2016], followed by a worker rally at the Democratic debate that evening … The workers say they are looking to vote for a candidate who supports their fight.” In 2020 the real value of $15 will be less than it is today. As a comparison $15.00 in 2015 was only worth $14.22 in 2011. In 2020 the real value of $12 will be less than it is today. As a comparison $12.00 in 2015 was only worth $11.37 in 2011.Hillary waited a long time to share her thoughts about the minimum wage, and when she did she immediately took $15 right off the table. It rather reminds me of the time that Obama took the public option out of the debate far, far too early. Why? Because $12 is more “politically viable”.
$12 is not enough !!!
“An Unfulfilled Demand From The March On Washington: A $15 Minimum Wage When protestors gathered in the nation’s capital 50 years ago from Wednesday, they had ten concrete demands, one of which was “A national minimum wage act that will give all Americans a decent standard of living.” They also pointed out that research showed that “anything less than $2.00 an hour fails to do this.” |
| $2 in 1963 is equivalent to $15.51 in 2015. |
“We use MIT's living wage calculator [link] and look at some U.S. counties to show that $12 per hour is not a living wage in many cases. The conclusion? $15 should be the absolute minimum.”
x YouTube VideoI ask you to consider, which women’s rights are more important than the right to earn a wage that will allow a full-time worker to live with dignity and feed her child?
Fighting to eliminate starvation wages for women and people of color is Bernie Sander’s passion.
When voting in the presidential primary, please “Follow the Money”.
The mathematics behind the argument to raise the minimum wage to $12 do not hold. This number was apparently pulled out of thin air, in an attempt to subvert efforts to establish $15 as the federal minimum wage. In 2020, when a $12 wage would finally take effect it will not have the same value that it does today; it will more likely be closer to $11.37, which is only 4% greater in real dollars than the historical peak set almost 50 years ago back in 1968. What would Dr. King and other Civil Rights leaders think of the progress that has been achieved after so long a fight? It’s been over 50 years, people, since Dr. King shared his dream. 50 long years. When does the greed stop? The question on the table continues to be: do full-time workers deserve to be paid a living wage? Do they deserve to be paid a wage that does not require them to apply for government aid, such as food stamps, in order to survive? If your answer is yes, then the harsh reality is that the only way to obtain this wage is to FIGHT for it. And as far as I can see, only one presidential candidate in 2016 is willing (and able) to do that.Fight for $15! Go, Bernie, Go!