Study Says Minimum Wage Actually Should Be $21.72

Study Says Minimum Wage Actually Should Be $21.72

On Tuesday night, in his State of the Union address, Obama proposed raising the minimum wage to $9 and tying it to cost-of-living increases—a radical move according to Republicans, who say it would lead to layoffs. (A debatable stance, according to research we've covered.)

But according to a 2012 study, Obama's proposed increase is paltry.

That's because worker productivity has been steadily increasing, while the minimum wage—increased to $7.25 in 2009—hasn't even kept up with the cost of living. Check it out: minimum wage and productivity

Learnvest

Get started with a free financial assessment.

"Real" minimum wage is the dollar value of the minimum wage taking into account inflation. It reached a high in 1968, but has lost ground since then, ensuring that even full-time workers on minimum wage live below the poverty line.

A single mother of one would have to work 40 hours a week all year with no days off to earn enough to barely lift her and her child above the federal poverty line of $15,130. (A poverty line that is in itself a controversial measure of actual poverty.)

In short, employees have been providing more and more value to employers, while employers have been valuing them less and less.

Tell us: What do you think of raising the minimum wage? Do you think $9 is enough? Via Huffington Post

Learnvest

Financial planning made simple.

Get your free financial assessment.

Related Tags

Get the latest in your inbox.

Subscription failed!

You're Now Subscribed!