Study Says Minimum Wage Actually Should Be $21.72

Alden Wicker

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

“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

  • Anonymous

    Raising the minimum wage is ridiculous. If it was increased in accordance with inflation, maybe so. Otherwise, no. People should go to college and others should stop majoring in liberal arts majors

    • Caitlin

      that’s a selfish, rude and unfair to say. i think we should raise it, but even if we did there are still a lot of states that do not pay the federal minimum as it is now, which i think therein lies the problem. a lot of people can’t afford to go to college. and why should people tailor their schooling needs based on solely on a paycheck? obviously people want to make something of themselves with their life and everyone dreams of big paychecks, but for a lot of people it’s not worth it. I’m an art major and I’m doing what I love. I’m not rolling in the dough, but my level of happiness is way more important to me than trading it all in for something that pays more and makes me miserable. try to think about other’s and the differences between people before you make an asinine statement again.

      • Long Pham

        Unfortunately, your argument is flawed. All states abide by federal minimum wage laws, but some states have higher minimum wages. That said, minimum wage is a very sensitive topic, but I believe that people would think differently if they fully understood the economic effects of minimum wage on the availability of jobs and how it undermines the workforce.

    • SR

       ”…stop majoring in liberal arts majors” I hope you realize how ignorant that statement is. You’re arguing about politics when political science itself is considered a liberal art. Along with many other important fields like math and science. Think, then speak.

      • Guest

        Umm, math and science are not liberal arts. They’re science, duh.  You get a BS, not a BA if you major in any math/science field.

  • Nstephens0402

    Sad in deed. The day has come when the employee is truly a liability. Profits and increasing the workload on employees is just the way it is.

  • WordLife99

    Wow, if everyone went to college then who would work trades (ie. auto mechanics, welders, plumbers), you know positions a society cannot function without. Also, your history and psychology teachers/professor (assuming you went to college) more than likely have liberal arts degrees, so with no one pursuing these degrees who would educate our children?

    • TJ Tretman

      Well, raising the minimum wage would probably mean less jobs. So, only the most qualified would get those jobs.

  • Rockstar_chick87

    Raising minimum wage raises the cost of living, because these companies that now have to pay their workers more are going to have to make up for lost profit by raising the prices of their product. It’s a never ending cycle of dog chasing tail. Let’s just pay everyone $50/hr, then everyone would be rich! Why don’t we do that? Huh?……..Then a loaf of bread would go from $2.00 to $20.00…..

    • Francesco Tetto

      Or make it up by not increasing, or even decreasing salaries of the highest paid workers.  Over the last 40 years salaries of the highest paid workers have increased over a hundred fold while minimum wage has only increased by a factor of 10.  There is a much larger discrepancy between the salary of a CEO and a janitor than there has been in modern history. 

      EDIT: typos

      • Greg

        Well you can pretty much kiss manufacturing in the US goodbye.  Sure you can look at some companies that pay a lot to the higher ups, but most manufacturing, especially smaller companies, can’t afford an increase, especially one as absurd as $21.  Then we will all cry about how nothing is made in the US anymore.

        • Mmurphy_a

          Maybe just maybe the employers should not be so greedy and paid descent wages. How much money does one person need? geesh

          • Sammi Jo Stevens

            as much as they can earn! that’s the incentive this country has lost.

          • Justin Melton

            That’s not the incentive this country has lost. What this country has lost is the inability to compete in the global economy. With big industrialization increases in third world countries that don’t have half the labor laws we do, businesses can make 3x the product AND ship it from overseas for less than you would do it for… If we don’t impose new sanctions on what money we can make overseas then we will eventually be left in the dust. Actually, it may already be too late. But don’t think for a second it’s because no one is innovative or smart anymore. It’s exactly the opposite. Why would a smart person make less money here when he can make it 10 fold in Taiwan? … Exactly.

  • babaghanouj

    The problem is not minimum wage but the percentage of the profit which goes to the top, there was a report that said that 30 years ago the average CEO would make 25 times what a average employee made, but now the average CEO makes 500 times the average employee. Raising minimum wage will only raise prices but will not address the core of the problem. Like everything politicians do is superficial, made to look like something is done about a real problem when in fact it really isnt.