The federal government has just set the record for the longest period of time without an increase in the minimum wage to keep up with inflation. The minimum wage has now been ignored for over a decade and Kevin Drum says that our political leadership has effectively killed the federal minimum wage through willful neglect.
Today, thanks to their unwillingness to support an increase, well under one percent of workers earn the federal minimum wage, which makes it effectively meaningless.
It is actually much worse than that. Well under half of one percent of American workers earned the minimum wage in 2017. And lots of American workers earn less than the minimum wage. In fact, more than twice as many workers earned less than the minimum as earned the minimum wage in 2017.
Kevin Drum also produced the best kind of data for examining the real value of the minimum wage which is to calculate it as a percent of the median income.
This view… shows that the federal minimum didn’t really peak in the 60s and then decline. In reality, it’s been slowly declining ever since we started collecting income statistics in the 50s. Back then, a full year of minimum-wage work earned you about 40 percent of the median. Today that’s down to 20 percent, and on current trends the minimum wage will decline to its lowest point in history by next year.
The federal minimum wage is nearly irrelevant, so it is amazing that it generates so much opposition from business lobbies who have succeeded at convincing the public that economists are worried about it being too high when in reality, five times more economists want to raise it than oppose raising it.
And it isn’t just the minimum wage that is nearly dead. Overtime pay is also dying. Nick Hanour says, “the overtime threshold, which used to cover 65 percent of workers, today covers only 7 percent” of workers.