Time for a Raise? “Scraping By,” Lowdown on Minimum Wage

Time for a Raise? “Scraping By,” Lowdown on Minimum Wage

KQED recently posted an incredible slide show to spread awareness and knowledge about the minimum wage. What is the federal minimum wage versus the state minimum wage? How does minimum wage now compare to minimum wage 50 years ago? Does raising minimum wage encourage businesses or discourage them? KQED has set out to answer all these questions and then some, so you can make an educated opinion about minimum wage for yourself.


While the entire slideshow has valuable information, there are a few key points that should be pointed out.


First, according to KQED and the research done for the Economic Policy Institute, the federal minimum wage in 1968 was $1.60. To us today, that might not seem like a lot compared to the current $7.45. However, you have to take into account the “real wage” or the adjustment used for inflation (essentially, what you could actually get for your dollar). When taking into account real wage, federal minimum wage was actually $10.69 in 1968!



Demonstration of the decline of a single mom’s earnings on minimum wage in relation to the poverty line since 1968. (KQED)

Following this research and taking in the account of the “real wage” in 1968, a single mom working for the federal minimum lived above the poverty line. Since the early 80’s, a single mom working for the federal minimum wage was actually living below the poverty line. With inflation constantly changing the buying power of the dollar, things are progressively getting worse, meaning that people living on minimum wage will rely more on government assistance like welfare and Medicaid.


The new federal minimum wage proposed by Democratic lawmakers (who are backed by President Obama) is $10.10, which would put people — like single moms — above the poverty line. Some oppose this, as the thinking is it will make it harder for companies to hire more people, which will then raise the unemployment rate.


Research is fairly inconclusive as to whether this is true or not. There were two conflicting studies done on New York after a wage increase: one study done by Arindrajit Dube, Ph.D., saying the hike had “no employment effects on minimum wage increase” and another in the Industrial and Labor Relations Review that said the hike had “robust evidence that raising the New York minimum…significantly reduced employment rates of less-skilled, less-educated New Yorkers.”


In February of this year, the Congressional Budget Office estimated that “hiking the federal minimum to $10.10 would reduce total employment by about 500,000 workers, or 0.3 percent,” while simultaneously lifting “nearly a million people above the poverty line and raise the pay of 24.5 million workers (either directly or indirectly).”


What do you think of the minimum wage? Do you think it is fine where you live? Or do you think it should be higher? Why or why not? Let me know what you think in the comments below or tweet me @kateeb790!

Kate Brown

Kate Brown has a BA in Communications and currently resides in San Francisco. She loves creating and engaging in art, and has been a part of art shows all around the west coast! Her favorite pastimes include trying out new cafes and pizzerias, watching HIMYM on repeat, having adventures (aka reading), and writing prologues for random story ideas. Follow her on Twitter @kateeb790!

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