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Tuesday 24 July 2012
Raising the Minimum Wage Is Cheap and Easy

In terms of whether we can afford a higher minimum wage, it is worth remembering that the minimum wage in 1968 would be almost $9.00 an hour in today’s dollars. In spite of the high minimum wage in the late 1960s, the job creators of that period pushed the unemployment rate down to 3.0 percent.

And the country has not gotten poorer in the last four and a half decades. We have policy wonks running around Washington who seem to think that cell phones, computers, the Internet, and all other innovations of the past four decades that we now take for granted have reduced our standard of living.

This is of course nonsense. Productivity has increased by more than 120 percent since the late 1960s. If the minimum wage had kept step with productivity growth and inflation, it would be over $20 an hour today.

The real problem in our economy today is not a lack of productivity. The problem is that the gains from productivity growth have not been broadly shared. The wealthy have used their power to rig the deck so that most of the benefits of growth have gone to those at the top. They have used their control of trade policy, the Federal Reserve Board and more recently the Wall Street bailout, to ensure that those at the top have gained at the expense of everyone else.

36 notes

  1. adeleblancsec reblogged this from veruca-assault
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  5. libertyequalitybrotherhood reblogged this from questionall and added:
    I’m not a fan of government-sponsored education of any form, but if there was one mandatory class before you gained...
  6. poofyphluff reblogged this from jolly-dolly
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  11. dailyrenegade said: Raising the minimum wage does nothing, since it inspires inflation and raise prices…so you make a dollar more per hour, but everything you buy costs more to compensate.
  12. questionall reblogged this from azspot and added:
    Weird - I said the exact same thing in an earlier post - Awesome!
  13. jolly-dolly reblogged this from azspot
  14. azspot posted this

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