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Minimum Wage doesn’t Raise Prices

Wages have been either stagnant or declining for the past 30 years.  That is a Fact, indisputable and supported by vast research.

Study Shows…
Real Wages…
Wages in America…

That last one has some fairly good statistics.

“The minimum wage is 21.4% less [in 2004] than it was in 1979”

“As one source has put it, “in 2000 a CEO earned more in one workday
(there are 260 in a year) than what the average worker earned in 52
weeks. In 1965, by contrast, it took a CEO two weeks to earn a worker’s
annual pay”.

“With 1992 as base year, productivity was at 82.2 in 1979. It grew to
94.2 by 1989 and 116.6 by the year 2000. In [2003], moreover, it
has exploded, putting it over 120. That’s a nearly 40% increase”

 “The overall picture is abundantly clear: real average hourly ages of
more than 100 million of American workers’ are less today than 25 years
ago; real wages of college educated workers have risen only modestly in
the late 1990s and fallen since under Bush II; and real wages of the 10
million lowest paid workers have declined more than 21%.”

With all that in mind,  Corporate profits over the same time period have soared!

Profits skyrocket…
After Tax profits…
Rise in Profits…

“The U.S. Department of Commerce recently reported that corporate profits
(which includes both domestic and foreign profits) now make up the
largest percentage of the country’s gross domestic product (GDP) since
the 1950s. This ratio currently stands at just under 13 percent of GDP,
amounting to a total of US $1.9 trillion (see Figure 1). However, wage
and salary disbursements have been slowly trending downward from 47
percent of GDP in 1985 to 44.4 percent in the second quarter of 2011
(see Figure 2). These trends seem to point to increased inequality
between workers and managers, driven to some extent by the outsourcing
of lower-skilled jobs to Asia.”

 Income Inequality

“the Top 1% has more than triple its income with fairly steady growth
since 1980. The middle and lower classes have seen only about a 15%
increase in real income with all of those gains coming after the early

 Looking at all this data from the perspective of a rising minimum wage – we can tell that there has been no such thing in the past 30 years, yet prices have still gone up.  What has gone up along with prices?  Executive compensation and Corporate profits.

The only thing that goes up with minimum wage increases is the health of the economy as a whole.

Study on Minimum Wage… (pdf)
Job Loss Myth…
Impact of minimum wage…

  • No evidence exists that teenagers or less-than-high-school-educated
    adults lost work as a result of the 1996-97 minimum wage increases.
  • Historically, analyses of the minimum wage’s impact on young workers
    have never shown the predicted large job-loss effects.

  • The small
    negative employment effects found in past analyses diminish over time
    and are no longer statistically significant.

  • Minimum wage increases
    are well targeted in the sense that 63% of the gains from a dollar
    increase in the minimum wage would be expected to accrue to working
    households in the bottom 40% of the income distribution.

  • Of the 8.4
    million workers (age 18 to 64) whose wages and incomes would increase
    with a one-dollar raise in the minimum wage, 2.7 million (32%) are the
    parents of 4.7 million children. Of the 2.7 million parents who earned
    at or near the current minimum wage in 1999, 63% had family incomes
    below $25,000.

  • Most minimum wage workers are adults (71%), age 20 and
    up.[2] Women and minority workers are over-represented among the minimum
    wage workforce. Slightly less than half (48%) of the minimum wage
    workforce are full-time workers.

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