The minimum wage was introduced in 1955. From 1955 to 1970 a worker earning the minimum could purchase between 40 to 100 gold oz depending on the year.
In 2011, a current minimum wage earner spending their entire gross paycheck- could purchase only 7 gold oz.
I posit that an increase in minimum wage coupled with low inflation is the magic formula to maintain a healthy wealth distribution.
Year- Minimum wage converted to gold
1955- 44 Gold oz
1970- 92 Gold oz
1980- 10 Gold oz
1990- 20 Gold oz
2000- 40 Gold oz
2011- 7 Gold oz
Take note of the 1970’s boom to the bust of the 1980’s. Notice the perceptions drop a minimum wage worker could purchase in gold.
It took the economic boom of the 1990’s to finally see an increase in the purchasing power of minimum wage workers on a par to the 1955 /1970 era.
So many things amount to noise and distraction; I like to look at a few prices to prove my point.
Simply put, the price of gas has doubled since 2000, salaries have not kept us. Official CPI masks the true damage inflation has inflicted upon the populace.
While corporate profits are up for many reasons, two of them are: they pay workers less in inflation adjusted dollars than ever before, and they are able to pass thru inflation costs to consumers who are paid less than the rate of inflation would dictate.
Consumers have had to use the credit card to purchase food, fuel and tires.
Of course some consumers were reckless with credit, but most used credit to pay for the basic necessities.
For the poor and middle class to live off a weak dollar they have had to leverage themselves up to the hilt.
GOP / tea party / conservative and right leaning blogs abhor the minimum wage and will not honestly discuss it in any way- except to say that it is an evil government regulation inflicted upon the “job creators”.
While the picture is bleak- I still think we can get out of this hole.
apmex
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