Skip to main content

In Alaska, we are lucky enough to have a minimum wage above the federal level at $7.25 an hour. But this still doesn't meet the needs of America's standard of living. The cheapest place in Anchorage'll probably run you 6-9 hundred dollars a month. Which is one whole paycheck devoted to rent.

Hopefully you don't have too many bills and other expenses that have to be paid for, something has to be cut.

Some can go without electricity, some without heat, some without food or water. It just doesn't have to be like this.

The puzzle is why so little was done to counteract these forces. Government could have given employees more bargaining power to get higher wages, especially in industries sheltered from global competition and requiring personal service: big-box retail stores, restaurants and hotel chains, and child- and eldercare, for instance.

Safety nets could have been enlarged to compensate for increasing anxieties about job loss: unemployment insurance covering part-time work, wage insurance if pay drops, transition assistance to move to new jobs in new locations, insurance for communities that lose a major employer so they can lure other employers. With the gains from economic growth the nation could have provided Medicare for all, better schools, early childhood education, more affordable public universities, more extensive public transportation. And if more money was needed, taxes could have been raised on the rich.

Big, profitable companies could have been barred from laying off a large number of workers all at once, and could have been required to pay severance -- say, a year of wages -- to anyone they let go. Corporations whose research was subsidized by taxpayers could have been required to create jobs in the United States. The minimum wage could have been linked to inflation. And America's trading partners could have been pushed to establish minimum wages pegged to half their countries' median wages -- thereby ensuring that all citizens shared in gains from trade and creating a new global middle class that would buy more of our exports.

Here is a chart that ties the minimum wage to the poverty line up to 2007:

Minimum wage and Poverty Line

Multiplying the minimum wage by a work year of 50, 40-hour weeks gives the annual earnings that can be expected from a minimum wage job. The real annual income from a minimum wage job is the blue bars. The red line is the poverty level real annual income for a family of four. Minimum wages have never been sufficient to raise a family out of poverty, if only one member of the family works.

Here is another from the same link above, detailing the minimum wage starting from 1938 to 2013:

minimum wage throughout history

A federal minimum wage was first set in 1938. The graph shows nominal (blue diamonds) and real (red squares) minimum wage values. Nominal values range from $0.25/hr in 1938 to $6.55/hr as of July 2008. The graph adjusts these wages to 2007 dollars (red squares) to show the real value of the minimum wage. Calculated in real 2007 dollars, the 1968 minimum wage was the highest at $9.47. The real dollar minimum wage (red squares) falls during periods Congress does not raise the minimum wage to keep up with inflation. The period 1997-2007, is the longest period during which the minimum wage has not been adjusted. The minimum wage increases in three $0.70 increments--to $5.85 in 2007, $6.55 in mid 2008, and to $7.25 in mid 2009. The real values after 2007 are projected for future decline in purchasing power.

It sucks when you hear people say things like, "Keep that up, and you'll be flipping burgers your whole life."

Well, that'd be okay if America, during the 1970's, didn't begin to re-distribute the nation's wealth towards the top tax brackets. Wages would have been steady growing and fast food jobs wouldn't have that stigma attached to it.

There is a problem when a a group of individuals can get together and have more money than over 50% of any nation.

But starting in the late 1970s, and with increasing fervor over the next three decades, government did just the opposite. It deregulated and privatized. It increased the cost of public higher education and cut public transportation. It shredded safety nets. It halved the top income tax rate from the range of 70-90 percent that prevailed during the 1950s and '60s to 28-40 percent; it allowed many of the nation's rich to treat their income as capital gains subject to no more than 15 percent tax and escape inheritance taxes altogether. At the same time, America boosted sales and payroll taxes, both of which have taken a bigger chunk out of the pay of the middle class and the poor than of the well-off.

Everything, and I mean damn near everything has gotten better in this country but, the few social safety nets we have for our citizens. People who complain about how dumb America is, blame the elites who don't give a fuck about anybody but them and theirs.

I bet if Democrats acted to raise the minimum wage, you'd hear cries about businesses leaving America because of their anti-business attitude. Which of course is just bullshit, not every American corporation and company, but it seems quite a few of them value their profits over America's workers. They see us as spoiled, they see us as expensive, we aren't even humans to them anymore, we're capital.

Companies were allowed to slash jobs and wages, cut benefits and shift risks to employees (from you-can-count-on-it pensions to do-it-yourself 401(k)s, from good health coverage to soaring premiums and deductibles). They busted unions and threatened employees who tried to organize. The biggest companies went global with no more loyalty or connection to the United States than a GPS device. Washington deregulated Wall Street while insuring it against major losses, turning finance -- which until recently had been the servant of American industry -- into its master, demanding short-term profits over long-term growth and raking in an ever larger portion of the nation's profits. And nothing was done to impede CEO salaries from skyrocketing to more than 300 times that of the typical worker (from thirty times during the Great Prosperity of the 1950s and '60s), while the pay of financial executives and traders rose into the stratosphere.

"And nothing was done to impede CEO salaries from skyrocketing to more than 300 times that of the typical worker"

Let's try that out, a typical worker who gets paid 7.25 an hour, 40 hours a week:

Your gross income would be $15,080, and $1,256.67 in a month, before expenses, with no state tax added on.

Social Security takes out a chunk, which leaves you with $13,926.38 in one, whole year.

Times that by 300, and you get $4,177,914 in one year. But that's not enough, so everybody who doesn't frequent the clubs they do, the people who don't have wealth like they do, they can all suffer and die in the streets.

That's what is possible if the Senate doesn't pass these unemployment benefits. I get $432 a month off of my UI benefits, I'm very fortunate for that too.

But where I stay, everything together cost about $1500, so you see the
last thing I would want is to stay on unemployment insurance.

Everybody is looking for work, 5 applicants to every job, that makes getting a job a competition even more than it already was. Now, it's possible to be too qualified for a job.

But it doesn't have to be like this, there was one in Congress who understood.

Feel his roar

Originally posted to TrahmalG on Wed Jul 14, 2010 at 11:40 PM PDT.


If our wealth was distributed fairly, would our economy be stable?

76%42 votes
23%13 votes

| 55 votes | Vote | Results

Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags


More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  Tip Jar (18+ / 0-)

    "A nation that continues...spend more money on military defense than on programs of social uplift is approaching spiritual doom." *Martin Luther King, Jr.*

    by TrahmalG on Wed Jul 14, 2010 at 11:40:42 PM PDT

    •  Yes except for oil (1+ / 0-)
      Recommended by:
      wu ming

      Have to achieve oil independence for any kind of a stable economy.

      •  if we weren't hanging on the edge of the abyss (1+ / 0-)
        Recommended by:

        it would be an easier sell to make policy changes that raise the price of gas a bit, for long term needs. one reason there is resistance to things like gas taxes (not all, or even most, but a significant plurality) is a fear that any new increase in living expenses will cause people and businesses to lose their grip, and the abyss we've made is so awful people would do anything to stay out of it.

        in a prosperous society, costs and benefits can be more calmly debated. when people are rightly terrified of being devastated, it's harder to do.

        surf putah, your friendly neighborhood central valley samizdat

        by wu ming on Thu Jul 15, 2010 at 08:21:29 AM PDT

        [ Parent ]

  •  Great post. Can you produce a chart (1+ / 0-)
    Recommended by:

    that shows per capita GDP for the bottom 90% of the populations of the US and other industrialized nations.

    Most Americans still think they are financially better off than people in other countries but this is only true if the wealth held by the top 1-% is averaged over the population.

    If the true GDP of the bottom 90% is used they will quickly see how badly things have deteriorated.

  •  i didn't vote (3+ / 0-)
    Recommended by:
    wu ming, Hoghead99, TrahmalG

    i have to agree with the majority of your "diary". when it comes to wealth distribution i get a bit nervous. i live in france which has for the most part a wealth distribution système. while france is one of the most enjoyable places to live in the world wealth distribution does have it's setbacks. in france there are the ultra rich, a very small middle class and an immense proletariat. i think it would be best in the states to tax the rich a bit more (like under reagan), immediately stop fucking around with unemployment benefits during a crisis, stop waste ( military waste, government waste, corporate gluttony etc), and go green. if america would get started on getting ebvironmentally friendly jobs wouldn't need to be "minimum wage level". just my opinion of course.

    i know that this is a serious forum but i must say that i think that sarah palin is a skank

    by patrianostra on Thu Jul 15, 2010 at 02:39:09 AM PDT

    •  your class categories need some evidence (0+ / 0-)

      and definitions stable across national boundaries. what does the american middle class have that the french middle class lacks? are french proletariats better or worse off than american middle class workers? how rich are the french ultra rich vs. the american ultra rich, in both absolute and relative terms?

      i think you may be confusing american class self-description for the actual living conditions.

      surf putah, your friendly neighborhood central valley samizdat

      by wu ming on Thu Jul 15, 2010 at 08:24:32 AM PDT

      [ Parent ]

  •  The rest of us (2+ / 0-)
    Recommended by:
    Hoghead99, TrahmalG

    were too good to our businesses and the rich in the past.

    Oh how they must have suffered.  It is odd to say that, since they did so well in this country. Even with Social Security, Welfare, Unemployment and Medicare/Medicaid, they thrived.  They had everything anyone should ever want, plus we treated them with respect.  

    You just know they suffered because of their actions, now.  It is like this big revenge on the rest of us.

    We thought our leaders were minding the store, but they were allowing it to be plundered.

    We didn't say Wealth Care, we said Health Care

    by relentless on Thu Jul 15, 2010 at 04:02:23 AM PDT

  •  If the minimum wage (2+ / 0-)
    Recommended by:
    wu ming, TrahmalG

    was indexed to inflation since the 70's, it would now be roughly $16 per hour. All other wages would of course be much higher as a result.

    Federal, state, and local income tax collections would be greater. SS and Medicare would be awash in money. Sales of big ticket items would be higher. No liar loans or "creative" mortgage products would be necessary, because more people would be able to afford a standard mortgage. Consumers would not have been faced with the choice of running up credit card debt or watching as their standard of living fell.

    Running this economy for the benefit of the wealthy has been an unmitigated disaster on many levels.

    "A lie is not the other side of a story; it's just a lie."

    by happy camper on Thu Jul 15, 2010 at 07:57:12 AM PDT

  •  Income Inequality Kos (1+ / 0-)
    Recommended by:

    Income Inequality Kos, a weekly diary series, will be launching tonight at 9:00 p.m. eastern.

    We discuss income inequality, concentration of wealth, and related issues. Diaries in the weekly series will contributed by general Kossack volunteers.

    Tonight's diary is a rundown on the Robert Reich article.

    Please join us.

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site