A few years ago, I saw a graphic that claimed that in the 35 years between 1978 and 2013, the “real value” of the federal minimum wage in the U. S. has decreased by 25%, while the cost of going to a four-year college has increased by 1,120%. It’s an interesting comparison, though one immediately jumped on by chart-wielding opponents of any increase to the minimum wage. According to this chart at CNN [1], one said, the “buying power” of the minimum wage in 1978 represented $8.22 in 2013 dollars, and that’s a decrease of “only” 13 percent. No one asked the commenter how he'd feel if his salary were cut by 13%, though...
Of course, the “buying power” of a dollar is based on a market basket comprising many items, from entertainment to housing and everything in between. So what about just the necessities of keeping body and soul together? Well, there’s lots of historical data out there so perhaps a little exercise in number-crunching might bring some clarity to discussions of just what minimum wage will buy. [Note: all numbers herein are based on the references cited using brackets. Projections and estimates are based on simple linear interpolation/extrapolation using an Excel spreadsheet].
First, a couple of numbers: in 1978, the federal minimum wage was $2.60 per hour. In 2013, it was $7.25.We'll start with some common food items:
Of course, the “buying power” of a dollar is based on a market basket comprising many items, from entertainment to housing and everything in between. So what about just the necessities of keeping body and soul together? Well, there’s lots of historical data out there so perhaps a little exercise in number-crunching might bring some clarity to discussions of just what minimum wage will buy. [Note: all numbers herein are based on the references cited using brackets. Projections and estimates are based on simple linear interpolation/extrapolation using an Excel spreadsheet].
First, a couple of numbers: in 1978, the federal minimum wage was $2.60 per hour. In 2013, it was $7.25.We'll start with some common food items: