Real Value Of Federal Minimum Wage, 1956-2003, in 2000 Dollars

Economic Policy Institute ^ | February 4, 2003 | Economic Policy Institute

[Red Jones]

Year	Minimum Wage in 2000 Dollars
1956	4.50
1957	5.75
1958	5.50
1959	5.45
1960	5.50
1961	5.75
1962	6.00
1963	6.05
1964	6.25
1965	6.50
1966	6.30
1967	6.90
1968	6.90
1969	7.25
1970	6.75
1971	6.00
1972	5.80
1973	6.20
1973	6.20
1974	6.55
1975	6.50
1976	6.30
1977	6.75
1978	6.50
1979	6.75
1980	6.45
1981	6.00
1982	5.75
1983	5.60
1984	5.45
1985	5.30
1986	5.00
1987	4.90
1988	4.60
1989	4.80
1990	5.05
1991	5.15
1992	5.10
1993	5.05
1994	4.90
1995	4.80
1996	5.10
1997	5.25
1998	5.30
1999	5.45
2000	5.25
2001	5.10
2002	5.00
2003	4.80

[Red Jones]

thanks, I wish I could do that.

[The Electrician]

Where does the 'earned income tax credit', food stamps, underground (off the books) economy, other sources of assistance, and the like enter into the picture? Focusing solely on minimum wage is hardly a complete or accurate picture.

[Mr. Buzzcut]

I have nothing against fast food workers ... hell, i once was one ... but i was worth only the pittance i was getting and it convinced me to bust my ass from there on ...

[Red Jones]

of course the minimum wage statistic isn't everything, it's just what it is.

A lot of people think that post 1970 the economy went bad because of excessive spending on welfare types of programs. This is because in the tumultuous 1960's politicians made such a big deal out of helping the poor and then after that time the economy went bad.

But all that helping the poor didn't cause the economy to go bad. What caused the economy to go bad was all the dysfunctional regulations imposed on business, the tort costs and then later on very unwise trade policies as well as run-away government spending that was directed in all directions, not just to the poor. When you measure transfer payments from the taxpayers to citizens and see which income group of americans gets the largesse, well it is the upper 20%, the top quintile, that gets the largest amount per capita in transfer payments. The lower 20% is second in this stat, not first. The bureaucrats also benefit a lot more than the poor.

We've ourselves turned our own economy bad because we never discipline politicians who make decisions that harm our economy. And then we've blamed it on the poor. As some old-fashioned people would say this puts our souls in mortal danger.

[Red Jones]

another aspect of this whole equation is the tax burden. Even people working at minimum wage pay a significant payroll tax. But it seems that the most heavily taxed people draw a paycheck at between 70,000 and 87,000 a year. These people pay the payroll tax at its' full rate, then they pay income tax on the same income. They're still double-taxed unlike dividend income earners. Paychecks above 87 grand don't pay payroll tax on the amount above 87 grand. So, their marginal tax rate goes down quickly.

[rogue yam]

The last time I worked for minimum wage was in the late 1970s during the summer in Baton Rouge. Assembling crap in an un-airconditioned warehouse. You're darn right it sucked. At summer's end I went back to college full-time and made quite good grades while earning an engineering degree. I had no problem understanding my motivation there. Of course I was plenty motivated already. For some reason, all during the 60s and 70s when I saw those public service ads on TV that said "To get a good job, you need a good education" they just made plain good sense to me. What I've never understood is anyone who is over 21 and works for minimum wage. How can you have lived that long and not picked up some kind of skill that teenagers don't have?

[Ken H]

You've nailed a big part of it, IMO.

[Red Jones]

and young people today are trying to do what you did. When they work those summer jobs at minimum wage they get paid a lot less than you did because the minimum wage hasn't kept pace with inflation. And then when they pay for that college tuition they have to pay a lot more than you did because on average college tuitions have gone up much faster than inflation. And so they get student loans which are very easily available tomake the difference. And if they major in engineering like you, then they won't be able to get a job because of H1b. But they'll still have to pay back that student loan. From one generation to another we are slowly putting our people into bondage because we've made a lot of stupid decisions in managing our nation's affairs. And under this scenario the only comment you can make is to say something bad about a person who works a low wage job. very unfortunate.

[Ken H]

Bad things have happened to our economy...

I agree.

The New Deal and the Great Society are coming into full fruition.

We have a monstrous Federal bureaucracy, welfare dependency that spans generations, and high taxes to pay for it all.

This is what comes from an expansive view of general welfare and interstate commerce by the Left's living, breathing Constitution.

[rogue yam]

Your reply to my post was lame so you can stuff the attitude, Bucko. H1B visas have not choked off all prospects for young graduates. And adults with no skills are still, and will always be, lazy people. We are in a downturn right now and you and a number of other whiners want to claim that it's the end of the world. Well, I've seen downturns before and we've always pulled through. Five years ago nobody was peddling this doom-and-gloom nonsense and someday before too long it will again be put on the shelf. Sure, if it was up to me I'd cut back on immigration and H1B visas. But this thread is about the minimum wage. So maybe it has 25% less purchasing power than it did 20 years ago. So what? My point remains the same. Better yourself and you won't have to worry about it!

[ETERNAL WARMING]

The harm of minimum wage is a long-documented fact.


LOL And how many "minimum wagers" can you pay for out of one spoiled CEO's annual bonus? Oh...that's different huh?

[John Valentine]

We are also planning on actually cutting social security payments to the elderly poor within just 5 years or so from now. We've also made dramatic cuts in medicaire just in the last 2 years. These are also signs that our economy is simply losing it's ability to support our people on a collective basis.

Where does this come from? I think you have been listening to too much DNC propaganda.

There may be problems with Social Security down the road, especially if we put off reforming the system, but nothing is as close as five years.

You need to get your facts straight before commiting yourself to print.

[ETERNAL WARMING]

October 23, 2002 | EPI Issue Brief #184
For a printer-friendly version of this report, download an Acrobat PDF version of this paper.

Phony accounting and U.S. trade policy
Is Bush using Enron-like tactics to sell trade deals to the public?

by Robert E. Scott

The U.S. has experienced steadily growing trade deficits for nearly three decades, and these deficits have accelerated rapidly since the North American Free Trade Agreement (NAFTA) took effect in 1994 and the World Trade Organization (WTO) was created in 1995. The toll on U.S. employment has been heavy: from 1994 to 2000, growing trade deficits eliminated a net total of 3.0 million actual and potential jobs from the U.S. economy.1

Proponents of new trade agreements to build on NAFTA and the WTO have frequently claimed that such deals create jobs and raise incomes in the United States. When the Senate recently approved President Bush’s request for fast track trade negotiating authority,2 he called the bill’s passage an “historic moment” that would lead to the creation of more jobs and more sales of American products abroad. Two weeks later at his economic forum in Texas, he argued that “[i]t is essential that we move aggressively [to negotiate new trade pacts], because trade means jobs. More trade means higher incomes for American workers.”

The problem with these statements is that they misrepresent the real effects of trade on the U.S. economy: trade both creates and destroys jobs. Increases in U.S. exports create jobs in this country, but increases in imports destroy jobs because the imports displace goods that otherwise would have been made in the U.S. by domestic workers.

The President’s statements—and similar remarks from others in his administration and from members of both major parties in Congress—are based only on the positive effects of exports, ignoring the negative effects of imports. It is an attempt to hide the costs of new trade deals, in order to boost the reported benefits. These are effectively the same tactics that led to the bankruptcies of Enron, WorldCom, and several other major corporations.

The impact on employment of any change in trade is determined by its effect on the trade balance, the difference between exports and imports. Ignoring imports and counting only exports is like balancing a checkbook by counting only deposits but not withdrawals. The many officials, policy analysts and business leaders who ignore the negative effects of imports and talk only about the benefits of exports are engaging in false accounting.

The impact of trade on employment is one of the most widely used measures of the costs and benefits of trade policies, but also one of the least understood. Table 1 shows the changes in goods trade (excluding services) from 1994 to 2000, measured in constant 2000 dollars. Table 1 also shows estimates of the employment impact of trade. These estimates utilize a detailed, 192-sector model that is prepared annually by the U.S. Bureau of Labor Statistics (see the methodology section for more details).

click on url for more details.

[John Valentine]

But it seems that the most heavily taxed people draw a paycheck at between 70,000 and 87,000 a year. These people pay the payroll tax at its' full rate, then they pay income tax on the same income. They're still double-taxed unlike dividend income earners. Paychecks above 87 grand don't pay payroll tax on the amount above 87 grand. So, their marginal tax rate goes down quickly.

This is total crap. I suppose you are talking about the upper limit on income for the Social Security tax. That is NOT the income tax. If you want to talk apples, stick to apples.

[Red Jones]

Our fearless leader, King George II, put together a commission to look at social security during 2001. They concluded that under the current obligations and taxes and economic trends we would cut social security payments to the elderly in real terms in 2016. Then, just a few weeks ago Bush increased social security obligations by adding millions of new workers who are currently illegal aliens to be social security beneficiaries. So, I don't know the precise exact facts. Such things are hard to come by. But I would bet that they're pulling the wool over your eyes and many others obviously.

[Red Jones]

I read an analysis here on FR recently, I think it might have been from Time mag. It said the people who faced the highest marginal tax rates when they increased their income was people who make paychecks at 87 grand for precisely the reasons I mentioned. People who pay only income tax, but make over a 100 grand, frequently are able to have their tax accountants arrange things so that they end up paying a smaller actual overall federal tax rate than people who pay both payroll and income taxes and make 70-80 grand. You have to include employer paid tax and employee paid tax for payroll taxes and that's 15.5% total. Then, you gotto remember that they're double taxed on that income too. The things I'm speaking of are no secret. But I admit I'm not a tax accountant.

[Red Jones]

the upper limit on income for the Social Security tax. That is NOT the income tax

oh now I understand what you're saying. You are actually saying that the payroll tax is not a tax. Republican robots frequently can't think. Let me explain. The federal government collects about 35% of its' revenue from the income tax. It collects about 25% of its revenue from the payroll tax. Some people have to pay both the payroll tax and the income tax. Some people don't. There are other taxes and fees too that the government collects besides payroll and income tax and those are real taxes too. If you want to actually measure the tax rates that people pay, then you have to add up all of these various taxes and divide by total income of the individual.

[jeremiah]

The left seems to have convinced the right of the efficacy of social spending.

[Red Jones]

thanks Eternal Warming. I'm as strong a conservative as there is. And I was a loyal republican up until Trent Lott sold the constitution in 1999. George Washington and Ronald Reagan are my 2 political heroes. But the conflict between liberals and conservatives is yesterday's paradigm. Now, we americans regardless of whether we're dems or repubs, conservatives or liberals, should unite and oppose the New world Order slimeballs. The NWO slimeballs include both Bush's and Clinton. One of the worst days in American history was September 11, 1990 when George Bush announced to us that he was loyal to the NWO.

As america is the nation that is intimidating nations all over the world into the World Trade Organization and is leading the NWO, then I should say 'May God Have Mercy On The United States Of America!'

Proud worldy people are seduced by Bush' drive into the New World Order madness, but decent people tremble.

[zeaal]

I pulled out my first pay stub (it's in a HS memory book). May 4, 1978. 37.25 hours at 2.35 per hour. Total 87.53. I was RICH! According to the table, that 37.25 hours translates to 242.13 to 2000 dollars. Doggone, I was rich.