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Federal Minimum Wage Drops 15 Cents/Hour in first 3 Quarters of 2016

According to information just released by the Bureau of Labor Statistics, the U.S. minimum wage has fallen by 15 cents an hour in the first 3 quarters of 2016.

No one in the government or press puts it this way, but they should, and here’s why: people don’t eat  dollars.  We don’t wear dollars.  We don’t use a dollar as transportation to get to work.  We have to buy food, clothing and transportation to live.  For seven years now, the U.S. minimum wage has stood at $7.25 an hour,  but the actual amount of food, clothing, transportation and other expenses that the minimum wage will pay for continues to go down as inflation erodes the value of a dollar.  This effect is measured by the Consumer Price Index (CPI).  At the beginning of the year, the cost of goods as measured by the CPI stood at 236.525, but stood at 241.428 by September 2016.  These numbers seem dry and abstract, but divide one by the other and you’ll find out that what a person could buy for $7.10 at the beginning of the year costs $7.25 now. For minimum wage workers, the real, observable effect is the same as losing 15 cents an hour.

In Inflation-Adjusted terms, in terms of what people can actually buy, the Federal Minimum Wage has gone down by 15 cents an hour in the first 3 quarters of 2016.Keep in mind that during this period, how hard a minimum-wage employee works hasn’t changed.  How much value minimum-wage work creates for an employer hasn’t diminished.  Only two numbers have changed: what businesses get paid when people buy their goods and services, and the value of what workers are paid for the work they do to create those goods and services.  While the amount businesses get paid for goods and services has gone up, the real value of what minimum wage earners take home has gone down by fifteen cents an hour.  Fifteen cents an hour doesn’t sound like much, but when you’re scraping to get by, that’s $1.20 less a shift — that’s bus fare that’s disappeared. That’s $6.00 less for a 40-hour work week — that’s a loaf of bread and a jar of peanut butter that’s gone from the house. It’s like working nearly an hour more a week this year than you did last year and not getting paid for it. These kind of declines have been building year after year after year after year after year after year as inflation grinds the value of a dollar down and the federal minimum wage is not adjusted to account for that.

The United States Congress is the political body responsible for laws that would change the federal minimum wage to at least keep up with information, or possibly rise to match the actual cost of living. But the Congress has done nothing, letting the minimum wage stagnate for six years. What has the Congress been up to instead? Introducing legislation to take overtime pay away from millions of Americans, that’s what.

In the meantime, presidents can introduce legislation to Congress.  What have the 2016 presidential candidates said about the minimum wage on their campaign websites?

Democrat Hillary Clinton:  “Hillary believes the minimum wage should be a living wage, and she will work to get to a $15 minimum wage over time, with appropriate variations for regions with a higher cost of living.”

Libertarian Gary Johnson: nothing. Not one word.

Green Jill Stein: “Set a $15/hour federal minimum wage, with indexing.”

Republican Donald Trump: “If you start raising that minimum wage, you’re going to make a lot of our companies even more non-competitive.”


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