Wages still lag

August 1, 2009 

Your recent article on the federal minimum wage increase failed to contextualize the declining real value of the minimum wage. Even with this latest 70-cent increase to $7.25 an hour, minimum wage workers today are earning about 18 percent less than in 1968, after adjusting for inflation. The fact that America's wage floor has lost value over time, instead of at least keeping pace with inflation and increased worker productivity, is one of the principal reasons for our nation's growing income inequality over the same period.

Consider another reality check: Under the stingy federal poverty guidelines, a family of two would be considered poor by the federal government with earnings of $14,570 per year. A minimum wage worker earning $7.25 an hour in a standard 2,000-hour work year would earn $14,500 a year.

The recent minimum wage raise sure isn't moving anyone to prosperity, much less out of poverty.

Louisa Warren

Policy Advocate, N.C. Justice Center


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