The Increase in Minimum Wage & Hourly Pay Compared to Average CEO Pay.

by Pitt Griffin on August 15, 2018 · 0 comments

in Economics

The chart above tracks the growth of the average hourly wage of the American worker. It seems to show an overall steady and solid increase. But it is an optical illusion. The scale on the right starts at $22.00 and ends at $22.80. If it started at $0.00 the columns would appear to be about the same height.

What the chart does show is that in the last 12 months wages have increased nominally by 54 cents. But if you factor in inflation, the increase is 10 cents.

This is not what the congregation was promised by the administration and its congressional poodles when they were selling the tax cuts. Once again the wealth giveaway to the top earners and corporations has not led to significant increases in worker pay. How often will poorly-educated white men fall for this? 

Adding insult to injury will be the inevitable calls from fiscal conservatives that something must be done about the concomitant exploding deficits. And they will demand that the ‘something’ should be cuts in social programs.

Because they are shameless.

Having looked at the middle, let’s look at the bottom — the minimum wage. It has been stuck at $7.25 since 2009. If it had tracked with inflation it would be $8.55 today. However, if we instead picked 1968 as a baseline, and matched inflation, the minimum wage would now be $11.59.

Let’s take it one step further. If instead, the minimum wage had risen as much as average CEO pay it would now be $93.52.

And if the ratio of CEO pay to the average wage had remained the same the average wage would be $287 an hour.

And yet the supply-siders still insist on cutting taxes on the economic aristocrats and complain that the poor are fighting a ‘class war’ and demanding ‘wealth redistribution’. It’s like running someone over and complaining they dented your fender. 

And the small-government types say that wages at each end of the scale are merely a product of market forces and any attempt to interfere is merely socialism and will only assure a Soviet-style command economy. It’s rubbish of course. Many countries see economic growth combined with a vibrant middle class and a robust safety net.

As Christoper Hitchens so pithily observed of libertarianism (specifically Ayn Rand’s ‘Objectivism’) “I have always found it quaint, and rather touching, that there is a movement in the US that thinks Americans are not yet selfish enough.”

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