Obama's 'Job-Killing' Minimum Wage Hike Is Actually Pretty Low
Last night during the State of the Union President Obama stated that he wanted to raise the minimum wage to $9.00 per hour.
Some analysts have already come out against the move. University of Texas Economic Professor Daniel Hamermesh told Newsmax:
"Raising the minimum wage will kill off a few jobs and is a slightly harmful idea. Not a disaster, and some people will benefit. But it is a job-killing bill. There are better things to do," he said. "On the other hand, the proposal to tie the minimum wage to the cost of living is nearly excellent."
The jump from $7.25 to $9.00 seems like a large one for a number of reasons. But in reality, for decades the inflation-adjusted minimum wage hovered around and over $9 per hour in 2012 dollars.
First, here's the chart detailing the gradual rise of the legal minimum wage in the history of the United States:
But that doesn't really tell you the real story, because of inflation.
Below is an inflation-adjusted chart of minimum wage throughout history tied to December 2012 dollars.
Notice that for certain periods of time in the sixties, seventies, and early eighties the minimum wage in December 2012 dollars hovered over and around $9 per hour.
Only since the beginning of the Reagan administration has minimum wage dropped significantly below the $9 level:
Also worth considering is that certain states have minimum wages that are both higher and lower than the federal level of $7.25.
Currently only one state, Washington, has a minimum wage higher than the President's goal of $9 per hour.
Washingtonians receive $9.19 per hour minimum. On the other end of the spectrum, minimum wage in both Georgia and Wyoming is a meager $5.15. The point remains, a $9 minimum has worked in at least some portions of the country, but others remain adamantly against increases.
In short, while the proposal to raise the minimum wage to $9 seems bold, during two decades of U.S. history minimum wage earners were making the equivalent of $9 in inflation-adjusted 2012 dollars anyway.
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