By Alden Wicker
NEW YORK (Learnvest) — Last week, in his State of the Union address, President Barack Obama proposed raising the minimum wage to $9 and tying it to cost-of-living increases — a radical move, according to Republicans, who say it would lead to layoffs. (A debatable stance, according to research we’ve covered.)
But according to a 2012 study, Obama’s proposed increase is paltry.
That’s because worker productivity has been steadily increasing, while the minimum wage — increased to $7.25 in 2009 — hasn’t even kept up with the cost of living. Check it out the chart here.
- When Will The Federal Reserve Raise Interest Rates?
- Former Goldman Trader Sues: $8 Million Bonus Just Not Enough
- The Rich Get Richer: U.S. Gains 1 Million More Millionaires
- How Investors Expect to Earn a Required 14% Annual Return
- U.S. Tops in Charitable Giving, With Poor, Middle-Class Giving More Than Rich
“Real” minimum wage is the dollar value of the minimum wage taking into account inflation. It reached a high in 1968, but has lost ground since then, ensuring that even full-time workers on minimum wage live below the poverty line.
A single mother of one would have to work 40 hours a week all year with no days off to earn enough to barely lift her and her child above the federal poverty line of $15,130. (The poverty line that is in itself a controversial measure of actual poverty.)
In short, employees have been providing more and more value to employers, while employers have been valuing them less and less.