Minimum Wage Was Once Enough To Keep a Family of 3 Out of Poverty
Amid protests across the country over retail and service jobs that pay little better than the minimum wage, it's easy to forget that this income benchmark once meant something slightly different. In the past, a minimum-wage job was actually one that could keep a single parent out of poverty.
Since the 1980s, the federal minimum wage has kept pace with neither inflation, nor the rise of the average worker's paycheck. That means that while a federal minimum wage in 1968 could have lifted a family of three above the poverty line, now it can't even do that for a parent with one child, working full-time, 40 hours a week and 52 weeks a year (yes, this calculation assumes that the parent takes no time off).
In a Wednesday speech, President Obama pushed for a bill that would increase the federal wage to $10.10 (a rate closer in line with the most progressive municipal minimum wages, including one Washington, D.C. looks close to adopting). Perhaps that hike sounds unrealistic by historic standards. But it would actually bring us back to the kind of income floor America ensured prior to the 1980s, before Congress stopped passing the regular adjustments necessary to keep the minimum wage a livable one. Congress has only increased it twice since 1997.
This graph, from the Economic Policy Institute's David Cooper, neatly illustrates the minimum wage's precarious relationship to the poverty line. The dotted blue line at right shows what would happen if Congress were to pass the current bill proposed by Senator Tom Harkin and Representative George Miller (their bill would gradually raise the wage in three steps):
All of the historic dollar values are converted into 2013 dollars. Historically, the poverty line has remained relatively constant.
It's important to note that families living just above the federal poverty line are still struggling by many measures. But as long as the federal government bothers to identify a basic income threshold essential to scrape by, it seems only fair to hold the same government to that standard in its minimum wage policy.
Top image from a fast-food worker strike in Seattle in August: David Ryder/Reuters.