Minimum Wage Goes Up Today – Too Bad Everything Costs More.

Starting today, the Federal minimum wage will go up $.70 an hour, or for a 40 hour work week, a paycheck will go up a whopping $28. However, with the price of gas, food, and just about anything else you can think of going up too, it’s not going to make much of a difference:

The increase, from $5.85 to $6.55 per hour, is the second of three annual increases required by a 2007 law. Next year’s boost will bring the federal minimum to $7.25 an hour. The new minimum is less than the inflation-adjusted 1997 level of $7.02, and far below the inflation-adjusted level of $10.06 from 40 years ago, according to a Labor Department inflation calculator.

Seriously, $.70 an hour? What exactly is that supposed to do for someone making that kind of money? Nothing, really. California had a minimum wage of something like $8.75 if I remember correctly, which, while is still low, at least seems a little more decent than $6.55. That extra $28 a week should go a long way to…um…add a few extra gallons of gas to your car.

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Comments (10)

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  1. Mike says:

    Raising minimum wage rarely makes a difference because it causes inflation.

  2. Mike says:

    Raising minimum wage rarely makes a difference because it causes inflation. The cost of labor goes up and is then reflected in the price. Minimum wage doesn’t help anyone. The market is efficient and will properly value jobs and goods.

  3. david says:

    “The market is efficient and will properly value jobs and goods.”

    I disagree – no one can tell me that these CEO’s of failed companies are worth millions while police, firefighters and teachers make nothing in comparison, especially teachers. We reward people who run companies into the ground, yet teachers who educate our kids are forced to buy their own supplies for their classroom on $25K a year.

  4. Mike says:

    The examples of firefighters, police, and teachers aren’t jobs where the market determines their salary. In these jobs there is government intervention and inefficiencies that cause the lower salary. Look at the difference in salary between soldiers and military contractors. The contractors make more because the private company is more efficient, and has less red tape than our military. CEO’s salaries are inline with the value they provide. The road to becoming one of those CEO’s is long and difficult with no guarantees of becoming a CEO. These are the people who sleep in their office, and work through the night because it is what is expected. Yes some of them fail. But people of all positions fail. That is a risk the employers take, and with CEO’s they are even more willing to risk paying a failed CEO millions for the possibility the CEO will net the companies millions.

  5. Braunn says:

    “contractors make more because the private company is more efficient, and has less red tape than our military”

    Given that the Pentagon pays both the military servicemen and the military contractors, I don’t think this is the best example of “market efficiency” in action.

    “Pork barrel politics” and “crony capitalism” perhaps, but not free market economics.

    Anyone wanna buy a hammer? On sale for $500!

    On topic:

    While not necessarily a big fan of minimum wage regulation, I do believe that if it’s going to be done, it should be done right. The fact that for years (and to this day, as the article points out) the minimum wage hasn’t kept up with the cost of inflation just reeks of congress doing just enough to get by (“We’ll throw them a bone and they’ll vote us back in again.”) rather than any true effort to assist those in need.


  6. david says:

    Amen Braunn.

  7. PT says:

    All the more reason people need to go get a higher education and higher paying job. Lessen your dependence on govt regs.

    If people are working those jobs it’s obviously worth it to them and they are satisfied. If it wasn’t they would go get themselves more. Right? That’s the logical way of things isn’t it? There are of course exceptions (old, physically/mentally unable).

  8. When the cost of a good or service goes up, all other things being equal, the demand for that good or service goes down. So pay close attention to the unemployment rate, especially teenagers and minorities.

    For instance, if you want your kid to have piano lessons, and there are 4 possibilities:
    *Lessons from the best teacher in town for $50 per hour
    *Lessons from a competent, experienced teacher for $40 per hour
    *Lessons from an ok teacher for $30 per hour
    *Lessons on piano from an untried teacher for $20 per hour

    In this scenario, in a free market, you might give the rookie teacher a try for $20 per hour.
    But raise the minimum salary for piano teachers to, say, $40 per hour. Are you really “helping” the untried teacher? Or are you guaranteeing full employment for the most skilled and experienced teachers at the expense of the others? (Look up the origins of the Davis Bacon employment acts when you get a chance. These were our first minimum wage laws, and were designed to guarantee full employment for whites at the expense of blacks. They’ve worked well.)

    Congratulations to the Democrat party for sawing the bottom rungs off of the employment ladder.

  9. tiffanie says:

    the federal minimum wage doesn’t effect us in Michigan since our state minimum wage is at $7.40/hr as of July 1st. But yeah…I see what you’re saying. I can’t imagine having to live on min. wage…I don’t think I could do it!

  10. David Carter says:

    You said “Seriously, $.70 an hour? What exactly is that supposed to do for someone making that kind of money?”

    Well if you were making $5.85 an hour, that was almost a 12% raise. I would say that is pretty significant. Where I live, there are people who actually live off of this pay rate (somehow).