Minimum Wage Maximum Freedom
Erik Thompson 10/9/21
*editor's note: all values reflect when this article was researched
In 2012, 200 fast food workers walked of their jobs in New York City. What sorcery could have convinced them to commit such a heinous act? Was it democrats? Al Queda? Communists? None of the above, faithful reader. It was, surprisingly, their poor working conditions. They were demanding 15 dollars an hour and the right to unionize. In the intervening 10 years, the movement has grown from just a few walk-outs to a full-fledged global force in 300 cities across 6 continents. It has become one of the most successful and expansive grass-roots movements in the recent era. It has also become a historical artifact.
In the 10 years since its inception, the FF15 has won sporadic raises for several millions of people. Several states are also in the process of raising their minimum wages. This is an outstanding achievement that should not be dismissed off hand. But, in the 10 years that this fight has been waged, the value of 15 dollars has depreciated, through inflation, into being almost completely worthless to the working class. Beyond that, what will the 15 an hour accomplish in the long run? Are we not still bound to our employers for our survival? If equality be our aim, if economic freedom is our goal, is the fight for 15 not just tilting at windmills?
2009 2012 2021 A 7.25* 7.76 9.23 B 5.70 6.10 7.25* C 14.02 15.00* 17.84 D 11.76 12.61 15.00* E 15.00* 16.05 19.13
Using the graph above we will explore how the buying power of the proposed (15) and current (7.25) minimum wages changes through time. The columns are the three years of interest to this topic: 2009, the year of the 7.25 minimum wage we are attempting to reform; 2012, the year of the introduction of the Fight for 15; 2021, the current year. The rows are the current (7.25) and proposed (15) federal minimum wage rates, marked by *, with their relative buying powers corresponding to their respective years. We will take cells A1 and B3 , or the value of 7.25 in 2009 and 7.25 in 2021, as examples to show how the chart will work.
7.25 in 2009 (A1) has the same buying power that 7.76 did in 2012 (A2), and that 9.23 has in 2021 (A3). That essentially means if you had 7.25 in 2009, you would have been able to purchase the same amount of goods as 9.23 would buy in 2021. Conversely, 7.25 in 2021 (B3) has the same buying power that 6.10 did in 2012 (B2), and 5.70 did in 2009 (B1). Again, if you had 7.25 now, you would only be able to purchase now as much as 5.70 did back in 2009. This is a very basic summation of inflation, and while it may not seem important to the layman, it is of immense importance to capitalists.
Don't imagine, however, that anything we do for our people in the way of profit sharing, or enabling them to acquire stock, or providing meals at low rates, medical attention, recreation grounds, vacations, and so forth is done from philanthropic motives- not in the least. Whatever we do for our employees we do because we think it pays, because it is good business. -Julius Rosenwald, founder Shefferman union-busting firm 1926
Since 2009, the worth of 7.25 has decreased to 6.91 (E1[E2 relative to the buying power of A1), then to 5.70 (B1[B3 relative to the buying power of A1]). The buying power of A1, though, has increased over time, relative of E2 and B3, to A2 and A3 respectively. By simply existing in time, in 2021, anyone still earning minimum wage is losing, in buying power, 3.53 an hour (A3-B1). In 2012, though, the fight was started for 15 an hour. For all intents and purposes, it would have been a substantial increase, in buying power (compared to A1), of 6.26 (C1-A2). Honestly, due to inflation, 7.25 in 2012 was worth 6.91, so the actual potential earnings could have been 7.11 an hour (C1-E1). Unfortunately for the working class, while some sectors did see an increase in their wages, most did not earn the coveted 15 an hour. By demanding 15 an hour in 2012, and not securing it, we have now set our losses at 7.11 an hour. But our losses didn't stay at 7.11 an hour. As you can see, the buying power the proposed 15 of 2012 (C2) has the same buying power as 17.84 in 2021 (C3). Therefore, by the time 2021 rolled around we were losing out on another 2.84 (C3-C2) an hour. That was predicated on us obtaining the 15 in 2012, though. In fact, since the working class is still earning the same (depreciated) 7.25 an hour it was earning in 2009, it stands to reason that we are in actuality losing, per hour, at least 12.14 (C3-B1) in potential buying power. If we secure the 15 minimum in 2021, or even in 2022, we stand to gain, in relation to the start of the Fight for 15, 3.97 an hour (D2-E3). Compared to what the working class was earning in 2009, though, we would have only won 2.53 an hour (D1-A3) in relative buying power. This is only if we secure the 15 an hour minimum wage, right now. As it stands, we aren't gaining anything, and compared to what we could have been gaining, we are losing money every hour worked.
Imagine for a moment you are purchasing a gallon of gasoline. You notice the sign says 3.19 per gallon. Outrageous, it was only 2.99 per gallon yesterday! On your receipt, though, you discover that you only paid 2.99 for your gallon. You saved .20! The next day you go back and pay only 2.99 again. So far you have saved .40