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Do We Need To Fix The Minimum Wage?

By Justin Gardner | Related entries in Ideas, Social Programs

The previous post about the show “30 Days” got me thinking. How can we fix this problem? I think I may have a solution. This could be completely naive, but it seems right to me.

Currently, the federal minimum wage is $5.15 an hour. Why can’t we put a law into place that automatically raises it at the beginning of every year accoring to the rate of inflation?

Of course this should be retroactive from 1997, when the last minimum wage increase was passed. Now, in 2004 the rate of inflation was 2.5%. Take that as the average for the past 8 years or so and you get a 20% hike. That’s represents a $1.03 raise to $6.18. Not too terribly painful, but enough to make a difference. We could even spread this out over the next four years and increase the wages by 7.5% and then drop back down to 2.5%. However, let’s not get TOO complicated.

Inflation rates haven’t spiked since the 70s, so employers can know ahead of time what the rate will most likely be. We’re talking literally a few nickels every year to start out. And this way our workforce won’t have to wait for the politicians to agree what the “right” amount is because the economy will do it for them.

Here’s a list that projects a 2.5% hike every year for the next ten years. Unreasonable? Also, this list assumes that we hike it by 20% to start off with.

2006: $6.33
2007: $6.49
2008: $6.65
2009: $6.82
2010: $6.99
2011: $7.16 (this is what Ted Kennedy wanted in 2001!)
2012: $7.34
2013: $7.52
2014: $7.71
2015: $7.90

Here’s another list to show what a 3.75% hike every year would do:

2006: $6.41
2007: $6.65
2008: $6.90
2009: $7.16 (Kennedy’s magic number)
2010: $7.43
2011: $7.71
2012: $8.00
2013: $8.30
2014: $8.61
2015: $8.93

Here’s one more list that shows a (probably excessive) 5% hike:

2006: $6.49
2007: $6.81
2008: $7.15 (Kennedy!)
2009: $7.51
2010: $7.89
2011: $8.28
2012: $8.69
2013: $9.12
2014: $9.58
2015: $10.06

As you can see, we’re talking about an average between all three plans of a few dimes difference between every year. Is this unreasonable?

Thoughts?

This entry was posted on Sunday, June 19th, 2005 and is filed under Ideas, Social Programs. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

2 Responses to “Do We Need To Fix The Minimum Wage?”

Amy Says:
July 25th, 2005 at 8:14 am
Kudos to New England for at least making an effort. With the exception of NH, all of the NE states have base min wages higher than the fed standard. My home state (VT) is near the top at $7.00/hr. And the same goes for the West coast — WA state is at the tip-top with a base min of $7.35/hr. Check out the discrepancies:
http://www.dol.gov/esa/minwage/america.htm#Washington
Bsd Says:
August 6th, 2006 at 11:19 am
Good job.

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