It seems that more and more politicians are warming up to the idea that the minimum wage to flip a hamburger should be $15 an hour. It’s a “living wage,” at least it is so-called. But, is such a move one of prudence or just plain stupidity?
First of all, the current minimum wage is $7.25 per hour, which is almost five times as much as I made when I was younger and sacking groceries at a small town market during my first “real job.”
Since that time, things have obviously become more expensive, but is it because everything is necessarily that much more valuable, or, have we simply become that much more superficial in our living habits?
Frankly, it is my opinion that it is the latter, but for now, let’s pretend that it is the former.
From $1.50 to $7.25 is an increase of 221%; a fairly substantial increase in light of what things used to cost 40 years ago.
If one was to stretch out that initial income to the lofty goal of $15/hour, then that would amount to a 325% increase in wages. Now, for the reality check.
Back in 1975, when I got that first big job, the price of a loaf of bread was around $.028. Today, the price is an average of $1.45 or an increase of 223%.
Again, in 1975, the price for a gallon of milk was around $1.40. Today, the average price is $3.43, which is a difference of 118%.
Last, but not least, the price of gasoline was around $0.57 a gallon; today it is around $2.83 or an increase of approximately 219%.
As you can see, if it became mandatory for all businesses to increase the minimum wage to $15 an hour, that would far exceed by more than 100% of the cost of increase for just the basic things people have been purchasing for the past 40 years.
In fact, for anyone to be making the standard minimum wage today is in line with the cost of increases we have seen for the past 40 years as well.
The reality is, if it is mandated that all the burger-flippers out there make $15 an hour, then to maintain a level of consistency, that loaf of bread that runs about $1.45, now, will then cost $2.80 a loaf or about twice as much.
The big stunner, though, will be in the cost of gasoline and milk. Instead of gasoline costing about $2.83 a gallon, it will zap the motorist to the tune of $6.95 a gallon and for all the moo-juice drinkers, instead of paying $3.43, he will then pay $14.00 a gallon!
The bottom line is, raising the minimum wage to $15 an hour is a financial disaster waiting to happen. It is out of touch with reality.
Jobs will be lost, especially those of the burger-flipper variety, and everyone would suffer immensely.
So, the next time you hear about someone complaining about not making enough at their low-skill job and wanting to inflate their wages by double, you might want to share a few of the figures above with them.
Not only do they put things in perspective, they highlight a sense of reality that is sorely missing in a society where expense is frequently ignored by pretense, and that to its own financial ruin.