Tomorrow the federal minimum wage goes up 70 cents to $6.55 an hour. Rather than join in either side of the outrage—the people who think $6.55 is still way low (including, ostensibly, the 23 states with higher floors) or the people who think the minimum wage is an unforgivable distortion of supply and demand that leads to greater unemployment (paging Milton Friedman)—I’m going to ignore the minimum wage altogether.
Why? I just don’t see the relevance. According to the Bureau of Labor Statistics, last year 75.9 million Americans were paid at hourly rates (58.5% of all wage and salary workers). Of those, 267,000 got the federal minimum wage. That’s probably a lower number than you’re used to hearing, but only because folks tend to also count the 1.5 million people who make less than the minimum wage—always be generous to your waitresses. Still, we’re only talking about 1.7 million people, and we don’t really know what 1.5 million of those are actually taking home at the end of the day.
So I propose instead looking at the median wage made by the 75.9 million people getting paid by the hour. If you dig through this report (it’s a PDF), you see that, nationally, that’s $11.95.
Let’s take that, figure on a 40-hour workweek… and come up with an annual pre-tax total of $24,856. Now let’s flip over to the 2008 federal poverty guidelines, and see that $24,856 clears the poverty hurdle for a family of four—by a whopping $3,656. Keep in mind that we’re using the median wage, which means half of the people we’re talking about make less.
Maybe I just shy from a good ideological fight, but I kind of think that’s the thing we should be discussing.
UPDATE: I answer some of the questions commenters have asked in this post here.
Barbara!