A batch of Clinton WH documents were released last week. One that every liberal should take note of concerned the minimum wage.
The market value of the minimum wage peaked in 1968. Declined during the reign of Nixon, partially restored under Carter, dropped precipitously under Reagan, modest (and similar) increases under GHWB and Clinton. By 2007 it was at a sixty-year low. Today it remains below the 1950 minimum wage, but not by as much as it was in 2007.
The post twenty-first century assault on the lowest wage workers would shame any decent person but should particularly shame those who claim to be liberals. The old liberal lion, Senator Kennedy, was a leader on this issue and not a weasel like many in the Clinton administration, including Clinton. Kennedy had this strange notion that workers paid the least shouldn’t also have to see their real wages drop most years and a raise shouldn’t be dependent of political wrangling in Washington.
Sen. Kennedy has proposed an increase in the minimum wage to $7.25/hour by 2002 through $.50 increases in 1998-2000, and then indexing it to inflation thereafter (about $.30 increases in 2001-2002).
Nobody on team Clinton liked Kennedy’s proposal at all. (A $7.25 minimum wage in 2000, net of federal payroll taxes, would have been a few cents more than it was in 1968.) There was some consensus that the 1998 minimum was of $5.15 was perhaps too low at the macro-economic level (net, close to only two-thirds of what it was in 1968); so, slower and smaller increases would be preferable to doing the right thing.
As for indexing the minimum wage to inflation – sheesh – promising to raise the minimum wage is a perpetual campaign theme for Democrats. Why would we want to give that up? (And god forbid indexing it from an historical high of $7.25 in 2000. That $1.00/hour in 1960 (or $5.82 gross in 2000) was closer to what they had in mind (back before those Democratic administrations and Congresses in the 1960s decided that the country could afford to be a bit more generous to the poorest paid workers).
At the time of these considerations, Janet Yellin had yet to weigh in; so, the record on her is undefined at this time. What we do know is that nothing was generated from Clinton or his administration that put this issue clearly before the public and would have forced Congress to either do something positive or display their cruelty. (If Gore made it a campaign issue, it wasn’t a memorable one.)
From 1998 to 2007 the market value of the minimum wage declined from 67% of the 1968 wage to just over 50% (gross). (It was at 59% (gross) in 2004, was it a John Kerry campaign issue?) It was invaluable in the 2006 Democratic takeover of the House. The three $.70/hour annual increases were a good start. However, at its peak of $7.25 in 2009, it was still only worth 74% of the 1968 gross hourly minimum wage rate. (Note: federal payroll tax rates were lower in 1968) Today that $7.25, at gross, is back down to 67%.
The “discussion” among team Clinton advisers highlights that the term and application of “minimum wage” has never been defined to mean one specific thing after being in use for over a hundred years at the state level and sixthy-five years at the federal level. It has generally deferred to cheap labor employers – modestly reducing the exploitative bent of anti-social employers. Teddy Kennedy’s 1998 proposal leaned towards considering the income needs of employees. While some of those on team Clinton were good with splitting the concept baby – the impulse of “third wayers” – absent information on what it means for real people in the real world, cheap labor employers won that round.
In the real world, that 1968 federal minimum wage was sufficient to support a single, independent adult in medium- low cost-of-living regions. Not NYC and not lavishly. When decent and adequate-for-one housing could be had for 30% of income. How much post secondary education and many college diplomas with low to no debt did that wage facilitate? Before USians bought into the superiority of easy credit and cheap labor. (Instant gratification is always an easy sell to the rubes – that’s why the rich keep getting richer and the poor remain poor or poorer.)
A real, honest, and much needed national discussion (or even among bloggers) of the minimum wage is possibly less likely than junking the Electoral College. Vaguely defined and loosely applied, it’s working well enough for the oligarchs and politicians (they require a partisan battle every once in while to keep the rigged game working – the minimum wage battle is ready-made for whenever they’ve run out of meaningless crap to spar over).
A shame really.