In John Burbank’s Dec. 30 column, “Work to create future of better wages, benefits,” he repeats the misleading statement that the inflation-adjusted minimum wage today is lower than in 1968. This is technically true, but 1968 did not represent the typical economic conditions of that time period; 1968 was an outlier spike year, with the minimum wage at $10.77 in today’s dollars. In 1968 there was a significant increase in the legislated federal minimum wage. The economy was booming with the unemployment rate about 3.5 percent, so market-based wages were relatively high. Therefore, raising the minimum wage did not have a significant impact on the economy.
However, if you take the average minimum wage in today’s dollars of every year from 1963 to 1973, this average minimum wage was $9.50, which is about the same as it is now. This is a good thing, because the value of unskilled labor does not increase with time. But this does not tell the whole story. There was no EITC or child credits in those years. Today a single mom with two children earning the minimum wage will get tax credits of roughly $7,000, which boosts her effective income to about $12.60 per hour, so she’s much better off than her counterpart was in 1968.
Burbank also alludes to the liberal notion that all productivity increases should be passed on to the workers. This would be great for workers in companies or industries that can increase productivity, however, it would not benefit anyone else like school teachers, social workers or retired people. This is why unions promote this idea. A more fair way to have everyone benefit from productivity increases is to let the marketplace lower the prices of these companies’ products, which will happen in efficient markets.
I like some of Burbank’s ideas, but he would have more credibility if he presented accurate and objective facts instead of old liberal clichés.
Jerry Fraser
Lynnwood
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
