This letter is in response to Paul Friedrich’s Dec. 4 letter to the editor regarding the minimum wage. First, I will note with some amusement that, after taking a previous letter writer to task for his “insulting tirade,” Mr. Friedrich then goes on to himself immediately insult said letter writer by implying that he is stupid (“Let’s keep this simple enough for even Ted Neff to understand”). However, I agree with him that it is important to disagree without being disagreeable, so I will do my best to keep my letter strictly to the facts.
Mr. Friedrich states that in Switzerland, a worker with a high minimum wage must work an hour to buy a standard McDonald’s meal, while in the U.S. a worker with a low minimum wage works approximately four-fifths of an hour for the same. His argument is that there is a straight cause and effect relationship between these two sets of facts. However, if that were the case, we would see that same cause and effect relationship play out in all other countries as well. So I went to Numbeo.com which has cost-of-living information for various countries to test his hypothesis, and found that it simply does not hold true. For example, Australia has a minimum wage of 16.87 Australian dollars an hour ($14.14 U.S.), while a combo meal at McDonalds is only $8.90 Australian dollars, meaning a worker there works only a little over half an hour for their Big Mac meal. Likewise, workers in Denmark enjoy a minimum wage of 103 kroner and hour ($17 U.S.) and shell out a little over half that — 60 kroner — for a combo meal. I could go on, but I think that is sufficient to show that Mr. Friedrich’s main argument is based on one selective statistic rather than the larger reality. It simply is not true that higher minimum wage leads inexorably to workers working longer for their Big Mac.
Secondly, he states “Minimum wage has never worked in the past.” I find this odd, considering our current minimum wage is much lower now than in the past. It was consistently higher from the mid-1950s to the mid-1980s, peaking in 1968 when it reached $10.86 (calculated in 2014 dollars) . This period was also a period of great growth in our economy, so it is hard to see how the higher minimum wage was harmful in any way.
Finally, Mr. Friedrich states “raising wages without increased productivity is inflation.” Perhaps he is not aware that wages have not been keeping up with producitivity gains for years. According to CNN Money, productivity and wages tracked each other pretty well up until the mid-1970s, when they started to diverge. Between 1973 and 2011, productivity rose by 80.4 percent while median hourly compensation rose only a measly 10.7 percent. The gap between productivity and compensation is currently the highest it has been since WWII.
Given this set of facts — a historically low current minimum wage, a historically high gap between worker productivity and worker compensation, and our own as well as other countries’ experience that prove that higher minimum wage is sustainable without harm to the economy — I’d say it’s high time to raise the minimum wage!