40% Of US Workers Now Earn Less Than 1968 Minimum Wage

Submitted by Tyler Durden on 08/05/2013 15:45 -0400 http://www.zerohedge.com/news/2013-08-05/40-us-workers-now-earn-less-1968-minimumwage Submitted by Michael Snyder via The Economic Collapse blog, Are American workers paid enough? That is a topic that is endlessly debated all across this great land of ours. Unfortunately, what pretty much everyone can agree on is that American workers are not making as much as they used to after you account for inflation. Back in 1968, the minimum wage in the United States was $1.60 an hour. That sounds very small, but after you account for inflation a very different picture emerges. Using the inflation calculator that the Bureau of Labor Statistics provides, $1.60 in 1968 is equivalent to $10.74 today. And of course the official government inflation numbers have been heavily manipulated to make inflation look much lower than it actually is, so the number for today should actually be substantially higher than $10.74, but for purposes of this article we will use $10.74. If you were to work a full-time job at $10.74 an hour for a full year (with two weeks off for vacation), you would make about $21,480 for the year. That isn't a lot of money, but according to the Social Security Administration, 40.28% of all workers make less than $20,000 a year in America today. So that means that more than 40 percent of all U.S. workers actually make less than what a full-time minimum wage worker made back in 1968. That is how far we have fallen. The other day I wrote an article which discussed the transition that we are witnessing in our economy right now. Good paying full-time jobs are disappearing, and they are being replaced by low paying part-time jobs. So far this year, 76.7 percent of the jobs that have been "created" in the U.S. economy have been part-time jobs. That would be depressing enough, but what makes it worse is that wages for many of these low paying jobs have actually been declining over the past decade even as the cost of living keeps going up. The following is from a recent USA Today article... In the years between 2002 and 2012, real median wages dropped by at least 5% in five of the top 10 low-wage jobs, including food preparers and housekeepers.

So where have the good jobs gone? Well, there are three long-term trends that are absolutely crushing American workers right now. First of all, thanks to our very foolish politicians American workers have been merged into a global labor pool where they must directly compete for jobs with workers on the other side of the planet that live in countries where it is legal to pay slave labor wages. This has resulted in millions upon millions of good jobs leaving this country. Big corporations can pad their profits by taking a job from an American worker making $15 an hour with benefits and giving it to a worker on the other side of the globe that is willing to work for less than a dollar an hour with no benefits. Our politicians could do something about this, but they refuse to do so. Most of them are absolutely married to the idea of a one world economic system that will unite the globe. Unfortunately, the U.S. economy is going to continue to lose tens of thousands of businesses and millions upon millions of jobs to this one world economic system. Secondly, big corporations are replacing as many expensive workers with machines, computers and robots as they possibly can. As technology continues to advance at a blistering pace, the need for workers (especially low-skilled workers) will continue to decrease. Unfortunately, the jobs that are being lost to technology are not coming back any time soon. Thirdly, the overall U.S. economy has been steadily declining for more than a decade. If you doubt this, just read this article. As our economy continues to get weaker, the lack of jobs is going to become a bigger and bigger problem. And as our economy systematically loses good jobs, more Americans are forced to become dependent on the government. Back in 1979, there was about one American on food stamps for every manufacturing job. Today, there are about four Americans on food stamps for every manufacturing job. When I first found that statistic I was absolutely stunned. How in the world can anyone out there deny that the U.S. economy is collapsing? But as I mentioned above, it isn't just that the number of jobs is not what it should be. The quality of our jobs is declining as well. For example, one study found that between 1969 and 2009 the wages earned by American men between the ages of 30 and 50 declined by 27 percent after you account for inflation. That is a pretty stunning decline. And it has only accelerated in recent years. Median household income (adjusted for inflation) has fallen by 7.8 percent since the year 2000, and the ratio of wages and salaries to GDP in the United States is near an all-time record low. Most Americans are finding that their bills just keep going up but their paychecks are not. This is causing the middle class to wither away, and most families are just trying to survive from month to month at this point. In fact, according to one recent survey 76 percent of all Americans are living paycheck to paycheck.

So where do we go from here? To some people the answer is simple. They say that we should substantially raise the minimum wage. And yes, that would definitely make life a bit better for lots of low paid workers out there, but it would also have some very negative side effects. A substantially higher minimum wage would mean higher prices at retail stores and restaurants, and it would also greatly increase the incentive that corporations have to replace American workers with foreign workers or with technology. We already have rampant unemployment in this country, and right now there are more than 100 million working age Americans that do not have a job. We certainly don't want to make that worse. So raising the minimum wage would not solve our problems. It would just redistribute our problems. What we really need to do is to return to the principles that once made this country great. In early America, we protected our markets with high tariffs. Access to the U.S. market was a privilege. Foreign domination was kept out, and our economy thrived. It is definitely not "conservative" and it should not be "liberal" to stand by and watch millions upon millions of our good jobs get shipped over to communist China. We need more "economic patriots" in America today, but unfortunately they appear to be a minority at this point. And once upon a time the U.S. economy was actually a free market system where rules, regulations and red tape were kept to a minimum. Our nation blossomed under such a system. Sadly, today we have become a nation that literally has millions of laws, rules and regulations. The control freaks seem to run everything. In fact, the Obama administration recently forced one small-time magician out in Missouri to submit a 32 page disaster plan for the little rabbit that he uses in his magic shows for kids. That is a very humorous example, but it is a perfect illustration of how absurd our system has become. Another thing we could do to turn this around would be to get rid of the IRS and the income tax. Did you know that the greatest period of economic growth in U.S. history was during a time when there was absolutely no income tax? If you doubt this, just read this article. And of course probably the most important thing that we could do for our economy would be to get rid of the Federal Reserve. The Fed is a massive Ponzi scheme and it has played a primary role in creating almost every single financial bubble in the post-World War II era. Right now we are living in the greatest bond bubble in the history of the planet, and when that Fedcreated bubble bursts the pain is going to be absolutely excruciating. In addition, the value of our currency has declined by over 96 percent and the size of the U.S. national debt has gotten more than 5000 times larger since the Fed was created. The Federal Reserve is at the very heart of our economic problems, and we desperately need to shut it down. Unfortunately, our politicians are not even willing to consider these solutions, and most Americans are way too busy watching Toddlers & Tiaras, Honey Boo Boo and other mindless television programs to be bothered with the real problems that our country is facing.

So needless to say, the great economic storm that is coming is not going to be averted. Most of the country is still asleep, and most people are going to get absolutely blindsided by the economic nightmare that is rapidly approaching.

Mon, 08/05/2013 - 15:48 | 3818417 ebworthen

Ah reality. So minimum wage should be at $11/hour but the Corporatocracy lobbyist's won't allow it. No need to wonder why Food Stamps (EBT) are at an all time high and incomes so low. Meanwhile, career employment at an all time low as the middle class is slowly extinguished. Login or register to post comments Mon, 08/05/2013 - 15:51 | 3818422 ParkAveFlasher

Food stamps allow price controls to stay in effect. It is also a suppressing factor, God Forbid the plebes use their heightened wages to take up arms. Login or register to post comments Mon, 08/05/2013 - 16:06 | 3818470 Spider

What they should do is boycott the fiat currency. Your a slave to the system as long as you let the system create the money and give it to whomever it wants - PM's free us from this special interest / government monopoly. Buy gold/silver and abandon their fiat. You cant beat Jamie Dimon in a dollar war but you definitely can beat him in a gold/silver war --------------------If you are fed up with whats happening in the PM markets then its time PM investors take back the PM markets. Join the Silver Pledge - an effort to beat the banks at their own game by having investors join up and buy physical silver - together we can break this market. You can read more here: http://www.communitysynergy.com/subscribe/silver_pledge_site.html If you dont like it dont sign up - but for people who are sick of sitting and doing nothing at least lets work together to BREAK this silver market Login or register to post comments

Mon, 08/05/2013 - 16:10 | 3818492 ATM

People in the hood do boycott currency. They use Tide. Login or register to post comments Mon, 08/05/2013 - 16:35 | 3818587 SafelyGraze

just hang on tight for another generation when average earnings reach parity with prison wages at which point the United Amero productive capacity will at last be unleashed and we will again become an export powerhouse

Login or register to post comments Mon, 08/05/2013 - 17:04 | 3818705 silverserfer

any plan starts with ending the FED and having sound money. otherwise there will be no savers and the ponzi will grow. regardless of where the jobs are and what minimum wage is Login or register to post comments Mon, 08/05/2013 - 18:43 | 3819012 smlbizman

yep...they r working for a 64 dime and a 64 quarter.... Login or register to post comments Mon, 08/05/2013 - 19:59 | 3819181 Shocker

Didn't know what the word 'Recovery' meant, but starting to figure it out.

Job Situation http://www.dailyjobcuts.com Login or register to post comments Mon, 08/05/2013 - 20:46 | 3819291 walkre

from that link a story to Caterpillar layoffs http://www.wlfi.com/dpp/news/local/lafayette-caterpillar-announces-layoffs In an emailed statement, Caterpillar said measures like vacation shutdowns and reduction in flexible workforce have already been implemented. Seaman said the slow down in demand started at the beginning of the year. "I think they started to see some slow down of order coming in in the first quarter. And I think that perpetuated into the second quarter." Anyone care to explain how the Fed and WH will spin a recovery going forward? How can Q3 possibly have positive growth with layoffs like these everywhere. Those jobs were good jobs and they aren't coming back anytime soon. The manufacturer has been trimming hours since Q1 and was possibly hoping for some sort of miracle at the last hour? Now there's talk of "taper" on top of a globally slowing economy Taper because the deficit is shrinking... RIIIIIIIIIIIIIIIIIIIGHT Login or register to post comments Mon, 08/05/2013 - 22:28 | 3819543 yogibear

Bloomberg and CNBC will spin it as being positive. Where's that rally monkey? AT&T plans major layoffs again.

Login or register to post comments Mon, 08/05/2013 - 23:59 | 3819759 ebworthen

AT&T sucks ass. Sorry for the grunts. Not sorry for the turd management. Fuck AT&T to Hell. Login or register to post comments Mon, 08/05/2013 - 19:14 | 3819093 Flakmeister

Any real plan starts with being able to pay for your own energy requirements..... Login or register to post comments Mon, 08/05/2013 - 21:10 | 3819346 boogerbently

Some say the lack of collective bargaining is what keeps wages low, consumer spending down, and GDP stifled. OTHERS Say, public/govt. unions are what cause our huge national debt. An increase in the minimum wage would be the natural progression from inflation, without having to admit there's inflation. At some point, the price of gold (and miners HAS to rise). According to the "bobbing heads", for the last.....X years, there's no inflation, but they can always tell you what your dollars are worth, now, compared to X years ago !! Login or register to post comments Mon, 08/05/2013 - 22:05 | 3819484 Harbanger

"An increase in the minimum wage would be the natural progression from inflation, without having to admit there's inflation. At some point, the price of gold (and miners HAS to rise)." The monetary system was designed to create "growth" thru inflation, so you need minimum wage increases along the way. Gold is only being suppressed because it threatens confidence in the system, otherwise it would already be much higher. Login or register to post comments Mon, 08/05/2013 - 21:25 | 3819376 Stuck on Zero

If American wages were to fall to zero we would still not be able to compete with Asia. Those sucking mercantilists would still not allow any of our manufactured products into their countries.

Login or register to post comments Mon, 08/05/2013 - 23:56 | 3819751 The Burning Planet

You just hit the nail on the head. Asians don't believe in "free markets." Only stupid Americans do. Login or register to post comments Tue, 08/06/2013 - 00:05 | 3819773 Antifaschistische

So, you think the answer, is raising the minimum wage to $20 and halting imports of foreign goods...so you will then be forced to buy American made products? That's not a "FREE MARKET" either. Do you really think paying $45,000 for your Ford F150 strip down model would be the answer to America's economic woes? Now...the fact that a bunch of idiots spend their incomes on crap from WalMart is something I don't comprehend, but that's not the fault of China. They must be laughing in their assembly plants as they ask themselves "who would buy this stupid crap?" Login or register to post comments

Tue, 08/06/2013 - 01:35 | 3819905 greyghost

oh brother, the u.s. grew strong and wealthy with tariffs and duties imposed upon other countries. never was a "free market". free trade and free markets are for the corporations so they can seek and use the lowest possible labor cost.....period. lets see....u.s. textiles were made in new england until early seventies when they moved to noth carolina and then they moved to cental america by early eighties, well i figure they have settled somewhere around bangladesh/pakistan area. wont be long before they start the cycle all over again retracing their steps. free trade/free markets...i call bullshit Login or register to post comments Tue, 08/06/2013 - 01:50 | 3819918 ghandi

Best post I seen all year. Login or register to post comments Mon, 08/05/2013 - 17:21 | 3818763 Make_Mine_A_Double

Seriously, WTF is with the Tide thing? It's bulky, not easily concealable or main line interchangable across financial means. Is it the big orange container that make it's look like a basketball? Just bright objects intrique the untermenschen? I thought it was a gag until someone told me it really was a store of value in da' hood. Login or register to post comments Mon, 08/05/2013 - 19:02 | 3819069 seek

It has value and retains its value, and the big orange jug makes it readily recognizable, and it is easily shoplifted. A big jug is on par with a $10 bill, and one or two jugs can get an addict their next hit. Also, it actually is interchangable due to the value. The street value is about half the retail value, so if someone needs detergent, they'll happily fork over $10 for something worth $20.

The market is big enough there's actually an arbitrage play, with drug dealers consolidating Tide containers and selling them back in bulk to grocery stores. Login or register to post comments Mon, 08/05/2013 - 19:07 | 3819081 Tijuana Donkey Show

Now that is capitalism. And who says the hood don't know nuttin? Login or register to post comments Mon, 08/05/2013 - 21:03 | 3819220 GetZeeGold

Tide is HoodgoldTM Login or register to post comments Mon, 08/05/2013 - 21:16 | 3819360 boogerbently

" it really was a store of value in da' hood." My argument as to why gold (1oz) will really be useless (like a $10,000 bill now), when the SHTF. "Barter" will require smaller "denominations"......like SILVER, wine, cigs, tuna..... Bullets, will of course, be priceless. Login or register to post comments Mon, 08/05/2013 - 23:17 | 3819653 Jugdish

I'll trade you my Daichi tuna for your cigerettes ? Login or register to post comments

Mon, 08/05/2013 - 22:28 | 3819542 CH1

Seriously, WTF is with the Tide thing? It's bulky, not easily concealable or main line interchangable across financial means. Yeah, but at least it's not Bitcoin - that would anger the ZH trolls! Login or register to post comments Mon, 08/05/2013 - 23:23 | 3819662 tpgaynor

You had me up to the point where you said the monthly winner would get free silver. That my friends sounds like the old double double cross. Login or register to post comments Mon, 08/05/2013 - 15:52 | 3818425 The Gooch

Meep Meep. http://www.youtube.com/watch?v=Gq_bjaI0NTo Login or register to post comments Mon, 08/05/2013 - 16:12 | 3818500 PersonalRespons...

OT: HLF, NFLX, FB, GRPN all up over 3% today. WTF? Is this some sort of short squeeze. -brain meltingLogin or register to post comments Mon, 08/05/2013 - 16:34 | 3818585 walkre

no, this is the real deal and it makes perfect sense

the 40% making min. wage and less than $20,000 per year are piling back into stocks Login or register to post comments Mon, 08/05/2013 - 17:00 | 3818690 rocker

Me thinks not. This is the 40% who own no stocks. They did not benefit from the POMO program. The 40% who are buying stocks are the last boomers who had a real job. The Squid wants to suck that last 201K account up before the party ends. Login or register to post comments Mon, 08/05/2013 - 22:41 | 3819579 Go Tribe

Yes, proud to own a piece of American capitalism in stawks. Login or register to post comments Mon, 08/05/2013 - 21:23 | 3819371 boogerbently

Only HLF has a reasonable PE. (14.7) FB, PE = 197 NFLX PE = 318 GRPN has NEGATIVE earnings. Buffet doesnt buy anything with a PE over 10 !! Login or register to post comments Mon, 08/05/2013 - 22:30 | 3819553 CH1

OT: HLF, NFLX, FB, GRPN all up over 3% today. WTF? Is this some sort of short squeeze. brain melting-

You're looking for reasons in the "markets"? THERE IS NO REASON - there's only the evil, villainous, thieving Fed. Login or register to post comments Mon, 08/05/2013 - 15:57 | 3818441 insanelysane

At this point, we need the illegal immigrants to become legal, just to kick these wage numbers up. Login or register to post comments Mon, 08/05/2013 - 16:12 | 3818498 ATM

and to prime the SSI and medicare ponzis. Been my argument for a long time. If we need more and moar people to pay into these bullshit scams them we need more and moar people. They ain't being born here so we need to import them or allow them to run in free of trouble. Login or register to post comments Mon, 08/05/2013 - 16:42 | 3818615 Joe Davola

That and who wants to spend all weekend tending to the landscaping. Login or register to post comments Mon, 08/05/2013 - 21:31 | 3819395 SimMaker

But.....what is actually happening is you are importing millions more people who do NOT contribute TO the system....but consume from the tax payer.........

How does bringing in millions more non-contributing welfare claimants help support the system? Login or register to post comments

Mon, 08/05/2013 - 22:27 | 3819540 NihilistZero

Not 2 mention remitances suck money right out of our economy and into Mexico's Login or register to post comments Mon, 08/05/2013 - 16:03 | 3818468 Antifaschistische

The primary result of Ben's Printflation strategy is the reduction in the cost of REAL wages. That is not a secret. If the price of everything around you rises faster than your wages, you are effectively making less. Here's the truth that American's will not accept. If we want to play in an international economy we have to have internationally competitive wages. Go ahead....make minimum wage $12. It will not help our economy and it will not help the poor.

Crushing the dollar, by the Fed, is lowering the cost of wages and increasing corporate profitability. But blame the Fed, not the min wage laws. Login or register to post comments Mon, 08/05/2013 - 16:31 | 3818570 PhilofOz

No wonder the USA is where it is today. F#*ked!! Once the wealth was shared, now it goes to the top few percent, those that have the power to ensure they get near everything whether they actually work for it or not. Those unfortunates that have no such power are supposed to live on a wage that will barely feed them because they know there will be another person just as desperate to get that minimum wage just to stay alive waiting to take their job. It is sickening that anyone suggest there should not be fair safety net wages for the lowest paid workers. The day is fast approaching when there will be far more people that want to get out of the USA than want to get into it. It's a bloody outright lie that paying them a far bigger wage will see them lose their jobs and cause major damage to the economy. How is it here in Australia we have a minimum wage of $16.37 per hour (US$14.84) and an official unemployment a couple of percentage points lower than that of the USA? Keep in mind that is the rate for a permanent worker that is given four weeks annual leave, sick pay and job security. There is 25% loading on that for casual workers, effectively bringing that rate to

$20.46. On top of that is now a compulsory 12% superannuation amount put in by an employer, bringing a casual minimum wage to $22.91. Before my wife became a permanent employee working as a cleaner in the Adelaide CBD, she earnt over $27 an hour for weekdays, $37+ an hour for Saturdays and $47+ an hour for Sunday. As a permanent part-time it is now $21+, $31+ and $42+. Employers pay what they have to by law or they won't have a business. It actually is a massive boost to the economy when the mass of lowest paid workers have disposable income to throw back into that same economy instead of just enough for the basics to stay alive.... and we can still get a loaf of bread or a litre of milk for $1.00. I call bullshit to anyone that says paying a decent wage to the lowest paid is bad for those workers and the economy. Login or register to post comments Mon, 08/05/2013 - 16:37 | 3818599 NotApplicable

Decent wages do NOT emerge from the barrel of a gun. Your economy works in spite of this depradation, not because of it. Wages, like labor, only work when they exist sans coercion. Why are you so dead set against living in a voluntary society? Why must you insist upon violence in order to create your false utopia? Login or register to post comments Mon, 08/05/2013 - 17:08 | 3818719 walkre

tell the American working his/her ass off for $8/hour that the Australian worker making $20/hour is using violence what a load of shit you're spewing Login or register to post comments Mon, 08/05/2013 - 18:32 | 3818986 MachoMan

The two wolves that eat the sheep for dinner are simply using democracy then? Login or register to post comments

Mon, 08/05/2013 - 20:24 | 3819233 nmewn

Yes, the wolves never concern themselves with the reality of the sheep, until one or two shows up at their door, armed, with a very bad attitude. We'll need Banzai for the visual ;-) Login or register to post comments Mon, 08/05/2013 - 18:41 | 3818999 The Burning Planet

The richest 400 people in the US are worth more than the bottom 100 million, or 140 million, I forget which it is. Hooray for crony capitalism. Login or register to post comments Mon, 08/05/2013 - 19:50 | 3819166 Totentnzerlied

The Australian's labor is not worth $20. How is he getting it? Hmm... Once Australia's been stripmined of everything of real value, can't afford oil, and has to print money just to cover its interest, wages will plummet to parity once again. And if the laborer thinks its his place to unilaterally determine the value of his own labor ... well that's called labor socialism (or labor communism, or their cousin, syndicalism), and they're free to try it and hopefully do the world a big favor by dying in the process. My god this is so fucking simple. Wow. Wow. Really? As I always say: it's morons like walkre and the clown above who can't even understand wages, and the fact that they outnumber intelligent people 100 to 1, that tells me the next revolution will be the Free Shit Army establishing an outright Marxist-Leninist dictatorship and slaughtering any last remains of the productive class en masse. Their envy and greed are every bit as infinite as that of the uberrrich parasites, in fact, the only difference is that one group has money and the other doesn't - that's it. So far beyond fucking doomed, we are, when the rich have convinced the poor that things which will make them (the poor) poorer are good and things that will make them (the poor) richer are evil. Just how is it working out for you?

Login or register to post comments Mon, 08/05/2013 - 20:08 | 3819203 Wannabee

@Tot... Your argument hold for Switzerland as well? I think not. They have a quality of life that puts most countries to shame. Including USA Login or register to post comments Mon, 08/05/2013 - 21:20 | 3819307 walkre

Free Shit Army The real free shit army is small as a mercenary group. They're called crony capitalists. The group that sucked the government teet to the tune of 17 trillion Dollars. But you rather focus on the much larger group who gets a few peanuts as handouts. You're dumb as a rock but that is a virtue you share with many Americans. Hence the lack of progression and the inability to change the culture. Instead your clinging on to a worldview that has been outdated since before Christ was an infant. People who work want to fucking particpate in the fucking economy. Got it? You deprive them of a fair wage and give them some lame ass government sponsored propaganda deal instead is not going to last forever. Eventually people are figuring it out and they will demand more. Eventually you've exhausted every trick and pony show they aren't buying it anymore. When Americans start filing asylum claims in Russia is the day the propaganda stops working. Fuck it! Login or register to post comments Mon, 08/05/2013 - 22:29 | 3819544 prains

Tot Your entire economy is a free shit army, including you. 17 trillion in debt is because you make nothing of value and have to print money to cover costs, meaning free shit for ALL of you. Some just don't even bother to play but it's still free shit for you too,