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AFL-CIO Now

Work Harder, Make Less: 40% Earn Less Than 1968 Minimum Wage

At one time it was an economic tenet for America's worker: Work smarter, better, faster and harder and you’ll reap the rewards. That’s exactly what America's workers have done for the past four decades plus. But while worker productivity has soared, workers’ wages have been tightly tethered to the ground. So much that economist Dean Baker writes:

If the minimum wage had risen in step with productivity growth [since 1968], it would be over $16.50 an hour today. That is higher than the hourly wages earned by 40% of men and half of women.      

Think about that. Forty percent of the nation’s workers today make less and have less purchasing power than did a minimum wage worker in 1968.

Dave Johnson at the Campaign for America’s Future Blog asks two questions:

How did the long-standing connection between wages and productivity get so badly broken?

This break off of wages from productivity growth is partly (largely?) the result of trade agreements that pit Americans against exploited workers in non-democracies. This weakened the bargaining power of unions, moved factories and industries out of the country, devastated entire regions of our country—and gave the giant multinational corporations, Wall Street and the billionaires the leverage they needed.   

Who pocketed the rewards of the worker productivity gains?

See if you can guess who got them? (Hint: It’s the 1%; this is one driver of the terrible income and wealth inequality….The 1%/99% thing is real. When you hear that the 6 Walmart heirs have more wealth than one-third (or more) of all Americans combined, it is real. When you hear that the people on the Forbes list of the 400 wealthiest Americans have more wealth than half of all Americans combined, it is real. And the effects on the rest of us are real.

Read more from Johnson and more from Baker, co-director of the Center for Economic and Policy Research (CEPR) on The Huffington Post.

President Obama has called for increasing that federal minimum wage to $9 an hour. But adjusted for inflation—let alone the much bigger increase in worker productivity—the 1968 minimum wage would be $10.58 an hour. Read more from worker advocates, including the AFL-CIO, who call for a more substantial increase in the minimum wage.  

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