Working class Millennials and Gen-Z have a right to complain about being poorer than our parents — because we are. When you adjust incomes to inflation, most of us are making much less money than our parents did at our age.
We don’t remember the ‘good old days’ where one income was enough to support a family. Most of us have been working all our lives, with very little to show for it. Many of us even remember both of our parents having to work, since we were the ‘latch-key kids’ of the 1980’s and 1990’s, coming home after school to take care of ourselves.
History of the Minimum Wage
When the minimum wage was first instituted under FDR in the 1930’s it was supposed to be a living wage. This was to ensure that every American had a chance at a good life. However, it hasn’t increased with the times, to make up for inflation rates.
I got my first job in 1998 and the minimum wage was $5.15 per hour. Today in 2023–25 years later — the minimum wage is only $7.25. That means in 25 years, the minimum wage has only gone up a little over $2. It isn’t enough for people to live on anymore. Not even close.
My dad used to take us to Taco Bell a lot growing up, because they had the $0.59, $0.79, $0.99 menus. Today, if you bought the taco that used to cost $0.59 in the 1990’s, it is $1.19. That is almost double the price that it used to be. While a small increase like that might not seem like much, it adds up.
It used to be that a family could survive on a single income. Now, if both parents make the minimum wage, it would take both of them working two jobs to support a family of four.
According to the University of Maryland,
During the post-World War II economic boom, the labor movement successfully pushed the federal minimum wage to $1.60/hour in 1968 (equivalent to $11.20 in 2017 dollars). Due to difficult economic conditions in the following decades, organized labor was unable to sustain the momentum to increase the minimum wage and it declined to the 2017 equivalent of $7.25/hour.
Now, I’m going to break down the cost of living so you can see the costs then vs. now. It helps to paint a picture of why so many people in the United States are living in poverty today.
1950
- Minimum wage: $0.75
- loaf of bread: $0.12
- gallon of milk: $0.83
- home purchase: $7,354
- car purchase: $1,510
1960
- Minimum wage: $1.00
- loaf of bread: $0.23
- gallon of milk: $1.00
- home purchase: $11,900
- car purchase: $970
1970
- Minimum wage: $1.60
- loaf of bread: $0.25
- gallon of milk: $1.32
- home purchase: $17,000
- car purchase: $1,208
1980
- Minimum wage: $3.10
- loaf of bread: $0.50
- gallon of milk: $1.57
- home purchase: $47,200
- car purchase: $2,412
1990
- Minimum wage: $3.80
- loaf of bread: $0.75
- gallon of milk: $2.20
- home purchase: $79,100
- car purchase: $4,551
2000
- Minimum wage: $5.15
- loaf of bread: $1.99
- gallon of milk: $2.50
- home purchase: $119,600
- car purchase: $6,030
2010
- Minimum wage: $7.25
- loaf of bread: $2.99
- gallon of milk: $3.20
- home purchase: $221,800
- car purchase: $5,541
2020
- Minimum wage: $7.25
- loaf of bread: $2.50
- gallon of milk: $3.50
- home purchase: $336,900
- car purchase: $5,583
(Average home prices from Better, Average car prices from Official Data, Average bread prices from Illustrative Mathematics, Milk prices from Taste of Home)
Adjusting to today’s cost of living
When you look at the rising costs of living, the thing you will notice the most is that home prices especially have skyrocketed in the time since 1950. Minimum wage hasn’t kept pace. Not even close. This is what now puts home ownership so out of reach for many Americans today.
According to Better Mortgage,
Median home value (inflation-adjusted to 2020 dollars): $79,063
Imagine if it only cost $79K to buy a home today! Things would be so much different for so many people. When you look at the pricing for the 1950’s, that is what you are really looking at; how much less things cost relative to people’s income.
When it comes to the minimum wage, it hasn’t even come close to adjusting with inflation over time.
According to the Center for Economic and Policy Research,
If the minimum wage did rise in step with productivity growth since 1968 it would be almost $21.50 an hour.
Since currently the minimum wage is only about 1/3 of what it should be to account for inflation, it is no wonder that people aren’t able to live on it anymore. People are making 1/3 of what they should be in order to be able to live off of the minimum wage. This is a travesty of epic proportions and one that should be rectified as soon as possible to lift many working poor out of poverty!
The fight for $15
You have probably heard in recent years about the “fight for 15” as a number that is being proposed to raise the minimum wage in the United States.
According to a 2022 statement by President Joe Biden:
A job is about more than a paycheck. It’s about dignity. When I was running for president, I said it was past time to increase the federal minimum wage to $15 an hour. Last year, I made a down payment on that pledge with Executive Orders directing my Administration to work toward ensuring that employees working on federal contracts and federal employees earned a $15 per hour minimum wage.
Since January 2022, Federal employees have been being paid at least $15 an hour for their work. This needs to be expanded further to all workers.
In 2021, According to PBS News, President Biden proposed raising the minimum wage to $15 for all workers:
Biden’s plan would shake things up entirely. He proposes gradually raising the wage to $15 an hour by 2025, starting with a jump to $9.50 this year. Thereafter, it would be indexed to grow at the same rate as the U.S. median wage — the point at which half earn more and half earn less.
Unfortunately, this proposal wasn’t able to pass through congress when a vote was taken in March 2021 as part of the COVID stimulus relief package.
Now that the pandemic is coming to an end, it is time to look again at raising the Federal minimum wage. Workers deserve to have fair compensation for their time, and the fight for 15 will only bring us part of the way.
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