Minimum Wage, Inflation, and What Rep. Blackburn Apparently Never Knew

Presently, there is a discussion about increasing the federal minimum wage to $10/hour, and (unsurprisingly) there is political talk around this issue. I'm not going to discuss the merits of any side here, except to point out that any or argument made based on the principle, of, "I remember when I used to work for much less money when I was a teenager," is invalid for many of today's US Congress-critters.

And here's why:

Age, Inflation, and Relative Monetary Value of "When I was 18" vs Now:
In the 113th Congress (i.e., the current one):

• The average age of a US Senator is 61
• the youngest US Senator is 39
• the oldest US Senator is 89
  
• The average age of a US Representative is 58
• the youngest US Representative is 29
• the oldest US Representative is also 89

With these ages, we can use an inflation calculator to determine how much the equivalent pay would have been when these Congress-critters were 18 years old. Below is the list showing the year when the Congress-critter in question was 18 and what the equivalent value of $10 in 2012 was in that year:

• Average US Senator: 1970, $1.71
• Youngest US Senator: 1992, $6.20
• Oldest US Senator: 1942, $0.72
• Average US Representative: 1978, $2.88
• Youngest US Representative:  2002, $7.90
• Oldest US Representative: 1942, $0.72

Therefore, to all those Congress-critters that remember the "good-old-days" when they were hard working teenagers that were making so much less than $10, I have two things to say to you:

1. Congratulations on having a work ethic when you were younger.
2. Inflation exists, don't forget about it, or you'll undercut your own argument.

Case Study in Inflation Ignorance:
In fact, the perfect person to refer these points to is Representative Blackburn, who blindly and blithely failed to recognize that she was undercutting her own argument against raising the minimum wage when she made the following statement:

What we’re hearing from moms and from school teachers is that there needs to be a lower entry level, so that you can get 16-, 17-, 18-year-olds into the process. Chuck, I remember my first job, when I was working in a retail store, down there, growing up in Laurel, Mississippi. I was making like $2.15 an hour. And I was taught how to responsibly handle those customer interactions. And I appreciated that opportunity.

Representative Blackburn - for all that she sits on committees that have to deal with the impacts of inflation - completely forgot that she's no young'un any more, and that - as she aged - the value of the dollar that she earned when she was 16-18 years old is now worth far less. Rep. Blackburn is presently 60 years old, and therefore, when she was 16-18 years old (in 1969 - 1971), the value of her $2.15/hour job was $13.20-$12.02/hour if she were paid in 2012-equvalent dollars. In other words, when Rep. Blackburn was a teenager of 16-18 years, she was paid at a value that exceeded the $10/hour rate that she is arguing against.

... and she didn't even recognize this!

Now, if we assume that inflation is real (which it is), and if we assume that the value of $7.25/hour was valid back in 2009, then we should at least presume that it should keep track with that value, and this means pegging the minimum wage to the inflation rate. If we even did that minor action, it would place the current minimum wage at $7.74/hour in 2012 dollars. However, if we look at the nominal value (or the equivalent value between two years) of the US minimum wage over the decades in which minimum wages existed, you can see that it reached as high at $10/hour (in 2009 dollars; $10.67 in 2012 dollars). That was back in 1968, only one year before Rep. Blackburn started working at her rate of $2.15/hour. What's more, the rate that Rep. Blackburn was paid as a teenager was higher than minimum wage, which was $1.60/hour between 1969-1971.

... and she doesn't even recognize this!

Now, if you calculate the 2012 value of the minimum wage rate that existed when Rep. Blackburn was 16-18 years old, you get $9.88-$8.95/hour, which is still higher than the current minimum wage rate of $7.25/hour that she's saying should not be increased!

... and she doesn't even recognize this, either!

Therefore, let's "correct" Rep. Blackburn's statement by recognizing that inflation exists, and that a significant time has passed since she was 16-18 years old:

What we’re hearing from moms and from school teachers is that there needs to be a lower entry level that still ought to pay a decent wage, so that you can get 16-, 17-, 18-year-olds into the process without them thinking that a work ethic is only tied to what one "costs" a company, and that they can easily be let go once they might cost more than the next inexperienced kid. Chuck, I remember my first job, when I was working in a retail store, down there, growing up in Laurel, Mississippi. I was making like $2.15 an hour, which was 55 cents higher than the minimum wage at the time and would be the equivalent of $12-$13 an hour in today's terms. And I was taught - while being paid more than the minimum wage of $1.60 an hour - how to responsibly handle those customer interactions. And I appreciated that opportunity for useful training while being treated like a human being and not a potential cost to the company. In fact, did you know that today's equivalent value of the $1.60 an hour that was minimum wage when I was 16-18 years old would be almost $10 an hour in today's terms?

There now. All fixed. See how the facts completely undermine her argument of "when I was a kid, I wasn't paid the grand sum of $10/hour!" since the fallacy of her point is made clear by the very evidence that she presents as the example of her own hard-work-at-low-pay, her nose-to-the-grindstone-ness, and her pulled-myself-up-by-my-bootstraps attitude. It just shows her (apparent) self-righteousness to be blithely ignorant blather, wrapped in nostalgia for a "simpler time" and tucked into bed with a healthy dose of political ideology of "the rugged individual" that actually never existed. Will Rep. Blackburn's office release a statement, explaining her misstatement of the facts? Don't hold your breath.

Side note: You can also do the same thing with figures that are found in those "can you believe it?!?" e-mails that show how much "simpler" and "cheaper" it was to live back in 1910, 1920, etc. Without a conversion that takes inflation (and hyperinflation) into account, they're next to worthless. (Also, without any recognition of the benefits that have accrued in society and technology since that time, these sites are similarly worthless.) Sites like The Cost of Living, though, make for a better-informed relative comparison with the past.