Here is a Great Graphic from David Ruccio at Real-World Economics Review Blog. It captures the fact that in real (inflation adjusted terms), the US minimum wage is lower than it was 45 years ago. The pie charts shows that earning minimum wage does not prevent one from being impoverished. Indeed, the gap between the two has grown considerable.
The problem is not simply about minimum wage and poverty. It is about aggregate demand more generally. It is not clear where it will come from. Wage growth is hardly keeping pace with inflation. There is political pressure to reduce transfer payments. Credit had filled the gap, but for numerous reasons, cannot be relied on going forward.
Great Graphic: US Minimum Wage
Reviewed by Marc Chandler
on
July 18, 2012
Rating:
Reviewed by Marc Chandler
on
July 18, 2012
Rating:
