Federal Minimum Wage Workers Get $0.23 Pay Cut in First 10 Months of 2016

Real Value of the U.S. Minimum Wage, 2009 to 2016

According to information just released by the Bureau of Labor Statistics, by October 2016 the U.S. federal minimum wage had fallen by 23 cents an hour from its average level in 2015 — and had fallen 92 cents an hour from its 2009 level.

Of course, the BLS doesn’t state the news in those terms, but that doesn’t make such news any more true.  In literal, nominal terms, the U.S. federal minimum wage has stood at seven dollars and twenty-five cents an hour for years now — but you can’t eat money.  The actual amount of in food, clothing and shelter that the minimum wage will buy continues to go down as inflation erodes the value of a dollar.  This effect is measured by the Consumer Price Index (CPI).  By October 2016, the cost of living measured by the CPI had risen 3.2% compared to its average 2015 level.  This means that seven dollars and twenty-five cents in October 2016 will only buy what seven dollars and two cents could buy in 2015.  How hard a minimum-wage employee works hasn’t changed.  How much value minimum-wage work creates for an employer hasn’t changed.  Only what the minimum-wage worker gets for all that work has changed — and it’s gone down by twenty three cents an hour.  Twenty-three cents an hour doesn’t sound like much, but when this kind of change happens again and again and again, month after month, year after year, the effect is really noticeable, especially for someone whose wage wasn’t big to begin with.

Under Republican leadership, the U.S. Congress has refused to raise the federal minimum wage for years on end, not even to correct for the increasing cost of living.  As a candidate, Donald Trump said he wouldn’t raise the minimum wage if he became president.  Unless both the Republican Congress and our Republican President have an abrupt change of heart, expect living conditions for America’s poorest full-time workers to get even bleaker.