This morning I tried to gather information about the statistics that comprise the basis of the federal minimum wage rate (currently $5.15/hour). My efforts have thus far gone unrewarded, and that's after calling and speaking with someone at the U.S. Department of Labor's Wage and Hour Division. In the spirit of getting to the bottom of this issue I combed over the Fair Labor Standards Act for a while. Then my eyes began to hurt and I gave up. Does anyone reading this know on what set of statistics or indexes the current federal minimum wage is based?I ask because a couple of days ago my friend Rob sent me this URL:
http://oregonstate.edu/instruct/anth484/minwage.html
I presume he was frustrated, as am I, with what the current federal minimum wage represents in terms of purchasing power. The aforementioned web page demonstrates, graphically, just how far the cost of living outstrips the purchasing power enabled by the federal minimum wage (this is done by comparing "nominal dollars" to "real dollars"). Now, to be fair, I haven't checked the sources of the data on purchasing power and cost of living. It would not be at all surprising to find the CPI referenced, but, as I said, I haven't looked into it. I try to look upon all statistics with some skepticism initially, and I also try to account for their situational nature. That said, it's pretty tough to laugh off the other basis of comparison that the authors use: that of the federal poverty level. According to the last chart, in 2004, the federal minimum wage equaled just 55% of the federal poverty level for a family of four. Does that seem right to you?
At some level, localities have always recognized local variations in needs and living costs. This is, I presume, why numerous individual states have, over the years, enacted their own minimum wage laws, with rates that often exceed the federal rate. Furthermore, as a response to the fact that in many places in the last decade the largest sector of job growth has been the unskilled, low-wage sectors, many individual cities have adopted "living wage" standards, to help ensure the long-term economic stability of their regions.
http://www.cfpa.org/issues/issue.cfm/issue/LivingWage.xml
For better or worse, the basis for this "living wage" is the 1968 federal minimum wage, adjusted for inflation ($9.12/hr) and rounded up slightly ($10/hr). If I follow this logic correctly, then, a one-earner family of four who is paid an adjusted wage of $9.12/hr can expect to occupy a space at 90% of the federal poverty level. According to the site listed above, however, an hourly "living wage" of $10 would move that same family just above the federal poverty level. While I applaud efforts to address poverty and raise earning standards, I'm not convinced that this is enough. I'm also not convinced that using federal standards as a basis for determining wages in a particular place makes sense.
What do other people think?
I realize that very few economies in the U.S. are currently primarily "local." This is why it doesn't surprise me that local "living wage" standards are adopted as a means of responding to human needs while working within the current, more generalized system. Even so, I cannot help but imagine that a local wage system, situated within a local economy, that is responsive to local needs, makes the most sense. What would this look like? In truth, I'm not sure. This vision of mine is highly dependent on a lot of assumed infrastructural factors already being in place: predominantly local employers, predominantly local markets, predominantly locally-sourced goods, etc. With these structures in place, it would be manageable to determine a minimum standard of compensation that takes the needs of a place and its people into account.
The problem is, this country, and the cities therein, are a long way from there. We're perilously dependent on unseen systems, distant suppliers and a "market" that determines the worth of our labor. Life as we know it in this country is supported by unsustainable energy resources (as we make unsustainable energy demands) and policies that will, at some point, come to a crashing end. That's why I'm interested in how we get from where we are now, to the place I'm envisioning. Or perhaps there are alternative possibilities. I'm embarrassingly ignorant about a good many things. But I want to learn more about our present state of things and start envisioning an altogether different response. Where would your thoughts take us?
