Comments on: Minimum Wage Hikes Part III: Minimum Wages and Federal Assistance http://blog.principal.com/2013/02/25/minimum-wage-hikes-part-iii-minimum-wages-and-federal-assistance/ Investment management insights and commentary Tue, 21 May 2013 19:55:14 +0000 hourly 1 http://wordpress.org/?v=3.5.1 By: Jason http://blog.principal.com/2013/02/25/minimum-wage-hikes-part-iii-minimum-wages-and-federal-assistance/comment-page-1/#comment-87 Jason Tue, 19 Mar 2013 16:40:39 +0000 http://blog.principal.com/?p=1845#comment-87 I personally don’t believe there is an issue with the minimum wage, the issue is with the money the wage is being paid in.

In 1964 the minimum wage was $1.25 but those 5 quarters were made of 90% silver. Those same 5 quarters have a present day melt value of just over $26 (based only on today’s silver spot price of 28.93, excluding the copper content).

=5*(28.93*0.0321507466*6.25*0.9) = $26.16

]]> By: Ben Miller-Coleman http://blog.principal.com/2013/02/25/minimum-wage-hikes-part-iii-minimum-wages-and-federal-assistance/comment-page-1/#comment-86 Ben Miller-Coleman Wed, 13 Mar 2013 15:49:30 +0000 http://blog.principal.com/?p=1845#comment-86 Is there any reason to believe that the upward slope to the 1% won’t continue?

]]> By: Robin Anderson, Economist, Principal Global Investors http://blog.principal.com/2013/02/25/minimum-wage-hikes-part-iii-minimum-wages-and-federal-assistance/comment-page-1/#comment-85 Robin Anderson, Economist, Principal Global Investors Fri, 08 Mar 2013 16:51:32 +0000 http://blog.principal.com/?p=1845#comment-85 While not specifically targeted at “executives,” this interactive chart from EPI shows the relative changes in average income over time. If you use “top 1%” as a proxy for executives and “bottom 90%” as a proxy for lower-wage workers, you can see how the distribution has changed from the early parts of the last century until 2007.

]]> By: Ben Miller-Coleman http://blog.principal.com/2013/02/25/minimum-wage-hikes-part-iii-minimum-wages-and-federal-assistance/comment-page-1/#comment-84 Ben Miller-Coleman Thu, 07 Mar 2013 21:36:27 +0000 http://blog.principal.com/?p=1845#comment-84 Last question, then I will stop pestering you on this topic. Historically, how does the comparison between minimum wage and executive compensation play out (I believe, but am unsure, that executive compensation is a term of art in economics that can be quantified)? What was the ratio in 1938 and what is it now?

]]> By: Robin Anderson, Economist, Principal Global Investors http://blog.principal.com/2013/02/25/minimum-wage-hikes-part-iii-minimum-wages-and-federal-assistance/comment-page-1/#comment-83 Robin Anderson, Economist, Principal Global Investors Fri, 01 Mar 2013 20:07:36 +0000 http://blog.principal.com/?p=1845#comment-83 Hi Ben, thanks for reading. There
    has

been some work done to look at inflation-adjusted minimum wage. Here’s a link to some work at Oregon State University. What you’ll see is that when you adjust the minimum wage to 2012 dollars, the 1938 minimum wage comes out at around $4 per hour. Compare that to the current $7.25 per hour. Inflation-adjusted minimum wages peaked around 1968 – OSU tags the figure at around $10.51 in 2012 dollars. As you’ll see in the graph, that’s been on a downward trend since then though. The slips you see between 1968 and today are the periods when Congress doesn’t adjust the minimum wage for inflation; the jumps are when Congress bumps the minimum wage. So a pattern emerges where the minimum wage is increased, and for a period of five to ten years, inflation eats away at it. Bump again, and inflation starts eating away again.

]]> By: Ben Miller-Coleman http://blog.principal.com/2013/02/25/minimum-wage-hikes-part-iii-minimum-wages-and-federal-assistance/comment-page-1/#comment-82 Ben Miller-Coleman Thu, 28 Feb 2013 19:33:17 +0000 http://blog.principal.com/?p=1845#comment-82 *1938, sorry for the typo.

]]> By: Ben Miller-Coleman http://blog.principal.com/2013/02/25/minimum-wage-hikes-part-iii-minimum-wages-and-federal-assistance/comment-page-1/#comment-81 Ben Miller-Coleman Thu, 28 Feb 2013 19:32:33 +0000 http://blog.principal.com/?p=1845#comment-81 Hi Robin,
Thanks for the series. I think this is an important issue you are tackling. I can’t remember if you did this in your first article or not, but I was wondering comparatively speaking, has minimum wage kept paced when inflation is factored in? Is there a way to compare minimum wage in 1928 when it was created and minimum wage today?

Thanks,
Ben

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