In 1968 the Federal minimum wage was $1.60/hr, which is equivalent to $10.71/hr in today's dollars according to the Bureau of Labor Statistic's inflation calculator. Even in San Francisco, the living wage ordinance hasn't managed to keep pace. It provides for a minimum of $10.24/hr, 47 cents less than the federal minimum wage equivalent in 1968.
Jordan Weissman has an article in The Atlantic reporting on how McDonalds Corporation teamed up with Visa to create a financial planning tool for their minimum wage work force. The punch line is the second job: they assume right up front and out of the gate that their workforce can't survive on working 2,000 hour/year at McDonalds. Here is the sample budget assuming two full time jobs yielding $2,060/month ($24,720 take home/year--no benefits, no vacation):
Earning the $2060/month outlined in this budget would require an hourly wage of $12.36/hr, assuming full time employment at 40 hours per week. In other words, the current federal minimum wage of $7.25/hr will get you less than 60% of what is needed for this budget. Even in expensive San Francisco, the "living wage" level only gets you 85% of the way there.
Let's take a look at this budget; it's our kids' budget. The $20 for health insurance may be adequate while they are 20 years old and healthy? The $800 "spending" money ($27/day) has to cover food and clothing, gas, parking, car maintenance, pet food, vet bills, and entertainment. Not too many beers in that budget. It's about equivalent to what we pay to cover our daughter's expenses, and she is in college and supplements her expenses with a part time job. It's often not enough. This McDonald's budget is also approximately equal to the poverty level for a family of 4 in the U.S. Perhaps that's what they had in mind with their two incomes. But, as they say ... don't try this at home!
Weissman followed up his article with a response to some criticism pointing out that, duh, McDonalds jobs are meant to be entry level, and short term...students flipping burgers after school, and all that. But how rare are they?
There are about 104 million full time workers in the U.S. The median wage is $19.40/hr ($775/week divided by 40), which means that 57 million workers earn less than that. About 20 million full time workers earn less than what is needed to cover the McDonald's budget.
Why is it not high time to restore the minimum wage to its 1968 level? Why is it not high time to raise the minimum wage to cover the McDonald's budget?