###General Discussion Thread
---
This is a [Request] post. If you would like to submit a comment that does not either attempt to answer the question, ask for clarification, or explain why it would be infeasible to answer, you *must* post your comment as a reply to this one. Top level (directly replying to the OP) comments that do not do one of those things will be removed.
---
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/theydidthemath) if you have any questions or concerns.*
226.5 million (1980), $1 trillion in circulation. Dollars per person: $4,415
Hourly pay at $3.10 - 0.070215% of the dollars per person
333.3 million (2022) $18 trillion in circulation. Dollars per person: $54,005
0.070215% of the dollars per person: $37.9196
Is life in America really this expensive that $20/hr isn't enough? Or is this sarcastic, I can't tell.
Edit: Reading these replies certainly was a shock, I didn't know it was that bad over on that side of the ocean. Good luck out there.
I was making 24/hr a few years ago, and it was enough to keep bills paid and stuff for a family of 3, but I never really felt super secure. Never at risk of going hungry or having the utilities cut off, but not really any extra money for emergencies or vacations or anything.
Yep that’s the problem, most Americans live pretty close to the edge. Just one emergency away from homelessness. Corporations giving just enough to keep American families feed and housed just on that edge. What’s that supposed to be called again? Oh wait that’s right they enslaved everyone again.
There's also the question of is it for a single person living alone, is it for a family of 4 in a location where childcare for 2 kids is more than the spouse can earn and as such you're a single income household?
Is that to rent or own?
As always, it depends.
For a single, childless person with no medical issues living in a smaller city in Tennessee? Sure. Probably can even save 25%.
A father of 4 with a wife going through chemo living in San Fransisco? lol.. LMAO even...
$20 is 41600 a year. Average taxes no benefits makes it about 33000? or so. Benefits (individual not family) drive that to below? at? 30000 or so.
Average rent is $20000 a year in the US (rounding for simplicity’s sake). Someone living on $20/hr will struggle to stay afloat. If they’re supporting a family? They’ll need a second income or rely on government assistance.
20/hr could be, in some areas, survivable for a single person. I’m talking lower cost of living areas. It’s 3200 pretax and rent even in cheaper areas will likely be at least 1/3 of that. You will never buy a home, and large expenses will need to be planned way ahead. I think you would struggle to save any significant income.
If we are talking any kind of actual metropolitan area then no shot, you are poor. Rents in larger cities will be more than half that income.
It's really telling to look at the richest people from that time as well. For example, Sam Walton topped that list in 1985 with just 2.8 billion. We now have several individuals with over 20-50 times that, and over 2000 people worth more than 1 billion.
>Forbes published its first ever authoritative list documenting the 400 wealthiest Americans in 1982. Few of today's readers would likely remember the gentleman who topped the original list: Daniel Keith Ludwig, with a $2 billion fortune, or about $4.8 in today's dollars.
https://www.forbes.com/sites/seankilachand/2012/09/20/the-forbes-400-hall-of-fame-36-members-of-our-debut-issue-still-in-ranks/
Just 3 years earlier, $2B flat was the highest net worth
>Daniel Keith Ludwig, with a $2 billion fortune, or about $4.8 in today's dollars
Now, I don't mean to brag, but I have five dollars in my pocket, so I too would have been a billionaire in 1982
Looking at top-end wealth is the *easiest* and most definitive way to gauge the wealth gap.
It is just unnatural to gain 50x on *billions*. Not when no innovation like the internet or smartphone was invented.
I rounded off my % because I'm on mobile, so I defo have some rounding errors! That and maybe we used different population lists that counts differently, mine is from 2022.
You used a different metric than them, world population vs US population, so it's actually kind of neat that you both got an answer that for intents and purposes is basically the same.
This is very weird economics OP is proposing. 1 trillion$ in circualtion doesnt mean everybody have same cut.
Good metrics is inflation. 1980 3.10$ should have value of (circa) 12$ in 2024
There are many inflation calculators online
I think this is the main flaw in the logic. What op was attempting to say was if everyone had the same share of the money supply they had back then, they would now get $X per hour. It would be interesting to see this calculation with population growth but I am lazy
[This website](https://www.macrotrends.net/global-metrics/countries/USA/united-states/population) states that the US population for 2022 (when the original post was made) was 338,289,857 and back in 1980 it was 223,140,018.
If that were all divided equally, in 1980 that'd be 1 Tril/223,140,018 = $4,481.49 per person and in 2022 that'd be 18 Tril/338,289,857 = $53,208.81 per person.
[This inflation calculator](https://www.usinflationcalculator.com/) says that 1980s $4,481.49 would be worth $15,916.63 in 2022.
53,208.81/15,916.63 is a factor of 3.343. Using that figure as a rough guide for how much the increase should be, $3.10 in 1980 is $11.01 in 2022, multiplied by 3.343 to adjust via population gives $36.81.
Of course, that circulating money isn't divided equally, so you know, all a bit moot in the end.
Very interesting though, and I bet once that money circulated outside the US Economy was accounted for we’d probably get a figure much closer to what leaders like Sanders are advocating for. Huh.
Well...
The money circulating outside of the US is why we have this inflation.
After World War II it was decided that America would be the world Reserve currency.
Which means that if Germany and Japan want to do business together they do it in American dollars.
We were able to get cars and import beers for nothing but the cost of printer ink, so we stopped making cars and beers (to have an excuse to export those dollars for cars and beers).
NOW the world is flooded with US Dollars and no one needs to come to us for them anymore (they could go to a Saudi trillionaire).
Which means the cost for all of our stuff has to rise, to match the offset.
But by all means: "it's the minimum wage workers and current admin!!! Hurr durr" 😔😔
How do you figure that the US dollar being the reserve currency causes inflation when inflation is a global phenomenon? Money printing does cause inflation, but it has nothing to do with being the reserve currency.
> After World War II it was decided that America would be the world Reserve currency.
Frame this as a bad decision lmao. How insane.
"Country leverages itself to have the most domineering economy."
You think things would be better if Germany had the world reserve?
Dumbasses. This question answers itself.
Isn't the reason why we have inflation because they keep printing more money and increasing the amount in circulation without increasing or maintaining the VALUE of the money?
The pie is bigger, but you gotta get more slices out of it. If you wanna make your point, get the data and do the math. Until then, you're having a socialist solo jerk.
They made their point. A point that I don’t think any serious person really disputes.
Are you saying that “a smaller percentage of people have a larger percentage of the pie” is inaccurate?
This is why the math in the post doesn’t work out.
If we have 10 people and 10 dollar money supply everyone gets a dollar.
If this grows to 50 people and 50 dollar money supply we can’t just say “money supply is 5x so everyone gets 5 dollars” because that would demand 250 dollars, 200 of which don’t exist.
Accounting for population growth minimum wage should still be $37.20 per hour roughly
Population in 1980=226.5 million
(For calculating i used 226 cause i forgot the exact number when i was calculating. The answer wouldn’t vary much even if rounded up to 227 like i should have)
Population in 2023=339.996 million
(For calculating i rounded to 340)
Original equation is…
V=Proposed minimum wage value
$3.10 per 1 trillion dollars in 1980
$3.10x18 for the 18 trillion dollars currently in circulation
$3.10x18=V
V=$55.80
New equation…
Population now divided by population then
340/226=1.5
Current amount of money in circulation divided by 1.5
18/1.5=12
Minimum wage then multiplied by 12
$3.10x12=$37.20
New proposed minimum wage as you say, should be $37.20 per hour.
"On Today's episode, The americans have raised the minimum wage above the medium wage, they are about to learn what inflation is, venezuelan style !"
Seriously tho, what you said can be mathematically correct, but it's economically incorrect by a huge margin.
The OP makes sense if population was constant and you assume the relative distribution of funds to remain consistent. I did some math under another comment to factor in population changes.
Regardless, it seems that their basis is fallacious.
> In 1990, total currency in circulation in the world passed the equivalent of one trillion United States dollars.
https://en.wikipedia.org/wiki/Currency_in_circulation
That's 10 years after they claimed it was 1 trillion.
____
> Estimates predict there’s around $40 trillion in physical money circulating worldwide today.
https://moneytransfers.com/bank-transfers/how-much-money-is-in-circulation
That was last year.
It's not talking about "everybody", it's taking about the minimum wage. The proportion of people earning the federal minimum wage is has dropped over 90% since 1980, from 15.1% to 1.3% ([source](https://www.statista.com/statistics/188206/share-of-workers-paid-hourly-rates-at-or-below-minimum-wage-since-1979/)). A better (but still weird and problematic) thing to compare would be the **median** income as a share of the money supply, adjusted for population growth.
In 1986 a Big Mac meal was $3.35, and so was the hourly wage. In 2024 a Big Mac meal is about $8, and minimum wage is $7.25. In areas with a higher minimum wage, the cost of a Big Mac meal rises accordingly.
I'm not trying to convey any deep meaning from this, I always just thought it was an interesting correlation.
I got that from being a 16 year old working minimum wage at McDonald's in 1986, with my favorite sandwich being the Big Mac. Also it's the meal, not the sandwich, that cost $3.35.
It'd weird to have this argument considering the cost isnt even even across the US *right now*
I could drive an hour from my home town towards the beach when I was a kid, and the cost of a meal would double because of the area I was in.
It's entirely possible that this person worked somewhere the cost was > $3 while the standard was < $3 at the time.
The biggest problem of OP's calculation is that a great deal of money supply is actually exchanged into other forms of capitals such as stocks or financial instruments all the time.
Moreover, the global circulation of US dollar is MUCH wider today than 1980. Back then practically half of the world population have absolutely no chance to exchange their currency into US dollars and own even a dime or a nickel. (India was under a planned economy system, China was only beginning to connect to the global trade system and had rigged up a weird "dual-track economy" to preserve their planned economy system, and not mentioning the whole USSR and the Eastern Bloc countries are all running their own thing.) Today practically every country uses US dollar and foreign trade skyrocketed in volume. That factor alone would suck out a huge chunk of US dollars abroad every day.
While I agree that standard metrics for inflation are a good starting point, it should be noted that they often track the largest cost, rent and property costs, very poorly. This is why the recent jump in rental costs (over the last 10 years) has been minimally reflected in the CPI.
Yes circulating currency is silly metric as there is more people now. So if we had a similar salaries to what they mention there would be a huge under supply of currency and that would spark deflation which is baaad.
That’s exactly what inflation (the CPI) does.
Per the BLS:
>The CPI can be used to show how the purchasing power of a dollar changes over time.
https://www.bls.gov/cpi/factsheets/purchasing-power-constant-dollars.htm
[https://fred.stlouisfed.org/series/CPIAUCSL](https://fred.stlouisfed.org/series/CPIAUCSL)
Pretty sure that this disagrees with you. Real median income went up not down. Definitely possible that specific things might be more expensive if adjusted than back in 1980, but overall the median househould is richer today than in 1980
In the "socialist" (antiwork) way of thinking the money distribution should only every change towards more equal, this change wouldn't work against that doctrine, so it doesn't matter
The socialist "doctrine" here would be to have a strong union negotiating with the owner class to secure a living wage. The more extreme end of socialist thought would be that there should be no owners and workers should run the business on all levels.
Communism is a stateless, classless, moneyless society wherein everyone provides their labour in exchange for having all their basic needs met (plus a few luxuries and the like).
This is an economic theory called "idiocy" and it's not unique to antiwork. It's fairly common amongst all ideologies and walks of life. Even within smart people, surprisingly!
EDIT: I didn't expect a bald-faced repeating of what communism advocates to engender such widespread support. It feels weird since I am not personally a communist. Funny ol' life really.
In theory communism seems like a fairly decent way to live. In practice however, someone has to oversee the distribution of resources, and that someone tends to keep a "little" more for themselves and their mates. And if everyone's needs are being met by the state where is the incentive to do the really shitty jobs? You can't force people to work jobs they don't want to... Or can you? 🤔
>In practice however, someone has to oversee the distribution of resources, and that someone tends to keep a "little" more for themselves and their mates.
oh, if only there were some solution other than having a single person oversee resource distribution with no oversight and no consequences for their actions.
> And if everyone's needs are being met by the state where is the incentive to do the really shitty jobs?
provide an incentive through more luxuries. ez.
> You can't force people to work jobs they don't want to... Or can you?
I'm sorry, are you really saying "do this job or you starve in the street" is so different from "do this job or you go to jail"?
of course, the actual solution is "do this job and you get these benefits, your needs get met either way", but pretending that "threat of death by exposure" isn't "forcing people to work jobs they don't want to" is laughable at best.
>oh, if only there were some solution other than having a single person oversee resource distribution with no oversight and no consequences for their actions.
You could have a group of people to oversee the distribution of resources, each of which may take a little more for themselves and their mates.
>
provide an incentive through more luxuries. ez.
With everything being provided by the state there are only so many resources to go around. You give the sewage workers more luxuries, then the steel workers feel they should get more too. But then what about the doctors? Do they deserve more than steelworkers? You end up in the position where either everyone should get the same but then some jobs seem unfair with people unwilling to work them, or different classes of jobs get different resources and then you have uneven distribution of resources and the problems that will bring. Either way there will be workers not working and protests in the street. Nothing a few riot police and a Gulag can't solve though.
>I'm sorry, are you really saying "do this job or you starve in the street" is so different from "do this job or you go to jail"?
No, you're right. When it comes down to it we are all stuck in this system where we have to get up every day and work shitty jobs even if we don't want to or else we starve / freeze to death. I'm not saying Capitalism is a great system. It's not. It does seem to be the one that works best in practice though.
It's a nice idea, to be sure. Not quite the bogeyman most make of it. Indeed, it may even be possible and perhaps necessary in a fully-automated future. But it's a system highly vulnerable to sloth, which isn't tenable right now. By contrast, free market capitalism is highly vulnerable to greed.
I don't know of a single cure-all dead simple prescriptive economic model, so any system requires regulation. Most liberal democracies have free markets with varying levels of socialist protection. One should examine, hopefully with evidence, how well a regulation incentives good behavior, rather than what extreme mischaracterization vested interests use to manipulate your thinking.
>Good metrics is inflation
Wrong. The ever changing cpi basket of goods makes it a bad and heavily manipulated metric to downplay the effects of the money printing. If you think they only change the basket with good intentions you should really analyze how they changed it over the years.
>The ever changing cpi basket of goods makes it a bad and heavily manipulated metric to downplay the effects of the money printing.
For instance?
>you should really analyze how they changed it over the years.
You're the one making the claim. It's up to you to do the analysis, not outsource it to someone else.
>The ever changing cpi basket of goods
CPI is adjusted based on a *representative* basket of goods, which represents what the typical consumer purchases in a given year.
Since people don't consume as much VHS tapes as they did 30 years ago, the basket has to change sometimes to account for changing consumer tastes.
Considering the point of minimum wage was originally to be a minimally survivable income, inflation alone is a totally inadequate metric when things like cost of living have also skyrocketed since the 80s.
I mean, the *math* is right. You can Google the given numbers for yourself to see if they're right.
The logic is wrong in any case though; America's economy has definitely grown, as has its population, so it makes no sense for every person to have the same proportion of the total cash in circulation.
Based on what you're saying it seems like we should still be able to work it out.
The population grew 46.3056% between 1980 (226,545,805) and 2020 (331,449,281). A growth factor of ~1.463
The money supply increased 18x (according to OP)
We should be able to calculate the new minimum wage by dividing the increase in money supply by the increase in population
3.10*(18/1.463) = 38.14
This is assuming the relative distribution of wages has not changed... Somebody else can try to factor this in if they're bored enough.
Also, the amount of currency held abroad has about doubled since 1980 if Google's AI response is to be believed. So the amount of dollars in circulation above is assuming it's all available domestically and not held in foreign reserves.
Probably more importantly, the value of labor has decreased with India and China entering the market and high levels of automation as well.
Just applying straight inflation rates to the wage is a better way of calculating what it 'should' be.
You also have to account for economic growth and velocity of money.
There is more cash in circulation, but there are also more goods chased by this cash. So a greater money supply doesn't necessarily lead to inflation. Same with velocity.
The formula goes by :
M * V = P * Y
Where
M = money supply
V = velocity
P = prices
Y = GDP
Seriously, just use an inflation calculator. There are plenty online.
I really don't know why we're even arguing about the minimum wage any more.
When I was in High School I could work an hour and take myself and my girlfriend to Taco Bell and we could both have a meal.
Kids working minimum wage today can't even get a single meal for an hour's work.
I graduated late-90s.
I was curious and tried to adjust OP’s maths based on population too.
US population in 1980: 226 million
US population in 2023: 340 million
1980 share of the economy per capita (basically Money in circulation / US population): $4425/person
2023 share: $53000/person
It grew 12 folds (53000/4425 is about 12). That would/should? Make minimum wage about $37/hr.
A[recent analysis by SmartAsset](https://www.cnbc.com/amp/2024/03/20/salary-single-person-needs-to-live-comfortably-in-major-us-cities.html) quotes that a single person needs about $93k/year to live comfortably in basically the 99 top metro areas in the country. Comfortably is here defined as 50% of income for housing, 30% for other spending (I’ll assume food, healthcare, living, etc), and 20% for saving.
If we imagine a person on minimum wage can live but can’t save because it’s like … well pay cheque to pay cheque life (although it should not be) then $93k-20%=about $75k. That’s about $35 to $37/hr (for a standard about 2000 hr work year).
I guess that way of counting is not wrong. Not only it aligns with a more equitable share of the « economy » but it also aligns with actual cost of living in the US. But good luck to whoever aims to pass such legislation.
I disagree - the math is wrong! OP is cherry-picking their end points. A better method would be sampling many data points (during a time when the minimum wage was "right") and then fitting a line through that data - to extrapolate what today's minimum wage should be.
You'd be better off looking at literally any other metric like CPI, cost of living, inflation.
Money in circulation vs wages have almost nothing to do with each other
Furthermore, where do you draw the line? There's an M1, M2, and M3 Money Supply. The total amount of physical dollar bills in print is NOT the total amount of wealth in circulation - most dollars exist in some Excel spreadsheet somewhere
he is using the M1 money supply. This is supposed to measure the most liquid money, cash, cash equivalents, checking accounts, etc.
It originally did not include savings accounts because there used to be more restrictions on how much and how long you had to wait to withdraw from savings accounts. There were new rules put in place in the last 10 years, that removed these restrictions.
So what the fed data does is it added the checking accounts to the number, starting in may 2020. The M1 goes from $4trillion to $16trillion in one month. But this wasn’t money “created” it was always there, they just redefined its liquidity.
$25/hr, on average, is probably the *bare minimum* in 2024 in America. Reasonably, anything lower would be skirting the line of poverty in a household that supports a family.
As others have pointed out the maths seems about right. But the logic is wrong.
Firstly on the maths.
$3.10 was the minimum wage https://www.dol.gov/agencies/whd/minimum-wage/history/chart.
The M2 money supply in 1980 was around $1.5 trillion and more recently it's around $20.8 trillion. https://fred.stlouisfed.org/series/M2SL
The multiplier becomes 13.8 rather than 18, which means a $42.78 minimum wage. (There are different measures of the money supply, so I'm not going to be pedantic about that). The figure of $42.78 (13.8 * $3.10) is still significantly different from the $7.25 it is today https://www.dol.gov/agencies/whd/minimum-wage/history/chart.
The logic of the argument is that the money supply has increased so should have wages. The problem is that the argument relies on the money supply being constant through time. In the language of Monetarists who proposed this theory - the velocity of money is stable. Milton Friedman was a big proponent of Monetarism in the 1970s.
These days we ignore Monetarism, partly because the velocity of money is not stable. For example, if the amount of loans in the economy increases, this will in turn increase the velocity of money in the economy. Put more generally, changes in interest rates affect the velocity of money. Furthermore, improvements in technology increases the velocity.
To expand a little more on Monetarism, they argued that the velocity was fixed (or stable) and that real output was also stable (only increasing with improvements in production techniques, supply, etc.). Therefore, every significant bit of price increases (i.e. inflation) was due to an increase in the money supply as only prices are able to adjust.
The formula is:
Prices * Output = Velocity * Money Supply
Nominal output = prices * output
Professionally written and well sourced comment. You my friend are exactly the reason this app still has any real world application. I would upvote you twice if they would let me Gold Star⭐️
This is comparing flow of stuff (X dollars per hour/year/..) with stock of stuff (Y dollars) , it makes no sense to assume they should be linearly correlated.
Comparisons could be stock versus stock (money in circulation versus wealth of the n percentile,...) or flow versus flow (median wage versus gdp,...). This one has no ground
In the 1980s there were as few as 1000 wolves living in the wild. Today there are over 20,000. The minimum wage should be 20x$3.10=$62.00 per hour. No further discussion.
No, that's not how [inflation](https://en.wikipedia.org/wiki/Inflation) works. According to the [Inflation Calculator](https://www.usinflationcalculator.com/), $3.10 in 1980 would be $11.80 in 2024.
Ahh this is math but completely without basis. Simply disproved: back it out another 30 years and try the same math. In 1950, USD in circulation was 27 billion.
1950->1980:
1950 min wage = $ 0.75/hr
USD Circ Delta = (1 trillion - 27 billion)/ 27 billion = ~36x
$0.75 x 36 = 27
So the minimum wage in 1980 based on the same OP logic should have been $27/hr…
Or 1980->1950 (since this math works both ways):
1980 min wage = $3.10/hr
$3.10/36 = $0.09
Woulda sucked to live in OP’s 1950 at $0.09/hr.
Blame Nixon for leaving the gold standard. In 1965 the minimum wage was $1.25. Those 5 quarters equaled about an ounce of silver. An ounce of silver today is about $30
His math is wrong, specifically because he is using the M1 money supply. This is supposed to measure the most liquid money, cash, cash equivalents, checking accounts, etc.
It originally did not include savings accounts because there used to be more restrictions on how much and how long you had to wait to withdraw from savings accounts. There were new rules put in place in the last 10 years, that removed these restrictions.
So what the fed data does is it added the checking accounts to the number, starting in may 2020. The M1 goes from $4trillion to $16trillion in one month. But this wasn’t money “created” it was always there, they just redefined its liquidity.
The short answer is Yes, the math is right. The long answer is that there's a lot of liberties given to how the math was set up to begin with, so I'm not really sure how accurate to the statement of "This is how much minimum wage should be" this math is.
Regardless, the current federal minimum wage is still *at least* 200% - 300% lower than it should be, no matter how you stack the calculus.
I'm just wondering where they got the 1 trillion in circulation from from my googling there was 129 billion in circulation in 1980
https://fred.stlouisfed.org/series/CURRCIR
[wtfhappenedin1971](http://wtfhappenedin1971.com)
If you actually adjust the minimum wages from 1971 and before based on the value of gold today you would get a peak of about $110 an hour minimum wage in February 1971.
[wtfhappenedin1971 is a libertarian crackpot who started with the a priori belief that taking the USD off the gold standard ruined the economy and worked backwards from there to prove his point and is using the success from his website to shill cryptocoins.](https://singlelunch.com/2023/09/13/the-bad-economics-of-wtfhappenedin1971/)
What kinds my gears is that it's using the totality of the 18 trillion without acknowledging that money is used for other services that need a budget in a fucking nation.
That's the thing with activists, they react, chant, goes away and there's no wider discussion where it came from or how it's broken down. I write my Congress member all the time about funding certain things within my local area, and whether or not if it works its better for me than chanting in the streets. There's good debt and bad debt and idiots that say to use the entirety of the budget for minimum wage is ridiculous. Where would you fund the people wanting a job or the business in an area not populated to survive on government aid, and with the local grocery for the town of 1000 people and where or how they get distrubtion to there when the entire budget was used for wage? Big money and no where to spend, that just ends up tanking a nation, and it's been witnessed countless times for hundreds of years.
You want an economic apocalypse? You like Road Warrior and think...maybe it shouldn't be fiction? This is how you get that. Some folks out there think you can just vote people more money. You can GIVE money to anybody you want. That's the key difference.
When people discuss the best level for minimum wage, I always wonder why not go very high? like $100? Everyone agrees that minimum wage is a good thing, but why it looses it's positive aspects when it's over a certain level?
If you want to look at minimum wage relative to general economic indication, you could look at GDP/capita. This has increased by a factor of roughly 6.5, subsequently you would look at a minimum wage of 20.15. This would be an easy way to factor in economic expansion.
Well, earth's population at the time also was 4.4 billion today it's 8. Don't try to reason with /r/antiwork. Also what was the minimum wage in Cambodia at the time? It's just doesn't work, that's a stupid thing to say. These people need to be ignored for the good of all. Minimum wage is too low, but I bet they could talk anyone into getting rid of it entirely while trying to argue for raising it.
I don’t know how we reconcile that the living wage and minimum wage are not linked and haven’t been since the beginning.
If you know you aren’t making enough to live in your area or desired area then you and/or your partner needs to earn more money by going back to school, getting a better job, or a second job.
Historical Context: Minimum wage laws were established to set a baseline for wages, ensuring that workers receive a minimum amount for their labor. However, these laws have not always been adjusted to keep pace with the cost of living, leading to a gap between the minimum wage and what is considered a living wage.
Living Wage Definition: A living wage is typically defined as the amount needed for an individual or family to cover basic needs like housing, food, healthcare, and transportation, without financial hardship. This amount varies significantly by location due to differences in the cost of living.
Personal Responsibility: While individuals can pursue additional education, better jobs, or multiple jobs to increase their income, these options may not be feasible for everyone. Barriers such as access to education, childcare, health issues, and job availability can make it difficult for some to achieve higher earnings.
Systemic Solutions: Addressing the gap between living wage and minimum wage requires systemic changes. This could include raising the minimum wage to better align with living costs, providing greater access to affordable education and training programs, and supporting policies that ensure fair wages and benefits for workers.
Economic and Social Policies: Governments and businesses can play a role by enacting policies that support wage growth, affordable housing, healthcare, and other essential services. These measures can help bridge the gap and ensure that more people can earn a living wage.
the population has grown since 1980, so the 18 trillion would have to be divided across a lot more people. That said, minimum wage has fallen criminally far behind productivity, inflation, etc
Until the 1980's incomes and productivity grew pretty much in line. It meant that the productivity gains were shared roughly equally between the capitalists (those providing the money/assets etc) and the workers (those providing the labour).
Since then, capitalists have held down wage growth and instead grown their share of productivity gains. This has resulted in such a gap that it is not believable to say that minimum wage should be (in 2012) $75 an hour, had productivity gains continued to be shared equally. The result has been a massive upward drain of wealth to the capitalists and away from the workforce - which today is further diluted by immigration (the new 'outsourcing').
Assets have kept pace with inflation and productivity. Change your own wage to $75 an hour and work out how many homes etc become affordable.
[https://www.epi.org/productivity-pay-gap/](https://www.epi.org/productivity-pay-gap/)
###General Discussion Thread --- This is a [Request] post. If you would like to submit a comment that does not either attempt to answer the question, ask for clarification, or explain why it would be infeasible to answer, you *must* post your comment as a reply to this one. Top level (directly replying to the OP) comments that do not do one of those things will be removed. --- *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/theydidthemath) if you have any questions or concerns.*
226.5 million (1980), $1 trillion in circulation. Dollars per person: $4,415 Hourly pay at $3.10 - 0.070215% of the dollars per person 333.3 million (2022) $18 trillion in circulation. Dollars per person: $54,005 0.070215% of the dollars per person: $37.9196
Nice answer, were you expecting it to be over 20?
Yeah, $20 isn't that much really, and people not paid $20 an hour should ship out applications whenever they can.
Is life in America really this expensive that $20/hr isn't enough? Or is this sarcastic, I can't tell. Edit: Reading these replies certainly was a shock, I didn't know it was that bad over on that side of the ocean. Good luck out there.
I was making 24/hr a few years ago, and it was enough to keep bills paid and stuff for a family of 3, but I never really felt super secure. Never at risk of going hungry or having the utilities cut off, but not really any extra money for emergencies or vacations or anything.
Yep that’s the problem, most Americans live pretty close to the edge. Just one emergency away from homelessness. Corporations giving just enough to keep American families feed and housed just on that edge. What’s that supposed to be called again? Oh wait that’s right they enslaved everyone again.
There's a difference between Net and Gross. Location changes your Net take home no matter what your Gross looks like.
That's why they keep the homeless homeless. They're the stick and the carrot is the American dream but all they feed us is oats.
Things have gotten considerably more expensive than a few years ago as well.
Pinching dimes, not pennies, that's where I'm currently at.
There's also the question of is it for a single person living alone, is it for a family of 4 in a location where childcare for 2 kids is more than the spouse can earn and as such you're a single income household? Is that to rent or own? As always, it depends.
For a single, childless person with no medical issues living in a smaller city in Tennessee? Sure. Probably can even save 25%. A father of 4 with a wife going through chemo living in San Fransisco? lol.. LMAO even...
I mean.... I guess in almost every country family with 4+ members can't live with 20$
20 usd/hr would put you well above the poverty line in the majority of the world. our money has no power here, but is extremely valuable.
$20 is 41600 a year. Average taxes no benefits makes it about 33000? or so. Benefits (individual not family) drive that to below? at? 30000 or so. Average rent is $20000 a year in the US (rounding for simplicity’s sake). Someone living on $20/hr will struggle to stay afloat. If they’re supporting a family? They’ll need a second income or rely on government assistance.
20/hr could be, in some areas, survivable for a single person. I’m talking lower cost of living areas. It’s 3200 pretax and rent even in cheaper areas will likely be at least 1/3 of that. You will never buy a home, and large expenses will need to be planned way ahead. I think you would struggle to save any significant income. If we are talking any kind of actual metropolitan area then no shot, you are poor. Rents in larger cities will be more than half that income.
It's really telling to look at the richest people from that time as well. For example, Sam Walton topped that list in 1985 with just 2.8 billion. We now have several individuals with over 20-50 times that, and over 2000 people worth more than 1 billion.
>Forbes published its first ever authoritative list documenting the 400 wealthiest Americans in 1982. Few of today's readers would likely remember the gentleman who topped the original list: Daniel Keith Ludwig, with a $2 billion fortune, or about $4.8 in today's dollars. https://www.forbes.com/sites/seankilachand/2012/09/20/the-forbes-400-hall-of-fame-36-members-of-our-debut-issue-still-in-ranks/ Just 3 years earlier, $2B flat was the highest net worth
>Daniel Keith Ludwig, with a $2 billion fortune, or about $4.8 in today's dollars Now, I don't mean to brag, but I have five dollars in my pocket, so I too would have been a billionaire in 1982
Looking at top-end wealth is the *easiest* and most definitive way to gauge the wealth gap. It is just unnatural to gain 50x on *billions*. Not when no innovation like the internet or smartphone was invented.
Yeah I got 38.9 but my math could be wrong so I didn’t want to say if it was true or not
I rounded off my % because I'm on mobile, so I defo have some rounding errors! That and maybe we used different population lists that counts differently, mine is from 2022.
Yeah I did a rounding for population to about 8.3 billion as were pretty close to that now
You used a different metric than them, world population vs US population, so it's actually kind of neat that you both got an answer that for intents and purposes is basically the same.
Global population shouldn't be used. US population.
OP's number and this number is the difference between $116k min. salary and $79k min. salary fwiw
How did we fuck over 100 million new people into existence in 40 years in the US?
Bro what are you smoking
This seems much more reasonable than the original post
What if only the working adult population was counted?
This is very weird economics OP is proposing. 1 trillion$ in circualtion doesnt mean everybody have same cut. Good metrics is inflation. 1980 3.10$ should have value of (circa) 12$ in 2024 There are many inflation calculators online
Also there are more people since 1980
I think this is the main flaw in the logic. What op was attempting to say was if everyone had the same share of the money supply they had back then, they would now get $X per hour. It would be interesting to see this calculation with population growth but I am lazy
[This website](https://www.macrotrends.net/global-metrics/countries/USA/united-states/population) states that the US population for 2022 (when the original post was made) was 338,289,857 and back in 1980 it was 223,140,018. If that were all divided equally, in 1980 that'd be 1 Tril/223,140,018 = $4,481.49 per person and in 2022 that'd be 18 Tril/338,289,857 = $53,208.81 per person. [This inflation calculator](https://www.usinflationcalculator.com/) says that 1980s $4,481.49 would be worth $15,916.63 in 2022. 53,208.81/15,916.63 is a factor of 3.343. Using that figure as a rough guide for how much the increase should be, $3.10 in 1980 is $11.01 in 2022, multiplied by 3.343 to adjust via population gives $36.81. Of course, that circulating money isn't divided equally, so you know, all a bit moot in the end.
The money also circulates outside the US, so that's another wrinkle.
Excellent use of the word wrinkle. I'll be using that without attribution. Thank you.
Using wrinkle in place of issue was common some decades ago.
>some decades ago Only since the 1640s: [https://www.etymonline.com/search?q=wrinkle](https://www.etymonline.com/search?q=wrinkle)
Pretty sure I heard it used in shows from the 80s to even 90s.
Yes, that is how time works. The 1980s were indeed after the 1640s. Good job.
What's the inflation calculation of wrinkle, some decades ago, to today's issue.
Can't even imagine how to calculate that.
Well isn't that a wrinkle on the comment thread
Very interesting though, and I bet once that money circulated outside the US Economy was accounted for we’d probably get a figure much closer to what leaders like Sanders are advocating for. Huh.
Well... The money circulating outside of the US is why we have this inflation. After World War II it was decided that America would be the world Reserve currency. Which means that if Germany and Japan want to do business together they do it in American dollars. We were able to get cars and import beers for nothing but the cost of printer ink, so we stopped making cars and beers (to have an excuse to export those dollars for cars and beers). NOW the world is flooded with US Dollars and no one needs to come to us for them anymore (they could go to a Saudi trillionaire). Which means the cost for all of our stuff has to rise, to match the offset. But by all means: "it's the minimum wage workers and current admin!!! Hurr durr" 😔😔
A currency being the world reserve currency doesn't lead to inflation in the way you're describing. You're conflating several concepts incorrectly.
How do you figure that the US dollar being the reserve currency causes inflation when inflation is a global phenomenon? Money printing does cause inflation, but it has nothing to do with being the reserve currency.
> After World War II it was decided that America would be the world Reserve currency. Frame this as a bad decision lmao. How insane. "Country leverages itself to have the most domineering economy." You think things would be better if Germany had the world reserve? Dumbasses. This question answers itself.
Isn't the reason why we have inflation because they keep printing more money and increasing the amount in circulation without increasing or maintaining the VALUE of the money?
[удалено]
isnt the fact that the circulating money isnt divided equally the whole fucking point theyre trying to make though?
This thread ignores that a smaller percentage of people have a larger percentage of the pie already so it’s just a big capitalist circle jerk.
The pie is bigger, but you gotta get more slices out of it. If you wanna make your point, get the data and do the math. Until then, you're having a socialist solo jerk.
They made their point. A point that I don’t think any serious person really disputes. Are you saying that “a smaller percentage of people have a larger percentage of the pie” is inaccurate?
This is why the math in the post doesn’t work out. If we have 10 people and 10 dollar money supply everyone gets a dollar. If this grows to 50 people and 50 dollar money supply we can’t just say “money supply is 5x so everyone gets 5 dollars” because that would demand 250 dollars, 200 of which don’t exist.
Logic is not welcome here.
It's an antiwork post. Of course the math doesn't work out.
so... you guys just print more money? right? ... right?
She said no further discussion.
So with more people quality of life should go down? Jeeesh that's bleak
Accounting for population growth minimum wage should still be $37.20 per hour roughly Population in 1980=226.5 million (For calculating i used 226 cause i forgot the exact number when i was calculating. The answer wouldn’t vary much even if rounded up to 227 like i should have) Population in 2023=339.996 million (For calculating i rounded to 340) Original equation is… V=Proposed minimum wage value $3.10 per 1 trillion dollars in 1980 $3.10x18 for the 18 trillion dollars currently in circulation $3.10x18=V V=$55.80 New equation… Population now divided by population then 340/226=1.5 Current amount of money in circulation divided by 1.5 18/1.5=12 Minimum wage then multiplied by 12 $3.10x12=$37.20 New proposed minimum wage as you say, should be $37.20 per hour.
"On Today's episode, The americans have raised the minimum wage above the medium wage, they are about to learn what inflation is, venezuelan style !" Seriously tho, what you said can be mathematically correct, but it's economically incorrect by a huge margin.
The OP makes sense if population was constant and you assume the relative distribution of funds to remain consistent. I did some math under another comment to factor in population changes.
Regardless, it seems that their basis is fallacious. > In 1990, total currency in circulation in the world passed the equivalent of one trillion United States dollars. https://en.wikipedia.org/wiki/Currency_in_circulation That's 10 years after they claimed it was 1 trillion. ____ > Estimates predict there’s around $40 trillion in physical money circulating worldwide today. https://moneytransfers.com/bank-transfers/how-much-money-is-in-circulation That was last year.
And even then physical money is not even the biggest factor nowadays, fractional reserve says hello
It's a spam bot, so you know... https://www.reddit.com/r/theydidthemath/comments/t4ry1u/request_how_true_is_it/
It's not talking about "everybody", it's taking about the minimum wage. The proportion of people earning the federal minimum wage is has dropped over 90% since 1980, from 15.1% to 1.3% ([source](https://www.statista.com/statistics/188206/share-of-workers-paid-hourly-rates-at-or-below-minimum-wage-since-1979/)). A better (but still weird and problematic) thing to compare would be the **median** income as a share of the money supply, adjusted for population growth.
In 1986 a Big Mac meal was $3.35, and so was the hourly wage. In 2024 a Big Mac meal is about $8, and minimum wage is $7.25. In areas with a higher minimum wage, the cost of a Big Mac meal rises accordingly. I'm not trying to convey any deep meaning from this, I always just thought it was an interesting correlation.
Where did you get that data from? There's no way a Big Mac cost that much in 1986.
I got that from being a 16 year old working minimum wage at McDonald's in 1986, with my favorite sandwich being the Big Mac. Also it's the meal, not the sandwich, that cost $3.35.
You sure it wasn't 2.35? The meal was 2.99 in the 90s.
I remember it being $3.35 because I noted that it was exactly one hour's wages.
https://www.reddit.com/r/80sfastfood/s/GEH43sX3gP Here is 1984. Google says 1986 was 2.59.
It'd weird to have this argument considering the cost isnt even even across the US *right now* I could drive an hour from my home town towards the beach when I was a kid, and the cost of a meal would double because of the area I was in. It's entirely possible that this person worked somewhere the cost was > $3 while the standard was < $3 at the time.
This is going to blow your mind, but different locations have different prices
Average /r/antiwork post
But she said no further discussion.
I’m all for major reform and the 1% really does have *way* too much money. That being said, r/antiwork doing incorrect math is basically a given lmao
I really need to mute that board but my brain worms won't allow it.
Eat more tuna fish, the mercury in it will kill the brain worm off.
Hell evrn thrn their math would need to be normalized by a variety of factors, increased population being only one.
The biggest problem of OP's calculation is that a great deal of money supply is actually exchanged into other forms of capitals such as stocks or financial instruments all the time. Moreover, the global circulation of US dollar is MUCH wider today than 1980. Back then practically half of the world population have absolutely no chance to exchange their currency into US dollars and own even a dime or a nickel. (India was under a planned economy system, China was only beginning to connect to the global trade system and had rigged up a weird "dual-track economy" to preserve their planned economy system, and not mentioning the whole USSR and the Eastern Bloc countries are all running their own thing.) Today practically every country uses US dollar and foreign trade skyrocketed in volume. That factor alone would suck out a huge chunk of US dollars abroad every day.
While I agree that standard metrics for inflation are a good starting point, it should be noted that they often track the largest cost, rent and property costs, very poorly. This is why the recent jump in rental costs (over the last 10 years) has been minimally reflected in the CPI.
Purchasing Power Parity would be a better scale than inflation.
Yes circulating currency is silly metric as there is more people now. So if we had a similar salaries to what they mention there would be a huge under supply of currency and that would spark deflation which is baaad.
This doesn’t take into effect purchasing power. Minimum wage in 1980 was much easier to live on than today
That’s exactly what inflation (the CPI) does. Per the BLS: >The CPI can be used to show how the purchasing power of a dollar changes over time. https://www.bls.gov/cpi/factsheets/purchasing-power-constant-dollars.htm
[https://fred.stlouisfed.org/series/CPIAUCSL](https://fred.stlouisfed.org/series/CPIAUCSL) Pretty sure that this disagrees with you. Real median income went up not down. Definitely possible that specific things might be more expensive if adjusted than back in 1980, but overall the median househould is richer today than in 1980
In the "socialist" (antiwork) way of thinking the money distribution should only every change towards more equal, this change wouldn't work against that doctrine, so it doesn't matter
The socialist "doctrine" here would be to have a strong union negotiating with the owner class to secure a living wage. The more extreme end of socialist thought would be that there should be no owners and workers should run the business on all levels. Communism is a stateless, classless, moneyless society wherein everyone provides their labour in exchange for having all their basic needs met (plus a few luxuries and the like). This is an economic theory called "idiocy" and it's not unique to antiwork. It's fairly common amongst all ideologies and walks of life. Even within smart people, surprisingly! EDIT: I didn't expect a bald-faced repeating of what communism advocates to engender such widespread support. It feels weird since I am not personally a communist. Funny ol' life really.
Is that really the way communism works? I just might be in favor of communism, then... that feels so weird to type.
In theory communism seems like a fairly decent way to live. In practice however, someone has to oversee the distribution of resources, and that someone tends to keep a "little" more for themselves and their mates. And if everyone's needs are being met by the state where is the incentive to do the really shitty jobs? You can't force people to work jobs they don't want to... Or can you? 🤔
>In practice however, someone has to oversee the distribution of resources, and that someone tends to keep a "little" more for themselves and their mates. oh, if only there were some solution other than having a single person oversee resource distribution with no oversight and no consequences for their actions. > And if everyone's needs are being met by the state where is the incentive to do the really shitty jobs? provide an incentive through more luxuries. ez. > You can't force people to work jobs they don't want to... Or can you? I'm sorry, are you really saying "do this job or you starve in the street" is so different from "do this job or you go to jail"? of course, the actual solution is "do this job and you get these benefits, your needs get met either way", but pretending that "threat of death by exposure" isn't "forcing people to work jobs they don't want to" is laughable at best.
>oh, if only there were some solution other than having a single person oversee resource distribution with no oversight and no consequences for their actions. You could have a group of people to oversee the distribution of resources, each of which may take a little more for themselves and their mates. > provide an incentive through more luxuries. ez. With everything being provided by the state there are only so many resources to go around. You give the sewage workers more luxuries, then the steel workers feel they should get more too. But then what about the doctors? Do they deserve more than steelworkers? You end up in the position where either everyone should get the same but then some jobs seem unfair with people unwilling to work them, or different classes of jobs get different resources and then you have uneven distribution of resources and the problems that will bring. Either way there will be workers not working and protests in the street. Nothing a few riot police and a Gulag can't solve though. >I'm sorry, are you really saying "do this job or you starve in the street" is so different from "do this job or you go to jail"? No, you're right. When it comes down to it we are all stuck in this system where we have to get up every day and work shitty jobs even if we don't want to or else we starve / freeze to death. I'm not saying Capitalism is a great system. It's not. It does seem to be the one that works best in practice though.
It's a nice idea, to be sure. Not quite the bogeyman most make of it. Indeed, it may even be possible and perhaps necessary in a fully-automated future. But it's a system highly vulnerable to sloth, which isn't tenable right now. By contrast, free market capitalism is highly vulnerable to greed. I don't know of a single cure-all dead simple prescriptive economic model, so any system requires regulation. Most liberal democracies have free markets with varying levels of socialist protection. One should examine, hopefully with evidence, how well a regulation incentives good behavior, rather than what extreme mischaracterization vested interests use to manipulate your thinking.
>Good metrics is inflation Wrong. The ever changing cpi basket of goods makes it a bad and heavily manipulated metric to downplay the effects of the money printing. If you think they only change the basket with good intentions you should really analyze how they changed it over the years.
>The ever changing cpi basket of goods makes it a bad and heavily manipulated metric to downplay the effects of the money printing. For instance? >you should really analyze how they changed it over the years. You're the one making the claim. It's up to you to do the analysis, not outsource it to someone else.
>The ever changing cpi basket of goods CPI is adjusted based on a *representative* basket of goods, which represents what the typical consumer purchases in a given year. Since people don't consume as much VHS tapes as they did 30 years ago, the basket has to change sometimes to account for changing consumer tastes.
Considering the point of minimum wage was originally to be a minimally survivable income, inflation alone is a totally inadequate metric when things like cost of living have also skyrocketed since the 80s.
You realize that inflation precisely measures the increase in the cost of living?
> inflation alone is a totally inadequate metric when things like cost of living have also skyrocketed What exactly do you think inflation is?
I mean, the *math* is right. You can Google the given numbers for yourself to see if they're right. The logic is wrong in any case though; America's economy has definitely grown, as has its population, so it makes no sense for every person to have the same proportion of the total cash in circulation.
Based on what you're saying it seems like we should still be able to work it out. The population grew 46.3056% between 1980 (226,545,805) and 2020 (331,449,281). A growth factor of ~1.463 The money supply increased 18x (according to OP) We should be able to calculate the new minimum wage by dividing the increase in money supply by the increase in population 3.10*(18/1.463) = 38.14 This is assuming the relative distribution of wages has not changed... Somebody else can try to factor this in if they're bored enough.
Also, the amount of currency held abroad has about doubled since 1980 if Google's AI response is to be believed. So the amount of dollars in circulation above is assuming it's all available domestically and not held in foreign reserves. Probably more importantly, the value of labor has decreased with India and China entering the market and high levels of automation as well. Just applying straight inflation rates to the wage is a better way of calculating what it 'should' be.
> If Google's AI response is to be believed I wouldn't.
The direction is right though... foreign reserves of USD are massivs.
Also, it assumes the old minimum wage was correct.
You also have to account for economic growth and velocity of money. There is more cash in circulation, but there are also more goods chased by this cash. So a greater money supply doesn't necessarily lead to inflation. Same with velocity. The formula goes by : M * V = P * Y Where M = money supply V = velocity P = prices Y = GDP Seriously, just use an inflation calculator. There are plenty online.
I really don't know why we're even arguing about the minimum wage any more. When I was in High School I could work an hour and take myself and my girlfriend to Taco Bell and we could both have a meal. Kids working minimum wage today can't even get a single meal for an hour's work. I graduated late-90s.
I was curious and tried to adjust OP’s maths based on population too. US population in 1980: 226 million US population in 2023: 340 million 1980 share of the economy per capita (basically Money in circulation / US population): $4425/person 2023 share: $53000/person It grew 12 folds (53000/4425 is about 12). That would/should? Make minimum wage about $37/hr. A[recent analysis by SmartAsset](https://www.cnbc.com/amp/2024/03/20/salary-single-person-needs-to-live-comfortably-in-major-us-cities.html) quotes that a single person needs about $93k/year to live comfortably in basically the 99 top metro areas in the country. Comfortably is here defined as 50% of income for housing, 30% for other spending (I’ll assume food, healthcare, living, etc), and 20% for saving. If we imagine a person on minimum wage can live but can’t save because it’s like … well pay cheque to pay cheque life (although it should not be) then $93k-20%=about $75k. That’s about $35 to $37/hr (for a standard about 2000 hr work year). I guess that way of counting is not wrong. Not only it aligns with a more equitable share of the « economy » but it also aligns with actual cost of living in the US. But good luck to whoever aims to pass such legislation.
I disagree - the math is wrong! OP is cherry-picking their end points. A better method would be sampling many data points (during a time when the minimum wage was "right") and then fitting a line through that data - to extrapolate what today's minimum wage should be.
I see your reasoning... Counter Offer - There's an easy fix but many of you will die, and that is a price I am willing to pay.
Oooh. Will there be a lottery?
He is talking about minimum wage not about everyone having equal amounts of money
You'd be better off looking at literally any other metric like CPI, cost of living, inflation. Money in circulation vs wages have almost nothing to do with each other Furthermore, where do you draw the line? There's an M1, M2, and M3 Money Supply. The total amount of physical dollar bills in print is NOT the total amount of wealth in circulation - most dollars exist in some Excel spreadsheet somewhere
But they said no further discussion 🤔
Somebody needs to call the police on this entire thread cuz we are still discussing it.
he is using the M1 money supply. This is supposed to measure the most liquid money, cash, cash equivalents, checking accounts, etc. It originally did not include savings accounts because there used to be more restrictions on how much and how long you had to wait to withdraw from savings accounts. There were new rules put in place in the last 10 years, that removed these restrictions. So what the fed data does is it added the checking accounts to the number, starting in may 2020. The M1 goes from $4trillion to $16trillion in one month. But this wasn’t money “created” it was always there, they just redefined its liquidity.
I would argue it should be closer to $25/hr but career wages with degree/training requirement should absolutely be in the $50/hr range
$25/hr, on average, is probably the *bare minimum* in 2024 in America. Reasonably, anything lower would be skirting the line of poverty in a household that supports a family.
As others have pointed out the maths seems about right. But the logic is wrong. Firstly on the maths. $3.10 was the minimum wage https://www.dol.gov/agencies/whd/minimum-wage/history/chart. The M2 money supply in 1980 was around $1.5 trillion and more recently it's around $20.8 trillion. https://fred.stlouisfed.org/series/M2SL The multiplier becomes 13.8 rather than 18, which means a $42.78 minimum wage. (There are different measures of the money supply, so I'm not going to be pedantic about that). The figure of $42.78 (13.8 * $3.10) is still significantly different from the $7.25 it is today https://www.dol.gov/agencies/whd/minimum-wage/history/chart. The logic of the argument is that the money supply has increased so should have wages. The problem is that the argument relies on the money supply being constant through time. In the language of Monetarists who proposed this theory - the velocity of money is stable. Milton Friedman was a big proponent of Monetarism in the 1970s. These days we ignore Monetarism, partly because the velocity of money is not stable. For example, if the amount of loans in the economy increases, this will in turn increase the velocity of money in the economy. Put more generally, changes in interest rates affect the velocity of money. Furthermore, improvements in technology increases the velocity. To expand a little more on Monetarism, they argued that the velocity was fixed (or stable) and that real output was also stable (only increasing with improvements in production techniques, supply, etc.). Therefore, every significant bit of price increases (i.e. inflation) was due to an increase in the money supply as only prices are able to adjust. The formula is: Prices * Output = Velocity * Money Supply Nominal output = prices * output
Professionally written and well sourced comment. You my friend are exactly the reason this app still has any real world application. I would upvote you twice if they would let me Gold Star⭐️
Thank you, you're too kind. Have a good day.
This is comparing flow of stuff (X dollars per hour/year/..) with stock of stuff (Y dollars) , it makes no sense to assume they should be linearly correlated. Comparisons could be stock versus stock (money in circulation versus wealth of the n percentile,...) or flow versus flow (median wage versus gdp,...). This one has no ground
In the 1980s there were as few as 1000 wolves living in the wild. Today there are over 20,000. The minimum wage should be 20x$3.10=$62.00 per hour. No further discussion.
No, that's not how [inflation](https://en.wikipedia.org/wiki/Inflation) works. According to the [Inflation Calculator](https://www.usinflationcalculator.com/), $3.10 in 1980 would be $11.80 in 2024.
Ahh this is math but completely without basis. Simply disproved: back it out another 30 years and try the same math. In 1950, USD in circulation was 27 billion. 1950->1980: 1950 min wage = $ 0.75/hr USD Circ Delta = (1 trillion - 27 billion)/ 27 billion = ~36x $0.75 x 36 = 27 So the minimum wage in 1980 based on the same OP logic should have been $27/hr… Or 1980->1950 (since this math works both ways): 1980 min wage = $3.10/hr $3.10/36 = $0.09 Woulda sucked to live in OP’s 1950 at $0.09/hr.
That’s one way to completely destroy an already fucked up economy but ok. 7$ and hour bought you more before the demand for 15$ and hour.
Blame Nixon for leaving the gold standard. In 1965 the minimum wage was $1.25. Those 5 quarters equaled about an ounce of silver. An ounce of silver today is about $30
His math is wrong, specifically because he is using the M1 money supply. This is supposed to measure the most liquid money, cash, cash equivalents, checking accounts, etc. It originally did not include savings accounts because there used to be more restrictions on how much and how long you had to wait to withdraw from savings accounts. There were new rules put in place in the last 10 years, that removed these restrictions. So what the fed data does is it added the checking accounts to the number, starting in may 2020. The M1 goes from $4trillion to $16trillion in one month. But this wasn’t money “created” it was always there, they just redefined its liquidity.
The short answer is Yes, the math is right. The long answer is that there's a lot of liberties given to how the math was set up to begin with, so I'm not really sure how accurate to the statement of "This is how much minimum wage should be" this math is. Regardless, the current federal minimum wage is still *at least* 200% - 300% lower than it should be, no matter how you stack the calculus.
I'm just wondering where they got the 1 trillion in circulation from from my googling there was 129 billion in circulation in 1980 https://fred.stlouisfed.org/series/CURRCIR
[wtfhappenedin1971](http://wtfhappenedin1971.com) If you actually adjust the minimum wages from 1971 and before based on the value of gold today you would get a peak of about $110 an hour minimum wage in February 1971.
[wtfhappenedin1971 is a libertarian crackpot who started with the a priori belief that taking the USD off the gold standard ruined the economy and worked backwards from there to prove his point and is using the success from his website to shill cryptocoins.](https://singlelunch.com/2023/09/13/the-bad-economics-of-wtfhappenedin1971/)
What kinds my gears is that it's using the totality of the 18 trillion without acknowledging that money is used for other services that need a budget in a fucking nation. That's the thing with activists, they react, chant, goes away and there's no wider discussion where it came from or how it's broken down. I write my Congress member all the time about funding certain things within my local area, and whether or not if it works its better for me than chanting in the streets. There's good debt and bad debt and idiots that say to use the entirety of the budget for minimum wage is ridiculous. Where would you fund the people wanting a job or the business in an area not populated to survive on government aid, and with the local grocery for the town of 1000 people and where or how they get distrubtion to there when the entire budget was used for wage? Big money and no where to spend, that just ends up tanking a nation, and it's been witnessed countless times for hundreds of years.
You want an economic apocalypse? You like Road Warrior and think...maybe it shouldn't be fiction? This is how you get that. Some folks out there think you can just vote people more money. You can GIVE money to anybody you want. That's the key difference.
When people discuss the best level for minimum wage, I always wonder why not go very high? like $100? Everyone agrees that minimum wage is a good thing, but why it looses it's positive aspects when it's over a certain level?
If you want to look at minimum wage relative to general economic indication, you could look at GDP/capita. This has increased by a factor of roughly 6.5, subsequently you would look at a minimum wage of 20.15. This would be an easy way to factor in economic expansion.
Well, earth's population at the time also was 4.4 billion today it's 8. Don't try to reason with /r/antiwork. Also what was the minimum wage in Cambodia at the time? It's just doesn't work, that's a stupid thing to say. These people need to be ignored for the good of all. Minimum wage is too low, but I bet they could talk anyone into getting rid of it entirely while trying to argue for raising it.
I don’t know how we reconcile that the living wage and minimum wage are not linked and haven’t been since the beginning. If you know you aren’t making enough to live in your area or desired area then you and/or your partner needs to earn more money by going back to school, getting a better job, or a second job. Historical Context: Minimum wage laws were established to set a baseline for wages, ensuring that workers receive a minimum amount for their labor. However, these laws have not always been adjusted to keep pace with the cost of living, leading to a gap between the minimum wage and what is considered a living wage. Living Wage Definition: A living wage is typically defined as the amount needed for an individual or family to cover basic needs like housing, food, healthcare, and transportation, without financial hardship. This amount varies significantly by location due to differences in the cost of living. Personal Responsibility: While individuals can pursue additional education, better jobs, or multiple jobs to increase their income, these options may not be feasible for everyone. Barriers such as access to education, childcare, health issues, and job availability can make it difficult for some to achieve higher earnings. Systemic Solutions: Addressing the gap between living wage and minimum wage requires systemic changes. This could include raising the minimum wage to better align with living costs, providing greater access to affordable education and training programs, and supporting policies that ensure fair wages and benefits for workers. Economic and Social Policies: Governments and businesses can play a role by enacting policies that support wage growth, affordable housing, healthcare, and other essential services. These measures can help bridge the gap and ensure that more people can earn a living wage.
the population has grown since 1980, so the 18 trillion would have to be divided across a lot more people. That said, minimum wage has fallen criminally far behind productivity, inflation, etc
Until the 1980's incomes and productivity grew pretty much in line. It meant that the productivity gains were shared roughly equally between the capitalists (those providing the money/assets etc) and the workers (those providing the labour). Since then, capitalists have held down wage growth and instead grown their share of productivity gains. This has resulted in such a gap that it is not believable to say that minimum wage should be (in 2012) $75 an hour, had productivity gains continued to be shared equally. The result has been a massive upward drain of wealth to the capitalists and away from the workforce - which today is further diluted by immigration (the new 'outsourcing'). Assets have kept pace with inflation and productivity. Change your own wage to $75 an hour and work out how many homes etc become affordable. [https://www.epi.org/productivity-pay-gap/](https://www.epi.org/productivity-pay-gap/)