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this post was submitted on 27 Sep 2023
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Today I Learned
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This kind of context?
$1 in 1938 is equivalent in purchasing power to about $21.77 today, an increase of $20.77 over 85 years. The dollar had an average inflation rate of 3.69% per year between 1938 and today, producing a cumulative price increase of 2,077.49%.
Minimum wage workers today have less purchasing power than they did in the Great Depression
If $1 then is now equivalent to $21.77, then that $0.25 minimum wage then would today only be $5.44 (25% of $21.77). $7.25 represents 133% more purchasing power.
The fuck kinda dollar store math are you doing?
He is actually correct. The math does check out.
The minimum wage in 1938 was worth about $5.44 in today's money. The peak minimum wage adjusted for inflation was in 1968 which would have been worth $13.46 in today's money
https://en.m.wikipedia.org/wiki/Minimum_wage_in_the_United_States
The math checks out what are you looking at?
Their math is correct. What is wrong is that prices increases have little to do with inflation. IMO inflation is happening because of the rabid greedy capitalism. Prices are moving only in upward direction.
97¢ store, you did the math wrong
Why are you comparing $1 to $0.25? This is an incorrect way to compare relative purchasing power.
As already pointed out, if $1 in 1938 is equivalent to $21.77 today, then $0.25 in 1938 is equivalent to $5.44 today ($21.76 / 4). Since minimum wage is $7.25, they are earning more per hour now after adjusting for inflation.
Another way to think about it is if someone wanted to buy something for $1 in 1938, they'd need 4 hours of minimum wage work ($1 / $0.25 = 4 hrs). That same $1 expense would be $21.77 today, or $21.77/7.25 = 3.0 hours of minimum wage work.
This isn't necessarily justification that the minimum wage isn't in need of an increase today, by the way. I personally think it needs an increase (among other work reforms) and is a decent argument that minimum wage in the US has been too low since it's inception. But it has increased since 1938 after adjusting for inflation.
I think some of you are conflating inflation and price increases. Inflation is the decrease in the value of money. Price increases are increases in the cost of commodities. I know that sounds a little pedantic, but while inflation can cause price increases, so can other things (things like taxes or monopolies). If the cost of living were locked to inflation, then yes, you'd see a 33% increase in the value of minimum wage. As an example, a 2 bedroom house was around $3900 in 1938. If you made minimum wage, then a house costs about 4 years' worth of labor. It's harder to get stats like that today because it varies so much by region... but I live in a pretty low cost-of-living state, and the median cost of a 2 bedroom house here is around $240k. Minimum wage today will earn you about $15k annually, meaning a house now costs 16 years' worth of labor.
I meant to say 7$ doesn't mean much. It's like saying company share price went up by 7$, that's why stock market changes are expressed in % not in $.