Ampersand

Minimum Wage Theory

By B. Deutsch

This article is from the May/June 2008 issue of Dollars & Sense: The Magazine of Economic Justice available at http://www.dollarsandsense.org/archives/2008/0508toon.html


issue 276 cover

This article is from the May/June 2008 issue of Dollars & Sense magazine.

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This cartoon is from the May/June 2008 issue of Dollars & Sense: The Magazine of Economic Justice available at http://www.dollarsandsense.org

Ampersand cartoon on the minimum wage


The Short Run

Minimal Wage Increase

By Jason Son

Here's some good news for California's low-wage workers: in January, more than one million workers received a pay raise of 50 cents, to $8 an hour, as the state completed a two-step process of increasing the minimum wage. But now the bad news: because of inflation, the beneficial effects of the pay increase will be wiped out in just two years, according to the online newsletter "California Progress Report."

In addition, workers on the lowest rung of the wage ladder will only earn $16,640 in 2008. This is still below the federal poverty line for a family of three; in other words, working full time at the new minimum wage still won't cover the basic expenses of a small household. And this benchmark does not take into account California's relatively high cost of living.

An alternative to the periodic, hard-fought battles to enact minimum-wage hikes that still fail to keep bottom-rung wages level with the cost of living would be to index the minimum wage to inflation. Under such a policy, the minimum wage would automatically adjust each year in step with a basic price index, allowing the lowest-paid workers to at least maintain their (very modest) spending power.

Jason Son is a Dollars & Sense intern.

Barry Deutsch is a cartoonist living in Portland, Ore. An original "Ampersand" cartoon appears in every issue of D&S. See more of his work at amptoons.com.

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