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And if they had kept up since 1949, minimum wage would be $4.22 an hour. Two can play the game of cherrypicking troughs and peaks. Additionally, average product

And if they had kept up since 1949, minimum wage would be $4.22 an hour. Two can play the game of cherrypicking troughs and peaks. Additionally, average productivity is not minimum wage productivity. They are separate statistics, and the bulk of the efficiency gains have not been made at the burger flipper level, but at higher levels, where there have been huge gains in pay. The productivity gains in engineering and manufacturing and energy production, etc... have dragged up the average. Someone stocking shelves in 2020 is about productive as someone stocking shelves in 1968. https://www.cnn.com/interactive/2019/business/us-minimum-wage-by-year/index.html https://www.cnn.com/interactive/2019/business/us-minimum-wag...

pmiller2 6y ago
It's not cherry picking when wages have been stagnant for the last 40+ years.
- missedthecue 6y ago
  Wages have not stagnated. Disposable income adjusted for inflation is up enormously since 1968, while at the same time, the average number of working hours per year is at an all time low. This is according to data collected by the federal reserve. https://fred.stlouisfed.org/graph/fredgraph.png?g=rKwm https://fred.stlouisfed.org/graph/fredgraph.png?g=rKwm
  - cryptoz 6y ago
    Wages have stagnated. Your graphs aren't really relevant to this question; so what if per capita disposable income has increased? That doesn't say anything at all about wages of people in America. Here is a more complete picture, with words and discussion and multiple graphs too: https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/ https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...
    - missedthecue 6y ago
      My graph also shows median income, and it clearly shows it has not stagnated, but risen, and not by any small amount.
      - cryptoz 6y ago
        Median income has nothing to do with real wage stagnation.
        pmiller2 6y ago
        It is real median income being shown, but that doesn’t show the full picture. For one thing, we need the definition of "disposable income" that's being used here.
      - pmiller2 6y ago
        Now, overlay that with a graph of productivity over time. Observe that productivity growth has greatly exceeded wage growth. Speculate on where the gains due to productivity have gone, if they’re not being shared with workers. There’s a story to tell here, but you’re not showing it.
        smaryjerry 6y ago
        Productivity has nothing to do with wages. If you worked 4 hours writing a book by hand or 4 hours writing a book on a computer with spell check, you were more productive but it has nothing to do with skill of the user but the technology of the time. Another example is in the 90s only rich has cell phones, now everyone Does, does that mean everyone is now rich? Quality of life is vastly better for the world now.
        pmiller2 6y ago
        You should read an economics textbook, then come back and tell me again with a straight face that productivity doesn't affect wages. You don't seem to have an understanding of the issues, and your examples are so irrelevant as to be not even wrong. Roughly, the way it "should" work is that if Company A and Company B are in the same industry, and Company A is more productive than Company B, free market forces cause Company A to pay more than Company B, thus improving their ability to compete for workers. Generalize this to an entire industry of competing companies, and then to an entire economy.
  - SketchySeaBeast 6y ago
    The graph is truly awful for showing hours worked. Also, what's that gigantic leap in disposable income? Are we to believe that on average American's have $50,000 worth of disposable income when they didn't before? I think that relies heavily on which version of average is being discussed.
    - missedthecue 6y ago
      the spike in the last year is an glitch in their display software, but it doesn't change the central point of what's being shown here. What version of average do you think is appropriate?
      - SketchySeaBeast 6y ago
        https://fred.stlouisfed.org/series/A229RX0 https://fred.stlouisfed.org/series/A229RX0 Even here there is a definitive and deliberate bump right during the beginning of the COVID times. I don't believe that's an artifact. Somehow this analysis is saying people are vastly better in August than they were in February. I think that "average" in most of the different versions is useless. The millionaire and billionaire classes can be so over-represented they can draw the rest up. It doesn't answer if all of society is actually becoming more well off or just the cream continuing to rise.
        pmiller2 6y ago
        The "COVID bump" is driven primarily by stimulus checks and enhanced unemployment benefits: https://www.marketwatch.com/story/personal-income-surges-105-in-april-on-the-back-of-government-relief-payments-but-spending-lags-2020-05-29 https://www.marketwatch.com/story/personal-income-surges-105...
        SketchySeaBeast 6y ago
        In this case it would seem that that money is less "disposable" and more "extremely import to ration". I must not understand the definition of disposable.
  - proverbialbunny 6y ago
    I wonder how this chart would look if it factored in living expenses.
    - pmiller2 6y ago
      Housing, education, and healthcare expenses have all increased faster than the rate of inflation, so, it would not look good. Not good at all.
- gwright 6y ago
  I'm not sure exactly what the data shows but total compensation would seem to be the more reasonable thing to look at. In particular the value associated with health insurance and other non-cash compensation has gone up.
  - pmiller2 6y ago
    No, "total compensation" includes things like health insurance benefits that simultaneously have gotten more expensive in real terms over time, and don't put money in my pocket. If I could go to my landlord and trade them a months' worth of health insurance benefits for rent, then you'd be on to something. If you could find a way to separate out the part of "total compensation" that actually contributes to income, such as stock grants & such, then we could talk. But, just "total compensation" doesn't cut it. If you really want to get a true picture of how screwed the American worker is, take a look at housing and education costs over time, as well. Both have increased faster than inflation, and vastly outpaced wage growth; yet everyone needs a home, and a college degree is practically a requirement for any vaguely middle-class career.
    - gwright 6y ago
      Those benefits are income to you. Not taxable income, but they have a non-zero value. They certainly appear on the balance sheet of your employer and represent an increase in their total payroll costs.
      - pmiller2 6y ago
        I don't care if they appear on my employer's balance sheet. They don't pay my rent, literally. You can say "screw insurance; we're offering all employees this super expensive concierge medical plan," and that literally has no effect on my balance sheet, which is the problem if you want me to be a good consumer in the economy and buy stuff. Or, if you don't think we need more homeless people in this country. If you want to look at the "value" of, say, an employer's group health insurance plan to me, what you really need to look at is the difference between buying the exact same coverage as an individual versus participating in the group plan. This is not an analysis that can typically be performed, because insurance companies don't want you to be able to compare on price like that. But, assuming you could, if I got, say, a $100 discount per month, and I was going to buy that coverage anyway, then, sure, you'd have a good case for calling that +$100 on my balance sheet.
bichiliad 6y ago
I think "kept pace" implies that if the trend were to continue. In your link, it looks like the trend for adjusted wages from the 40s to the early 70s is up and to the right, but after that point it reverses. Those two graphs still tell the same story to me.
WalterBright 6y ago
Also, "total compensation" is the correct thing to compare with, not "wage". Total compensation includes the value of benefits and the (so-called) employer contribution to taxes. Total compensation can be up to 40% more than salary.
- adkadskhj 6y ago
  Wouldn't that be relative, too? Eg if "total wage"'s point was to show lost benefits, the cost in the implied benefits would be relative to what those benefits relieve you from. Which is to say, insurance these days might be worth vastly more than it was in 1968, since Healthcare costs have skyrocketed for the uninsured.
- deleted 6y ago
  [deleted]
BurningFrog 6y ago
A simple thing to remember is that any minimum wage stat that takes 1968 as the base year is deliberately misleading. It was the first thing I thought when opening this, and as so often, it was the case.
slg 6y ago
>Someone stocking shelves in 2020 is about productive as someone stocking shelves in 1968. This is not completely fair. There are countless innovations that have allowed these low skill jobs to have an increase in efficiency and productivity. One example, when I was a teen and worked retail I remember we would all have to spend hours going around the store counting every product on the shelves in order to do our routine inventory checks because there was no other reasonable way to track that information. Now many stores have intelligent inventory tracking that requires little to no work from employees. The end result is that these employees are more efficient, stores need less workers, and stores can carry less inventory. Why isn't the benefit of that efficiency passed on to those employees who are now more efficient? How is that any different than a software developer receiving a higher salary because they are more efficient due to computers being more powerful?
- cafed00d 6y ago
  > Now many stores have intelligent inventory tracking that requires little to no work from employees. > Why isn't the benefit of that efficiency passed on to those employees who are now more efficient? It is, though, right? It is passed on to the employees who were responsible for the efficiency gains. Those employees who built those innovations — could be employees of retailer, or employees of the companies, say tech companies, for whom the retailer is a customer. I think the parent commenter’s point is still valid that: >>Someone stocking shelves in 2020 is about productive as someone stocking shelves in 1968. I would phrase it slightly differently: “the skill of stocking shelves in 2020 has been as efficient as it has been in 1968”. It’s the skill of creating innovations in inventory tracking , better statistical modeling and predictions/estimates, and probably the advent of tracking all this in digital systems that has multiplied the efficiency at the macro level. Employees who are stocking shelves have not been able to participate in those contributions.
  - slg 6y ago
    That is a reasonable retort, but it ignores that last question I asked. >How is that any different than a software developer receiving a higher salary because they are more efficient due to computers being more powerful? I'll admit software developers might be a bad example for that given question since they are responsible for some downstream efficiency, but the overall point still stands. Why do high skill jobs get to capture the value of their increased efficiency but low skills jobs don't?
monadic2 6y ago
That leads to the natural conclusion that only people valued by those in power will see society's benefits. That's not a society I want to live in.
thebradbain 6y ago
Assuming you cherry-picked the lowest wage and this article cheery-picked the highest when compared to productivity gains, a naive split right down the center would yield a wage of $14.11/hr — or almost double federal minimum wage today. I throw this number out there not for it to be taken seriously on its own purely because it’s “in the middle”, but to hopefully put into perspective how large this gap is, again naively assuming the “correct” number is somewhere between the two extremes. I personally find it harder to imagine that the “correct” minimum wage is closer to $4.22 than it is to $14.11 or even $24, but that’s just me.
tylerhou 6y ago
> And if they had kept up since 1949, minimum wage would be $4.22 an hour. Two can play the game of cherrypicking troughs and peaks. This is just wrong: the article is not talking about inflation; it is talking about indexing the minimum wage to productivity. Eyeballing the graph from the original article (and projecting productivity back to 1949), if indexed to productivity, then minimum wage would be at ~$15. Your subsequent criticisms have more merit, but the article addresses them as well. You may disagree with the article's arguments, but you should at least acknowledge them. > It would be claimed that the productivity of minimum wage workers has not kept pace with average productivity growth, so that it would not be feasible for minimum wage workers to earn pay that rises in step with average productivity growth. > There is some truth to this claim, but only at a superficial level. The productivity of any individual worker is determined not just by their skills and technology, but also by the institutional structure we put in place.
- pldr1234 6y ago
  Trickle down economics has created one of the greatest rifts in wealth equality in history. Yet people like the GP still champion the concept and its variants. I earn fantastically at work, but any vote I make will always be against the political party that spouts the same nonsense.
  - andrewjl 6y ago
    "Trickle down economics" did not cause that, a massive regulatory complex that protects incumbent monopolies did. An extensive rollback of regulatory complexity or a small business safe harbor exemption from everything but the critical health & safety pieces along with a Henry George land tax would solve our impasse. These are, sadly, not very popular policies. The most durable way to build middle class wealth is entrepreneurship. And not the SV kind. Family-owned business have something very few publicly traded ones do... long time horizons. We've destroyed the ability for the middle class to do that outside a select coterie of sectors.
    - hannasanarion 6y ago
lukewrites 6y ago
Help me to understand how you're reading this graph. I understand it to mean that in 1949 minimum wage was $4.22 an hour in 2018 dollars. Does that graph show worker productivity as well? Similarly I do not understand your assertion that the author is "cherrypicking troughs and peaks". from tfa: > Until 1968, the minimum wage not only kept pace with inflation, it rose in step with productivity growth. The logic is straightforward; we expect that wages in general will rise in step with productivity growth. For workers at the bottom to share in the overall improvement in society’s living standards, the minimum wage should also rise with productivity. Is their assertion regarding 1968 and minimum wage factually incorrect?
DeonPenny 6y ago
Not to mention the minimum wage was randomly picked by a govt worker. Who says the wage picked at any given time would be the best minimum wage and would have negative consequence like other minimum wage increases.
hn_throwaway_99 6y ago
> Someone stocking shelves in 2020 is about productive as someone stocking shelves in 1968. Note there was an article on the HN front page just in the past week or so about how Amazon warehouse workers were getting more repetitive stress injuries because partial warehouse automation allowed them to fulfill 3x the number of items per hour than before these systems were put in place.

pmiller2 6y ago

It's not cherry picking when wages have been stagnant for the last 40+ years.

missedthecue 6y ago
Wages have not stagnated. Disposable income adjusted for inflation is up enormously since 1968, while at the same time, the average number of working hours per year is at an all time low. This is according to data collected by the federal reserve. https://fred.stlouisfed.org/graph/fredgraph.png?g=rKwm https://fred.stlouisfed.org/graph/fredgraph.png?g=rKwm
- cryptoz 6y ago
  Wages have stagnated. Your graphs aren't really relevant to this question; so what if per capita disposable income has increased? That doesn't say anything at all about wages of people in America. Here is a more complete picture, with words and discussion and multiple graphs too: https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/ https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...
  - missedthecue 6y ago
    My graph also shows median income, and it clearly shows it has not stagnated, but risen, and not by any small amount.
    - cryptoz 6y ago
      Median income has nothing to do with real wage stagnation.
      - pmiller2 6y ago
        It is real median income being shown, but that doesn’t show the full picture. For one thing, we need the definition of "disposable income" that's being used here.
    - pmiller2 6y ago
      Now, overlay that with a graph of productivity over time. Observe that productivity growth has greatly exceeded wage growth. Speculate on where the gains due to productivity have gone, if they’re not being shared with workers. There’s a story to tell here, but you’re not showing it.
      - smaryjerry 6y ago
        Productivity has nothing to do with wages. If you worked 4 hours writing a book by hand or 4 hours writing a book on a computer with spell check, you were more productive but it has nothing to do with skill of the user but the technology of the time. Another example is in the 90s only rich has cell phones, now everyone Does, does that mean everyone is now rich? Quality of life is vastly better for the world now.
        pmiller2 6y ago
        You should read an economics textbook, then come back and tell me again with a straight face that productivity doesn't affect wages. You don't seem to have an understanding of the issues, and your examples are so irrelevant as to be not even wrong. Roughly, the way it "should" work is that if Company A and Company B are in the same industry, and Company A is more productive than Company B, free market forces cause Company A to pay more than Company B, thus improving their ability to compete for workers. Generalize this to an entire industry of competing companies, and then to an entire economy.
- SketchySeaBeast 6y ago
  The graph is truly awful for showing hours worked. Also, what's that gigantic leap in disposable income? Are we to believe that on average American's have $50,000 worth of disposable income when they didn't before? I think that relies heavily on which version of average is being discussed.
  - missedthecue 6y ago
    the spike in the last year is an glitch in their display software, but it doesn't change the central point of what's being shown here. What version of average do you think is appropriate?
    - SketchySeaBeast 6y ago
      https://fred.stlouisfed.org/series/A229RX0 https://fred.stlouisfed.org/series/A229RX0 Even here there is a definitive and deliberate bump right during the beginning of the COVID times. I don't believe that's an artifact. Somehow this analysis is saying people are vastly better in August than they were in February. I think that "average" in most of the different versions is useless. The millionaire and billionaire classes can be so over-represented they can draw the rest up. It doesn't answer if all of society is actually becoming more well off or just the cream continuing to rise.
      - pmiller2 6y ago
        The "COVID bump" is driven primarily by stimulus checks and enhanced unemployment benefits: https://www.marketwatch.com/story/personal-income-surges-105-in-april-on-the-back-of-government-relief-payments-but-spending-lags-2020-05-29 https://www.marketwatch.com/story/personal-income-surges-105...
        SketchySeaBeast 6y ago
        In this case it would seem that that money is less "disposable" and more "extremely import to ration". I must not understand the definition of disposable.
- proverbialbunny 6y ago
  I wonder how this chart would look if it factored in living expenses.
  - pmiller2 6y ago
    Housing, education, and healthcare expenses have all increased faster than the rate of inflation, so, it would not look good. Not good at all.
gwright 6y ago
I'm not sure exactly what the data shows but total compensation would seem to be the more reasonable thing to look at. In particular the value associated with health insurance and other non-cash compensation has gone up.
- pmiller2 6y ago
  No, "total compensation" includes things like health insurance benefits that simultaneously have gotten more expensive in real terms over time, and don't put money in my pocket. If I could go to my landlord and trade them a months' worth of health insurance benefits for rent, then you'd be on to something. If you could find a way to separate out the part of "total compensation" that actually contributes to income, such as stock grants & such, then we could talk. But, just "total compensation" doesn't cut it. If you really want to get a true picture of how screwed the American worker is, take a look at housing and education costs over time, as well. Both have increased faster than inflation, and vastly outpaced wage growth; yet everyone needs a home, and a college degree is practically a requirement for any vaguely middle-class career.
  - gwright 6y ago
    Those benefits are income to you. Not taxable income, but they have a non-zero value. They certainly appear on the balance sheet of your employer and represent an increase in their total payroll costs.
    - pmiller2 6y ago
      I don't care if they appear on my employer's balance sheet. They don't pay my rent, literally. You can say "screw insurance; we're offering all employees this super expensive concierge medical plan," and that literally has no effect on my balance sheet, which is the problem if you want me to be a good consumer in the economy and buy stuff. Or, if you don't think we need more homeless people in this country. If you want to look at the "value" of, say, an employer's group health insurance plan to me, what you really need to look at is the difference between buying the exact same coverage as an individual versus participating in the group plan. This is not an analysis that can typically be performed, because insurance companies don't want you to be able to compare on price like that. But, assuming you could, if I got, say, a $100 discount per month, and I was going to buy that coverage anyway, then, sure, you'd have a good case for calling that +$100 on my balance sheet.

bichiliad 6y ago

I think "kept pace" implies that if the trend were to continue. In your link, it looks like the trend for adjusted wages from the 40s to the early 70s is up and to the right, but after that point it reverses. Those two graphs still tell the same story to me.

WalterBright 6y ago

Also, "total compensation" is the correct thing to compare with, not "wage". Total compensation includes the value of benefits and the (so-called) employer contribution to taxes. Total compensation can be up to 40% more than salary.

adkadskhj 6y ago
Wouldn't that be relative, too? Eg if "total wage"'s point was to show lost benefits, the cost in the implied benefits would be relative to what those benefits relieve you from. Which is to say, insurance these days might be worth vastly more than it was in 1968, since Healthcare costs have skyrocketed for the uninsured.
deleted 6y ago
[deleted]

BurningFrog 6y ago

A simple thing to remember is that any minimum wage stat that takes 1968 as the base year is deliberately misleading. It was the first thing I thought when opening this, and as so often, it was the case.

slg 6y ago

>Someone stocking shelves in 2020 is about productive as someone stocking shelves in 1968. This is not completely fair. There are countless innovations that have allowed these low skill jobs to have an increase in efficiency and productivity. One example, when I was a teen and worked retail I remember we would all have to spend hours going around the store counting every product on the shelves in order to do our routine inventory checks because there was no other reasonable way to track that information. Now many stores have intelligent inventory tracking that requires little to no work from employees. The end result is that these employees are more efficient, stores need less workers, and stores can carry less inventory. Why isn't the benefit of that efficiency passed on to those employees who are now more efficient? How is that any different than a software developer receiving a higher salary because they are more efficient due to computers being more powerful?

cafed00d 6y ago
> Now many stores have intelligent inventory tracking that requires little to no work from employees. > Why isn't the benefit of that efficiency passed on to those employees who are now more efficient? It is, though, right? It is passed on to the employees who were responsible for the efficiency gains. Those employees who built those innovations — could be employees of retailer, or employees of the companies, say tech companies, for whom the retailer is a customer. I think the parent commenter’s point is still valid that: >>Someone stocking shelves in 2020 is about productive as someone stocking shelves in 1968. I would phrase it slightly differently: “the skill of stocking shelves in 2020 has been as efficient as it has been in 1968”. It’s the skill of creating innovations in inventory tracking , better statistical modeling and predictions/estimates, and probably the advent of tracking all this in digital systems that has multiplied the efficiency at the macro level. Employees who are stocking shelves have not been able to participate in those contributions.
- slg 6y ago
  That is a reasonable retort, but it ignores that last question I asked. >How is that any different than a software developer receiving a higher salary because they are more efficient due to computers being more powerful? I'll admit software developers might be a bad example for that given question since they are responsible for some downstream efficiency, but the overall point still stands. Why do high skill jobs get to capture the value of their increased efficiency but low skills jobs don't?

monadic2 6y ago

That leads to the natural conclusion that only people valued by those in power will see society's benefits. That's not a society I want to live in.

thebradbain 6y ago

Assuming you cherry-picked the lowest wage and this article cheery-picked the highest when compared to productivity gains, a naive split right down the center would yield a wage of $14.11/hr — or almost double federal minimum wage today. I throw this number out there not for it to be taken seriously on its own purely because it’s “in the middle”, but to hopefully put into perspective how large this gap is, again naively assuming the “correct” number is somewhere between the two extremes. I personally find it harder to imagine that the “correct” minimum wage is closer to $4.22 than it is to $14.11 or even $24, but that’s just me.

tylerhou 6y ago

> And if they had kept up since 1949, minimum wage would be $4.22 an hour. Two can play the game of cherrypicking troughs and peaks. This is just wrong: the article is not talking about inflation; it is talking about indexing the minimum wage to productivity. Eyeballing the graph from the original article (and projecting productivity back to 1949), if indexed to productivity, then minimum wage would be at ~$15. Your subsequent criticisms have more merit, but the article addresses them as well. You may disagree with the article's arguments, but you should at least acknowledge them. > It would be claimed that the productivity of minimum wage workers has not kept pace with average productivity growth, so that it would not be feasible for minimum wage workers to earn pay that rises in step with average productivity growth. > There is some truth to this claim, but only at a superficial level. The productivity of any individual worker is determined not just by their skills and technology, but also by the institutional structure we put in place.

pldr1234 6y ago
Trickle down economics has created one of the greatest rifts in wealth equality in history. Yet people like the GP still champion the concept and its variants. I earn fantastically at work, but any vote I make will always be against the political party that spouts the same nonsense.
- andrewjl 6y ago
  "Trickle down economics" did not cause that, a massive regulatory complex that protects incumbent monopolies did. An extensive rollback of regulatory complexity or a small business safe harbor exemption from everything but the critical health & safety pieces along with a Henry George land tax would solve our impasse. These are, sadly, not very popular policies. The most durable way to build middle class wealth is entrepreneurship. And not the SV kind. Family-owned business have something very few publicly traded ones do... long time horizons. We've destroyed the ability for the middle class to do that outside a select coterie of sectors.
  - hannasanarion 6y ago

lukewrites 6y ago

Help me to understand how you're reading this graph. I understand it to mean that in 1949 minimum wage was $4.22 an hour in 2018 dollars. Does that graph show worker productivity as well? Similarly I do not understand your assertion that the author is "cherrypicking troughs and peaks". from tfa: > Until 1968, the minimum wage not only kept pace with inflation, it rose in step with productivity growth. The logic is straightforward; we expect that wages in general will rise in step with productivity growth. For workers at the bottom to share in the overall improvement in society’s living standards, the minimum wage should also rise with productivity. Is their assertion regarding 1968 and minimum wage factually incorrect?

DeonPenny 6y ago

Not to mention the minimum wage was randomly picked by a govt worker. Who says the wage picked at any given time would be the best minimum wage and would have negative consequence like other minimum wage increases.

hn_throwaway_99 6y ago

> Someone stocking shelves in 2020 is about productive as someone stocking shelves in 1968. Note there was an article on the HN front page just in the past week or so about how Amazon warehouse workers were getting more repetitive stress injuries because partial warehouse automation allowed them to fulfill 3x the number of items per hour than before these systems were put in place.