Monday, March 18, 2013

Senator Warren On Productivity Growth Returns And The Minimum Wage: It Sure Didn't Go To The Worker

From "Elizabeth Warren: Minimum Wage Would Be $22 An Hour If It Had Kept Up With Productivity":

"'If we started in 1960 and we said that as productivity goes up, that is as workers are producing more, then the minimum wage is going to go up the same. And if that were the case then the minimum wage today would be about $22 an hour,' she said, speaking to Dr. Arindrajit Dube, a University of Massachusetts Amherst professor who has studied the economic impacts of minimum wage. 'So my question is Mr. Dube, with a minimum wage of $7.25 an hour, what happened to the other $14.75? It sure didn't go to the worker.' 
Dube went on to note that if minimum wage incomes had grown over that period at the same pace as it had for the top 1 percent of income earners, the minimum wage would actually be closer to $33 an hour than the current $7.25."

Senator Warren apparently wasn't actually arguing for a $22 / hour minimum wage but rather only something over $10 / hour. Still, it's quite an observation.

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