A Bell-Shaped Curve Reflects a Healthy Middle Class, We Don't Have One

Do you remember from school the Bell-Shaped Curve? 

Investopedia defines the Bell-Shaped Curve as:  "The most common type of distribution for a variable. The term Bell Curve comes from the fact that the graph used to depict a normal distribution consists of a bell-shaped line. The highest point in the curve, or the top of the bell, represents the most probable event. All possible occurrences are equally distributed around the most probable event, which creates a downward-sloping line on each side of the peak."

In a democratic society with a healthy market economy, we would expect to see most of the people earning approximately the middle income. So our Bell-Shaped Curve would show that middle income is the most frequently occurring income and most incomes surround the middle. Most incomes fit under the domed part of the bell. 

In an ideal Bell-Shaped Curve, shown below, the most normal income distribution expected, the closer we get to the middle income, the more people earn it: Both above and below. And, the further we get from the middle income, the fewer people earn it: So the fewest number of people are very poor or very rich. 

According to the IRS, in 2010, the U.S. income distribution, presented as number of personal income tax returns by income range, of all Americans was not a Bell-Shaped Curve -- quite far from it. The chart from the IRS below shows the share of personal income tax returns by income group. It shows an income distribution skewed heavily towards the lower income groups. In 2010, extremely few earned high incomes, the largest percentage was in the middle income region, and nearly an equally large number of Americans earned low incomes. As the trend line indicates, this reflects an economy with a bulging low-income population.

The appropriate economic policies for a democratic society with a healthy market economy would be those that greatly reduce the number of people at the low income side of the curve -- moving them into the middle class "dome of the bell" -- and greatly the number of people at the high income side of the curve, so we move towards a normal income distribution and evolve the society more democratic and economy more healthy: A Bell-Shaped Curve.

Charts below from the IRS, show U.S. income distribution, based on number of income tax returns at income ranges in the 2 years prior to 2008 Wall Street Crash ... and that there was NO Bell-Shaped Curve even distribution of income. In fact, distribution of income was even worse when U.S. economy was humming along.

The Chart below compares number of IRS individual income tax returns filed in 1985, 2006, and 2007. The U.S. dollar inflation calculator estimates that $1 in 1985 would be worth nearly double in 2006 and 2007. (Inflation 1985-2006 totaled 87.4% and inflation 1985-2007 totaled 92.7%.) 

This impacts the chart below by explaining the decrease in number of tax returns by those earning incomes under $10,000: Noted inflation of 87.4-92.7% would have pushed most of them into the $10,000 to < $30,000 income range. Half as many of individuals in that range would be pushed up into $30,000 to < $50,000. But the yet higher income ranges are much wider, hence less influenced by the inflation. 

Therefore, this chart below shows increase in constant dollars among upper income ranges while the lower and middle remained mainly unchanged.

This final chart, below, shows U.S. median income in constant dollars (all adjusted to 1975 dollars) since the end of World War II as it actually rose and, the dotted line, as it would have risen if the median income rose at the same rate as GDP. 

Notice that median income and per capita GDP rose in proportion until the late 1970's, when median income grew at a far slower, lower rate than per capita GDP rose. During the period discussed above, 1985-2007, the divergence in growth rate worsened. 

All in 1975 constant dollars: Median income was approximately $50,000. It rose to approximately $60,000 by 2007, but could have risen to approximately $90,000 if median income growth had kept pace with per capita GDP growth.  Median income grew by 20% during this period, but could have grown by 80% during this period.


This chart also indicates that, historically, the U.S. bell-shaped curve shift to today's non-bell-shaped curve began approximately in 1970-1980. 

Also starting approximately at that time were financial deregulation, repealing or not enforcing workplace conditions rules, and significantly lowering the tax rates on the upper end of the income population.

Does a rising tide lifts all boats ... and do so proportionately at about the same percentage? Well, it depends upon having a fair playing field. Clearly, tax policy, workplace conditions rules, and financial transaction regulations seem to significantly influence which boats rise. 

by Steve Reichenstein

Minimum Wage, GDP Growth, and Walton-omics

The OECD

Australia's economy has had 20 years of uninterrupted economic growth, low inflation, and low unemployment. Australia even maintained positive GDP growth during the 2008-2010 global recession! 

The chart below shows GDP for Australia and a sample of other nations in the OECD Organization of Economic Cooperation and Development. Australia and the United States are among the members. Australia is regularly among the top performers.

And ... Australia's federal minimum wage is $16.37 per hour ... which is more than $15.00 per hour in U.S. dollars. Minimum wage in the United States is just $7.25. 




The U.S. Federal 

The United States economy has been on a roller coaster of growth and unemployment (but steady at low inflation) for 40 years ... at a U.S. federal minimum wage that has declined in real (constant) dollars and, currently, stands at $7.25 per hour. NOTE that this is the U.S. FEDERAL minimum wage, meaning that employers can pay less in states with lower STATE minimum wages. 

In a 40-hour per week work week, a minimum wage job  at $7.25 per hour pays less than $15,000 per year and at $15.00 per hour pays $20,000 per year. In context, the official United States poverty level is $15,000 per year. 

Yes, minimum wage employees are paid less than the poverty rate. In the United States, the richest nation in history, minimum wage employees literally are "The Working Poor". Is job creation at less than the poverty rate the kind of job creation we want?

Taken together, all of the above and below facts show that in today's global market the minimum wage in an industrialized country does not suppress economic growth or push up inflation and unemployment.

On the contrary, a higher minimum wage likely would expand the economy by an amount greater than a 1:1 ratio -- meaning that for every dollar added to minimum wage the GDP would grow by more than one dollar -- because the velocity of money is highest among the lowest paid. 

Velocity of money is one way of measuring the degree of income sufficiency and of economic health. 

The more personal income you earn, the larger the percentage of that income you are likely to save or invest, rather than spend. And, visa-versa. The more of you your income that you spend, the more that dollar is passed from employee to baker to landlord to auto dealer ... and so on. 

Additionally, the facts -- U.S. Department of Labor economic statistics, since 1938, show that U.S. federal minimum wage has been increased just prior and during economic booms, meaning that minimum wage hikes did not suppress growth in GDP or job creation.

Minimum hourly wage of workers in jobs first covered by

Effective Date		1938 Act 1		1961 Amendments 2		1966 and Subsequent Amendments3
						Nonfarm		Farm
Oct 24, 1938		$0.25
Oct 24, 1939		$0.30
Oct 24, 1945		$0.40
Jan 25, 1950		$0.75
Mar 1, 1956		$1.00
Sep 3, 1961		$1.15		$1.00
Sep 3, 1963		$1.25
Sep 3, 1964				$1.15
Sep 3, 1965				$1.25
Feb 1, 1967		$1.40		$1.40		$1.00		$1.00
Feb 1, 1968		$1.60		$1.60		$1.15		$1.15
Feb 1, 1969						$1.30		$1.30
Feb 1, 1970						$1.45
Feb 1, 1971						$1.60
May 1, 1974		$2.00		$2.00		$1.90		$1.60
Jan. 1, 1975		$2.10		$2.10		$2.00		$1.80
Jan 1, 1976		$2.30		$2.30		$2.20		$2.00
Jan 1, 1977						$2.30		$2.20
Jan 1, 1978		$2.65 for all covered, nonexempt workers
Jan 1, 1979		$2.90 for all covered, nonexempt workers
Jan 1, 1980		$3.10 for all covered, nonexempt workers
Jan 1, 1981		$3.35 for all covered, nonexempt workers
Apr 1, 19904		$3.80 for all covered, nonexempt workers
Apr 1, 1991		$4.25 for all covered, nonexempt workers
Oct 1, 1996		$4.75 for all covered, nonexempt workers
Sep 1, 19975		$5.15 for all covered, nonexempt workers
Jul 24, 2007		$5.85 for all covered, nonexempt workers
Jul 24, 2008		$6.55 for all covered, nonexempt workers
Jul 24, 2009		$7.25 for all covered, nonexempt workers

The U.S. States

The table below pulls a sample of U.S. states to look for a correlation, a relationship, between states' minimum wage and GDP economic growth in 2012 and per capital income rank. I selected states from each geographic section of the nation as well as each range of per capita income in the nation. 

The actual 2012 data shows no relationship between a state's minimum wage, GDP annual economic growth, and/or per capital personal income rank. 

For example, Washington state had one of the highest gains in GDP and highest minimum wage rate, while Texas had the one of the highest gains in GDP and lowest minimum wage rate. California and Minnesota both had 3.5%, among the highest, gains in GDP, yet California had one of the highest minimum wage rate and Minnesota one of the lowest. 

STATE	PER CAPITA INCOME 2012 (RANK)	CHANGE IN GDP 2012 (PERCENT)	MINIMUM WAGE 2012 (DOLLARS)
Washington (state)	13	3.6%	$ 9.19
Connecticut	1	0.0%	$ 8.25
California	11	3.5%	$ 8.00
Minnesota	12	3.5%	$ 7.25
Ohio	26	2.2%	$ 7.85
Florida	21	2.4%	$ 7.79
North Carolina	33	2.7%	$ 7.25
Texas	29	4.8%	$ 7.25

Historical changes in Minimum Wages by State also shows that increases in Minimum Wage have occurred before and during economic booms without impeding, and perhaps improving, GDP economic growth and job creation. The historical table below from the U.S. Department of Labor details specific changes in minimum wage by state by year:  

CHANGES IN BASIC MINIMUM WAGES IN NON-FARM EMPLOYMENT UNDER STATE LAW: SELECTED YEARS 1968 TO 2013

State or other jurisdiction	1968 (a)	1970 (a)	1972	1976 (a)	1979	1980	1981
Federal (FLSA)	$1.15 & $1.60	$1.30 & $1.60	$1.60	$2.20 & $2.30	$2.90	$3.10	$3.35
Alabama	…	…	…	…	…	…	…
Alaska	2.10	2.10	2.10	2.80	3.40	3.60	3.85
Arizona	18.72 - 26.40/wk(b)	18.72 - 26.40/wk(b)	18.72-26.40/wk(b)	…	…	…	…
Arkansas	1.25/day(b)	1.10	1.20	1.90	2.30	2.55	2.70
California	1.65(b)	1.65(b)	1.65(b)	2.00	2.90	2.90	3.35
Colorado	1.00 - 1.25(b)	1.00 - 1.25(b)	1.00 - 1.25(b)	1.00 - 1.25(b)	1.90	1.90	1.90
Connecticut	1.40	1.60	1.85	2.21 & 2.31	2.91	3.12	3.37
Delaware	1.25	1.25	1.60	2.00	2.00	2.00	2.00
Florida	…	…	…	…	…	…	…
Georgia	…	…	1.25	1.25	1.23	1.25	1.25
Hawaii	1.25	1.60	1.60	2.40	2.65	2.90	3.10
Idaho	1.15	1.25	1.40	1.60	2.30	2.30	2.30
Illinois	…	…	1.40	2.10	2.30	2.30	2.30
Indiana	1.15	1.25	1.25	1.25	2.00	2.00	2.00
Iowa	…	…	…	…	…	…	…
Kansas	…	…	…	…	1.60	1.60	1.60
Kentucky	.65 - .75(b)	.65 - .75(b)	.65 - .75(b)	1.60	2.00	2.15	2.15
Louisiana	…	…	…	…	…	…	…
Maine	1.40	1.60	1.40 - 1.80	2.30	2.90	3.10	3.35
Maryland	1.00 & 1.15	1.30	1.60	2.20 & 2.30	2.90	3.10	3.35
Massachusetts	1.60	1.60	1.75	2.10	2.90	3.10	3.35
Michigan	1.25	1.25	1.60	2.20	2.90	3.10	3.35
Minnesota	.70 - 1.15(b)	.70 - 1.15(b)	.75 - 1.60	1.80	2.30	2.90	3.10
Mississippi	…	…	…	…	…	…	…
Missouri	…	…	…	…	…	…	…
Montana	…	…	1.60	1.80	2.00	2.00	2.00
Nebraska	1.00	1.00	1.00	1.60	1.60	1.60	1.60
Nevada	1.25	1.30	1.60	2.20 & 2.30	2.75	2.75	2.75
New Hampshire	1.40	1.45 & 1.60	1.60	2.20 - 2.30	2.90	3.10	3.35
New Jersey	1.40	1.50	1.50	2.20	2.50	3.10	3.35
New Mexico	1.15 - 1.40	1.30 - 1.60	1.30 - 1.60	2.00	2.30	2.65	2.90
State or other jurisdiction	1968 (a)	1970 (a)	1972	1976 (a)	1979	1980	1981
New York	1.60	1.60	1.85	2.30	2.90	3.10	3.35
North Carolina	1.00	1.25	1.45	2.00	2.50	2.75	2.90
North Dakota	1.00 - 1.25	1.00 - 1.45	1.00 - 1.45	2.00 - 2.30	2.10 - 2.30	2.60 - 3.10	2.80 - 3.10
Ohio	.75 - 1.25(b)	.75 - 1.25(b)	.75 - 1.25(b)	1.60	2.30	2.30	2.30
Oklahoma	1.00	1.00	1.40	1.80	2.00	2.00	3.10
Oregon	1.25	1.25	1.25`	2.30	2.30	2.90	3.10
Pennsylvania	1.15	1.30	1.60	2.20	2.90	3.10	3.35
Rhode Island	1.40	1.60	1.60	2.30	2.30	2.65	2.90
South Carolina	…	…	…	…	…	…	…
South Dakota	17.00 - 20.00/wk	1.00	1.00	2.00	2.30	2.30	2.30
Tennessee	…	…	…	…	…	…	…
Texas	…	…	1.40	1.40	1.40	1.40	1.40
Utah	1.00 - 1.15(b)	1.00 - 1.15(b)	1.20 - 1.35(b)	1.55 - 1.70(b)	2.20 - 2.45(b)	2.35 - 2.60(b)	2.50 - 2.75(b)
Vermont	1.40	1.60	1.60	2.30	2.90	3.10	3.35
Virginia	…	…	…	2.00	2.35	2.35	2.65
Washington	1.60	1.60	1.60	2.20 - 2.30	2.30	2.30	2.30
West Virginia	1.00	1.00	1.20	2.00	2.20	2.20	2.75
Wisconsin	1.25 (b)	1.30 (b)	1.45 (b)	2.10	2.80	3.00	3.25
Wyoming	1.20	1.30	1.50	1.60	1.60	1.60	1.60
District of Columbia	1.25 - 1.40	1.60 - 2.00	1.60 - 2.25	2.25 - 2.75	2.46 - 3.00	2.50 - 3.50	2.50 - 3.75
Guam	1.25	1.60	1.90	2.30	2.90	3.10	3.35
Puerto Rico	.43 - 1.60	.43 - 1.60	.65 - 1.60	.76 - 2.50	1.20 - 2.50	1.20 - 2.50	1.20 - 3.10
U.S. Virgin Islands	NA	NA	NA	NA	2.90	3.10	3.35
State or other jurisdiction	1988	1991	1992	1994	1996	1997	1998
Federal (FLSA)	$3.35	$3.80	$4.25	$4.25	$4.25	$4.75	$5.15
Alabama	…	…	…	…	…	…	…
Alaska	3.85	4.30	4.75	4.75	4.75	5.25	5.65
Arizona	…	…	…	…	…	…	…
Arkansas	3.25	3.35	3.65	4.25	4.25[c]	4.25[c]	5.15[c]
California	3.35	4.25	4.25	4.25	4.25	4.75	5.15
Colorado	3.00	3.00	3.00	3.00	3.00	4.75	5.15
Connecticut	3.75	4.25	4.27	4.27	4.27	4.77	5.18
Delaware	3.35	3.80	4.25	4.25	4.65	5.00	5.15
Florida	…	…	…	…	…	…	…
Georgia	3.25	3.25	3.25	3.25	3.25(d)	3.25(d)	3.25(d)
Hawaii	3.85	3.85	3.85	5.25	5.25	5.25	5.25
Idaho	2.30	3.80	4.25	4.25	4.25	4.25	5.15
Illinois	2.30	3.80	4.25	4.25	4.25[c]	4.75[c]	5.15[c]
Indiana	2.00	3.35	3.35	3.35	3.35(e)	3.35(e)	3.35(e)
Iowa	…	4.25	4.65	4.65	4.65	4.75	5.15
Kansas	1.60	2.65	2.65	2.65	2.65	2.65	2.65
Kentucky	3.35	3.80	4.25	4.25	4.25	4.25	4.25
Louisiana	…	…	…	…	…	…	…
Maine	3.65	3.85	4.25	4.25	4.25	4.75	5.15
Maryland	3.35	3.80	4.25	4.25	4.25	4.75	5.15
Massachusetts	3.65	3.75	4.25	4.25	4.75	5.25	5.25
Michigan	3.35	3.35	3.35	3.35	3.35(e)	3.35(e)	5.15(e)
Minnesota	3.55 & 3.50(f)	4.25(g)	4.25(g)	4.25(g)	4.25(g)	4.25(g)	5.15(g)
Mississippi	…	…	…	…	…	…	…
Missouri	…	3.80	4.25	4.25	4.25	4.75	5.15
Montana	3.35	3.80	4.25(g)	4.25(g)	4.25(g)	4.75(g)	5.15(g)
Nebraska	3.35	3.35	4.25	4.25	4.25[c]	4.25[c]	5.15[c]
Nevada	3.35	3.80	4.25	4.25	4.25	4.75	5.15
New Hampshire	3.55	3.85	4.25	4.25	4.25	4.75	5.15
New Jersey	3.35	3.80	4.25	5.05	5.05	5.05	5.05
New Mexico	3.35	3.35	3.35	4.25	4.25	4.25	4.25
New York	3.35	3.80	4.25	4.25	4.25	4.25	4.25
North Carolina	3.35	3.35	3.80	4.25	4.25	4.25	5.15
State or other jurisdiction	1988	1991	1992	1994	1996	1997	1998
North Dakota	2.80 - 3.10	3.40	4.25	4.25	4.25	4.75	5.15
Ohio	2.30	3.80(g)	4.25(g)	4.25(g)	4.25(g)	4.25(g)	4.25(g)
Oklahoma	3.35	3.80(g)	4.25(g)	4.25(g)	4.25(g)	4.75(g)	5.15(g)
Oregon	3.35	4.75	4.75	4.75	4.75	5.50	6.00
Pennsylvania	3.35	3.80	4.25	4.25	4.25	4.75	5.15
Rhode Island	3.65	4.25	4.45	4.45	4.45	5.15	5.15
South Carolina	…	…	…	…	…	…	…
South Dakota	2.80	3.80	4.25	4.25	4.25	4.25	5.15
Tennessee	…	…	…	…	…	…	…
Texas	3.35	3.35	3.35	3.35	3.35	3.35	3.35
Utah	2.50 - 2.75(b)	3.80	4.25	4.25	4.25	4.75	5.15
Vermont	3.55	3.85	4.25	4.25	4.75(e)	5.00(e)	5.25(e)
Virginia	2.65	2.65	3.65	4.25	4.25[c]	4.75[c]	5.15[c]
Washington	2.30	4.25	4.25	4.25	4.90	4.90	4.90
West Virginia	3.35	3.35	3.80	4.25	4.25 (d)	4.25 (d)	4.75 (d)
Wisconsin	3.35	3.80	3.80	4.25	4.25	4.75	5.15
Wyoming	1.60	1.60	1.60	1.60	1.60	1.60	1.60
District of Columbia	3.50 - 4.85	3.70 - 4.85	3.90 - 5.45	4.25	5.25 (h)	5.75	6.15
Guam	3.35	3.80	4.25	4.25	4.25	4.75	5.15
Puerto Rico	1.20 - 3.35	1.20 - 4.25(i)	1.20 - 4.25(i)	1.20 - 4.25(i)	1.20 - 4.75(i)	1.20 - 4.75(i)	1.20 - 5.15(i)
U.S. Virgin Islands	3.35	4..65(g,,j)	4..65(g,,j)	4..65(g,,j)	4.65(g)	4.65(g, j)	4.65(g, j)
State or other jurisdiction	2000	2001	2002	2003	2004	2005	2006
Federal (FLSA)	$5.15	$5.15	$5.15	$5.15	$5.15	$5.15	5.15
Alabama	…	…	…	…	…	…	…
Alaska	5.65	5.65	5.65	7.15	7.15	7.15	7.15
Arizona	…	…	…	…	…	…	…
Arkansas	5.15[c]	5.15[c]	5.15[c]	5.15[c]	5.15[c]	5.15[c]	5.15 [c]
California	5.75	6.25	6.75	6.75	6.75	6.75	6.75
Colorado	5.15	5.15	5.15	5.15	5.15	5.15	5.15
Connecticut	6.15	6.40	6.70	6.90	7.10	7.10	7.40
Delaware	5.65	6.15	6.15	6.15	6.15	6.15	6.15
Florida	…	…	…	…	…	…	6.40
Georgia	3.25(d)	3.25(d)	5.15(d)	5.15(d)	5.15(d)	5.15(d)	5.15(d)
Hawaii	5.25	5.25	5.75	6.25	6.25	6.25	6.75
Idaho	5.15	5.15	5.15	5.15	5.15	5.15	5.15
Illinois	5.15[c]	5.15[c]	5.15[c]	5.15[c]	5.50[c]	6.50[c]	6.50[c]
Indiana	5.15(e)	5.15(e)	5.15(e)	5.15(e)	5.15(e)	5.15(e)	5.15(e)
Iowa	5.15	5.15	5.15	5.15	5.15	5.15	5.15
Kansas	2.65	2.65	2.65	2.65	2.65	2.65	2.65
Kentucky	5.15	5.15	5.15	5.15	5.15	5.15	5.15
Louisiana	…	…	…	…	…	…	…
Maine	5.15	5.15	5.75	6.25	6.25	6.35	6.50
Maryland	5.15	5.15	5.15	5.15	5.15	5.15	5.15
Massachusetts	6.00	6.75	6.75	6.75	6.75	6.75	6.75
Michigan	5.15(e)	5.15(e)	5.15(e)	5.15(e)	5.15(e)	5.15(e)	5.15(e)
Minnesota	4.90 - 5.15(g)	4.90 - 5.15(g)	4.90 - 5.15(g)	4.90 - 5.15(g)	4.90 - 5.15(g)	4.90 - 5.15(g)	5.25 - 6.15(g)
Mississippi	…	…	…	…	…	…	…
Missouri	5.15	5.15	5.15	5.15	5.15	5.15	5.15
Montana	4.00 - 5.15(g)	4.00 - 5.15(g)	4.00 - 5.15(g)	4.00 - 5.15(g)	4.00 - 5.15(g)	4.00 - 5.15(g)	4.00 - 5.15
Nebraska	5.15[c]	5.15[c]	5.15[c]	5.15[c]	5.15[c]	5.15[c]	5.15[c]
Nevada	5.15	5.15	5.15	5.15	5.15	5.15	5.15
New Hampshire	5.15	5.15	5.15	5.15	5.15	5.15	5.15
New Jersey	5.15	5.15	5.15	5.15	5.15	5.15	6.15
New Mexico	4.25	4.25	4.25	4.25	5.15	5.15	5.15
New York	4.25	5.15	5.15	5.15	5.15	6.00	6.75
North Carolina	5.15	5.15	5.15	5.15	5.15	5.15	5.15
State or other  jurisdiction	2000	2001	2002	2003	2004	2005	2006
North Dakota	5.15	5.15	5.15	5.15	5.15	5.15	5.15
Ohio	2.80 - 4.25(g)	2.80 - 4.25(g)	2.80 - 4.25(g)	2.80 - 4.25(g)	2.80 - 4.25(g)	2.80 - 4.25(g)	2.80 - 4.25(g)
Oklahoma	2.00 - 5.15(g)	2.00 - 5.15(g)	2.00 - 5.15(g)	2.00 - 5.15(g)	2.00 - 5.15(g)	2.00 - 5.15(g)	2.00 - 5.15
Oregon	6.50	6.50	6.50	6.90	7.05	7.25	7.50
Pennsylvania	5.15	5.15	5.15	5.15	5.15	5.15	5.15
Rhode Island	5.65	6.15	6.15	6.15	6.75	6.75	6.75
South Carolina	…	…	…	…	…	…	…
South Dakota	5.15	5.15	5.15	5.15	5.15	5.15	5.15
Tennessee	…	…	…	…	…	…	…
Texas	3.35	3.35	5.15	5.15	5.15	5.15	5.15
Utah	5.15	5.15	5.15	5.15	5.15	5.15	5.15
Vermont	5.75(e)	6.25(e)	6.25(e)	6.25(e)	6.75(e)	7.00(e)	7.25
Virginia	5.15[c]	5.15[c]	5.15[c]	5.15[c]	5.15[c]	5.15[c]	5.15[c]
Washington	6.50	6.72	6.90	7.01	7.16	7.35	7.63
West Virginia	5.15(d)	5.15(d)	5.15(d)	5.15(d)	5.15(d)	5.15(d)	5.15(d)
Wisconsin	5.15	5.15	5.15	5.15	5.15	5.15	5.70
Wyoming	1.60	1.60	5.15	5.15	5.15	5.15	5.15
District of Columbia	6.15	6.15	6.15	6.15	6.15	6.60	7.00
Guam	5.15	5.15	5.15	5.15	5.15	5.15	5.15
Puerto Rico	3.61 - 5.15(i)	3.61 - 5.15(i)	3.61 - 5.15(i)	3.61 - 5.15(i)	3.61 - 5.15(i)	3.61 - 5.15(i)	3.61 - 5.15(i)
U.S. Virgin Islands	4.30 - 4.65(g,j)	4.30 - 4.65(g,j)	4.30 - 4.65(g,j)	4.30 - 4.65(g,j)	4.30 - 4.65(g,j)	4.30 - 4.65(g,j)	4.30 - 4.65 (g)
State or other jurisdiction	2007	2008	2009	2010	2011	2012	2013
Federal (FLSA)	5.15	5.85	6.55	7.25	7.25	7.25	7.25
Alabama	…	…	…	...	...	...	...
Alaska	7.15	7.15	7.15	7.75	7.75	7.75	7.75
Arizona	6.75	6.90	7.25	7.25	7.35	7.65	7.80
Arkansas	6.25[c]	6.25[c]	6.25[c]	6.25[c]	6.25[c]	6.25[c]	6.25[c]
California	7.50	8.00	8.00	8.00	8.00	8.00	8.00
Colorado	6.85	7.02	7.28	7.24	7.36	7.64	7.78
Connecticut	7.65	7.65	8.00	8.25	8.25	8.25	8.25
Delaware	6.65	7.15	7.15	7.25	7.25	7.25	7.25
Florida	6.67	6.79	7.21	7.25	7.25	7.67	7.79
Georgia	5.15(d)	5.15(d)	5.15(d)	5.15(d)	5.15(d)	5.15(d)	5.15(d)
Hawaii	7.25	7.25	7.25	7.25	7.25	7.25	7.25
Idaho	5.15	5.85	6.55	7.25	7.25	7.25	7.25
Illinois	6.50[c]	7.50[c]	7.75[c]	8.00[c]	8.25[c]	8.25[c]	8.25[c]
Indiana	5.15(e)	5.85(e)	6.55(e)	7.25(e)	7.25(e)	7.25(e)	7.25(e)
Iowa	5.15	7.25	7.25	7.25	7.25	7.25	7.25
Kansas	2.65	2.65	2.65	7.25	7.25	7.25	7.25
Kentucky	5.15	5.85	6.55	7.25	7.25	7.25	7.25
Louisiana	…	…	…	...	...	...	...
Maine	6.75	7.00	7.25	7.50	7.50	7.50	7.50
Maryland	6.15	6.15	6.55	7.25	7.25	7.25	7.25
Massachusetts	7.50	8.00	8.00	8.00	8.00	8.00	8.00
Michigan	6.95(e)	7.15(e)	7.40(e)	7.40(e)	7.40(e)	7.40(e)	7.40(e)
Minnesota	5.25-6.15(g)	5.25-6.15(g)	5.25-6.15(g)	5.25-6.15(g)	5.25-6.15(g)	5.25-6.15(g)	5.25-6.15(g)
Mississippi	…	…	…	...	...	...	...
Missouri	6.50	6.65	7.05	7.25	7.25	7.25	7.35
Montana	4.00-6.15(g)	4.00-6.25(g)	4.00-6.90(g)	4.00-7.25(g)	4.00-7.35(g)	4.00-7.65(g)	4.00-7.80(g)
Nebraska	5.15[c]	5.85[c]	6.55[c]	7.25[c]	7.25[c]	7.25[c]	7.25[c]
Nevada	6.15	6.33	6.55-6.85	6.55-7.55	7.25-8.25	7.25-8.25	7.25-8.25
New Hampshire	5.15	6.50	7.25	7.25	7.25	7.25	7.25
New Jersey	7.15	7.15	7.15	7.25	7.25	7.25	7.25
New Mexico	5.15	6.50	7.50	7.50	7.50	7.50	7.50
New York	7.15	7.15	7.15	7.25	7.25	7.25	7.25
North Carolina	6.15	6.15	6.55	7.25	7.25	7.25	7.25
State or  other jurisdiction	2007	2008	2009	2010	2011	2012	2013
North Dakota	5.15	5.85	6.55	7.25	7.25	7.25	7.25
Ohio	6.85	7.00	7.30	7.30	7.40	7.70	7.85
Oklahoma	2.00-5.15(g)	2.00-5.85(g)	2.00-6.55(g)	2.00-7.25(g)	2.00-7.25(g)	2.00-7.25(g)	2.00-7.25(g)
Oregon	7.80	7.95	8.40	8.40	8.50	8.80	8.95
Pennsylvania	6.25	7.15	7.15	7.25	7.25	7.25	7.25
Rhode Island	7.40	7.40	7.40	7.40	7.40	7.40	7.75
South Carolina	…	…	…	...	...	...	...
South Dakota	5.15	5.85	6.55	7.25	7.25	7.25	7.25
Tennessee	…	…	…	...	...	...	...
Texas	5.15	5.85	6.55	7.25	7.25	7.25	7.25
Utah	5.15	5.85	6.55	7.25	7.25	7.25	7.25
Vermont	7.53(e)	7.68(e)	8.06(e)	8.06(e)	8.15(e)	8.46(e)	8.60(e)
Virginia	5.15[c]	5.85[c]	6.55[c]	7.25[c]	7.25[c]	7.25[c]	7.25[c]
Washington	7.93	8.07	8.55	8.55	8.67	9.04	9.19
West Virginia	5.85	6.55	7.25	7.25	7.25	7.25	7.25
Wisconsin	6.50	6.50	6.50	7.25	7.25	7.25	7.25
Wyoming	5.15	5.15	5.15	5.15	5.15	5.15	5.15
District of Columbia	7.00	7.00	7.55	8.25	8.25	8.25	8.25
Guam	5.15	5.85	5.85	7.25	7.25	7.25	7.25
Puerto Rico	3.61-5.15(i)	3.61-5.15(i)	4.10(i)	5.08 – 7.25 (i2)	5.08 – 7.25 (i2)	5.08 – 7.25 (i2)	5.08 – 7.25 (i2)
U.S. Virgin Islands	4.30-6.15(g,j)	4.30-6.15(j)	4.30-6.15(j)	4.30-7.25(j)	4.30-7.25(j)	4.30-7.25(j)	4.30-7.25(j)

This is not a "blue state - red state" phenomenon either. Using a comparable statistic, people receiving Food Stamps, note that, in 2011, 46 million Americans were receiving Food Stamps.

In 2011, reported by Reuters, the states of Mississippi, Tennessee, New Mexico, and Oregon all had at least 20% of their population on the U.S. Department of Agriculture's "Supplemental Nutrition Assistance Program (SNAP)... or Food Stamps . And, topping it off, one-third (more than 30%) of people living in Alabama were receiving Food Stamps.

Republican members of the House overwhelmingly passed an Agriculture Department budget that slashes the SNAP program. Yet, in 8-12% of all Constituents in nearly 1/2 of the Republican Congressional Districts are on Food Stamps.       

Who & How Many 

How many U.S. employees would be affected by a change in minimum wage?

The U.S. Bureau of Labor Statistics estimates that 75.3-million -- or nearly 60% of all -- employees are paid on an hourly basis. Among hourly-paid employees, 4.7% earn at or below the U.S. federal minimum wage, or approximately 3.5-million employees are paid $7.25 per hour or less. 

Only 2.1% of full-time employees earn at or below the U.S. federal minimum wage, or 1.6-million employees. But 11.1% of part-time employees earn at or below the U.S. federal minimum wage. So most of those affected are part-time employees, and that pushes up the overall percentage of hourly wage earners who are paid at or below the minimum wage.

Table 9. Employed wage and salary workers paid hourly rates with earnings at or below the prevailing Federal minimum wage by usual hours worked on primary job, 2011 annual averages

Usual hours worked per week on primary job	Number of workers (in thousands)				Percent distribution				Percent of workers paid hourly rates
	Total paid hourly rates	At or below minimum wage			Total paid hourly rates	At or below minimum wage			At or below minimum wage
		Total	At  Minimum  Wage	Below  Minimum Wage		Total	At  Minimum Wage	Below  Minimum Wage	Total	At  Minimum Wage	Below minimum wage
Total, 16 years and over	73,926	3,829	1,677	2,152	100.0	100.0	100.0	100.0	5.2	2.3	2.9
Hours vary	4,962	491	198	293	6.7	12.8	11.8	13.6	9.9	4.0	5.9
0 to 34 hours	18,127	2,251	1,029	1,222	24.5	58.8	61.4	56.8	12.4	5.7	6.7
0 to 4 hours	411	59	22	37	0.6	1.5	1.3	1.7	14.4	5.4	9.0
5 to 9 hours	992	146	63	83	1.3	3.8	3.8	3.9	14.7	6.4	8.4
10 to 14 hours	1,550	211	128	83	2.1	5.5	7.6	3.9	13.6	8.3	5.4
15 to 19 hours	2,284	363	184	179	3.1	9.5	11.0	8.3	15.9	8.1	7.8
20 to 24 hours	5,272	673	337	336	7.1	17.6	20.1	15.6	12.8	6.4	6.4
25 to 29 hours	2,610	314	121	193	3.5	8.2	7.2	9.0	12.0	4.6	7.4
30 to 34 hours	5,006	484	173	311	6.8	12.6	10.3	14.5	9.7	3.5	6.2
35 hours or more	50,837	1,087	450	637	68.8	28.4	26.8	29.6	2.1	0.9	1.3
35 to 39 hours	6,050	343	134	209	8.2	9.0	8.0	9.7	5.7	2.2	3.5
40 hours or more	44,787	743	316	427	60.6	19.4	18.8	19.8	1.7	0.7	1.0
40 hours	39,231	653	286	367	53.1	17.1	17.1	17.1	1.7	0.7	0.9
41 hours or more	5,557	90	30	60	7.5	2.4	1.8	2.8	1.6	0.5	1.1
41 to 44 hours	659	12	3	9	0.9	0.3	0.2	0.4	1.8	0.5	1.4
45 to 48 hours	1,885	31	9	22	2.5	0.8	0.5	1.0	1.6	0.5	1.2
49 to 59 hours	2,038	26	6	20	2.8	0.7	0.4	0.9	1.3	0.3	1.0
60 hours or more	975	20	11	9	1.3	0.5	0.7	0.4	2.1	1.1	0.9

NOTE: Data exclude all self-employed persons whether or not their businesses are incorporated. Estimates of usual hours worked presented in this table differ from usual full- or part-time status (as shown in table 1) because of a sizable number of workers whose usual hours vary on the primary job.

Also according to the U.S. Bureau of Labor Statistics, an estimated 25% of U.S. private sector employees earn less than $10 per hour (as opposed to all employees which would be a much lower percentage, because public employees tend to be full-time and paid above minimum wage). 

Employees in the Services Sector, our fastest growing sector over the past 30 years ... represent most of those earning at or below the $7.25 federal minimum wage. 

Within the Services Sector, the leisure & hospitality industry -- mainly hotels and restaurants -- are the biggest employers paying less than $10 per hour. Retail is next, but not too far behind. 

Fully 19% of all leisure & hospitality employees earn at or less than the federal minimum wage. Leisure & hospitality employees represent nearly 52% of all hourly employees paid at or below minimum wage.

Retail trade employees represents 16.8% of all private sector hourly employees paid at or below minimum wage. Combined retail and wholesale represents 17.5% of all hourly employees paid at or below minimum wage.

Together, the leisure & hospitality and retail & wholesale hourly employees represent 70% -- nearly all -- of employees paid at or below minimum wage. 

Table 4. Employed wage and salary workers paid hourly rates with earnings at or below the prevailing Federal minimum wage by occupation, 2011 annual averages

Occupation	Number of workers (in thousands)				Percent distribution				Percent of workers paid hourly rates
	Total paid hourly rates	At or below minimum wage			Total paid hourly rates	At or below minimum wage			At or below minimum wage
		Total	At minimum wage	Below minimum wage		Total	At minimum wage	Below minimum wage	Total	At minimum wage	Below minimum wage
Total, 16 years and over	73,926	3,829	1,677	2,152	100.0	100.0	100.0	100.0	5.2	2.3	2.9
Management, professional, and related occupations	15,524	195	89	106	21.0	5.1	5.3	4.9	1.3	0.6	0.7
Management, business, and financial operations occupations	4,300	48	11	37	5.8	1.3	0.7	1.7	1.1	0.3	0.9
Professional and related occupations	11,224	147	78	69	15.2	3.8	4.7	3.2	1.3	0.7	0.6
Service occupations	17,800	2,322	742	1,580	24.1	60.6	44.2	73.4	13.0	4.2	8.9
Healthcare support occupations	2,700	98	52	46	3.7	2.6	3.1	2.1	3.6	1.9	1.7
Protective service occupations	2,028	61	22	39	2.7	1.6	1.3	1.8	3.0	1.1	1.9
Food preparation and serving related occupations	6,710	1,653	422	1,231	9.1	43.2	25.2	57.2	24.6	6.3	18.3
Building and grounds cleaning and maintenance occupations	3,618	211	111	100	4.9	5.5	6.6	4.6	5.8	3.1	2.8
Personal care and service occupations	2,745	299	135	164	3.7	7.8	8.1	7.6	10.9	4.9	6.0
Sales and office occupations	19,987	856	617	239	27.0	22.4	36.8	11.1	4.3	3.1	1.2
Sales and related occupations	7,813	600	441	159	10.6	15.7	26.3	7.4	7.7	5.6	2.0
Office and administrative support occupations	12,174	257	177	80	16.5	6.7	10.6	3.7	2.1	1.5	0.7
Natural resources, construction, and maintenance occupations	8,221	96	48	48	11.1	2.5	2.9	2.2	1.2	0.6	0.6
Farming, fishing, and forestry occupations	675	42	24	18	0.9	1.1	1.4	0.8	6.2	3.6	2.7
Construction and extraction occupations	4,332	28	13	15	5.9	0.7	0.8	0.7	0.6	0.3	0.3
Installation, maintenance, and repair occupations	3,214	26	11	15	4.3	0.7	0.7	0.7	0.8	0.3	0.5
Production, transportation, and material moving occupations	12,394	360	181	179	16.8	9.4	10.8	8.3	2.9	1.5	1.4
Production occupations	6,485	100	53	47	8.8	2.6	3.2	2.2	1.5	0.8	0.7
Transportation and material moving occupations	5,909	260	128	132	8.0	6.8	7.6	6.1	4.4	2.2	2.2

NOTE: Data exclude all self-employed persons whether or not their businesses are incorporated. Effective with January 2011 data, occupations reflect the introduction of the 2010 Census occupational classification system into the Current Population Survey, or household survey. This classification system is derived from the 2010 Standard Occupational Classification (SOC). No historical data have been revised. Data for 2011 are not strictly comparable with earlier years.

Table 5. Employed wage and salary workers paid hourly rates with earnings at or below the prevailing Federal minimum wage by industry, 2011 annual averages

Industry	Number of workers (in thousands)				Percent distribution				Percent of workers paid hourly rates
	Total paid hourly rates	At or below minimum wage			Total paid hourly rates	At or below minimum wage			At or below minimum wage
		Total	At minimum wage	Below minimum wage		Total	At minimum wage	Below minimum wage	Total	At minimum wage	Below minimum wage
Total, 16 years and over	73,926	3,829	1,677	2,152	100.0	100.0	100.0	100.0	5.2	2.3	2.9
Private sector	64,525	3,625	1,577	2,048	87.3	94.7	94.0	95.2	5.6	2.4	3.2
Agriculture and related industries	775	41	20	21	1.0	1.1	1.2	1.0	5.3	2.6	2.7
Nonagricultural industries	63,750	3,584	1,557	2,027	86.2	93.6	92.8	94.2	5.6	2.4	3.2
Mining	489	3	2	1	0.7	0.1	0.1	0.0	0.6	0.4	0.2
Construction	4,304	41	15	26	5.8	1.1	0.9	1.2	1.0	0.3	0.6
Manufacturing	8,556	91	47	44	11.6	2.4	2.8	2.0	1.1	0.5	0.5
Durable goods	5,264	41	18	23	7.1	1.1	1.1	1.1	0.8	0.3	0.4
Nondurable goods	3,292	50	29	21	4.5	1.3	1.7	1.0	1.5	0.9	0.6
Wholesale and retail trade	12,423	669	463	206	16.8	17.5	27.6	9.6	5.4	3.7	1.7
Wholesale trade	1,689	27	17	10	2.3	0.7	1.0	0.5	1.6	1.0	0.6
Retail trade	10,734	642	446	196	14.5	16.8	26.6	9.1	6.0	4.2	1.8
Transportation and utilities	3,069	46	22	24	4.2	1.2	1.3	1.1	1.5	0.7	0.8
Information	1,273	36	18	18	1.7	0.9	1.1	0.8	2.8	1.4	1.4
Financial activities	3,228	40	25	15	4.4	1.0	1.5	0.7	1.2	0.8	0.5
Professional and business services	5,857	157	85	72	7.9	4.1	5.1	3.3	2.7	1.5	1.2
Education and health services	12,636	355	185	170	17.1	9.3	11.0	7.9	2.8	1.5	1.3
Leisure and hospitality	8,943	1,963	610	1,353	12.1	51.3	36.4	62.9	22.0	6.8	15.1
Other services	2,970	183	86	97	4.0	4.8	5.1	4.5	6.2	2.9	3.3
Public sector	9,401	204	100	104	12.7	5.3	6.0	4.8	2.2	1.1	1.1
Federal	1,770	20	12	8	2.4	0.5	0.7	0.4	1.1	0.7	0.5
State	2,604	65	37	28	3.5	1.7	2.2	1.3	2.5	1.4	1.1
Local	5,026	119	50	69	6.8	3.1	3.0	3.2	2.4	1.0	1.4

NOTE: Data exclude all self-employed persons whether or not their businesses are incorporated.

Minimum Wage "Enabling" Subsidies?                   

Whereas in 1989 more Food Stamps recipient households did not have anyone working, twenty years later, in 2009 the majority of Food Stamps recipient households had jobs, according to a release by Atlantic Newswire.

Couple this Food Stamp recipient job-status information with the fact that job growth throughout the past decade primarily has been low-income jobs: 2002 = 3% ... in 2009 = 4.9% ... and 2011 = 6% of Americans were paid at or below minimum wage. 

And, most of the jobs created since 2008 have been low-paid jobs, according to recent research report by the National Employment Law Project. And, since first quarter 2001, 8.7% of new jobs have been low-paid and 6.6% have been higher-paid jobs.

In 2011, the Food Stamp program cost $68-billion. That's more than one-third of corporate income tax receipts that year. 

Some would suggest, and I agree, that our Food Stamp program has enabled businesses to pay employees at or below minimum wage: The SNAP "Food Stamp" program has become a business subsidy ... especially to the leisure & hospitality and other retail industries.




The growth in the number, and percentage, of Americans without health care insurance -- hence showing up in hospital emergency rooms with late stage illnesses --- is also costing state and federal governments increasing amounts of tax dollars.

State and federal Medicaid spending also might be a minimum wage "enabling" subsidy, as is suggested frequently about Food Stamps.

Facts about Food Stamp program and Medicaid and hospital charity care belong in any serious reporting and debate on Minimum Wage: The lower the wages, the higher the cost to government spending ... government subsidies to business ... that costs us in personal income taxes. It's all related.

The Employers

As the nation's largest private employer and market-influencing player in the retail and wholesale trade, Walmart hourly wage employee pay policy serves as a template for the sector. 

The Walmart - Sam's Club Pay Plan Fiscal Year 2013 states that the Facility Starting Rate (FSR) at the minimum Position Pay Grade (PPG) adjustment stands at $8.00 per hour. 

According to a 2010 ABC News report "Walmart CEO Pay: More in an hour than employees get all year", the Walmart CEO made more than 20% higher in an hour than a entry-level Walmart or Sam's Club store employee made in a whole year.

The ABC News report went on to point out that in the 1970's, CEO's of the S&P 500 were paid 3 times that of the average American employee, and by 2010 the CEO's of the S&P 500 were paid 319 times that of an average American employee: That's from 3-to-1 up to 319-to-1. 

The point of mentioning the pay of CEO's of top companies paying employees minimum wage is to show how successful companies are and the degree to which the CEO's have grown distant from their employees during some of America's biggest boom years and greatest productivity gain years. At 319-to-1 and being paid more in an hour than your basic employee makes in a year, that distance is vast.

Summary

What's the bottom line on raising the U.S. federal minimum wage from to $10 per hour?

A lot of restaurant, hotel, and other retail employees will earn about $20,000 per year instead of less than $15,000: They will be raised above the official U.S. poverty level and they will live with more dignity. The U.S. economy would get a stimulus without costing local, state, or federal governments more. And, the state and federal governments would save some of the money now spent on Medicaid and Food Stamps for these employees and their families.

Let's do it.

by Steve Reichenstein