Minimum wage is 90% lower than it was 40 years ago.

That is, in real wealth terms -- linked to an ounce of gold.

Keep in mind that this affects ALL of us to some extent. Sure, you might make twice minimum wage, but you're still much worse off than you would have been 40 years ago.

Here is the statistic:

In 1968, a minimum wage worker could work 22 hours and buy himself an ounce of gold!

In 2011, it would take 200 minimum wage hours to buy an ounce of gold.

Keep in mind that gold is just a stand-in for "real measure of wealth". I'm sure you could substitute "quality suit", "1/20 of a car", riding lawnmower, or any other metric you want.

I think I did give examples.  You click the URLs and little graphs open in new browser pages.  It's really very clever stuff, you should try it.

The article took the peak index linked US minimum wage over the last 80 years and picked an asset class (gold) which was at an historical low in terms of US dollars.

It took me 2 Google searches to confirm that.  Historical Gold price v inflation and Historical Minimum wage v inflation.  Simples.

It's totally dishonest, unrepresentative and one might expect people to show a modicuм of restraint and common sense and do a tiny amount of research to see whether the conclusions you can draw from that are meaningful.

Assuming that is that they wish to maintain any credibility or have their opinions valued as carefully considered and intelligent.

If the moving average minimum wage bought half the amount of milk or bread or cheese or electricity or rent which are things that poor people need, then it would merit a discussion.  Picking Gold as the reference assets was a dead giveaway as people on minimum wage have absolutely no business buying gold bullion and it is a really stupid, STUPID thing to spent what limited savings you have on.

I must partially agree with ggreg on this one.  Comparing minimum wage to gold prices isn't an accurate metric because both inflation and the price of gold vary, and not always together.  Plus, Matthew did cherry-pick the year where the minimum wage was the highest (in terms of inflation), and when gold was very cheap compared to today.

For Matthew to get his point across accurately, it would be more appropriate to simple compare inflation-adjusted dollars.  Using ggreg's link, we find that the minimum wage in 1968, it's peak, was equivalent to $10.60 today, about 46% higher than today minimum wage of $7.25.  If you look at the whole history of the minimum wage, from 1938 to the present, when adjusted for inflation, today's minimum wage looks pretty close to the statistical mean.

To Dolores: Except that you assume that the "official figures" for inflation are true. But they're not.

When they shrink packaging/amounts rather than raise prices, does that make it into the calculations?

When they start using plastic instead of metal and keep prices the same, does that enter the calculations?

A pack of skinless beef sausage is 11 oz. now. ELEVEN OUNCES! Down from 16 oz (or "1 pound"), no doubt. It's closer to 1/2 pound than it is to 1 pound! The mixed meat version is at 13 oz.

To GGreg and the Thread in General:
Anyhow, I clicked on this thread and thought quite a discussion had taken off. Not quite! More like the tidbit hit some kind of SERIOUS chord with ggreg, who had posted about 10 times. Among these posts were examples of ggreg at his worst (the kind of posts that make me question why he's here, why I allow him here, etc.) since the posts in question attack Trads as Trads. Ggreg only tolerates the typical Trad lifestyle (homeschooling, living on less, having other priorities than money, being non-worldly, being hostile to public schooling, etc.)

Having to agree with me on everything is not a prerequisite for membership on CathInfo (thank goodness!) but sometimes he really makes me wonder.

He seems quite hostile at times, and this thread is one of those times.

He gets supremely annoyed at anything that attacks human respect. When Trads believe in any conspiracy (defined as two evil men working TOGETHER in SECRET -- what's so hard to believe about that?) he gets all embarrassed and starts fumbling with his "Trad Card" as he contemplates flushing it down the toilet for the 1000th time.

I'm happy for him that his family is still practicing Catholic, I'm happy for him that he has a six-figure salary, but he needs to stop thinking he's better than everyone else. The only real judge of who "chose better" is counting up what % of our respective children made it to heaven.  That is impossible to determine, but I suppose we could look at whose lives more closely imitate the saints, to see who has the greater chances...

The U.S. hasn't been on the gold standard since the early 1930's and the only reason to link minimum wages (of any year) with the cost of gold (for any year) would be to rouse feeling of envy and anger among the masses.  I don't think that was Matthew's purpose in posting.  Maybe Matthew will explain to us how he came to this conclusion.  It is possible that he was being facetious or miscalculated in some manner.  But he did prove that if you start with a faulty premise you will get a faulty conclusion.      

Ggreg, don't get too worked up over this.  It reminds me of a time when I was sitting in a public place watching the news on TV.  Brian Williams, an NBC anchor (who earns millions per year and has a full staff of people who do research for him) mentioned as a cheerful happy story that in 1946 the war was over and the average American citizen was happy to buy a car and do a lot of driving and with gas prices being .27 cents per gallon, who could blame them?  He gave a knowing wink as he said the last part.  I almost jumped out of my seat. 27 cents in 1946 was the equivalent of $3.68 cents at the time (I actually forgot the year - it may have been 2006 or 2007).  It irritated me because the statement was so false because the cost of gasoline in real dollars was almost identical to what it was that year and would be more expensive if adjusted for inflation than the lull in oil prices now.    

Gold is real money, plain and simple. It's highly manipulated today though, as is the stock market.

Over a time scale of millennia, gold has always held its value. There are statistics like "an ounce of gold will get you a really nice suit". Which indeed holds true today.

It's a shame we don't use real money (gold, silver, or something else debt-free) for our money system, but the fact is that most Trads don't have extra money they need to protect by exchanging it for gold.

You keep 50,000 in the bank, and it loses about 10% of its purchasing power EVERY YEAR to inflation. The official government inflation figures are complete rubbish. They exclude food, energy, and almost everything else a human being buys regularly. In particular, human NEEDS rather than "wants".

Gold tends to preserve one's purchasing power.

But as things are priced in USD rather than gold or silver, you need to keep your monthly expenses in dollar form, as well as your "three month fund" for emergencies or surprise expenses.

But as far as your "nest egg" -- keep it in the stock market or banks at your own peril. Remember what happened in Cyprus -- they ended up losing almost half of their money they had in the banks. "Bail-ins" is the scary word of the day. And remember: it WILL happen to this country in the near future. They recently laid the groundwork for "bail-ins" worldwide. Basically the new law says that a deposit at a bank is no longer YOUR money. It's an investment. So don't keep too much in the banks, unless you don't mind losing it.

Gold is not "money."  Gold is a commodity, like oil, wheat, sugar, or any other good.  It isn't "money," because money is a medium of exchange, and you cannot go to a store and pay for the goods you wish to purchase with a hunk of gold any more than you can pay with a bag of sugar or a drum of oil.  You have to convert the good to dollars first, which can be used anywhere for purchases.  Gold may be a good store of value, in your opinion, but that does not make it money.

And yes, Matthew, of course the official inflation figures factor in everything you mentioned.  Inflation isn't measured based on what a "package" of sausage costs at the grocery store.  It based on an objective standard, such as weight.  If the weight is less, and price remains the same, of course inflation has occurred, and is accounted for.  There's nothing nefarious about companies doing this, it is simply a marketing tool.

Generally speaking, across the entire economy, and not just based on the price of a single commodity (gold), the minimum wage has about 46% less purchasing power than it did in 1968 (the minimum wage's peak), and is basically equivalent to the statistical mean of the minimum wage's purchasing power since it was first introduced to 2013.

Without doing any research, my common sense tells me that someone my father's age in 1980 could have supported a family on minimum wage, whereas today it would be downright impossible.

I strongly doubt it.  The minimum wage was never designed to be enough to support a family.  To the contrary, from what I have read on the subject, the minimum wage most mostly designed to be enough to keep a single person out of poverty.  In 1980, the minimum wage was equivalent to $8.76 today.  Would that be enough to support a family?  Perhaps, perhaps not.

The amounts, declines, percentages could all be calculated -- but the bottom line is that it is becoming more and more difficult to support a family, and this very much affects Trads trying to make a living in this (modern) world!

I do agree that it is becoming much harder to "keep up with the Joneses" that it was in 1980.  Worldly people have far more "necessaries" today than they did in 1980.  Cell phones, computers, a separate bedroom for each child, etc.

Additionally, in 1980, people with no or limited education could get a job that exceeded the minimum wage, say in a factory, and live a comfortable life.  Not so anymore.  If you want a job that is better than minimum wage, you need training or higher education.  For white collar work, that usually means college, but that brings its own host of problems, including high levels of debt, but that's another story.  The blue collar trades, however (plumber, carpenter, electrician, etc.), require far less training time and have lower training costs.  The job prospects are usually better as well.

None of this, however, has anything to do with the minimum wage.

And no, you can't just call them all lazy bums. It's not that simple.

I don't think laziness has much, if anything, to do with it.