‘Minimum wage should be $19, like in 1956 and indexed to median income’: I have uncovered the truth about how generations are being left behind economically. How can we fix this growing wealth gap?

Hey Money Minder, in 1956, the minimum wage was $1/hr, which equals $2000/year, or $9.88 adjusted for inflation. But let’s be real, just looking at inflation rates doesn’t give us the full picture.

Back then, the median income was $3600, so a minimum wage job was 55% of the median income.

Fast forward to 2019, the median income is $68,700. A full-time gig at minimum wage pulls in $14,500, which is only 21% of the median income.

If we wanted minimum wage to have the same impact as it did in 1956, it would need to be $18.90.

But if we boosted it to $18.90, then median income would skyrocket too.

The bottom line is that minimum wage is closely connected to the middle class. In the good ol’ days of 1956, even the waitress at your local diner was earning more than half of what a decent job paid. Now, she’s making peanuts compared to your salary and is struggling to get by.

You’ll see a similar trend when you look at how median income stacks up against median home prices over the years. Homes today cost almost three times what they did in 1980 relative to what people could afford. Yet, homeownership rates remain the same. We’ve just shifted around who gets to own a home.

I’m just fed up with my generation (boomers) not realizing how good they had it economically and how the newer generations are getting the short end of the stick.

We’re focusing on the wrong things. Presidents are judged on inflation, unemployment rates, and the stock market. Sure, those have been stable for the past fifty years, but we’ve also created a permanent underclass to do our dirty work.

Edit:

We’ve stirred up quite the discussion here (just as I’d hoped).

Yes, 1956 was the pinnacle of U.S. economic dominance. It’s time to acknowledge that and stop saying that people today are lazy. Previous generations had it better.

“But think of all the amazing tech and luxuries you have now” – that’s beside the point. Sure, most of us can’t function without those things, but having a smartphone and AC doesn’t build wealth.

“But hardly anyone is actually making minimum wage” – Yeah, but let’s face it, it should be closer to $20, and 25% of Americans aren’t making that. (Edit: my bad, it’s actually 25%).

And then there’s the argument, “I worked hard, found opportunities, and improved my life” – There are a couple of issues with that mindset. Yes, one ambitious person can make a better life for themselves, but that can’t dictate policy because not everyone can do the same.

We have 30 million working poor. We don’t have 30 million amazing opportunities waiting for them. And if we did, who would take on the jobs they’re doing now? We need them where they are.

Picture this: What if a radical leader went viral with a message to all low-wage workers to stay home if they make less than $15/hr? The economy would collapse by lunchtime.