High Programmer > Alan De Smet > Rants > Actual Impact of 2007 Democrat Minimum Wage Proposal

Actual Impact of 2007 Democrat Minimum Wage Proposal

The Data

Any serious discussion of minimum wage adjustments needs to take into account the historic inflation adjusted data, as well as the projected inflation adjusted data. I failed to find anyone providing this, so I put it together. I put this graph together. The inflation adjusted minimum wages are in November 2006 dollars. The line branches in the 1960s and 1970s because there were multiple different minimum wages in effect for different categories of workers; the lines show the lowest and highest entries.

graph of U.S. minimum wage, inflation adjusted and not, form start of minimum wage through projections based on early 2007 Democrat proposals.

(Table of data. Graph available under a Creative Commons license, see below. You can download the Creative Commons licensed Excel spreadsheet below.)


Under the Democrat's plan, the minimum wage will peak at an adjusted $6.86, assuming relatively minor inflation. If inflation larger, it will be even less. The adjusted minimum wage was last this high in March 1983, when it was $6.90.

This will not be the largest minimum wage we've ever had. That award goes to February 1968, when the larger minimum wage (there were two different ones) was $9.43 per hour in November 2006 dollars. If you want to discount that one (because the lesser minimum wage was $6.78), the winner is January 1979, with an adjusted minimum wage of $8.56.

Without regard to the merits and flaws of the minimum wage, this is a relatively minor change. It is possibly larger than the two increases in the 1990s, only slightly so. It's less than increases in the early 1980s.


Historic minimum wage data is from "History of Federal Minimum Wage Rates Under the Fair Labor Standards Act, 1938 - 1996." When there were multiple different minimum wages, I've listed both the largest and smallest.

Proposed minimum wage data is based on the following text from "House Votes to Raise Minimum Wage" at the New York Times. I assume that the law becomes official on February 1st, 2007. I furthermore assume that "60 days" means "2 months." Thus $5.85 on April 1st, 2007; $6.55 on April 1st, 2008, and $7.25 on April 1st, 2009. If the law takes longer to pass, or needs to fight a presidential veto, this will delay when the law takes effect, devaluing the minimum wage.

The measure would increase the minimum wage to $5.85 per hour 60 days after being signed into law. It would then rise to $6.55 per hour one year later and $7.25 after two years, bringing an estimated $4,000 per year extra to a minimum wage employee working full time.

"Inflation" data is based on "Consumer Price Index, All Urban Consumers - (CPI-U), U.S. city average, All items". I used the monthly data.

I ignored the day of the month in all cases, assuming that data was measured on the first of the month.

For future inflation I took an optimistic estimate: I applied the smallest monthly inflation averaged over five years based on data from January 1975 through the most recent data in November 2006: approximately 0.1886%. Using higher estimates would devalue the minimum wage even more quickly.

Excel spreadsheet with the raw data, calculated data, and graph (ZIP file, 177kB). This was originally done in OpenOffice.org, but I moved to Excel to do the graph as OOo's graphing capabilities were unable to handle it. The spreadsheet is available under a Creative Commons license, see below.


Creative Commons License

I release the graph above ("graph.png") and the spreadsheet above ("minwage.zip") under the Creative Commons Attribution-Share Alike 2.5 license. The required attribution is "Alan De Smet http://www.highprogrammer.com/alan/rants/minwage2007/". Alternately, the attribution can simply be "Alan De Smet", so long as the attribution is a working hyperlink to http://www.highprogrammer.com/alan/rants/minwage2007/. Note that this release only applies to the graph and the spreadsheet, not to this web page.


2007-01-26: Specified the inflation estimate I used. Corrected the date range I pulled the estimate from; the "1980" start date was the start of sampling, but each samples went back five years. Noted at start why there the lines sometimes branch. Some rephrasing. Some spelling fixes. Replaced placeholder with actual value of February 1968 lesser minimum wage. Marked notable entries on the graph. Added URL to graph. Released graph and spreadsheet under CC. Added link an HTML version of the data in table form.

2007-05-24: Corrected two years in "Sources." It previously suggested that the first two increases were both in 2007 and the third in 2008. The actual data is correct, only my summary was incorrect.

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