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Shrinking Minimum Wage

From the Fiscal Times, just what can the minimum wage afford and how has that changed over time?


Often looked to as a model era, the 1950s may have been nearly as picture-perfect as Leave it to Beaver seemed to suggest―minimum wage workers could pay rent for a month for less than a week and a half of full-time work―or catch Disney’s Cinderella for just over a half-hour of labor.

Minimum wage: $0.75/hour

Gas: $0.27 or 22m

Movie ticket: $0.48 or 38m

Rent: $42 or 56hrs



By 1960, the minimum wage of $1 had not quite kept up with inflation, making rent a bit less affordable―though still not quite two weeks of minimum-wage work. On the other hand, filling up the Corvette was actually relatively cheaper―it took just under twenty minutes of work to get a gallon of gas.

Minimum wage: $1/hourGas: $0.31 or 19mMovie ticket: $0.69 or 41mRent: $71 or 71hrs



In 1970, the outlook for minimum-wage workers was about as bright as a spinning disco ball. Compared to ten years before, the cost of rent and gas actually decreased. Movie tickets were the one exception―gaining in popularity and breadth (31 movies were released in 1970, compared to just 19 in 1960 and 11 in 1950), the cost of a ticket saw a big hike, and was the equivalent of a near hour of work.

Minimum wage: $1.60/hour

Gas: $0.36 or 14m

Movie ticket: $1.55 or 58m

Rent: $108 or 67.5hrs



The beginning of Reagan’s era marked the last in which paying the median rent was semi-feasible on a single minimum-wage income. A minimum wage worker could still pay rent with just under two weeks of work (but that’s still double the ratio that HUD recommends). Of course, if you lived in a more affordable area, you’d be in better shape. In Mississippi, for example, you’d only have to put in 58 hours of work to pay the median rent there.

Minimum wage: $3.10/hour

Gas: $1.25 or 24m

Movie ticket: $2.60 or 50m

Rent: $243 or 78hrs



By 1990, renting an average place on minimum-wage pay became near impossible. Employees would need to work 118 hours (that’s nearly 70 percent of gross monthly pay) to get shelter. And entertainment was no easier. You’d have to work over an hour to see Home Alone or Pretty Woman. The one bright spot was gas―prices were actually down from ten years prior, meaning earners only had to put in about a third of an hour of work to afford a gallon.

Minimum wage: $3.80/hour

Gas: $1.13 or 18m

Movie ticket: $4.23 or 1hr, 7m

Rent: $447 or 118hrs



By the time George W. Bush got to office, things were no better―though arguably, no worse. With a minimum wage of only $5.15 (it hadn’t raised since 1995, and wouldn’t again until eight years later in 2008) workers still had to work nearly 120 hours to afford median rent and more than an hour for a trip to the cinema.

Minimum wage: $5.15/hour

Gas: $1.49 or 17m

Movie ticket: $5. 39 or 1hr, 3m

Rent: $602 or 117hrs



Though the housing crash actually made rent more affordable, minimum-wage workers still had to put in 109 hours of work (or more than 60% of monthly income) in 2010. Of course, in cities like New York, the numbers are much higher. In 2010, the NY-Northern NJ-Long Island area had a median gross rent of $1,125, which equals 155 hours of work. Basically, if you worked full-time, didn’t eat, commute, or pay utilities, and gave nearly every penny to your landlord, you could just make it in the Big Apple.

Minimum wage: $7.25/hour

Gas: $2.78 or 23m

Movie ticket: $7.95 or 1hr, 6m

Rent: $790 or 109hrs



Posted in Economics.

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