Minimum wage vs. gasoline.

Posted byWaldo Jaquith 12 Comments on Minimum wage vs. gasoline.

Wage, gasoline graph

Enclicken to embiggen.

All figures are expressed in 1996 dollars in order to provide some sort of a commonality, and because that’s the year used by the Department of Labor in the data I’ve seen. Minimum wage data from the DoL, aggregated by infoplease. Fuel prices are the average national for leaded from 1955-1975, and unleaded all grades from 1975-2006, with the figures provided by the DoE. Where necessary, conversions to 1996 dollars were done using the Consumer Price Index calculator provided by OSU’s Robert Sahr.

What happens when the minimum wage exceeds the cost of a gallon of gasoline? I vote for “not a damned thing,” unless the Democrats have control of Congress by then.

Published by Waldo Jaquith

Waldo Jaquith (JAKE-with) is an open government technologist who lives near Char­lottes­­ville, VA, USA. more »

12 replies on “Minimum wage vs. gasoline.”

  2. And what happens if gasoline prices continue to rise, even after a minimum wage increase? Certainly, there would have to be some ceiling for the minimum wage before companies (particularly smaller ones) simply cannot afford to pay all employees.

  3. Er, I think you mean “when a gallon of gasoline exceeds the minimum wage.”

    Thanks. :)

    And what happens if gasoline prices continue to rise, even after a minimum wage increase? Certainly, there would have to be some ceiling for the minimum wage before companies (particularly smaller ones) simply cannot afford to pay all employees.

    There appears to be no danger of the minimum wage rising at a rate that is too great. :) Frankly, I’d just like to see it increase with inflation. Like, y’know, Sen. Allen’s pay.

  4. I remember living through that time in the early eighties when gas was hard to come by and I was working for minimum wage, or close to it then.

    It was really tough, but I would hate to think what that would be like today. I wouldn’t have been able to own (much less drive) my 250 dollar car or stay at the 75 dollar a month flop house. ‘Would have been the bridge for me…

    The Tramp

  5. Are You Better Off Than Your Parents Were?

    Charlottesville’s most famous blogger, the multi-talented Waldo Jaquith, has a post comparing the minimum wage and the cost of a gallon of gasoline over the past 50 years. View it here.

    Some people have said that Democrats are using the minimum wage issue as a sort of antidote to conservative ballot initiatives banning marriage equality…. [read the rest at http://www.vayd.org/node/111%5D

  6. What happens when a gallon of gasoline exceeds the minimum wage? I vote for “not a damned thing,” unless the Democrats have control of Congress by then.

    And even then (with Democrats in control congress) probably not a whole hell of a lot either.

  7. This is too often an emotional topic, laden with assumptions about “social justice” — and, generally, ignoring the idea with individual rights (whatever happened to the pro-choice Party?) — but I think there are a few compelling reasons for liberals to be wary of increasing the minimum wage. For one thing — though it probably generates a little frisson of anti-business, pro-little guy self-righteousness — it’s just an incredibly bad way to accomplish the purported goals. I’ll reproduce the general outline I wrote in a recent email:

    “I think there are some very good, substantive arguments that the Left should consider against raising the minimum wage — even arguing from the Left’s own basket of values. Off the top of my head:

    1) The notion that increasing the minimum wage has little effect on employment is probably true at the relatively low current MW rate, and at the relatively small previous increase levels. A 2 dollar hike will probably have a greater effect than the previous ~25-75 cent hikes, and it will probably be centered on small businesses. Nevertheless, it would be very hard to measure those effects, because “before and after” is not the proper metric. We’d need to know “after and otherwise”, which is, face it, an essentially untestable state.

    2) The majority of the MW earners are not the segment the Left really has in mind when it talks about people needing to earn a living. In large part, an increase in the MW is a wage hike for high school and college kids. It would be far more efficient to pursue strategies like a negative tax rate for those who are struggling in poverty.

    3) Hiking the minimum wage to livable wages increases the incentive to drop out of high school or college, or otherwise not pursue increased education/skill. It lowers the incentive to improve oneself [and to engage in productive activity, which–not ‘money’–is the actual source of wealth].”

  8. Though to be fair, Jon, as a libertarian it’s fundamental to your philosophy that there ought to be no minimum wage at all while for me, as a Democrat, it’s fundamental to my philosophy that there should be a base pay standard for everybody. I suspect we can both cite lots of evidence for our positions, but I think it just comes down to a philosophical difference on the role of government in business.

  11. If you’re an adult over the age of 25 and you’re still depending on a minimum wage to live by, you’re a moron. Support FULL repeal of the minimum wage by calling your Congressman.

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