Earlier this week U.S. Senators Patty Murray and Bernie Sanders published an editorial in The Seattle Times announcing they have joined forces to introduce legislation that would increase the federal minimum wage by 107%.

In their editorial pushing for a $15 federal minimum wage, Senators Murray and Sanders make a series of tired claims that are so predictable, yet patently flawed, that it will take several blog posts to address them all.

Let’s start with the claim that workers earning the $1.60 federal minimum wage in 1968 had more purchasing power (and therefore supposedly a better standard of living) than today’s minimum wage workers.  That is, if the federal minimum wage tracked the cost of living since 1968, today’s minimum wage would be $11.37.  This is true. But that is because 1968 was the year the federal minimum wage hit its inflation-adjusted high point. 

If you compare the value of today’s federal minimum wage with other random years it tells a different story.  Using the U.S. Bureau of Labor Statistics’ CPI calculator, if the federal minimum wage tracked inflation since 1938, the year the federal minimum wage law was enacted, today’s wage would be just $4.32 per hour.

Fast forward to 1948 and the minimum wage’s inflation-adjusted value for today would only be $4.17.  Jump ahead to 1958 and it would be $8.47, and at 1978 it would be $10.19.  Peg today’s minimum wage to 1988, and workers would be earning just $7.01 per hour.  Use 1998 and it would be $7.74, choose 2008 and it would be $7.48 an hour. 

Let’s try a couple more random years.  Adjust the value of the federal minimum wage to 1995 and today’s wage would be $6.84.  Try 2006 and it would be $6.28.  You get the picture. 

There is nothing random about the use of 1968—it is cherry picking to create a perception that fits the false narrative being pushed by Senators Sanders and Murray that entry-level workers are losing ground. 

If Senators Sanders and Murray truly believe the minimum wage should track inflation, they must be intellectually honest and admit the only logical way would be to track it since the inception of the minimum wage in 1938.  That means minimum wage earners today would earn just $4.32 per hour.  Instead they are earning nearly 70% more. 

That is because between 1938 and 2017, inflation has cumulatively increased 294% (an average of about 3.7% per year), while the federal minimum wage has increased 2,800% during the same period.  That hardly fits the narrative of workers losing ground.

Looking at it a different way, if we average out the inflation adjusted minimum wage over the eight decades between 1938 and 2017, the wage in today’s dollars has averaged $7.70.  Viewing it from this perspective, the historical purchasing power of federal minimum wage earners since 1938 is fairly close what they earn today, albeit a tad higher than the current $7.25 wage.  Again, this does not jive with the image of low-wage workers who have been exploited and left behind.

But let’s go back to the magical year of 1968 when minimum wage workers were supposedly better off.  We already know that year was an outlier in terms of the buying power of the minimum wage.  But those workers also paid much higher taxes than today’s minimum wage earners—today’s income tax rates for the lowest earners are half of what they used to be.  This is due, in part, to the Earned Income Tax Credit (EITC). 

Today low-income workers receive up to a 45% EITC tax credit, meaning the government refunds the income taxes low-wage workers pay, and sometimes “refunds” money even if they didn't pay any income taxes.  So not only do some of the poorest workers effectively pay no income taxes, they also receive a cash payment.  Nearly a quarter of Americans are eligible for the EITC tax subsidy. 

What is more, regressive excise taxes, which carry a greater burden for low-income families, have decreased from 13% of total revenues in 1960 to only about 2% today.

Add to the lower tax burden is the fact today far fewer workers even earn the minimum wage than in 1968.  In 1979, when the BLS began regularly studying minimum-wage workers, they represented 7.9% of all wage and salary workers.  Today minimum wage earners comprise just 2.6% of all wage and salary workers. 

So in 1968 minimum wage workers could buy more with their money, but there were more than twice as many earning minimum wage and they were paying much higher taxes than today’s minimum wage workers.  

It’s easy for Senators Murray and Sanders to claim minimum wage workers in 1968 were better than today, but that’s taking a simplistic view of a snapshot in time.  As always, the devil is in the details.