The minimum wage in America was created in 1938, during the New Deal. Some conservatives feel that a government-mandated minimum wage is a job-killer. Yet, after World War II, with the minimum wage firmly in place, the American middle-class blossomed, unemployment was low, and America became an economic powerhouse. How was this possible, when the very concept of a minimum wage is supposed to be a job-killer?
Let's look at two countries, and their minimum wages: The United States and Australia.
In the United States, the minimum wage is a stingy $7.25 (when tied with inflation and the increasing cost of living, it's lower than it has been in the past). In Australia, the minimum wage is $16.88 (with some exceptions for very young workers). Now, let's look at the unemployment rate, average wealth per adult, and median wealth per adult in the United States and Australia:
Unemployment: The United States currently has a 7% unemployment rate, and Australia has a 5.8% unemployment rate.
Average Wealth: In the U.S., the average (or mean) wealth per adult is $301,140. In Australia, it's $402,758.
Median Wealth: In the U.S., the median wealth per adult is $44,911. In Australia, it's an astounding $219,505. ("Median" is a middle point, where half are above and half are below.)
(Mean and median wealth per adult statistics taken from the 2013 Credit Suisse Global Wealth Report.)
So, why all the hand-wringing about increasing the minimum wage in America? Why so many doomsday prophets warning us about the Apocalypse if we raise it, especially when there is clear evidence that a higher minimum wage can exist alongside shared prosperity?
Ah, "shared!" There ya go! That's why. In America, there are many (not all) wealthy people who don't want shared prosperity, they want it all for themselves. And so they pay politicians to create policies that bring more wealth to them and less to everyone else. They evade taxes by placing money in secret offshore accounts, while soldiers fight for our country and then come home, oft-times disabled, to have their pensions cut. They shift money in and out of trusts to avoid estate taxes, while the politicians they bribe with campaign contributions wink and nod approvingly. Meanwhile, the very same bribed politicians cut food assistance to children and low-income senior citizens, declaring "we can't afford it!"
In America today, we are seeing a level of greed and selfishness not seen since the days of slavery, when many (not all) wealthy people saw other people as property, to be whipped and worked mercilessly, for profit and amusement. As David Simon, creator of The Wire television series recently wrote about income & wealth inequality in America, "...in my country you're seeing a horror show." And it's only going to get worse, now that the genie of campaign contributions has been let out of the bottle. It's like a snowball rolling down a hill, getting bigger and bigger. Once you allow the wealthy to buy Congress, as well as state legislatures, they will use that power to make sure you never reverse the trend, and that you never again have a say in your government. More money to the wealthy = more campaign contributions = more policies that distribute wealth upwards = more money to the wealthy = more campaign contributions, and so on and so on. And now, our bribed politicians are creating voter suppression laws--under the guise of trying to ferret our voter fraud--to make sure campaign contributions by the wealthy are not the only tactic available to destroy democracy.
So, if you want to experience the American Dream, or see where the New Deal went, try to make it to Australia, or some other country that truly cares about its citizens. Staying in America is a very risky proposition. (See, e.g., "Senior Poverty: Food Insecurity Rising Among Older Americans" & "Retirement Inequality Chartbook: How the 401(k) revolution created a few big winners and many losers")