Labor productivity over time is measured by the BLS Labor Productivity and Costs program (LPC). The specific index used here is for the Business Sector. The index value (base year=2009) in 1968 is 43.503 and 105.998 for 2014, indicating a 143 percent increase in productivity (105.998 /43.503).
Accounting for real inflation, productivity, and profit (U.S. labor productivity has increased 143% since 1968) —
If minimum annual household income had kept pace with productivity, it would now be $54,080.
So, if we were to implement the correct changes; and compensate the minimum wage-earner for productivity.
They'd have $12,080 of disposable income after projected annual expenses (Looking at the actual spending habits of the average worker, you need to generate an income of $42,000 to cover annual expenses).
And, $19,080 after covering the costs of basic necessities (The average person needs to generate $35,000 in annual income to cover the cost of basic necessities).
★ Source: http://1.usa.gov/23oTWBN
Since 1973, worker's compensation (wages and benefits) and productivity (how much workers produce per hour) have diverged, and what this has meant for the last few decades; is that a majority of American workers have not been benefiting from productivity growth.
Rising productivity provides the potential for substantial growth in the pay for the vast majority. In the post-New Deal economy, for two-and-a-half decades beginning in the late 1940s, pay of typical workers rose in tandem with productivity.
Americans should prioritize productivity, with wages based on value added; like we've done in America's distant past(Golden Age of economic expansion).
There is historic precedent that justifies encouraging rapid and persistent growth in labor output per hour (productivity); and linking wages to that national growth in productivity for a concomitant increase in purchasing power.
This consequential hike in wages spurs aggregate consumption, and it's the job of this mass consumption to accompany mass production.
We must broadcast the gains from growth widely, as this provides men and women purchasing power equivalent to the quantity of goods; and services offered by the country's productive apparatus.
When productivity rises, all American employees should receive a portion of the new bounty.✮ America's goals should be to:
❏ Raise Minimum Wage + Index it to Growth in Average Wages (Growth in the wage of the typical worker generally outpaces growth in prices over time; if it didn’t, living standards would never rise.)
❏ Tie Annual Wage Increases for All Workers to National Productivity (Removing the wedges between productivity and median compensation growth)
How would you respond to someone saying "Why not raise the minimum wage to $25, $50, or $100?"?