Washington state grabbed headlines this year with a minimum wage of $9.04/hour, thanks to a voter-approved automatic cost-of-living adjustment enacted in 1998. In 32 other states, the federal minimum – just $7.25/hour – applies.* But if it were adjusted for inflation using the Consumer Price Index (CPI), the federal minimum would be $9.16 today.
For America’s economy to function well over the long run, wages have to keep up – at the very least – with the cost of living. But inflation isn’t the only way to measure how well wages are keeping up with the economy, according to Salvatore Babones:
…the Social Security Administration uses something called the Average Wage Index (AWI)…[which is] an index of the average wages paid in any given year…[because] the CPI adjusts for changes in the cost of living, but doesn’t adjust for changes in quality of life. Simply put, we expect people to live better in 2012 than they did in 1974.
Adjusted for wage growth using the Average Wage Index (AWI) [the federal minimum wage] would be $10.74.
That said, even wage growth doesn’t tell the whole story, because wages have not kept pace with rising economic prosperity in America. Here’s Babones again: Read the rest of this entry »
Filed under: minimum wage, australia, average wages, Canada, Consumer price index, france, inflation, Labor, Minimum wage, Minimum wage in the United States, per capita income, personal income, united kingdom, united states, Wage, washington state
In late 2010, the Restaurant Association, Farm Bureau and a handful of other corporate interest groups sought to block a scheduled minimum wage cost-of-living adjustment for 2011. Their 
