Tracking The Postage Stamp And The Minimum Wage

by Categorized: Economy, Labor Date:

wagestampsNEW

 source: Bureau of Labor Statistics, U.S. Postal Service

Look at the price of postage stamps compared with the federal minimum wage since 1950.  An all-too-familiar pattern emerges.

For more than 20 years, until 1971, the two measures rose in near-lock-step. The minimum wage was 25 cents an hour for every penny the U.S. Postal Service charged to mail a letter.

Then rates started to pull apart — in that fateful time of inflation, the Arab oil embargo, Nixon’s wage and price controls, women entering the workforce in great numbers, the birth of the computer age and the Japanese threat to U.S. manufacturing.

By 1974, a stamp cost a dime and the minimum wage had fallen behind. Instead of $2.50, it was $2. And we’ve never looked back.

Stamps rose mostly in step with the Consumer Price Index until last month, when the 3-cent increase exceeded the inflation curve. And remember, postage prices are controlled by a (quasi) public agency.  As for the minimum wage, we all know it has lagged since the early ’70s.

That latest stamp hike is supposedly for just two years but of course it will never go back. If the minimum wage had kept up with postage prices, it would now be $12.25.

By no coincidence, the early ’70s was precisely when American workers stopped sharing in all they produced. Put another way, the income and total output are in place but workers aren’t seeing it.

Sure, some states, like Connecticut and Oregon, have pushed ahead of Congress by setting a minimum wage in the $9 range. Connecticut started to pull ahead of the nation for good in 1999. But no state has come close to keeping up.

Now President Obama wants to push the federal minimum to $10.10 an hour, and Connecticut Gov. Dannel P. Malloy wants the state to match that amount even if Congress doesn’t act — which would help many workers and hurt others.

Connecticut would be a lot better off if Congress raised the national wage. What should Congress do?  Even a wage of $12.25 an hour is barely enough to get by, and while it’s politically impossible to adopt, we’re basically paying it anyway with food stamps, rent subsidies and the earned income tax credit.

But it seems clear that Congress needs to give a raise at least for workers in a job for, say, 500 hours, and perhaps for everyone. Pass it and put a stamp on it.

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