The federal minimum wage used to increase almost lock step with labor productivity until it decoupled sometime in the late 60's. Had the minimum wage kept up with labor productivity, the minimum wage would now be an astounding $19.33 per hour, as calculated by the Economic Policy Institute. This is almost 170% above current levels.
We recalculated EPI's chart and arrived at similar numbers: $19.06 per hour for 2017.
As a result of this stagnation, labor's contribution to GDP has been in steady decline. Labor as a share of GDP peaked at 66% in 1970. Today that ratio stands at just 60%, slightly higher than the multi-decade low of 59% in 2010.
A person working at minimum wage for 40 hours a week, 4 weeks per month, 12 months per year - in other words, pretty much all the time with no vacation, save for weekends - would earn just $13,920 per year or just 10% above the federal poverty levels of $12,140 for an individual. Obviously, a person working at minimum wage would not be able to sustain himself for very long.
MIT's Living Wage Calculator project states that:
"many working adults must seek public assistance and/or hold multiple jobs in order to afford to feed, clothe, house, and provide medical care for themselves and their families."This reliance on public assistance puts a strain on public finances and amounts to a generous subsidy for corporations. It has become so pervasive that large corporations constantly route their workers to such programs or mount Thanksgiving collection drives for their employees.
MIT's Living Wage Calculator has calculated the living wage for every state, county, and major metropolitan area. Nationally, it estimates the living wage to be $16.07 per hour in 2017, around 7% higher than the $15 per hour minimum wage that most labor activists are asking for.
On a state by state basis, the living wage for each states ranges from a low of $10.03 per hour in South Dakota to a high of $17.11 for the District of Columbia.
| MIT 2017 Living Wage | |||
| By State | |||
| In US$ per Hour | |||
| State | MIT Living Wage | Federal Poverty Wage | Federal Minimum Wage |
| Alabama | $11.14 | $5.00 | $7.25 |
| Alaska | $12.48 | $7.00 | $9.84 |
| Arizona | $11.22 | $5.00 | $10.50 |
| Arkansas | $10.38 | $5.00 | $8.50 |
| California | $14.01 | $5.00 | $11.00 |
| Colorado | $12.47 | $5.00 | $10.20 |
| Connecticut | $12.88 | $5.00 | $10.10 |
| Delaware | $12.44 | $5.00 | $8.25 |
| District of Columbia | $17.11 | $5.00 | $12.50 |
| Florida | $11.75 | $5.00 | $8.25 |
| Georgia | $11.93 | $5.00 | $7.25 |
| Hawaii | $15.39 | $6.00 | $10.10 |
| Idaho | $10.64 | $5.00 | $7.25 |
| Illinois | $12.50 | $5.00 | $8.25 |
| Indiana | $10.70 | $5.00 | $7.25 |
| Iowa | $10.53 | $5.00 | $7.25 |
| Kansas | $10.69 | $5.00 | $7.25 |
| Kentucky | $10.49 | $5.00 | $7.25 |
| Louisiana | $10.91 | $5.00 | $7.25 |
| Maine | $11.60 | $5.00 | $10.00 |
| Maryland | $14.62 | $5.00 | $9.25 |
| Massachusetts | $13.39 | $5.00 | $11.00 |
| Michigan | $10.87 | $5.00 | $9.25 |
| Minnesota | $11.53 | $5.00 | $9.65 |
| Mississipi | $10.86 | $5.00 | $7.25 |
| Missouri | $10.76 | $5.00 | $7.85 |
| Montana | $10.95 | $5.00 | $8.30 |
| Nebraska | $10.60 | $5.00 | $9.00 |
| Nevada | $10.94 | $5.00 | $8.25 |
| New Hampshire | $12.01 | $5.00 | $7.25 |
| New Jersey | $13.72 | $5.00 | $8.60 |
| New Mexico | $10.98 | $5.00 | $7.50 |
| New York | $14.42 | $5.00 | $10.40 |
| North Carolina | $11.36 | $5.00 | $7.25 |
| North Dakota | $10.89 | $5.00 | $7.25 |
| Ohio | $10.47 | $5.00 | $8.30 |
| Oklahoma | $10.52 | $5.00 | $7.25 |
| Oregon | $12.48 | $5.00 | $10.25 |
| Pennsylvania | $11.11 | $5.00 | $7.25 |
| Rhode Island | $12.10 | $5.00 | $10.10 |
| South Carolina | $11.17 | $5.00 | $7.25 |
| South Dakota | $10.03 | $5.00 | $8.85 |
| Tennessee | $10.44 | $5.00 | $7.25 |
| Texas | $11.03 | $5.00 | $7.25 |
| Utah | $11.22 | $5.00 | $7.25 |
| Vermont | $12.32 | $5.00 | $10.50 |
| Virginia | $13.86 | $5.00 | $7.25 |
| Washington | $12.28 | $5.00 | $11.50 |
| West Virginia | $10.68 | $5.00 | $8.75 |
| Wisconsin | $11.03 | $5.00 | $7.25 |
| Wyoming | $10.63 | $5.00 | $7.25 |
| National USA | $12.08 | $5.01 | $8.71 |
When weighted by the Civilian Noninstitutional Population of each state, the National Living Wage amounts to $12.08 per hour while the weighted average federal minimum wage amounts to $8.71 per hour.
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