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October 24, 2005

A Minimum Minimum

Just in case you were wondering:  the federal minimum wage in the US--currently $5.15 per hour--is at its lowest level in 5 decades, adjusted for inflation:

The nominal US minimum wage has remained unchanged for the last 9 years; over that time, inflation has whittled away more than a fifth of the buying power of an hour of minimum-wage work.

The (relatively) good news for low-income workers is that, in the Northwest, these minimum wage standards only apply to Idaho and Montana; Washington, Oregon, California and Alaska have adopted a higher minimum wage.  Washington's is currently $7.35 per hour, and is adjusted upward each year for inflation.  In January it will rise to $7.63.  (That's still lower than the inflation-adjusted federal minimum wage during most of the 1960's and 1970's, by the way.)  Oregon's is currently $7.25 per hour, and is also indexed for inflation. 

BC's minimum wage is Can$8.00. Adjusting for purchasing power of the Canadian and US dollars, that's about $6.67 in US dollars.  And this isn't inflation-indexed -- meaning that inflation erodes its value every year.  So, overall, minimum wage standards seem to be one area in which Washington and Oregon may be doing a better job than BC in protecting low-income workers.

Posted by ClarkWD | Permalink


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You forgot Canadian health care, that puts BC far ahead.

Posted by: anonymous | Oct 24, 2005 8:50:03 PM

question for the economists: does a minimum wage that is indexed to inflation actually have an additional inflationary effect itself?

Posted by: colorless green ideas | Oct 28, 2005 12:31:06 PM