If the federal minimum wage had kept pace with changes in worker productivity, busboys and baristas would be making at least $21.72 an hour today, according to a study by the Center for Economic and Policy Research.
The report, which will be released in March, found that advances in technology have increased the amount of goods and services workers can produce. But as that progress was made, wages remained relatively flat.
The study brings to mind a figure published in Mother Jones in the summer of 2011. The magazine reported that “If the median household income had kept pace with the economy since 1970, it would now be nearly $92,000, not $50,000.”
If American workers had that much money in their pockets, they would have the means to buy the manufactured goods and services they’re currently skimping on, and the demand crisis that has crippled the economy since 2008 would disappear. Industrialists would get richer off the increased sales, and money collected in taxes would likely make all state and federally paid social programs, including education and health care, feasible.
Instead, that money has gone to the richest 1 percent of Americans, who use much of it for gambling in derivatives markets and investment in existing property, rather than new, productive industries. (Eighty percent of all credit in the United States goes toward the purchase of real estate.)