Skip to main content

Politics of the Federal Minimum Wage

In my previous post, I tried to test my theory that democrats care about poor people than republicans by looking at the change in federal minimum wage under democratic and republican presidents. It is somewhat difficult to prove or disprove my theory graphically, so I prepared a little spreadsheet and calculated real numbers. While I was at it, I decided to factor in the role of Congress in determining the federal minimum wage. The results are as follows.

It is important to get a general feel for the extent to which the two parties have controlled the executive (president) and legislative (Senate and House) branches of the government. As the pie chart below shows, Democrats have controlled Congress for a lot longer than the Republicans, while Republican presidents have ruled a little bit longer.
SOURCE: http://uspolitics.about.com/od/usgovernment/l/bl_party_division_2.htm


Next item to look at is government control by president, Senate and House majority. The Democrats have ruled this country either by controlling the presidency or Congress (D-D-D + D-R-R + R-D-D) 78% of the time!! It is safe to say they have played a dominant role in shaping the course of this country since WWII.


All this analysis is intended to shade light on the correlation between the party in charge and increase in federal minimum wage. The bar chart below indicates that federal minimum wage increased by $0.094/year under Democratic Presidents and $0.086/year under Republican presidents in nominal terms. When adjusted for inflation, however, the increase spikes to $0.130/year for Democratic presidents and declines to $-0.045/year for Republican Presidents. This result is fascinating because it demonstrates that Democratic presidents have been much more willing to allow minimum wage increases AND their increases kept up with inflation while their Republican counterparts have been very stingy. Since Republican presidents have failed to increase minimum wage with inflation, they have effectively suppressed the income and purchasing power of poor people. If this is not a proof that Democrats are better for the economic well-being of poor people, I don't know what is.

Now, lets look at how the different party controls of the presidency as well as Congress affect federal minimum wage increases. Once again, we see Democratic presidents and Congress being willing to increase minimum wages and keep those wages up with inflation while Republicans have done neither.
All in all, my hypothesis that Democrats have done more to help poor people by advocating increases in federal minimum wage have been proven to be pretty true. There are many factors that I have not considered, but my theory certainly has credibility.

Comments

Popular posts from this blog

Correlation Between Taxes and Social/Economic Programs

I have always wondered if the taxes people pay correlate with the availability of social and economic programs and safety nets, not to mention the military programs that protect them. This idea comes in light of the notion that Europeans are highly taxed compared to their American counterparts, but they seem to have access to free (or almost free) education and health care while the US provides neither. The Europeans live and work at a more leisurely pace than Americans and they have the comfort of knowing that their government has put safety nets in case a disaster. The Europeans do a lot to ensure that all their citizens have comparable opportunities, and thus you are less likely to see a huge gap between the poor and the rich. Perhaps the lack of incentive to excel has stifled entrepreneurship and innovation in Europe to some extent. In fact, Europe has historically high unemployment rates than the US and the size of government there is significantly larger than that of the US....

2001 Recession Deferred for 2008?

Most people remember the Dot-Com bubble of the 1990s that peaked in 2000 before bursting in 2001-2003. Considering how the NASDAQ composite lost more than 60% of its value by 2001 alone, the country was about to go into a recession. The 9/11 attacks made things worse too. As the impact of 9/11 and Dot-Com bust were about to pull the country into a recession, another bubble came to the rescue. It was the housing bubble that deferred a sure recession and kept the US in an era of faux prosperity. It gave Bush a reason to soldier on with flawed economic policies as the housing bubble gave the impression that the good economic progress of the Clinton years were being sustained through Bush's years. This time though, there does not appear to be another bubble ready to bail the US out of the recession it is in. After suffering through the I.T. and housing bubbles in just a decade, I don't think investors and people in general will be adventurous enough to create another bubbl...

Linux Tips and Solutions

PROBLEM: Audacious on K/Ubuntu Doesn't play my mp3s:: On my kubuntu 8.04.1 audacious is not playing any audiofile. I've tried to run my mp3s with amarok and it works. Also audacity is playing mp3s. SOLUTION: Click on Preferences in Audacious; Select Audio Tab; Set the 'cCurrent output plugin' to 'aRts output plugin'. __________________________________________________________ PROBLEM: File associations in Firefox 3.0 disappear in Kubuntu SOLUTION: Install firefox-3.0-gnome-support . . . more to come